USA heading for economic depression are we next?‏

A sustained decline of the money supply has occurred during only three business cycle contractions in recent history, each of which was severe as judged by the decline in output and rise in unemployment: 1920-1921,1929-1933, and 1937-1938. The severity of the economic decline in each of these downturns, it is widely accepted, was a consequence of the reduction in the quantity of money, particularly so for the downturn that began in 1929, when the quantity of money fell by an unprecedented one-third.

There have been no sustained declines in the quantity of money in the past seven decades until now. The figures known as M3 - which include broad range of bank accounts and are tracked by British and European monetarists for warning signals about the direction of the US economy a year or so in advance - began shrinking last summer. The pace has since quickened.

The stock of money fell from $14.2 trillion to $13.9 trillion in the three months to April, amounting to an annual rate of contraction of 9.6pc. "It's frightening," said Professor Tim Congdon from International Monetary Research. "The plunge in M3 has no precedent since the GreatDepression. The dominant reason for this is that regulators across theworld are pressing banks to raise capital asset ratios and to shrink their risk assets. This is why the US is not recovering properly," hesaid. http://www.telegraph.co.uk/finance/economics/7769126/US-money-supply-plunges-at-1930s-pace-as-Obama-eyes-fresh-stimulus.html

What the dear professor is saying is that we are reliant on debt issued by banks for our money supply and the banks are contracting their lending. There is another solution. Americans described the government they were creating after colonial expansion as a "Common Wealth," ensuring life, liberty and the pursuit of happiness for its people.

Implied in that vision was an opportunity for employment for anyone wanting to work, as well as essential social services for the population, the American dream was born. All of that can be provided again by a government that claims sovereignty over its money supply. That is what the American colonists did, in the innovative paper money system that allowed them to flourish for a century before King George forbade them to issue their own money,prompting the American Revolution.

It is also what Abraham Lincoln did, foiling the Wall Street bankers whowould have trapped the North in debt dependancy through the exigenciesof war. We need, along with Americans, to reclaim our sovereign rightas a nation to fund the Common Wealth they envisioned without entangling the government, citizens and companies in debt. This is a demand we must understand and raise so that we can offer analternative to the austerity that the Con Dems are heaping upon thepeople.