# 13 If banks are no longer allowed to create money, where will banks get enough money to make loans and fill clients' needs for money under the Green US Money plan?

The Green US Money plan converts through an accounting procedure, the existing credit the banks have created through loans (about $6 to 7 trillion, roughly the existing “money” supply) into US money, no longer bank credit. That process will indebt the banks to the government for the amount converted over and above their capital. At present when bank loans are repaid to the banks by their customers, those credits/debts go out of circulation/out of existence and the credit money supply contracts as loans are repaid, until they make new loans. But under the American Monetary Act, since it’s now money, those monies will not go out of circulation the way the credits did. They are repaid to the government in satisfaction of the debt the banks incurred in converting them from credit to money. That goes into a pool which can be used by Congress or it can even be re-lent to the banks at an adjusted interest rate. Note: this action de-leverages the banks, but does not reduce the money supply.

Probably the most important source of funds for bank lending will be the continuing government expenditures, over and above tax receipts, such as social security and other payments by government on the items in the Green US Money plan. Also the engineers tell us that $2.2 trillion is now necessary to make our infrastructure safe over the next 5 years. That’s $440 billion new money per year. Also the health care and education provisions, and grants to states in can be introduced as new money. ALL these will eventually be deposited into various types of bank accounts where provisions of the plan will allow this money to be lent or invested. The banks will be lending and placing this money that has been deposited with them; not lending credit they create, masquerading as money.

Instead of being rolled over as at present, new US monies will be paid to the bondholders as they become due. Those people/institutions will be looking for places to invest that money. One place would be in bank stock, which is a source of lending funds for banks. Of the $5 to 7 trillion in US bonds and notes privately held, about 3.5 trillion is due within 1 to 5 years; .72 trillion is due in 5 to 10 years; .35 trillion is due in 10 to 20 years. All these amounts will represent newly created US money and will eventually find their way to becoming new lend-able or investable  bank deposits and even investments in banks.

(Editor’s note: this monetary reform plan essentially takes the Banking industry out as the key player in the economy.  It also wipes out the Government Bond industry.  This is the reason Congress will never approve it.  It may only come about after, and as a reaction to, a financial catastrophe such as a default on the debt.  The Fire Department will not show up until there is a five alarm fire!)