What should the Federal reserve do if the unemployment rate is getting high?

The usual: Dump money into the system and lower interest rates!

Drinking salt water might seem to quench the parched gullet, but the mariner knows it%26#039;s a fool%26#039;s drink, ending in death from thirst!

What should the Federal reserve do if the unemployment rate is getting high?

Increase the money supply. In theory, some theory suggest not, but, whatever, increasing the money supply increases the demand for normal goods, and thus, results in more hiring. More hiring means lower unemployment.

What should the Federal reserve do if the unemployment rate is getting high? loan

Start hiring more people?|||A Method to Address Economic Recession,

Remove Poverty, Terrorism, Improve Law and Order,

Reduce Drug Abuse, Inflation

And Taxes in an Interest Based Economy.

By Dr. Niaz Ahmed Khan

?Bedar Pakistan, www.bedarpakistan.com.pk

Abstract

I have developed a new financial instrument which will be much more valuable than the bonds or the treasury bills government sells in the open market to raise much needed funds to run the country .These are all interest based instruments and can only be used by institutions. The instrument I am proposing is without interest and will be used by every body to purchased goods and services in the government and private sector resulting in up to 60% discounts .This is why these will be massively bought up front in massive amounts in the shortest period of time of one month to run the country for at a year and much more by the end of the year.

Introduction

The world is facing many challenges with no solution in sight.

The main cause of all these ills is the POVERTY.

1. Issue bonds which can be used by everybody rich or poor and and are not debt TO THE STATE so there is no question of interest.

How: I take the example of USA which is under the threat of great recession.

USA borrows money by selling treasury bills and the interest based bonds. The suggestion is to sell these bonds on non interest basis

EXAMPLE: One dollar buys 5 bonds on the condition that the amount should be $100000 or multiple of it. Fewer amounts will have rate of four and three. This discount period is only for one month at the start of the implementation of this system. In the second month the rate will be 4 in the next month. The rate of 3 will apply to subsequent months for the same amount

WHERE THESE BONDS WILL BE USED? 1. All state controlled services and commodities. EXAMPLE: A bill of (any service or Commodity) $100 can be paid with 200 bonds and there will be no exception to this rule .A NET DISCOUNT OF 60 %.

A simple formula will apply: Total bill in dollars x2 is the number of bonds surrendered. Price in bonds will not be less than the cost price but without the direct indirect taxes and the duties which are added to the present to make it very expensive.

It will attract at least 150 million people to take this opportunity as early as possible. And if one is sure of making 100% profit within 30 days there will be many more that will help themselves.

RESULT - Government gets at least $15 trillion within a very short period of time of few days and much more in the rest of the year .THIS IS NOT A LONE AS STATE HAS SOLD BONDS( Commodity) WHICH IS AN ALTERNATE CURRENCY AND DO NOT CARRY ANY INTEREST. One immediately thinks that who will bear the loss and this big loss to the state is not more than total year budget of $12 trillion which it collects in one year with all the taxes and the duties but the bond price is simply a cost price without any kind of tax or duty

WHO WILL SELL THESE BONDS? State will float tenders to will select a private agency (USMF) UNITED STATES MONITORY FUND JUST A NAME GIVEN TO THIS ORGANIZATION with the lowest bid WHERE AS second third and forth bidders will be auditors of USMF . This agency will employ at least 20 million unemployed on 10% commission basis and without any salary. These agents will have to pay $500 as an annual fee to USMF in order to build the infrastructure for the sale of bonds. Agents quota Will be $300000 per month or they will be allowed to sell their whole year quota in one day or in a month, This will only materialize if the agent shares his commission with the would be buyer. Greater the share of commission quicker the sale. This investor or a buyer will sell these bonds at the same rate of 5 per dollar and his bonds will sell like hot cakes every day as there is no condition of the amount of money to purchase any amount of bonds. In this way even the poorest person will get the same rate as the investor except for the commission which he takes from the agent who makes almost 100% profit by only investing $100000 .He will sell these bonds repeatedly and will keep at least 6% profit every day till the demand lasts. NOW THINK HOW MUCH STATE HAS ACCUMULATED Much more than few years budget in matter of only one month.

FLOOD GATES OF MONEY AND TURNING POINT.

This is only the first flood gate of money and there are seven of these yet to open so at the end of 30 days or even much earlier the government declares tax free country for ever. With the removal of all kinds of direct and indirect taxes and duties the price of oil electricity telephone and of all types on other items under government control is almost 60% less than before as these are being purchased by bonds (which is the cost price) and not with dollars. The production cost of every thing has come down tremendously.

SECOND OPTION

State also offers one million duty free if one deposits $100000 non refundable .This brings out all the black and spare money which state WAS NOT ABLE TO GET BEFORE AND AS THERE IS NO TAX AND HENCE NO TAX EVASION SO ALL THE MONEY IS WHITE AS IT IS BEING GIVEN TO GOVERNMENT .

This was the second flood gate of money which is even bigger than the first one and the exact amount is impossible to asses unless the system is implemented.

In order to provide cheep bonds through out the year government offers three types of registration fees.

1. Pay $100000 in the start of the year and get the rate of 5 for the rest of the year and this will suit the professional鈥檚 and salaried person鈥?/p>

2. pay $10000 yearly and get 20000 new bonds at the rate 5 every month but one has to collect 10000 bonds( equal to fee) to get this cheap rate through out the year. Higher the registration fee more the entitlement of cheep bonds. This registration will suit any small time business who will sell his product cheaper provided 15% bonds are also paid with rest of cash money by the customer SEE THE NEXT REGISTRATION FOR FARTHER EXPLANATION 15 %BONDS .This will apply to all goods in private sector and does not apply to the government sector. This is a big incentive to accept bonds in the private sector as the business accepting more bonds will have more business than the trader not accepting the bonds so the bonds market will multiply and there will be a constant need for bonds in the open market.

3. Third type of registration will be of $100000 which will entitle the business to sell its products through USMF. The value of merchandise sold through this source will help the business to get the 5 bond per dollar rate equal to the amount sold or opt for the duty free option equal the amount sold. But with one condition of surrendering 15% bonds at each sale in dollars

EXAMPLE; MERCHANDISED SOLD THROUGH USMF $1000. BONDS SURRENDERED 150 ARE DEPOSITED IN STATE ACCOUNT TO BE SOLD AGAIN SO THE CYCLE OF BONDS IS ESTABLISHED .A receipt of bonds surrendered is obtained from USMF for evidence of sale of merchandise and this receipt will entitle the traders to get cheep bonds or the duty free option through out the year BUT THE SAME RECEIPT CAN BE USED ONCE ONLY.

WHAT IS THE BENEFIT TO BUSINESS .1? CHEEP BONDS THROUGH OUT THE YEAR

2 .DUTY FREE OPTION WILL HELP INDUSTRY.

3. The quota which can be sold is ten times the amount of Registration but not more unless the registration fee is increased. Now all the business will opt for this registration in order to reduce the cost of production. These 15% bonds the business will get back through a chain of dealers sub dealers and ultimately the customer will pay this bond portion as he will get the end product very cheep because of tremendous cut in the cost of production by the factors already mentioned. This will replace the GST or the VAT or the two price system seen all over USA. Almost every body will sell their product through this channel as it will be much costlier to sell the product out side this system as cheap bonds are not available otherwise.

According to rough estimate at least $1000 trillion transactions are carried out every day in US and at each transaction 15% bonds are being surrendered, the price 15 bonds is $3 .So 3% of 1000 trillion will be $30 trillion which goes into government account without any compulsion every day (UNBELIEVABLE) this is the third flood gate of money AND IS CALLED THE GOLD MINE

4 Now the state is sitting in the driving seat and all the money in banks of private sector have transferred into government account and banks are no more the lenders but are borrower from the state which is the only source left and will invest in business with sound feasibility study checked by the state bank. The state will offer to invest 80% and the bank will bring investor who is willing to pool rest 20%. This 20 % will be deposited in the bank and the bank will oversee the running the business, running expenses will be given to the investor from its share of 20%. There will be no collateral and share of the profit and loss will be shared in the ratio of 60 and 40. The bank will share the 60% with the investor and 40 % will go to state funds and the state will provide every thing under its control below cost which will farther reduce the cost of production and at the same time will MARKEDLY improve the profit margins OF ALL THE BUSINESSES. No major business can refuse this offer. Any bank showing repeated loss will go out of business as there will be no more funds available from the government source and all other interest based sources are not available any more. Interest based banking is gone for ever or it may be at a very small scale and the state will not offer loans on interest as these are not any more profitable and risk free as there is no collateral . The amount of profit government will share will be unimaginable and this is the 5Th flood gate opened

THEN WHY NOT INVEST ON PROFIT AND LOSS SHARING BAS