The United States’ Foreclosure Problem – Solved with PMS!


Since I have been promising to present my very own solution to the foreclosure problem I think I’ll get started. I think you should know my proposal is a mixture of theory and several “proposals” that have been tried before.

None were implemented because they were pronounced as frauds and the proposal proposers jailed. Conspiracy theorists believe it is one reason JFK was gunned down in Dallas. I don’t know about that but the theory is alive and floating around in the universe.

That tells you that presenting solutions to the problems can be a very risky business. The powers that control what is called our money system like it the way it is, and anyone proposing to change it is immediately denominated a kook or worse.

Regardless, I will at least put it on the table for your review and critique. You should also know I am well aware we have what is called fiat currency as our currency. We really don’t have a choice about that.

My proposal will flip the equation we operate under in today’s economy. If you understand the public and private side of what is called the governors and governed, you will know I am speaking of the public as being the modern day elected officials (governors) who call themselves the government and the private as being you and me the citizen (governed).

This is important to understand as the public totally dominates the private in today’s governmental structure. My solution flips the equation as I mentioned above. My proposal puts the private where it should be and that is at the head of the structure.

I call my solution the People’s Money System (PMS). No pun intended by the way. Before I can lay out the system it is important I define value. After all, we are told value is important and if we are to use a commodity, or anything else for that matter, as a trading/purchasing tool it must have value.

If you read my post of two weeks ago, you will know the federal government has a title and code section that says the present day currency can be redeemed in gold and silver. This means, at least theoretically, we can walk into any federal reserve bank and trade our FRNs for an equivalent amount of gold or silver.

That is one example of value. Gold and silver are the “value” behind the FRNs turning them from fiat into “real” dollars. Of course if you have tried to redeem them, you know the federal reserve only gives you a like denominated FRN for the FRN you are trying to redeem.

This keeps the circulating fiat currency, well, fiat currency. And it also speaks volumes about what the governors say and believe on this thing called value.

To take that one more step, the federal reserve actually uses, among other types of collateral, foreign bonds bought with paper money (FRNs) as backing for the fiat currency they issue.

If you read Walker Todd’s Working Paper 9405, you would of course know this. However it bears repeating since I am talking about value. I don’t want anyone believing I would introduce a system that remotely mirrors this kind of value.

The Chicago Federal Reserve (CFR) answered the value of money question:

“What Makes Money Valuable?”

in their pamphlet titled, “Modern Money Mechanics”. They have since discontinued its publication but a simple search engine entry of the title will produce the document in its entirety should you want to read it for yourself.

The CFR answered the question by stating:

“Mainly, it is the confidence people have that they will be able to exchange such money for other financial assets and for real goods and services whenever they choose to do so.”

My premise is built around the CFR’s answer. After all, what else is there but the confidence of the people? And when you get right down to the nitty gritty, isn’t this another way of saying the full faith and credit of the government given we the people are the government?

It must be because when I tried paying for lunch the other day with silver dollars, the clerk behind the register said she could only accept real money. When queried, ‘what is real money?’, she showed me an FRN. Full faith and credit at its finest.

So it would appear a system would have to have the full faith and credit of those who will use it as well as have something of value to raise it above the level of fiat currency. I could be wrong but I don’t believe I am.

BTW, I can provide more examples of what is being used as value behind our present currency but I feel certain you can find them on your own. Hence, I will proceed into my PMS.

However, I won’t do it today given this post has taken up quite a bit of VRE. I suggest you do a search on the acronym CAFR and read Craig vs. Missouri to prepare yourself for my PMS presentation. The Craig case is an excellent explanation of the thing called a bill of credit and the CAFR is one leg in my value triangle.

If I do my job in explaining PMS, we just may be on the cusp of actually issuing a currency that will keep all of us out of foreclosure while allowing us to pay our bills as they come due. PMS also provides the added benefit of keeping our elected officials extremely honest.

I look forward to presenting PMS next week for your examination.

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  1. The discussion goes on for ever and yet little changes.

    Look at silver or even gold. What makes either valuable? Only the fact that people believe that there is value represented. The supply is not fixed though it is a lot harder to get more compared to printing money.

    What I do not understand about the article is not the argument for or against fiat money. It is the idea that there is a connection between foreclosure and a change from fiat money. Foreclosure is mostly from not being able to keep a loan current or pay off the loan when the due date arrives. Switching the definition of the currency being used to pay the loan is not going to impact the cash flow needed to support the loan payments.

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