>>16900655A sovereign money system would put an end to the cycles of economic booms and busts and to the endless spiral of inflation. Inflation is interest on the total money supply, passed down the supply chain to consumers. Booms happen when interest rates are low, and new principal exceeds current interest due. Busts happen when interests rates are high, and current interest due exceeds new principal.
Sovereign money is fully-reserved; meaning, every deposit is backed 1:1 by federal notes or by deposits in a Federal Reserve Bank account. The Federal Reserve system would be absorbed into the Treasury department, placing the minting power rightfully in the hands of the federal government.
Commercial banks would no longer be able to create money by lending at interest. Money creation would be dependent not on the amount of new debt, but on the amount of new federal spending. The justification for inflating the money supply must be based in the creation of new goods and services rendered to the public benefit, not in the service of arbitrarily-inflating debt.
