Submitted by Pachamama
Image a world where independent central banks in the Caribbean lend money directly to enterprises thereby circumventing zombie banks and their usury interest rates regime. In our current zero percent environment such banks will increase the money supply to new productive, non-foreign exchange shrinking projects, grow local economies, while withdrawing funding from circulation as it is repaid. This revolutionary but aged binary economic ideal has just again been introduced into the United States Senate by Elizabeth Warren. It is an ideal that is properly located within the economic and cultural history of the United States but foreign to most of the Caribbean. One of the best performing States in the Union, by some measures – North Dakota – uses its State’s bank to manage such a public banking system.
This is the very system that is generally available ONLY to commercial banks. Why is this? Why has this preferred monopoly status been reserved, exclusively, for large banks? Why not credit unions? Why not new kinds of foreign exchange earning enterprises? The answers may lie within the general tendency of capitalism’s movement from competition to monopoly – a global monopoly/oligopoly in banking. Warren’s bill proffers, when the veil is removed, that students should get the same ‘near-zero percent’ loans as large banks from the so-called ‘discount window’ of the Federal Reserve. Student loans now total over one trillion dollars in the USA. On these, students are currently being asked to pay interest of 7 percent or higher. Warren’s bill envisions 0.75% interest rate. Such a world, of which we can only dream of, will reverse private control over our money supply systems. It will restrict inter-mediation with higher levels of disinter-mediation. It will make capital infinitely more available to deserving enterprises at a near zero percent interest rate. It may need the accompaniment of a larger institutional structure of co-operatives in the Caribbean. It could represent a shift in current thinking and signals a strategic withdrawal for the global financial architecture.
The United States is a country which has had a complex monetary history. However, Warren’s initiative will be seen as a challenge to the masters of the universe. Her very ‘hallowed’ institution is populated by members who are all beholding to the very largest banks. These are the banks which are directly or indirectly funding the re-elections campaigns of all her colleagues. Non-banking corporations are generally ‘guided’ by the sources of their own funding – the very same large banks. Large banks which have worked assiduously to remove the firewall between commercial and investment banking. In this they have had almost 100% success. This success is but one arrow in the quiver of global interests to drive us further into poverty and re-establish a pre-capitalist system.
This simple idea will trigger a chain of complicated reactions from the ruling systems in the Caribbean. These systems are still captured by external controllers who would, no doubt, be threatened by a strategic localization of money supply, as a practical matter. This is the tapestry of a colonial system, still. We are likely to be told that ‘international’ lenders will stop capital inflows. We are likely to be told that countries in the Caribbean are somehow incapable of existing outside the established financial order. All manner of excuses will be fronted. But we will remain convinced that there is a need for Caribbean people to seek non-traditional initiatives in order to break out of the declining cycles of depression economics. This will require a mindset not yet unearthed in the Caribbean.
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