The Rise of Brownianism
By Anthony Wile - December 25, 2010

Ellen Brown has run a long-term campaign arguing that nations themselves ought to print money rather than third-party central banks. She even wrote a well-received book about it called Web of Debt. And she's making progress. There is legislation now at the federal level enshrining her point of view. (More about that below).

In this article, I want to examine the "Brownian" phenomenon in a little more detail. Also to raise questions about how this movement is evolving. It seems in some ways almost like a … promotion (even if Ms. Brown herself is not directly involved), a kind of dominant social theme promulgated by the power elite. First, all these new "public money" websites pop up. And then before you know it, there's legislation stripping the Federal Reserve of its powers (good) and promoting the use of those powers by the US government itself (bad). Imagine, the US gets rid of the Fed and its horrible money stimulation leading to booms and busts and then gives the US FedGov the power to do the same thing!

Let's start with what Ellen Brown believes. She argues that money ought to be printed with low or no interest by federal or state governments, as follows: We need to set up our own public banks, which cannot run short of "the full faith and credit of the United States" because they ARE the United States (or whatever local government is setting them up). In the U.S., we should nationalize the Federal Reserve and let it operate like a real government-owned bank, issuing money and credit on behalf of the public for infrastructure and other government expenditures. States could also set up their own credit mechanisms by setting up their own banks."

The above was from an interview that the Daily Bell did with Ellen Brown, and it all sounds perfectly sensible, but in practice the terrible boom/bust cycle of artificial money printing would not cease, nor would monetary inflation. Ellen was going to sit down with the Bell for another interview, but it never happened. Apparently, she was somewhat disturbed by statements made by Dr. Gary North, who has written about her and her proposals. Dr. North is an absolutely brilliant hard-money economist, one of the biggest brains in the business; his analysis is always worthwhile, and we were pleased that he took on the issue of public monetary policy.

But like others, we were uncomfortable that he started throwing around the "N word" – as in Nazi – in the context of his arguments. It seemed rather unnecessary considering the common sense logic he easily uses to rebut Ellen's proposed ideas. After all, while Germany under Hitler may have had public credit issuance, there are plenty of countries today that have it as well, most prominently China. In fact, the Bell has often suggested, as a matter of fact that Ellen Brown's solution – which the Bell named Brownianism – is likely to be somewhat better than what the United States has currently, which is a quasi private banking system using the color of law to allow private gain. There is no reason why the US (or any other country) ought to work in tandem with a "private" banking system for what is essentially a credit-making function that can done in other ways.

Of course, Ms. Brown and her Brownians (being partial to public power) claim that the US Federal Reserve is an entirely private system, but it is not. It was empowered under an act of the US legislature and Congress has oversight over the Fed and presumably can change or deepen the oversight if it wishes. However, the Anglo-American power elite stands in the shadows behind the Fed, evidently and obviously enriching itself. It would NOT have the same privileges with a public monetary system.

But while Ms. Brown's ideas (shared by others) are perhaps better than what the US has now, they are still far from optimal. The Bell has long pointed out just what Dr. North has, that ultimately depriving the market itself of the opportunity to control money is distortive and inflationary. Apparently, Benjamin Franklin who was a big proponent of public money himself admitted before his death that public-money printing was apt to be inflationary over time. That's because the state cannot control itself and because there is no facility that can determine how much money is needed in a given economy. Only a private market can do that.

In non-market driven schemes, the bias is always inflationary – that is to print too much. China, which has public money, is suffering from terrible inflation these days. Printing public money is no panacea. For this reason, the Bell advocates allowing the market itself to set the value and amount of money in circulation. In fact, the Bell regularly promotes the idea that markets ought to sort out competing currencies and even the debate over fractional reserve banking. In other words, let the market itself decide on what money is and how it circulates. Those of us who study money know that historically, money has proven out to be gold and silver trading in tandem – sometimes known as bimetallism. It also cannot be denied that there are plenty of instances of PRIVATE fractional reserve banking that have taken place, historically. If the market tolerates it, then so be it.

Ms. Brown and her Brownians argue otherwise, of course. Here she is again from her original interview with the Bell: "Allowing people to trade in any currency they want doesn't solve anything and just creates new problems. What's the exchange rate going to be between these various domestic currencies, and who is going to set it? Are you going to allow shortselling between currencies, derivative bets, etc.? If you have silver and gold coins trading together, what happens if gold goes up in value relative to silver? Will you have to change the face value of the coins? They could be left unstamped, but then you won't really have coins; you'll just have round gold bars. Then why not just keep your gold bars and sell them for paper dollars as needed? If the paper dollars lose value, as goldbugs are sure they will, the gold bars will fetch more dollars when sold, so value will have been preserved just as it would have been if the gold were actually turned into gold coins."

What we can see from this is Ms. Brown doesn't have much faith in the markets. She is firm in her conviction that the state itself ought to be in charge of money. Obviously, those who believe in free-markets don't agree. Bell staffers recently carried an article about Brownianism and its larger impact called "Debriefing a Sovereign Money Hater." The points made by this Bell "patriot" friend back in October was that Brownianism was gaining traction because the powers-that-be were setting up false flag websites to make it appear as if the movement was more powerful than it was. While his perspective was a bit "over the top," one might grant it is not entirely out-of-the-question given what's evolving in the monetary world:

Now it's an explosion on the 'Net … All power to the people and down with the banksters! An explosion of websites and people seemingly committed to the movement of sovereign money. A lot of them using military terminology too. And with "pledges" just like the Tea Party pledges after it was taken over from the Libertarians by Armey and Palin. Where'd those come from?

It's how these promotions work, Daily Bell. It's all very clever and very contemptuous. They are sure we can be manipulated – and have years of data and experience to prove it. You know it, Daily Bell! They find people – usually military people – and help them make the right presentations. It is phony but it makes it look like there is a swelling movement. And it is a phony movement and the sovereign money is a phony solution. But still they appear out of nowhere with videos and articles and websites and suddenly they are all over the place, apologizing for their former beliefs and using free-market rhetoric to argue for statist solutions. And all the videos are sort of the same! And all the rhetoric is the same! You'd have to be blind not to spot a "pattern."

"In fact, the powers-that-be would love the US and the world to move toward sovereign money! They work like a kind of mafia and are always trying something new. Think about it: If states or the US Treasury begin to print sovereign money, Leviathan will STILL be in charge of the printing press. Do you really think the powerful families – your perspective – that seem to run the world will have any trouble influencing the government as its prints more money? They could care less if it's "debt money" or not, just so long as they still control the printing presses. Do you really think the money won't end up in THEIR pockets? The one thing they DO control is government. … It's being orchestrated! That's how these things work.

To read the full article, click here: Debriefing a Sovereign Money Hater.

Is it being orchestrated? In fact, as it turns out, Congressman Dennis Kucinich has offered a kind of Brownian bill that would transfer the responsibilities of the Fed to the Treasury!

A Bell feedbacker we call "the Bug" sent us an exclusive commentary on Kucinich's bill. Here's some of it: "Instead of money issued by the Fed, Kucinich apparently wants money issued by the Treasury. Ellen Brown in all her glory … Now, if one has a concern about money controlled by the Fed as being inflationary, wait and see what you get when money is controlled by a politically motivated Treasury and Congress. …"

Here at the Bell, we track the dominant social themes of the power elite. But Bell staffers, friends and feedbackers (and elves) surely didn't expect how fast this promotion (if that's what it is) would move. It is a bit suspicious, as the Bell has pointed out, that all these "public money" websites have popped up recently, basically regurgitating Ms. Brown's view … and now legislation as well. Ellen Brown herself may be entirely sincere about her solutions (I have no reason to believe she is not) but the larger picture is less clear.

The idea that the US government will do a better job printing money than the Federal Reserve is dubious in the extreme. The only solution is to allow money to be valued by the market itself, as it has been for thousands of years. Let the market decide. Any other path is madness. And maybe a planned promotion of sorts.