http://www.infowars.com/the-after-the-fed-solutions-debate-begins-greenbackers-vs-goldbugs/
It is true that gold has been valued in society for thousands of years and it will likely continue to maintain its terrific investment value for the foreseeable future. Gold clearly has a physical value derived from the incredible energy it requires to mine and refine it. But gold, as a limited resource, is interest bearing and can be hoarded by those with the wherewithal to do so. This would seem to suggest that gold could then be manipulated by the few who control vast sums of it. And that sounds a lot like the economic tyranny we face today with the private Fed.
North attacks Greenbackers because they “are opposed to central banking, unless the central bank is 100% owned and controlled by Congress.” As if to say, how dare the people demand ownership of their own currency. It shows a blinding distrust for Constitutional government and obvious preference for private banking interests.
[Continued...]
It is true that gold has been valued in society for thousands of years and it will likely continue to maintain its terrific investment value for the foreseeable future. Gold clearly has a physical value derived from the incredible energy it requires to mine and refine it. But gold, as a limited resource, is interest bearing and can be hoarded by those with the wherewithal to do so. This would seem to suggest that gold could then be manipulated by the few who control vast sums of it. And that sounds a lot like the economic tyranny we face today with the private Fed.
North attacks Greenbackers because they “are opposed to central banking, unless the central bank is 100% owned and controlled by Congress.” As if to say, how dare the people demand ownership of their own currency. It shows a blinding distrust for Constitutional government and obvious preference for private banking interests.
[Continued...]
Toward the end of The Money Masters (released in 1996), Bill Still makes the following prophetic warning:
- ''Our country needs a solid group who really understand how our money is manipulated and what the solutions really are, because if a depression comes there will be those who call themselves conservatives who will come forward advancing solutions framed by the international bankers.
"Beware of calls to return to a gold standard.
"Why?
"Simple. Because never before has so much gold been so concentrated outside of American hands, and never before has so much gold been in the hands of international governmental bodies such as the World Bank and International Monetary Fund.
"A gold-backed currency usually brings despair to a nation, and to return to it would certainly be a false solution in our case. Remember: we had a gold-backed currency in 1929 and during the first four years of the Great Depression.
"Likewise, beware of any plans advanced for a regional or world currency. This is the international bankers' Trojan Horse.''
Keep the above in mind as you read the following:
--------------------------------------------
http://www.marketwatch.com/story/world-bank-chief-calls-for-new-gold-standard-2010-11-07
World Bank chief calls for new gold standard
By Chris Oliver
MarketWatch
Nov. 7, 2010
HONG KONG (MarketWatch) –- The president of the World Bank said in a newspaper editorial Monday that the Group of 20 leading economies should consider adopting a global reserve currency based on gold as part of structural reforms to the world’s foreign-exchange regime.
World Bank chief Robert Zoellick said in an article the Financial Times that leading economies should consider “employing gold as an international reference point of market expectations about inflation, deflation and future currency values.”
Zoellick made the proposal as part of reforms to be considered at this week’s G-20 meeting in Seoul.
[Continued...]
--------------------------------------------
I've said it before and I'll say it again: with "opponents" like the Austrian School, the international bankers don't need any allies!
_____________
If I had the power, I would simultaneously
* put all derivatives-infected mega-banks through Chapter 11 bankruptcy and, in the reorganization proceedings, legally void all of their derivatives contracts;
* liquidate all of the ill-gotten assets of criminal scam artists such as Henry Paulson and Bernard Madoff, and use the resultant proceeds to help replenish whatever retirement funds they raided;
* put all derivatives-infected mega-banks through Chapter 11 bankruptcy and, in the reorganization proceedings, legally void all of their derivatives contracts;
* liquidate all of the ill-gotten assets of criminal scam artists such as Henry Paulson and Bernard Madoff, and use the resultant proceeds to help replenish whatever retirement funds they raided;
http://www.prisonplanet.com/derivatives-the-real-reason-bernanke-funnels-trillions-into-wall-street-banks.html
Derivatives: The Real Reason Bernanke Funnels Trillions Into Wall Street Banks
Seeking Alpha
Feb 9, 2011
We’ve been over the numerous BS excuses that US Dollar destroyer extraordinaire Ben Bernanke has made for QE enough times that today I’d rather simply focus on the REAL reason he continues to funnel TRILLIONS of Dollars into the Wall Street Banks.
I’ve written this analysis before. But given the enormity of what it entails, it’s worth repeating. The following paragraphs are the REAL reason Bernanke does what he does no matter what any other media outlet, book, investment expert, or guru tell you.
Bernanke is printing money and funneling it into the Wall Street banks for one reason and one reason only. That reason is: DERIVATIVES.
According to the Office of the Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activities for the Second Quarter 2010 (most recent), the notional value of derivatives held by U.S. commercial banks is around $223.4 TRILLION.
Five banks account for 95% of this. Can you guess which five?
[Continued...]
___________________-
At the risk of sounding off here. The main reason for interest at all is because 8 out of 10 businesses fail within 2 years. You've got it backwards: unpayable interest debt is one of the primary reasons why so many businsses fail in the first place. So you're confusing cause and effect. Quote When the 8 do all that money is still in the economy and is not coming back to the banks directly. That doesn't change (a) the fact that bankrupties have a deflationary impact on our debt-based money supply since they reduce in value the collateral-backing of that money supply; (b) the fact that when the principal of a bank loan is repaid, the money initially created by that loan is not "still in the economy," but in fact vanishes back into the nothing out of which the bank created it; nor (c) the fact that the money needed to pay the usurious interest on all these money supply-expanding "loans" is never created to begin with, which means there's always a built-in shortage of money. You can try to explain it away all you want, the fact remains that it's a musical chairs system. Quote Interest keeps down inflation when the other 8 businesses fail. You've got it backwards again: unpayable interest debt is one of the primary causes of inflation, because it's only by raising prices that indebted business owners are able to "capture" -- through the process and production-and-exchange -- the necessary portion of other people's loan principal to pay the interest they owe. As I explained earlier in this thread, what keeps cost-push inflation from spiraling out of control is * the fact that money vanishes from the money supply whenever the principal of a bank loan is repaid; and * the deflationary impact that mortage loan defaults have on the money supply, due to the fact that pledged collateral usually sells for much less than what the bankrupted homeowner or business owner owed on it, and how this in turn forces the bank to offset the unpaid principal dollar for dollar from its capital assets. The more this happens nationwide, the less banks as a whole can lend. The less banks can lend, the more the gap between (a) the overall indebtedness of the economy (principal-plus-interest) and (b) the amount of money there is in circulation to pay it off increases (since interest debt continues to increase at a compounding rate regardless of whether the money supply increases along with it). And as that gap increases, more and more people are consequently forced into bankruptcy, thus creating a vicious, self-perpetuating cycle of bankruptcies, increased money shortages, followed by still further bankruptcies. | ||||
"For the first years of [Ludwig von] Mises’s life in the United States...he was almost totally dependent on annual research grants from the Rockefeller Foundation.” -- Richard M. Ebeling | ||||
Logged ____________
"Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests and the toilers everywhere, we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold." -- William Jennings Bryan
"Ron Paul has been the leading champion of sound money in the Congress. Here he explains why sound money means a new gold standard." -- http://mises.org/resources/3150
In 1929 the M2 money supply was approximately $46.6 billion; four years later it was roughly $32.2 billion. This 31% decrease was all it took to bring on a depression so severe and so devastating that it was called the "Great Depression."
Thus, when Austrian Schoolers insist on instituting a new gold standard under the euphemistic guise of "sound money," we would be well advised to consider what effect this would have on the M2 money supply, and hence on the economy -- and hence on our very lives.
Let's assume that a 100% reserve gold-based money system is instituted (since that's what Austrian School icon Murray Rothbard advocated); and -- since gold standard apologists are fond of waxing nostalgic about pre-1913 America (particularly the Gilded Age) -- let's also assume that, in accordance with the Gold Standard Act of 1900, each paper dollar is made "redeemable" in 23.22 grains of gold.
To determine what effect this will have on the M2 money supply -- which is $8.9137 trillion at present -- let's further assume that the U.S. has all the gold that's ever been mined (even though it doesn't) -- 165,000 metric tonnes, or 2.546336 trillion grains, according to the World Gold Council. If we divide that figure by 23.22 grains, we have a maximum M2 money supply of $109.66 billion.
That's a minimum 98.8% decrease!
This would make the 1/3 money supply contraction that occurred between 1929-1933 -- and the magnitude of the resultant depression -- both look miniscule by comparison. The effect of such a severe contraction would be beyond devastating -- it would be GENOCIDAL!
Realizing this, what if we instead made each paper dollar redeemable in merely two grains of gold? The result would be a maximum money supply of $1.273168 trillion, and hence a M2 money supply contraction of at least 85.7%, which, although not quite as bad as the previous figure (98.8%), is still far worse than the contraction that caused the Great Depression.
And if all this wasn't bad enough, there's also the issue of how the current trade deficit would (under the system in question) cause whatever gold we had to be quickly drained from our economy, thereby contracting the money supply even further.
As Byron Dale explains it here:
----------------------------
“Ok, so now we get that, which makes the total money supply for the United States roughly $1.6 trillion. Ok, if the United States has a trade deficit, like we do right now, of $40.4 billion per month (and it goes up and down a little), it would only take 3.29 years for the total money supply -- or all the gold -- to leave the country just to pay for the trade deficit. And they’re not bringing that money back -- or they’re not buying things from us -- or we wouldn’t have that trade deficit. They’re bringing this stuff over in big ships, and then the ships are going back empty. So the money flows over and doesn’t comes back, that’s why you have a trade deficit. Ok, so now, if we just went to that, with all the gold in the world, in a little over 3 1/4 years we wouldn’t have any gold in the country left -- and no money.
“Now what are we going to do?
“Now, if you borrow the gold back at interest, so you can have it back in your country, you’ve turned the whole thing into a debt money system again."
[Continued...]
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This is why deflation-worshipping Austrian Schoolers never want to talk about specifics. They figure that, if they simply parrot the euphemism "sound money" over and over again, everyone will just blindly assume that it's a good idea, and consequently refrain from determining for themselves what the actual effect of such a system would be.
Conclusion? Although Ron Paul is by far the most honorable politician in Washington, and although he's right on many issues, he is (with all due respect) sadly wrong on the question of what we should replace our current debt-based money system with.
This is why the "end the Fed" mantra is so misleading. It causes people to falsely assume that, if we simply "end" the Federal Reserve System, a much better system will magically and automatically take its place. Yet as we now see, that's not necessarily the case. Not by a long shot.
The solution? Instead of merely "ending" the Fed, we must replace it with the debt-free money system called for on page one of this thread -- a system that avoids both currency-destroying, compound interest-driven hyperinflation AND economy-destroying deflation.
Anything short of this will prove to be, at best, the equivalent of rearranging deck chairs on the Titanic, and, at worst, the equivalent of burning down the house to roast the pig.
Must we find that out the hard way?
___________________
There are quite a number of important political issues that are virtually screaming out for true reform, but if I had to pick the two most important, they would be (a) election reform, and (b) the subject of this thread -- monetary reform.
If I had the power, I would simultaneously
* put all derivatives-infected mega-banks through Chapter 11 bankruptcy and, in the reorganization proceedings, legally void all of their derivatives contracts;
* liquidate all of the ill-gotten assets of criminal scam artists such as Henry Paulson and Bernard Madoff, and use the resultant proceeds to help replenish whatever retirement funds they raided;
* replace our current debt-based money system with a debt-free "Greenback" money system, whereby all new money -- instead of being loaned into circulation at interest -- is spent into circulation at no interest to fund both (a) the production and repair of public goods everyone can see and benefit from (e.g., roads and bridges) and (b) a "National Dividend" -- all at a rate pegged by law to the general price level; and
* institute a new round of international agreements modeled on the Bretton Woods Accords, with an aim towards replacing the current “floating” exchange rates for national currencies with a fixed rate that, as such, is pegged to the value of either an agreed-upon standardized price index or an agreed-upon “basket” of diverse, widely available, everyday commodities (more on this here).
Now, since derivatives are just glorified gambling bets, and since the derivatives bubble dwarfs not only the most liberal estimate of the U.S. money suppply, but the annual productive output of the entire planet, I think it's important to stress that the monetary issue is actually composed of two logically distinct sub-issues: (a) derivatives, and (b) fractional reserve banking.
In my next two posts I'll address each of those sub-issues in turn.
-geolibertarian
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