View Poll Results: Should the people be free to transact unimpeded in any currency they choose?

Voters
69. You may not vote on this poll
  • Yes. The people should be free to transact unimpeded in any currency they choose.

    67 97.10%
  • No. The government should force the people by law or taxation to transact only in govnmnt currency.

    2 2.90%
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Thread: Honest Money Constitutional Amendment

  1. #211
    Quote Originally Posted by FreedomFanatic View Post
    Yeah, just go back to gold or silver, or a dollar backed by one or the other or both (I voted yes.)
    Thanks!



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  3. #212
    Why the Greenbackers Are Wrong (AERC 2013)

    by Tom Woods

    One of Ron Paul’s great accomplishments is that the Federal Reserve faces more opposition today than ever before. Readers of this site will be familiar with the arguments: the Fed enjoys special government privileges; its interference with market interest rates gives rise to the boom-bust business cycle; it has undermined the value of the dollar; it creates moral hazard, since market participants know the money producer can bail them out; and it is unnecessary to and at odds with a free-market economy.

    Unfortunately, not all Fed critics, even among Ron Paul supporters, approach the problem in this way. A subset of the end-the-Fed crowd opposes the Fed for peripheral or entirely wrongheaded reasons. For this group, the Fed is not inflating enough. (I have been told by one critic that our problem cannot be that too much money is being created, since he doesn’t know anyone who has too many Federal Reserve Notes.) Their other main complaints are (1) that the Fed is “privately owned” (the Fed’s problem evidently being that it isn’t socialistic enough), (2) that fiat money is just fine as long as it is issued by the people’s trusty representatives instead of by the Fed, and (3) that under the present system we are burdened with what they call “debt-based money”; their key monetary reform, in turn, involves moving to “debt-free money.” These critics have been called Greenbackers, a reference to fiat money used during the Civil War. (A fourth claim is that the Austrian School of economics, which Ron Paul promotes, is composed of shills for the banking system and the status quo; I have exploded this claim already – here, here, and here.)

    With so much to cover I don’t intend to get into (1) right now, but it should suffice to note that being created by an act of Congress, having your board’s personnel appointed by the U.S. president, and enjoying government-granted monopoly privileges without which you would be of no significance, are not the typical features of a “private” institution. I’ll address (2) and (3) throughout what follows.

    The point of this discussion is to refute the principal falsehoods that circulate among Greenbackers: (a) that a gold standard (either 100 percent reserve or fractional reserve) or the Federal Reserve’s fiat money system yields an outcome in which outstanding loans cannot all be paid because there is “not enough money” to pay both the principal and the interest; (b) that if the banks are allowed to issue loans at interest they will eventually wind up with all the money; and that the only alternative is “debt-free” fiat paper money issued by government.

    My answers will be as follows: (1) the claim that there is “not enough money” to pay both principal and interest is false, regardless of which of these monetary systems we are considering; and (2) even if “debt-free” money were the solution, the best producer of such money is the free market, not Nancy Pelosi or John McCain.

    To understand what the Greenbackers have in mind with their proposed “debt-free money,” and what they mean by the phrase “money as debt” they use so often, let’s look at the money creation process in the kind of fractional-reserve fiat money system we have. Suppose the Fed engages in one of its “open-market operations” and purchases government securities from one of its primary dealers. The Fed pays for this purchase by writing a check on itself, out of thin air, and handing it to the primary dealer. That primary dealer, in turn, deposits the check into its bank account – at Bank A, let us say.

    Bank A doesn’t just sit on this money. The current system practically compels it to use that money as the basis for credit expansion. So if $10,000 was deposited in the bank, some $9,000 or so will be lent out – to Borrower C. So Borrower C now has $9,000 in purchasing power conjured out of thin air, while Person B can still write checks on his $10,000.

    This is why the Greenbackers speak of “money as debt.” The $9,000 that Bank A created in our example entered the economy in the form of a loan to Person B. In our system the banks are not allowed to print cash, but they can do what from their point of view is the next best thing: create checking deposits out of thin air. Banks issue loans out of thin air by opening up a checking account for the customer, whose balance is created out of nothing, in the amount of the loan.

    The Greenbacker complaint is this: when the fractional-reserve bank creates that $9,000 loan at (for example) ten percent interest, it expects $900 in interest payments at the end of the loan period. But if the bank created only the $9,000 for the loan itself and not the $900 that will eventually be owed in interest, where is that extra $900 supposed to come from?

    At first this may seem like no problem. The borrower just needs to come up with an extra $900 by working more or consuming less. But this is no answer at all, according to the Greenbacker. Since all money enters the system in the form of loans to someone – recall how our fractional-reserve bank increased the money supply, by making a loan out of thin air – this solution merely postpones the problem. The whole system consists of loans for which only the principal was created. And since the banks create only the principal amounts of these loans and not the extra money needed to pay the interest, there just isn’t enough money for everyone to pay off their debts all at once.

    And so the problem with the current system, according to them, is that our money is “debt based,” entering the economy as a debt owed to a bank. They prefer a system in which money is created “debt free” – i.e., printed by the government and spent directly into the economy, rather than lent into existence via loans by the banks.

    In the comments section at my blog I have been told by a critic that even under a 100% gold standard, with no fractional-reserve banking, the charging of interest still involves asking borrowers to do what is literally impossible for them all to do at once, or at the very least will invariably lead to a situation in which the banks wind up with all the money.

    All these claims are categorically false.

    It is not true that “there is not enough money to pay the interest” under a gold standard or a purely free-market money, and it is not even true under the kind of fractional-reserve fiat paper system we have now. It certainly isn’t true that “the banks will wind up with all the money.” There are plenty of reasons to condemn the present banking system, but this isn’t one of them. The Greenbackers are focused on an irrelevancy, rather like criticizing Barack Obama for his taste in men’s suits.

    I want to respond to this claim under both scenarios: (1) a 100% gold standard with no fractional reserves; and (2) our present fractional-reserve, fiat-money system.

    In order to do so, let’s recall what money is and where it comes from.

    Money emerges from the primitive system of barter, in which people exchange goods directly for one another: cheese for paper, shoes for apples. This is an obviously clumsy system, because (among a great many other reasons I trust readers can conjure for themselves) paper suppliers are not necessarily in the market for cheese, and vice versa.

    A money economy, on the other hand, is one in which goods are exchanged indirectly for each other: instead of having to be a hat-wanting basketball owner in the possibly vain search for a basketball-wanting hat owner, the basketball owner instead exchanges his basketball for whatever is functioning as money – gold and silver, for example – and then exchanges the money for the hat he wants.

    People dissatisfied with the awkward and ineffective system of barter perceive that if they can acquire a more widely desired and more marketable good than the one they currently possess, they are more likely to find someone willing to exchange with them. That more marketable good will tend to have certain characteristics: durability, divisibility, and relatively high value per unit weight. And the more that good begins to be used as a common medium of exchange, the more people who have no particular desire for it in and of itself will be eager to acquire it anyway, because they know other people will accept it in exchange for goods. In that way, gold and silver (or whatever the money happens to be) evolve into full-fledged media of exchange, and eventually into money (which is defined as the most widely accepted medium of exchange).

    Money, therefore, emerges spontaneously as a useful commodity on the market. The fact that people desire it for the services it directly provides contributes to its marketability, which leads people to use it in exchange, which in turn makes it still more marketable, because now it can be used both for direct use as well as indirectly as a medium of exchange.

    Note that there is nothing in this process that requires government, its police, or any form of monopoly privilege. The Greenbackers’ preferred system, in which money is created by a monopoly government, is completely foreign and extraneous to the natural evolution of money as we have here described it.

    And make no mistake: money has to emerge the way we have described it. It cannot emerge for the first time as government-issued fiat paper. Whenever we think we’ve encountered an example in history of a pure fiat money being imposed by the state, a closer look always turns up some connection between that money and a pre-existing money, which is either itself a commodity or in turn traceable to one.

    For one thing, pieces of paper with politicians’ faces on them are not saleable goods. They have no use value, and therefore could not have emerged from barter as the most marketable goods in society.

    Second, even if government did try to impose a paper money issued from nothing on the people, it could not be used as a medium of exchange or a tool of economic calculation because no one could know what it was worth. Are three Toms worth one apple or seven fur coats? How could anyone know?

    On the other hand, the money chosen by the market can be used as a medium of exchange and a tool of economic calculation. During the process in which it went from being just another commodity into being the money commodity, it was being offered in barter exchange for all or most other goods. As a result, an array of barter prices in terms of that good came into existence. (For simplicity’s sake, in this essay we’ll imagine gold as the commodity that the market chooses as money.) People can recall the gold-price of clocks, the gold-price of butter, etc., from the period of barter. The money commodity isn’t some arbitrary object to which government coerces the public into assigning value. Ordering people to believe that worthless pieces of paper are valuable is a difficult enough job, but then expecting them to use this mysterious, previously unknown item to facilitate exchanges without any pre-existing prices as a basis for economic calculation is absurd.

    Of course, fiat moneys exist all over the world today, so it seems at first glance as if what I have just argued must be false. Evidently governments have been able to introduce paper money out of nothing.

    This is where Murray Rothbard’s work comes in especially handy. In his classic little book What Has Government Done to Our Money? he builds upon the analysis of Ludwig von Mises and concisely describes the steps by which a commodity chosen by the people through their voluntary market exchanges is transformed into an altogether different monetary system, based on fiat paper.

    The steps are roughly as follows. First, society adopts a commodity money, as described above. (As I noted above, for ease of exposition we’ll choose gold, but it could be whatever commodity the market selects.) Government then monopolizes the production and certification of the gold. Paper notes issued by banks or by governments that can be redeemed in a given weight of gold begin to circulate as a convenient substitute for carrying gold coins. These money certificates are given different names in different countries: dollars, pounds, francs, marks, etc. These national names condition the public to think of the dollar (or the pound or whatever) rather than the gold itself as the money. Thus it is less disorienting when the final step is taken and the government confiscates the gold to which the paper certificates entitle their holders, leaving the people with an unbacked paper money.

    This is how unbacked paper money comes into existence. It begins as a convertible substitute for a commodity like gold, and then the government takes the gold away. It continues to circulate even without the gold backing because people can recall the exchange ratios that existed between the paper money and other goods in the past, so the paper money is not being imposed on them out of nowhere.

    Free-market money, therefore, is commodity money. And commodity money is not “debt-based” money. When a gold miner produces gold and takes that gold to the mint to be transformed into coins, he simply spends the money into the economy. So free-market money does not enter the economy as a loan. It is an example of the “debt-free money” the Greenbackers are supposed to favor. I strongly suspect that many of them have never thought the problem through to quite this extent. If what they favor is “debt-free money,” why do they automatically assume it must be produced by the state? For consistency’s sake, they should support all forms of debt-free money, including money that takes the form of a good voluntarily produced on the market and without any form of monopoly privilege.

    The free-market’s form of “debt-free money” also doesn’t require a government monopoly, or rely on the preposterously naive hope that the government production of “interest-free money” will be carried out without corruption or in a non-arbitrary way. (Any “monetary policy” that interferes with or second-guesses the stock of money that the voluntary array of exchanges known as the free market would produce is arbitrary.)

    But now what of the Greenbacker claim that interest payments, of their very nature, cannot be paid by all members of society simultaneously?

    This is clearly not true of a society in which money production is left to the market. The Greenbacker complaint about interest payments in a fractional-reserve system is that the banks create a loan’s principal out of thin air, and that because they don’t also create the amount of money necessary to pay the interest charges as well, the collective sum of loan payments (principal and interest) cannot be made. Some people, the Greenbackers concede, can pay back their loans with interest, but not everyone.

    But this is not what happens in the situation we have been describing, in which the money is chosen spontaneously and voluntarily by the individuals in society, and in which government plays no role. Money in this truly laissez-faire system is spent into the economy once it is produced, not lent into existence out of thin air, so there is no problem of “debt-based money” yielding a situation in which “there is not enough money to pay the interest.” There is no “debt” created at any point in the process of money production on the free market in the first place. The free market gives us “debt-free money,” but the Greenbackers do not want it.

    Suppose I, a banker, lend you ten ounces of gold, at ten percent interest. Next year you will owe me 11 ounces: ten ounces for the principal, and one ounce for the interest. Where do you earn the money to pay me the interest? Either by abstaining from consumption to that extent and saving up the money, or by earning it through providing goods or services to others. In other words, you earn the money to pay the interest the same way you earn the money to pay for anything else.

    (Even under the classical gold standard, in which gold backed only some of the paper money in circulation, there is still a portion of the money supply – namely, the money substitutes that have gold backing – that were not lent into existence, and which can therefore serve as the source of interest payments.)

    Although the “there isn’t enough money to pay the interest” argument fails, I want to take up a related warning about sound money – a warning I noted at the beginning of this essay – that I read in the comments section of my blog: moneylending at interest by the banks will yield a long-run outcome in which the bankers have all the money.

    The argument runs like this: if banks can lend 1000 ounces of gold today and earn 100 ounces in interest (assuming a 10 percent rate of interest) at the end of the loan period, then in the next period they’ll have a new total of 1100 ounces to lend out, and in turn they can earn 110 in interest on that. Then they’ll have a total of 1210 ounces, and when they lend that out they’ll earn 121 ounces in interest. In the next period they’ll have 1331 (which is 1210 plus the 121 they earned in interest in the previous period) ounces, etc. Eventually, they’ll have everything.

    This is completely wrong, although even if it were right, presumably even bankers need to buy things at one point or another, so the money would be recirculated into the economy in any case. The money commodity itself rarely yields people so much utility that they will hold it at the expense of food, water, clothing, shelter, entertainment, etc. And when it is recirculated, the same money can be used to make interest payments on multiple loans.

    The more important reason that red flags should be going up here is that this warning would apply to any business, not just banking. For example, if Apple sells us great electronic equipment, it earns profits. Those profits allow it to invest in more efficient production processes, which means Apple will be able to produce even more and better computers and other devices next year. If we buy those, Apple will have still more profits, which means they’ll be able to produce still more and better products the year after that, and before you know it, Apple will have all our money.

    So what’s left out of these scenarios? Demand. Consumers do not have an infinite demand for electronic products. If Apple keeps producing more iPods, it will have to sell them at lower and lower prices in order to induce us to buy them. This is economics 101 – the law of demand, derived in turn from the law of marginal utility. The more electronics I buy, the less utility I derive from additional units of such goods (and thus the less eager I am to purchase more). Meanwhile, as my remaining cash balance is depleted by these purchases, the marginal utility of my remaining money increases (and thus the more eager I am to hold on to that money rather than exchange it for still more consumer electronics).

    The same goes for consumer (and producer) loans. The Greenbacker objection assumes that demand for loans is infinite. Like zombies, we’ll continue to demand loans no matter what the interest rate, and banks will always be able to find more people willing to take on more credit. But as we saw above, in order to induce us to absorb a greater supply of Apple electronics, and/or to induce additional buyers to enter the market, the prices of those goods had to fall.

    This principle holds true for credit as well. To induce us to accept an increasing supply of credit, the banks will have no choice, given the law of demand, but to lower the rate of interest. Two consequences follow. As they earn less in interest, they will be less able to afford to pay their customers competitive interest rates on savings accounts and on financial products like CDs. And as those customers turn away from the banking system in search of higher yields outside banking, the banks will have less to lend. These twin pressures place an upper limit on the amount of credit the banks can extend.

    So you can breathe easy. The banks won’t wind up with all the money after all.

    On the free market, the production of money would occur in the same way that the production of any other good takes place, with no money producer being granted any monopoly privilege. The average person doubtless has a difficult time imagining how money could exist without a monopoly producer. Wouldn’t everyone want to go into the money-production business? After all, you get to create money. Why, I’ll just create my own money and spend it! Isn’t that naturally more lucrative than producing other goods?

    First of all, no one can expect to print pieces of paper with his face on them and spend them into circulation. Nobody would accept them, needless to say, and as we have seen, it is impossible for money to be introduced ex nihilo in this way. The only kind of money that can emerge on the free market is one that, at least at one time, had been considered a useful commodity. Paper money can come into existence on the free market and without coercion if it serves as a redemption claim for the commodity money, but irredeemable paper money cannot originate without government threats or violence.

    Again, as we saw previously, the pattern is this: a commodity is freely chosen by market participants to serve as money, for convenience paper receipts fully convertible into that money begin to circulate as money substitutes, and finally the government removes the commodity backing from the paper and only the paper circulates. That is in fact what happened in the United States in 1933.

    So your friend Joe shouldn’t expect in a free market to be able to print up some paper notes with his face on them and be able to exchange them for goods and services. In addition to the logical problems with this that we examined before, he’d also look crazy for even trying such a thing.

    Also, as with every other industry, profit regulates production. The production of money, like the production of all other goods, settles on a normal rate of return, and is not uniquely poised to shower participants in that industry with premium profits. As more firms enter the industry, the rising demand for the factors of production necessary to produce the money puts upward pressure on the prices of those factors. Meanwhile, the increase in money production itself puts downward pressure on the purchasing power of the money produced.

    In other words, these twin pressures of (1) the increasing costliness of money production and (2) the decreasing value of the money thus produced (since the more money that exists, ceteris paribus, the lower its purchasing power) serve to regulate money production in the same way they regulate the production of all other goods in the economy.

    Once the gold is mined, it needs to be converted into coins for general use, and subsequently stamped with some form of reliable certification indicating the weight and fineness of those coins. Private firms perform such certification for a wide variety of goods on the free market. This service is provided for newly coined money by mints.

    Banking services would exist on the free market to the extent that people valued financial intermediation, as well as the various services, such as check-writing and the safekeeping of money, that banks provided.*

    The intermediation of credit consists of borrowing money from savers, pooling those funds, and using those pooled funds to extend loans to borrowers. Banks earn the interest-rate differential that exists between the rates they charge to borrowers and the rates they pay to savers. The pooling of savings and the identification of projects to which those funds can temporarily be directed is an important service in a market economy.

    And as with the production of all other goods and services on the market, credit intermediation is regulated by profit. It cannot be multiplied indefinitely, as a great many Greenbacker commentators appear to believe. In the same way that high profits in any industry attract newcomers to that industry and thereby dissipate those profits, a high interest-rate differential between borrowers and savers will attract more people into credit-intermediation services. These entrants will need to pay higher interest rates to savers in order to acquire additional funds to intermediate to borrowers. Conversely, in order to attract additional borrowers they will need to lower the interest rates charged to those borrowers. These twin pressures – higher rates paid to savers, and lower rates earned from borrowers – dissipate bank profits and place an upper bound on credit intermediation activities. So again, the banks face a natural limit to their activities, and cannot earn all our money.

    So far, we have considered the case of a gold standard or a pure free market in money. But under a non-market system of fiat-money and fractional-reserve banks the Greenbackers’ concerns are still misplaced. There are plenty of reasons to criticize fiat money and fractional-reserve banking, but since the case against them is undercut by false arguments, I want to take apart this particular false argument.

    We know from our earlier analysis that money has to emerge on the market as a useful commodity, and that the state theory of money, whereby money has value only when and because the state declares it to have value, is untenable.

    When Franklin Roosevelt confiscated Americans’ gold in 1933 and gave them paper money in exchange, this money did not enter the system “as debt.” It was a simple act of conversion of specie into paper. (Thanks to J.P. Koning for tracking down that link.) This is how all hard-money systems become fiat ones: the precious metal that backs the currency is taken away, and the people are left only with paper given to them in exchange for their metal. And since that portion of the money stock that consists of the redemption of the people’s specie into paper is not debt-based – the government is giving them the money, not lending it – it becomes a permanent portion of the overall money stock from which interest payments can be drawn. There is, therefore, always a portion of the money stock that is unconnected to any debt, so there is no built-in process even in a fractional-reserve fiat paper system by which debts must be collectively unpayable.

    Under the gold standard as it existed in the United States, the banks issued both kinds of money substitutes in the Misesian typology: money certificates (paper that serves as a receipt for gold on deposit) and fiduciary media (paper that, while physically indistinguishable from money certificates, does not correspond to any gold on deposit; this is what the banks create when they want to increase the money supply beyond just the stock of gold). Only the fiduciary media would qualify as being “debt-based money,” because only the fiduciary media enters the system as new loans. The money substitutes that correspond to gold in the banks’ reserves are not debt-based. They do not enter the economy in the form of a loan. They enter the economy as receipts for gold on deposit with the banks. This portion of the money stock, too, becomes a permanent fund, even after the transition to a fiat money system, from which interest payments can be drawn.

    Remember, once again, that when people pay banks interest on their loans, these interest payments themselves will in large measure be spent into the economy by employees of the bank. The same unit of money can thus be used to pay principal or interest on multiple loans as it circulates again and again. There is no reason that bankers or anyone else would want to earn profits and never spend or invest them, unless someone happens to be a fetishist deriving pleasure from literally rolling in the money itself. This is unusual.

    Far and away the best defenses and descriptions of a pure free market in money are Jörg Guido Hülsmann’s book The Ethics of Money Production and Jeffrey Herbener’s astonishing 2012 congressional testimony before Ron Paul’s monetary policy subcommittee. I strongly urge you to read at least the Herbener testimony. It is beautifully written and its logic practically compels the reader’s assent. (While you’re at it, watch this video in which Professor Herbener explains why he became an Austrian mid-career, even though he stood to gain nothing professionally by doing so.)

    In short, there is no need to replace the Fed with another government creation. There is no good reason to replace the Fed’s monopoly with a more directly exercised government monopoly. All we need for a sound money system are the ordinary laws of commerce and contract.

    Let’s oppose the Fed for the right reasons, and let’s oppose it root and branch: not because it doesn’t create enough money out of thin air (is this really a fundamental critique of the Fed, after all?) but because the causes of freedom, social peace, and economic prosperity are at odds with any coercively imposed monopoly, and because the naive confidence in the American political class that the Greenbacker alternative demands is beneath the dignity of a free people.

    (Thanks to Robert Murphy for his comments on this essay.)

    *There is a tradition within the Austrian School, particularly among Rothbardians, of separating these functions of banks. Banks can act as money warehouses or as credit intermediaries, or as both. These are not the same thing. It is possible to imagine banks that offer one service or the other, as well as to conceive of banks that offer both services but distinguish sharply between them. Checking deposits, for instance, would be available to customers on demand, and so in that case the bank would be operating as a money warehouse, while savings accounts, CDs, etc., would be considered a loan to the bank, with which the bank could engage in intermediation activities.

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  4. #213




    No need to change the constitution.
    Honest money cannot be stopped now.

    'We endorse the idea of voluntarism; self-responsibility: Family, friends, and churches to solve problems, rather than saying that some monolithic government is going to make you take care of yourself and be a better person. It's a preposterous notion: It never worked, it never will. The government can't make you a better person; it can't make you follow good habits.' - Ron Paul 1988

    Awareness is the Root of Liberation Revolution is Action upon Revelation

    'Resistance and Disobedience in Economic Activity is the Most Moral Human Action Possible' - SEK3

    Flectere si nequeo superos, Acheronta movebo.

    ...the familiar ritual of institutional self-absolution...
    ...for protecting them, by mock trial, from punishment...


  5. #214
    ^^ LOL

    Exactly.

    $#@! asking the fiat lords if we can "pretty please" have a competing currency. We're just going to do it without their loving blessing.

  6. #215
    Quote Originally Posted by presence View Post



    No need to change the constitution.
    Honest money cannot be stopped now.
    That is not actually correct. The Constitution allows taxation of gold and silver, which is preventing people from freely using it as money. Constitution must be amended to abolish all forms of taxation (theft) or the country will perish.

    Simple as that.

    Thanks.

  7. #216



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  9. #217

  10. #218

    Every now and then I like to look at government numbers and see what they really mean. I ran into this batch several months ago but hadn’t had time to play with them till now. What I found shocked me so badly that I ran them three times on a calculator and once using exponents. As you’ll see below, these are “Oh my God” numbers.

    Here are facts:

    The average US house sells for about $300,000, and the Federal Reserve is buying $40 Billion dollars’ worth of mortgages per month. (If that sounds like a bunch of numerical gobbledegook to you, please hang on for just a moment.)

    The Fed has been very public about this, by the way. They explain that they are purchasing “mortgage-backed securities” (for your safety, of course), and they surround the discussion in financial-speak. But, in the end, they are buying houses, plain and simple. It’s all there, for those who wish to check.

    Now, here are those numbers:

    $40,000,000,000 per month, divided by $300,000 per house = 133,333 houses per month.

    Let’s round that down to 130,000 to account for the various financing fees and transfer taxes.

    So, Ben Bernanke is buying 130,000 houses per month. Kind of shocking, no?

    That means that since this program began in September of 2012, the Fed has bought 1.43 million houses.

    And, by the way, there is no end in sight.

    In Fairness to Ben



    Now, to be fair, I should clarify that your kids are not really buying all those houses for Ben Bernanke personally – they’re buying them for his bosses – the owners of the Federal Reserve.

    You didn’t think the Fed was owned by the government, did you?

    Oh, no. It is owned by the big banks. I’d tell you exactly who, except that no one knows exactly who. We know that people own shares of the Fed banks (there are twelve of them in all), but the US government is keeping the details secret.

    Think I’m making that up to be flamboyant? Please, check it out for yourself! They admit that “the big banks” own the Fed, but they never say which ones. A list did circulate in the 1930s, but that was the last time.

    How Your Children Are Forced to Pay



    You may have heard this before, but if not, hang on to something:

    The Fed uses dollars to buy bonds from the US Treasury. These dollars, however, do NOT come from their savings. Instead, they come as a check that is “drawn upon itself.” (That quote is from the Fed’s own documents, by the way – a paper called Modern Money Mechanics.)

    In other words, the Fed just makes up the money. They are buying all those houses with money they just make up! (But it’s surrounded with very intricate accounting, of course.)

    But it also means that your children have to pay off the bonds!

    The Fed sells all those bonds to investors – who will, of course, want their money back, with interest.

    So, where will the money for paying off those bonds come from? From taxes, of course.

    When a government sells a bond, they are selling a right to their tax receipts. And that means your kids will be taxed to pay it all off.

    The Fed will keep the houses, of course, but hidden behind paragraphs of confusing financial and accounting terminology.

    Bye Bye Home Ownership



    Home ownership in America is falling off a cliff, as you can see in this graph:


    So, Mr. and Ms. America, get ready to meet your new landlords: Benny and the Banks.

    Paul Rosenberg

    FreemansPerspective.com

  11. #219
    Modified the Brief Explanation section thus:

    Fiat (unbacked) "money" is the single greatest instrument of plunder ever invented by the mind of man.
    Free Competition in currencies kills fiat
    , because fiat cannot exist without aggressive violence of government forced monopoly, which aggressive violence is the definition of evil, and is the opposite of justice and of Free Market.

    Again, fiat (unbacked) currency is nothing but an instrument of plunder of the people by the government, via legalized counterfeiting and inflation; therefore, Free Market, absent government coercion, will reject such a fraudulent currency, for the simple reason that no one likes being plundered!

    So, Free Competition in currencies slays fiat, and with it welfare state and warfare state, because it makes it impossible for the government to rob and plunder the people, and steal their wealth through legalized counterfeiting and inflation.

    Thus, Free Competition in currencies binds the government down with the chains of sound money, making impossible government plunder via legalized counterfeiting, and therefore, making possible liberty and prosperity of the people.
    Last edited by Foundation_Of_Liberty; 09-07-2013 at 04:56 PM.

  12. #220
    ...

    The history of banking in the modern era (since the establishment of the Bank of England in the late 17th century), has been nothing but an ugly cavalcade of theft of sovereign national treasuries too vast to calculate. From the beginning, these large private central banks (the Bank of England, the Federal Reserve, the Bank of Japan, etc.), were intentionally designed to operate freely above the rule of law in their respective nations. They have been the financiers of most of the conflicts and wars in the last two centuries and are continuing to do so unabated to the present. Countless millions have died in these bankers’ wars in service to the unbridled greed of these financiers.

    Through the massive inflation of each nation’s currency they dominate, the bankers have robbed the citizens of the purchasing power of their money and with it, their life savings. Since the establishment of the Federal Reserve in 1913, for example, the purchasing power of the US dollar has been eroded to nearly 1/100th of its original value. This has not been accidental. This was planned from the beginning. Private fractional reserve central banking is the greatest criminal conspiracy that continues to this day to hide in plain sight.

    But please, don’t just think this is only our opinion. Fascinatingly, the bankers themselves have throughout the decades, clearly revealed their purpose and intent. At this juncture, we would like to offer some quotes for you by the highest ranking members of the banking elite, past and present.


    “The bank hath benefit of interest on all moneys which it creates out of nothing.”William Paterson, founder of the Bank of England in 1694

    “Let me issue and control a nation’s money and I care not who writes the laws.”Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild.

    “If my sons did not want wars, there would be none.”Gutle Schnaper, wife of Mayer Amschel Rothschild and mother of his five sons

    “The few who understand the system will either be so interested in its profits or be so dependent upon its favours that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.” The Rothschild brothers of London writing to associates in New York, 1863

    “Banking was conceived in iniquity and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of a pen they will create enough deposits to buy it back again. However, take it away from them, and all the fortunes like mine will disappear, and they ought to disappear, for this world would be a happier and better world to live in. But if you wish to remain slaves of the Bankers and pay for the cost of your own slavery, let them continue to create deposits.”Sir Josiah Stamp, President of the Bank of England in the 1920s, the second richest man in Britain

    “When you or I write a check, there must be sufficient funds in our account to cover the check; but when the Federal Reserve writes a check, there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money.”From the Boston Federal Reserve Bank pamphlet, “Putting it Simply.”

    “Neither paper currency nor deposits have value as commodities. Intrinsically, a ‘dollar’ bill is just a piece of paper. Deposits are merely book entries.”“Modern Money Mechanics Workbook” – Federal Reserve of Chicago, 1975

    “I am afraid the ordinary citizen will not like to be told that the banks can and do create money. And they who control the credit of the nation direct the policy of Governments and hold in the hollow of their hand the destiny of the people.”Reginald McKenna, as Chairman of the Midland Bank, addressing stockholders in 1924

    “I am just a banker doing God’s work.”Lloyd Blankfein, CEO, Goldman Sachs, 2009

    “Banks do not have an obligation to promote the public good.”Alexander Dielius, CEO, Germany, Austrian, Eastern Europe Goldman Sachs, 2010


    So there it is in their own words. The arrogance, elitism, and condescension of bankers towards the common citizen are starkly revealed. These brilliant criminals have created the Ponzi scheme of all Ponzi schemes and so far, protected it from any form of criminal prosecution. However, that might be about to change. Awareness of their criminality is growing throughout the world at a rapid pace but never doubt that this group will fight tenaciously and be willing to go to any extremes to protect their centuries’ old scam. We predict there will undoubtedly be more strange banker deaths ahead of us in the ensuing weeks, months, and years.

    The next time you walk into your local bank, please ask yourself this question, “Do I really want to entrust my hard earned wages and savings to a centuries’ old criminal scheme?” If you don’t, please consider gold and silver for protection of your wealth.”

    Read full article: http://www.lewrockwell.com/2014/03/n...it-like-it-is/

  13. #221
    The Biggest Secret About Banking Has Just Gone Mainstream

    Posted on April 28, 2014 by WashingtonsBlog

    Banks Create Money Out of Thin Air … Conferring Enormous Windfall Profits At the Expense of the People

    We’ve pointed out for 4 1/2 years that banks create money out of thin air.
    Specifically, it has now been conclusively proven that loans come first … and then deposits FOLLOW.
    This is the most important secret about modern banking … because it debunks one of the biggest myths preventing a strong economy, challenges one of the main pork barrel profit centers for big banks … and opens up incredible opportunities for a prosperous economy.

    This odd and counter-intuitive – but crucially important – truth has now gone mainstream …
    Specifically, the Financial Times’ Martin Wolf – one of the world’s most influential mainstream financial writers - says that, since banks create money out of thin air, they should be stripped of this power, and limited to normal depository functions. Wolf indicates the centrality and importance of the issue with his subtitle:

    The giant hole at the heart of our market economies needs to be plugged.
    And Business Insider – the world’s most popular financial news blog – is currently running this as its top two front page stories:



    (Read the Business Insider stories here and here.)
    If we reclaimed the power to create credit from the too big to fail banks, we would all be much wealthier

  14. #222
    Wow, way to make the poll options as biased as possible.

  15. #223
    In other words, lets ignore 3000 years of history and adopt a radical-pseudo-anarchist position just because we don't want to pay a penny more in taxes.

  16. #224
    Quote Originally Posted by 56ktarget View Post
    In other words, lets ignore 3000 years of history and adopt a radical-pseudo-anarchist position just because we don't want to pay a penny more in taxes.
    Now this may come as a shock, but I don't think you quite get it.
    “The nationalist not only does not disapprove of atrocities committed by his own side, but he has a remarkable capacity for not even hearing about them.” --George Orwell

    Quote Originally Posted by AuH20 View Post
    In terms of a full spectrum candidate, Rand is leaps and bounds above Trump. I'm not disputing that.
    Who else in public life has called for a pre-emptive strike on North Korea?--Donald Trump



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  18. #225
    Quote Originally Posted by MichaelDavis View Post
    Wow, way to make the poll options as biased as possible.
    The poll options are the exact logical opposites of each other, and thus are fair.

    Many people simply do not understand that these are the only two possible choices.

  19. #226
    Quote Originally Posted by 56ktarget View Post
    In other words, lets ignore 3000 years of history and adopt a radical-pseudo-anarchist position just because we don't want to pay a penny more in taxes.
    Gold and silver will become the de facto currency of a truly free market, because it is the most convenient for the purpose.

    And yes, we don't want to pay a penny more in taxes, because all public taxation of private property is theft.

  20. #227
    Ron Paul on 'End the Fed'
    By Noureddine Krichene

    Ron Paul, a former Congressman, was a medical doctor; yet, his writings treated true economics in an ocean of falsehood. It is a miracle to have a non-economist write about the true economic science when this science has become totally corrupted by demagogues. It has become a science of government intervention and disorder.

    Most disquieting, some Nobel Prize winners are staunch advocates of anti-market forces and preach total money destruction by the government. Practically, there is no university that teaches the true nature of money, banking, and markets as displayed in Ron Paul's writings. You feel sorry for students who spend US$60,000 a year at elite universities and learn anti-market Stalinism.

    For Ron Paul, money is a market commodity, like a car, produced at a real cost in labor and capital, and is exchanged against other real commodities. A bit of paper has zero-cost in labor and capital, it can never be money. It is so by state coercion. The state outlaws gold, which it cannot print, in favor of paper, which it can print with no limit. It has therefore no check on its spending and despotism.

    For Ron Paul, paper is the money of war, noting that the United States, with unlimited paper money, has become the first warrior of the world, unhesitantly waging wars in every corner of the world.

    Among Paul's writings is his excellent book End the Fed (2009) where he held it as of utmost vital interest of the United States to end the Federal Reserve (Fed). He contended that the Fed has been destabilizing the US economy, inflicting recurrent catastrophes ever since it was created.

    Did the United States need a central bank? For Ron Paul, the answer was positively no. The US economy was growing by leaps and bounds before 1914, making discoveries in communications, cars, radios, photography, airplanes, heavy machinery, with no central bank.

    A central bank would be a fifth wheel in a coach. The US Treasury emitted notes against gold prior to 1913, and therefore had no need for a central bank for circulating money. It was vested-interest financial groups that forced the Fed on government for bailout purposes; under the guise that it was necessary for the US economy, this was a poisoned gift.

    For Ron Paul, financial crises, an inherent feature of fractional banking, were brief and self-liquidating prior to 1913. A crisis on the scale of the Great Depression had never occurred and would never have occurred had it not been for the Fed. The stock index could not have gone up threefold from 1926 to 1929 without very low interest rates and unending liquidity from the Fed. It was the very design of the authors of the Fed to provide an infinitely elastic money supply, as much money as speculators and debtors wished to have.

    Likewise, stock prices could never increase by 25% per year, as they did during 2009-2014, without the Fed's money floods.

    Speculative prices became interminably inflated by the Fed, allowing an amazing free real wealth to speculators. The Fed has turned the stock market into a true casino; it is no longer an investment vehicle.

    For Ron Paul, the Fed should have ended promptly in 1929 with the stock crash. Confronted with a grandiose disaster, politicians of the time should have realized that nothing good would come out of the Fed, or more generally, from a central bank, a truth discovered long ago by France, which promptly abolished John Law's bank in 1720 when stocks crashed dramatically, then by Thomas Jefferson (1811), Andrew Jackson (1832), Charles Holt Carroll (1850s), and Amasa Walker (1873).

    In 1933, a group of economic professors at the University of Chicago elaborated the "Chicago Plan", urging two-tier banking: (i) 100% reserve banking that strictly emits no money; and (ii) investment banking that strictly receives no deposits; it only buys and sells bonds and equities.

    This Plan wanted to end central banking, establish a banking system fully immune to crises with no unemployment (except frictional), and end government inflation of the stock markets. The conviction of ending central banking was shared by Ludwig von Mises, Friedrich Hayek, Murray Rothbard, and Maurice Allais.

    Yet, instead of abolishing the Fed, politicians confiscated all the gold of the citizens in 1934 and further empowered the Fed, adding to government despotism.

    Ron Paul considered "the creation of the Fed the most tragic blunder ever committed by Congress. The day [the existence of the Federal Reserve] it was passed [into law], old America died and a new era began. A new institution was born that was to cause the unprecedented economic instability in the decades to come. The longer we delay a conversion to sound money and away from central banking, the worse our crises will grow and the more the government will expand at the expense of our liberties. Our wealth is drained, our productivity is sharply diminished. Our freedoms are eroded.

    "We have been through nearly a hundred years of this same repeating pattern, so it is time to wise up and learn something. When the printing presses are available to the government and the banking cartel, they will use them rather than do the right thing. Manipulating interest rates is an immoral act. It is economically destructive. A central bank setting interest rates is price-fixing and is a form of central economic planning. Price-fixing is a tool of socialism and destroys production. Artificially low rates of interest orchestrated by the Fed induced investors, savers, borrowers, and consumers to misjudge what was going on. Multiple mistakes are made. Prosperity can never be achieved by cheap credit. If that were so, no one would have to work for a living."

    Ron Paul stated that the Fed should be abolished because it is an immoral, unconstitutional, and unpractical interest-group institution; it promotes bad economics and undermines liberty. Its destructive nature makes it a tool of tyrannical government. Nothing good can come from the Fed. Diluting the value of the dollar by increasing its supply is a vicious, sinister tax on the poor and the middle class. The Fed's monetary policy has brought us to where we are today. The evidence is abundant that the Fed is at fault and should be abolished.

    Ron Paul considered that the entire operation of the Fed was based on an immoral principle. Transferring wealth is limited when taxes and borrowing are the only tools the politicians can use. The cooperation of the politicians and the counterfeiters at the Fed is based on the immorality of fraud and deceit. Morality of money is related to morality in politics. The system is morally corrupt. Few understand or decry the immorality of the redistribution of wealth through government force.

    Prodded by the politicians, vested-financial interest, and academics, the Fed went on its worst money rampage during 2009-2014, creating seven times the amount of money it created during 1913-2008.

    Poverty is spreading and money chaos has never been as pervasive as now. A sheer plundering is under way: debt is pushed on the top of already intoxicated debt at near-zero interest rates. The Fed's elite believe that their mandate is full-employment and economic prosperity. This mandate was never thought of in the 1913 Fed Act; not by omission, but simply because mass-unemployment never existed in the United States before 1929.

    The irony is that the Fed causes structural mass-unemployment, and at the same it believes that it can restore full-employment. There can be no delusion greater than this one. The Fed is a roadblock to employment; if removed, employment will be restored naturally.

    Generations had to suffer from the anti-constitutional scheme in 1913 that repealed the Constitution's fundamental money law.

    No government in any country should bail out any bank or any company. A just government protects no vested-interest group, be it unions, farmers, or bankers. More specifically, a bank should never be bailed out, simply because it emits fictitious debt which it requires to be paid in real capital.

    Assume a bank has a reserve of $100 in gold; eager to earn interest and commissions, it issues fictitious loans for $1,000 in gold. Evidently, $100 in gold cannot pay a fictitious amount of $1,000 in gold. The government would never bail out the bank with $900 in gold. The bank sinks. With paper money, the government prints $900 and bails out the bank. This is the essence of a central bank as a bailout institution with paper money. Workers and poor people should suffer a $900 loss in real capital (food, clothing, energy) to pay the bank or its debtors for a fictitious capital the bank had emitted at the stroke of the pen.

    Ron Paul's message was never understood. Politicians and "experts" on money do not understand even the basic principles of money. Former Fed chairman Ben Bernanke did know what the dollar was; however, he maintained that the relation of zero-interest, printing money, and full-employment was as accurate as the law of gravity.

    The ideology of abolishing unemployment and restoring prosperity by printing trillions of dollars and forcing zero interest rates is stronger now than ever. Debt is being forced at near zero-interest rates regardless of creditworthiness. Huge capital is being destroyed and people's agony deepens.

    The Fed has charted a course between a Scylla of hyperinflation and a Charybdis of debt collapse as in 1933 and 2008. The Fed is second to none in money anarchy and economic destruction: more debt, more speculation, more inflation, more poverty, and more injustice. Some are made overly rich for free; others are totally denuded.

    Noureddine Krichene has a PhD in economics from UCLA.

    (Copyright 2014 Noureddine Krichene)
    Last edited by Foundation_Of_Liberty; 07-01-2014 at 11:59 AM.

  21. #228

    "Of course, more than a few Christians have highlighted the prophetic implications. “And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name,” reads Revelation 13:17, one of the Bible verses frequently cited by critics of the cashless plot. Other opponents of the schemes point to the implications for privacy and security, especially in light of the NSA scandal as well as the FATCA and GATCA global tax regimes. In a “cashless society,” literally every transaction would be tracked. If the electricity grid went down, chaos would ensue. If a government decided to quash dissidents, it could cut them off from the economy.

    The potential for mischief or worse is literally endless. Whether Americans and humanity will put up with it, though, remains to be seen."


    Read more: http://www.thenewamerican.com/tech/i...ntrol-humanity


    The solution, of course, is free competition in currencies, as described by this amendment.

  22. #229
    Ron Paul Predicts Inevitable and Complete Currency Collapse

    Former U.S. Presidential candidate & 22-year Congressman explains a huge problem
    few Americans know about – and how you should prepare...




    Watch it here.

  23. #230
    What Will Trump Do About the Central-Bank Cartel?

    Trump could end global banking tyranny


    Thorsten Pollet | Mises.org - February 13, 2017

    Of course, change for the better doesn’t come from politics. It comes from better ideas. For it is ideas that determine human action. Whatever these ideas are and wherever they come from: They make humans act. For this reason the great Austrian economist Ludwig von Mises (1881 – 1973) advocates the idea of the “sound money principle” –

    “The sound-money principle has two aspects. It is affirmative in approving the market’s choice of a commonly used medium of exchange. It is negative in obstructing the government’s propensity to meddle with the currency system.”

    Mises also explains convincingly the importance of the sound money principle for each and every one of us –

    “It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically it belongs in the same class with political constitutions and bills of right.”

    Mises’s sound money principle calls for ending central banking once and for all and opening up a free market in money. Having brought to a halt political globalism for now, the new US administration has now also a once in a lifetime chance to make the world great again — simply by ending the state’s monopoly of money production.

    If the US would move in that direction — ending legal tender laws and giving the freedom to the American people to use, say, gold, silver, or bitcoin as their preferred media of exchange — the rest of the world would most likely have to follow the example. That said, Mr. Trump could really make a real change, simply by embracing Mises’s sound money principle.

    http://www.infowars.com/what-will-tr...l-bank-cartel/
    Full article here.

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