“…marvelously helpful and has some stunning historical vistas…” Hugh Downs
“…provides the needed background for seeing the basic structural issues at work” Michael Hudson
“…a masterful work” Michael Kumhof
Given Stephen Zarlenga turns out to be a prominent proponent of money reform in the US, it seems to have taken me a long time to discover him?
Over time, whoever controls the money system, controls the nation.
As it happens, this is the my third big money book this year which ends up equating money with power. Not just in the (dis)empowering sense of any money but the overpowering importance of the money system.
That money’s purchasing power extends to the purchase of power is hardly breaking news. But such talk typically tells personalized stories about privileged entitlement, abuse of power or corruption. It’s not about the system. It’s about bad apples, not about how the orchard is run. There is constant talk of money but it turns out be 97% about prices, including that of money, and, of course, who will have to pay the bills. There is little talk about money as a systemic variable. Not surprising given expert voices keep chanting that, on the contrary, money is the veil. Asking systemic questions like who gets to create and allocate new money remains tabu. Just ask the money reformers…
Just as at the personal level money’s tabu has much to do with the self-positioning status implications, so it is with money as a topic of political economy. The tabu covers the manifestations of privilege and power and protects the machinations restitching the veil, not least via those economists at the back of my head chanting eternal truths like: “Money emerged from barter to deal with the non-coincidence of wants…”
The “Metallist” origin of money, used as a medium of exchange, is based on the presumed low efficiency of barter. However, barter is usually ill-defined and archaeological evidence about it is inconclusive. Moreover, the transaction costs associated with barter seem to have been exaggerated by metallists. Indeed, the introduction of a unit of account reduces the complexity of the relative prices system usually associated with barter. Similarly, in-kind transactions have timing constraints which are often labeled as “the double coincidence of wants”; with a system of debt and credit, delayed exchange, that is lending, is possible. Such adaptability of barter is confirmed by the study of Mesopotamian and ancient Egyptian palatial economies. They provide evidence that non-monetary transactions have persisted during millennia, challenging the metallist vision about the origin of money.
hal.archives-ouvertes.fr 2019 Barter and the Origin of Money – by Serge Svizzero and Clement Tisdell
Son of Italian immigrants, Stephen A. Zarlenga was an interdisciplinary student at the University of Chicago. Following graduation as a psychologist in 1963 he entered a life-long career as a finance professional in mutual funds, commodities trading, real estate and insurance. His interest in “the lost science of money” took him through all the relevant literature he could find in the US Library of Congress and in the early 1990 his research culminated in a 700 page book and the establishment of the American Monetary Institute.
Although the author was sufficiently positioned to advise the US government, he apparently could not find a US publisher and the book was first published as a German translation by a specialist Swiss publisher in 1997. An English edition finally appeared in 2002.
The subtitle “The Myth of Money – The History of Power” fits the book best because it is not just a chartalist story of money as power, but the story of the veiling of this power. Even the absence of a contemporary science of money, Zarlenga unfolds as just one of many fabrics repeatedly sewn anew to restitich the multi-layered disguise of the monetary system.
… Karl Marx and Adam Smith shared practically the same primitive view of money.
Zarlenga, Stephen. 2004 The Myth of Money – The History of Power – 270
Zarlenga’s massive reference work is filled with invaluable details and background information on more or less well known historic episodes around seigniorage, money allocation, banking and high finance. Although Zarlenga is focused on the history of coinage, he by no means excludes money as credit. The interest paid on national debt and the quasi sovereign issue of private credit money are two of the central targets of his critique. The commodity theory of money is exposed at every opportunity as an economic concealment maneuver. Zarlenga is an academically free-floating, ideosyncratically critical reader of monetary theory. In his readings, not just Adam Smith but also Karl Marx becomes an apologist of the Bank of England, just as economists generally only have to offer blindness or obfuscation on the subject of money.
Though Marx is found to play his part promoting the bankers’ favourite commodity theory of money, it is Ludwig Von Mises and W.S.Jevons that particularly attract Zarlenga’s indignant contempt.
Von Mises’ book has a multitude of contradictions and unconfirmed claims, particularly in its main monetary statements. An example of this is the unsupported claim: “The concept of money as a creation of the law and the state is clearly untenable. It is not evidenced by a single phenomenon in the market. «Why? No Answer. We have already documented many case studies in this book – at least one in each chapter – that refute Von Mises’ claims. The method used by Von Mises and the Vienna School of Economics is either a loud assertion, as in the example above, or purely theoretical thinking.
Zarlenga, Stephen. 2004 The Myth of Money – The History of Power – 270
And W.S.Jevons gets it like this:
“Jevons was not concerned with the question of whether the money should be controlled by the state or by a private bank. He ignored the work of Ricardo, Berkeley, Raithby, Tooke, Thompson, Mc Culloch, and others, and instead simply assumed that money should be privately controlled … “
Zarlenga, Stephen. 2004 The Myth of Money – The History of Power – 270
Zarenga’s socially harmful exploiter is not Marx’s capitalist industrialist, or only as a special Ur-type of capitalist sovereign in control of a metal mine and coin factory. Zarlenga’s ruling class is less class than corrupt elite. A finance capital mafia of abusers of money power have maneuvered themselves into the center of sovereignty with the Bank of England’s institutionalization of the hybrid credit-money system. This system not only systematically deceives and exploits workers and the population, but above all the entrepreneurs and producers. It is precisely the productive cohorts, including industry, that are systematically sabotaged.
Here Zarlenga sounds like a Schumpeterian, and his analysis mirrors in many ways the main strands of heterodox money history and theory. However, Zarlenga’s strong chartalist position and fundamental criticism of interest money firmly places him with money-reformers. With almost medieval severity, Zarlenga reminds the reader of all the good reasons why one has tried again and again to prevent usury. Zerlanga’s anger at usury relates to the credit money system as a whole, and ultimately to a contempt for money-from-money gain as unearnt and intrinsically parasitic income.
Again that fits Schumacher’s critique of “arm-length investment” and his distinction between creative production or distribution and the accumulating margin-taking of intermediation. Above all, Zarlenga’s analysis fits that of the money reformers who want to un-licence private money creation and transition to interest free sovereign, “positive” money.
As Simon Mouatt explains (see review article below), by the standards of academic intepretations of Smith or Marx, Zarlenga’s commentary may be a bit rough and unfair but nonetheless points to that curious narrative alliance of faith in a primitive commodity theory of money-from-barter which to this day corresponds to what approximately 85%-97% of your average population believes: systemically reproduced obfuscation and ignorance sustains the money tabu. And that’s how it should be. Discuss money for real? Better not. As Paul once told Bernard at MIT: “Don’t touch the money system!”
Occasionally the money system stirs itself into such a froth that systemic money talk seeps into the mainstream chatter. Like in the wake of the 2008, MMT got a bit of attention and so has Bitcoin’s double disintermediation from State and Banks. Most recently the emergence of Central Bank Digital Currencies has posed questions, at least potentially. As money reformer Joseph Huber explains: CBDC means positive money. Meant just as a restricted and complementary currency. But debt-free state-money nonetheless.
CBDCs should be welcome to the sovereign money reformers. Citizens may get central bank accounts in Britcoins, DigiGreenbacks or EchtEuros. Theoretically, this opens a wide door to the hall of money democratization.
In practice, however, even the money reformers do not usually portray their program like this, not least because democratic control would remain limited and highly mediated. Positive money reformers typically imagine a newly established central bank authority or even 4th state monetary power. Like Zarlenga, whose reform plans have a lot in common with those of Positive Money. Not least the withdrawal of private bank licences to create new public money.
Even with all the systemically threatening financial froth of the 2008 crisis, money reformers could not table the money system into a political issue. Despite a slick media campaign, cohorts of heterodox academics, libertarian support from right and left and even the FT’s Martin Wolf, Positive Money barely surfaced in the mainstream media even though they were actually flooded at the time by financial crisis chit chat.
However, Swiss direct democrats discussed a sovereign money initiative and in the end the majority gained the impression that the reformers wanted to reduce the existing diversity of different banks to just one central bank. Which is a lazily fuzzy simplificaction but nonetheless hits the iffy nail of money reform: if not the banks, who should control the money supply? At least without tons of qualifying detail, a central committee does not sound promising.
What is rarely considered officially is to book central new money directly to citizens. Direkt financing has de facto been practiced all over but typically in veiled disguise. Helicopter money may have hit the headlines but basically remains as tabu as the mysteries of private money creation.
Direct debt-free transfers to the population continues to sound too good to be true. With Central Bank Digital Currencies now at hand monetary realities have changed, but there is no media attention paid to the implied systemic potential. Money as a topic? Any time. The money system? That is not a topic. That’s just how things are. Can’t have loose talk on that. Someone might want to know who the central bank owes what, and why, when it issues new money?
Just follow the money …
- Zarlanga articles /money reform
- Zarlenga’s book – complete pdf
monetary.org publisher’s info about book + author
“The Lost Science of Money traces the money power through three and a half millennia from barter to the Euro. It draws fascinating, previously lost monetary principles from ancient Greece and Rome, from the experience of the Moslems, Venice, the Templars, the Jews, the Bank of Amsterdam and Bank of England, and the Federal Reserve System. The Lost Science of Money shows that the question of usury is far from settled, and that monetary reform is more a matter of morality and law than of economics. It demonstrates that a good money system must be based in law, not in commodities, and defines the essential elements needed to remove structural injustice from our money system.”
goodreadsWilleZurMacht 4* 2021 …”…Exhaustively researched by a strongly independent thinker and finance professional who is not afraid to make normative recommendations on economic policy, but somehow manages to remain even-handed for almost a thousand pages. World history through the lens of money, with many historical details totally absent in other writers. Engages the philosophical and spiritual context to monetary history, and is fearless in its attacks on, variously, the ancient Persians, 16th century Amsterdam Rabbis, Oliver Cromwell, Adam Smith, Marx, the Austrian School, the World Bank, the IMF, et al. etc… Written in a fast paced style, beginning with the ancient history of money in the west from the pre-Roman period to the present, I found it hard to ignore the book and finished it in two weeks. Being well-versed in writings of Mises, Rothbard, Sowell, Friedman, and other Austrians, I read this book to break me out of my comfort zone and challenge my ideas, and it did…”…
goodreadsClif 3* 2015 …”….I believe the case is made that highly regulated issue of currency by the government directly would be preferable to the system controlled by the banks that we have now, one that has proven itself destructive repeatedly. It is sobering that the author predicts another economic collapse as he writes in 2002 and the very thing happened in 2007. He sees collapse as the best opportunity for change, yet in this latest episode, I did not hear one word about the system he proposes though I avidly followed the economic news throughout the housing bust. I only happened across this book in a link encountered on a blog a few months ago…”…
amazonDavid Eagen 1* 2014 …”…I am not a free market proponent. I have read both Zarlenga and Mises. I have read Del Mar and Rothbard. I have read Marx and Hayek. In any sense one must look at the whole picture to see what is right and what is wrong. What is freedom and what is control. What is fair and right. What is moral and just. I have yet to find amy person who can explain economic theory that answers these questions or answers what is best for society. Each and everytime it comes down to people and circumstance.
The one star is because of Zarlenga’s arrogance in proposing he has the answer and for the scary thought of someone implementing this in real life and destroying personal freedom, responsibility and right to hapiness. Also one star for the fact that money does NOT come from law, but from what society accepts as money. (NOTE: society means people not the abstract “market”)
beyondmoney/pdf 2012 The Lost Science of Money: The Mythology of Money – the Story of Power by Stephen Zarlenga – A Book Review by Thomas H. Greco, Jr.
“Zarlenga’s book, is in many ways, impressive, but in other ways, disappointing. This massive treatise (more than 700 pages) recounts the history of money from early times, providing an interesting historical overview based on a wide variety of sources. It is a scholarly, well researched, and insightful account of the evolution of money, banking, and finance, in which the author argues that a main arena of human struggle is over the monetary control of societies.., and shows how the money power has historically rivaled that of governments. All that is well and good; the story of money IS the story of power, and the author tells it well. It is, indeed unfortunate that few people today realize the important political implications that are inherent in the control over money and banking, or that such control has typically been in the hands of elite private interests. This well researched history goes a long way toward clearing away the fog that has enshrouded that bastion of privilege. The book attempts to do two things, first, to describe the dimensions of the money problem by tracing its roots, not only in economics and finance, but also in ethics, religion, and politics; and second, to prescribe, in broad outline at least, a solution. In the first instance it is mostly successful, but in the second, in my view, it falls far short.
…”In addition to supporting Henry George’s views — “he was right!” Zarlenga said, several times — Zarlenga has a workable alternative to the current debt-based money system. Just as importantly, it is fairer, removes the function of money-creation, but, critically, not banking, from the bankers, where it has led to bad judgment and outright fraud, usury, and economic booms and busts for centuries.
Would his 9-member Monetary Authority — to be appointed by the president and confirmed by the Senate — be immune from political manipulation, as well as the usual financial establishment influence? No, but if they are tasked by charter with maintaining neither inflation nor deflation, that is a good start, and an even better start is that they won’t be creating money to bailout the TBTF friends — at least their is no legal reason for them to do so.
Stephen Zarlenga wrote a paper (1994) titled A Refutation of Menger’s Theory of the “Origin of Money.” Like my Critique of Austrian Economics (2004), it includes an appendix in which he re-prints the insulting and unsubstantiated referee comments that Judith Thommesen wrote, as well as his own unsuccessful efforts to get his paper assigned to a real economist. Clearly, I am not the first person to encounter the Dragon Lady, though I am one up on Zarlenga: The Mises Institute did not (as far as I know) report him to the police as a terrorist. Since the Austrians are afraid to respond to Zarlenga’s paper, I will do it for them. … So liquidity is caused by liquidity. I stress that I’m not referring to the increased liquidity which a money commodity would exhibit by virtue of its becoming money. We are considering its liquidity before it would have become money. Thus to really explain a commodity’s liquidity, [Menger] would have to explain why supply, demand, and markets develop for a commodity. If you use only liquidity to explain them, you are in a circle. We know why markets developed for cattle or wheat. But has Menger really explained why markets would have developed for “These little discs… which in themselves seem to serve no useful purpose (1984, p. 6)” except if they were already money (1994, p. 8)? read more pdf here Stephen Zarlenga Responds To Aguilar’s Review.
ABSTRACT: Mainstream monetary theory has been subject to critiques from heterodox economists from the post-Keynesian and Marxist traditions yet, the monetary reform movement has been critical of political economists from all traditions for failing to identify the private issue of money as the central problem. In the United Kingdom for instance, credit monies emanating from private banks constitute 97% of circulating currency (Shakespeare 2002). This paper reviews elements of the classically-derived mainstream view, and its critics, and evaluates the claims of monetary reformers. Stephen Zarlenga, for instance, in his historical study of the political economy of money, suggests that the (unnecessary) acceptance of the private creation of money precludes the possibility of a state-sanctioned ‘money of account’ (Zarlenga 2002).This cartalist notion of state-money, (perhaps mistakenly) citing Aristotelian origin, is seen as indispensable for effective monetary reform today. It is proposed that money is issued and established by law that is deliberately intended to exceed its intrinsic value, when functioning as a measure of commodities. Yet, this paper argues that these reformist ideas have been unfair in their historical treatment of Marx, Smith and Keynes, who had more sophisticated ideas on monetary matters than is credited. Notwithstanding, Zarlenga’s (et al) work serves to illuminate an interesting arena for future research.
KEY WORDS: Zarlenga, Monetary Reform, Monetary Theory, Smith, Keynes, Marx.
INTRODUCTION: It is generally recognised that the private control of monies, in the modern era, has been increasing at the expense of the state. Several observers have noted, for instance, developments such as capital flow liberalisation, financial market deregulation and private credit creation (Strange; Amin; Cohen 1998; Strange). Still others point to political forces facilitating this transformation of global finance (Helleiner; Cerny 1998; Germain 1998). Within the globalisation discourse there has also been a debate about this erosion of state sovereignty, deriving from the suggestion that inter alia, state capacity to pursue independent fiscal and monetary policies has been diminished. The control of money is clearly a source of social power and, as accumulation diverts monies towards financial elites (from interest, fees and charges), the subsequent plutocracy may be to the detriment of the productive economy and society. Antecedents of these notions can be found in Lenin, Luxemburg and Hilferding, who noted the role of investment banking with the growth of the joint-stock firm and, in more recent times by several academics and monetary reformers (Hilferding 1910; Luxemburg 1971; Kennedy 1995; Lenin 1996; Shakespeare 2002; El Diwany 2003). The argument put forward in Zarlenga’s book is that this financial plutocracy has consciously obfuscated the (significant) research consideration of private money-issue, whether this manifests in the absence of historical records from the ancient world or from the deliberate politicisation of the economics discipline in the present. Zarlenga argues instead for the state reclamation of the ‘money of account’ issue capability, that also consciously chooses to refrain from the use of a commodity (with intrinsic value) since this is fraught with the continual misdirection of resources and (usually) the lack of state control. Zarlenga and other monetary reformers then argue for state-issued ‘interest-free’ money, for the purposes of public works or the spread of capital ownership, or even the comprehensive establishment of debt-free fiat monies (Kelso 1958; Kennedy 1995; Shakespeare 2002; El Diwany 2003).
THE MAINSTREAM VIEW :Monetary theorists, as Niebyl noted in his study of the classical period, have traditionally tended to explain the role of money in the productive economy by addressing particular conditions, pertaining to a defined historical context. Subsequently abstract notions or theories of money, which can be universally applied, are rare and subject to inconsistencies (Niebyl 1946). Notwithstanding, in the modern era a general Ricardian notion of money can be identified, at least in a crude form, which has exerted a major strategic influence on thinking in policy circles for two centuries, even though it is clear that not all classicists (and others since) adhered to these ideas. This mainstream approach presents a capitalist economic system that possesses a harmonious equilibrium, which can only be achieved if the authorities avoid misguided intervention and any market rigidities are removed. It is claimed that the unfettered operation of markets leads to an efficient allocation of resources and economic development. Furthermore, it is assumed that the ‘trickle-down’ theory ensures that the ‘spoils’ reach the marginalised. It is concluded that universal capitalism per se is the ‘natural’ historic social order that cannot be improved upon. Economic history is therefore complete.
In this context money and credit are seen as secondary – imperative for the functioning of capitalism but neutral, serving merely as a means of exchange, and not able to instigate or radically alter (at least in the long-term) the operation of economic activity or any real economic variables.i
Blaug notes that there is also the notion of ‘superneutrality’, adhered to by the monetarist school, that claims the neutrality of money even under specific conditions of an increasing rate of growth of money supply – something that Hume had not agreed with Blaug, M. (1995). Why is the Quantity Theory of Money the Oldest Surviving Theory in Economics? …”… read whole article here – GM/PDF
the-maierfiles.com 2008 Debt free money more than a good reason for hidden wars
“If you’re interested in the dark, hidden backstories, reading Stephen Zarlenga’s book – The Lost Science of Money: The Mythology of Money, The Story of Power … is a perfect good start! And for those who can read between the lines also Dr. Hjalmar Schacht, his 1967 book The Magic of Money is a real eye-opener…”…
archive.sustecweb.co.uk 2005 William Krehm – Review – Stephen Zarlenga, The Lost Science of Money
“This is a remarkable book on two counts: the author has staked out a subject in so all-embracing a way that, to my best knowledge, has no precedent. The “hidden science of money,” in its misty origins and seductive ambiguities, has always been a happy hunting ground for the devil’s minions. Zarlenga draws a bead on the entire process from its sacral beginnings to the latest financial scandals. With careful documentation he explodes the myth of the founding fathers of economic theory, who, peeping beneath Adam and Eve’s fig-leaves, saw in them destined traders frustrated by barter…”…
cooperative-individualism.org 2003 Review of the Book: The Lost Science of Money by Stephen Zarlenga – by Edward J. Dodson
…”…The bottom line for Stephen Zarlinga is ending privilege, an objective with which I am in full agreement: “A society such as the U.S., depending on private bank credits in place of government-created money, is operating in moral quicksand. It has established a special privilege of power for those private parties issuing the credit – the bankers. …” The problem is that the commercial banks are not beneficiaries of the current system. Even the Federal Reserve Banks have restrictions imposed by law of their distribution of profits to member bank shareholders. The primary beneficiary is the United State government, which, as I have explained earlier, along enjoys the power to self-create credit. Neither government nor privately-owned banks ought to have this destructive power. Purchases up to some relatively low value level can be adequately handled by fiat coins of nominal intrinsic value without risking the integrity of the system. However, paper currency must be denominated in quantities of specific goods and services over which the issuing deposit bank has control (and its delivery thereof upon demand is appropriately guaranteed by governmental regulation, independent auditing and required insurance coverage). This debate is far from over, of course. Although Stephen Zarlenga is more comfortable with government in full control of money issuance and circulation than I am, the introduction of a long list of other reforms might persuade me that government had reached a point of sufficient public trust to trust government to introduce and maintain sound money.”
cooperative-individualism.org/pdf 2003 The Lost Science of Money Review by Todd Altman
Stephen Zarlenga’s groundbreaking book The Lost Science of Money explodes various myths surrounding both the history and nature of money, and proposes what I believe is a long-overdue reform of our monetary system. Zarlenga sets the stage early on when he writes: “The thesis of this book is that a main arena of human struggle is over the monetary control of societies and that this control has been and is now exercised through obscure theories about the nature of money. If it had to be summarized in one sentence, it is that by misdefining the nature of money, special interests have often been able to assume the control of society’s monetary system, and in turn, the society itself Describing how this has been
done historically will make these concepts vital, and hopefully sweep aside the mystification in which money has been purposely shrouded. Guidelines for monetary reform are then presented, to end the private control of monetary systems and instead assert the public societal role to control money
under the rule of law, rather than the whims of men. With this thesis and purpose in mind, Zailenga takes the reader on an exhaustively researched historical journey, beginning with an examination of how money functioned in ancient societies, and progressing through time to the present day. Among the key findings of Zarlenga’s analysis are: …”…
Zerlanga articles /money reform
AmRevPolEcon/GG-PDF 2016 MOVING MONETARY REFORM TO THE “FRONT BURNER” by Stephen Zarlenga
Abstract: Entering the 3rd Millennium we face both great danger and opportunity. Unheard of wealth concentrates into very few, largely undeserving hands. Even in America, the richest country on Earth, people work harder and produce more than ever, yet increasingly fall into debt and bankruptcy, while predators plunder society by merely shuffling papers. Major corporations concentrate on profiting by misusing the money system, rather than with production. Such corruption is not sustainable or justifiable. The American Monetary Institute holds that the structure of the money system itself is at the root of
the corruption and we promote reform to bring our monetary system into harmony with the nature of money. There is a growing awareness of the urgent need for reform away from privately issued money toward more public control of money systems; away from a religious adherence to questionable economic theory, toward producing desirable human results. There’s a growing recognition of the need for better methodology – drawing conclusions in part from experience and historical cases rather than isolated theory. Our task: to make monetary reform a primary goal of 21st century justice movements. It may not be easy, but think how fortunate we are, in a sense, to face such a worthy challenge.
KEYWORDS: Monetary history theory and reform; Critique of economic method and Austrian economics;
Monetary case studies; Monetary justice; Economic justice; methodology; mproving economic and monetary thinking methodology
Abstract: This paper discusses the great importance of the monetary question, and briefly examines some of the dominant erroneous concepts of money and their effects upon societies. It also points and links to the great progress currently being made by researchers in this field, so readers can examine them more fully. It presents very brief summaries of what some of the important new papers do. It also aims at helping instructors in outlining a reading curriculum to assist in a long overdue understanding of money power. Finally, the paper presents a money and banking system proposal which has evolved since the Great Depression of the 1930s, and is now ready for implementation and has even been introduced as potential legislation into the United States Congress.
positivemoney.org WHY MONETARY REFORM IS NOT EASY TO BRING HOME TO ECONOMISTS
Why do most mainstream economists not recognise the relevance of monetary reform? Prof Joseph Huber discusses this in the new passages of his paper entitled “Sovereign Money in Critical Context”:
wikipedia/S.Zarlenga …”Criticism: Austrian economists fundamentally disagree with nationalizations of any sectors of the economy and, thus, oppose Zarlenga’s proposals to “nationalize central banks,” such as the Fed in the U.S., which is presumed to be a private enterprise.
Although Zarlenga’s history of fiat money was in line with heterodox analysis and especially Post-Keynesian, his notions of “sovereign money” aka “debt-free money,” and the opposition to fractional banking have been criticized severely, especially the “refusal” to acknowledge that “all money is a liability of the issuing state.”
Critics state that “debt-free money” advocates are “confused on the accounting, vague on the terminology, and rarely provide details on their proposal” and point out that the suggestion to have, for example in the United States, the central bank, instead of providing the government with a “loan”, simply “transfer[ing]” money to the government’s account with the Fed, would not make money “debt-free” because the Fed’s liabilities grow: first, in the form of Treasury deposits, and, then, as the Treasury draws down those deposits, in the form of bank reserves. And they note that the Fed would continue to pay interest on reserves in order to control the interest rate.In the critics’ words, “debt-free money” can never be either debt-free or interest-freeand the positions advocated by Zarlenga and supporters of “sovereign money” would only be “logically consistent” with zero interest-rates in the economy “forever.”…”…
Zarlenga’s book – complete free pdf