For or Against Usury

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  • Sun, Feb 07, 2010 - 04:08am

    #101
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    Re: For or Against Usury

What I do like is that even if it does not work, at least the system would be for the peoples benefit and controled by representatives of the people.

Goes211,

I would have never thought in a million years after talking with you that you would ever start to think in these terms.  I’m shocked 🙂

After all money is just another commodity and commodity prices fluctuate due to supply and demand all the time.

This is true only if we are using commodity money, and the prices of commodity money couldn’t flucuate, only the purchasing power of the commodity being used could flucuate.  Currently prices do not fluctuate due to supply and demand.  The banking system can manupulate and drive up the prices of any product to increase their own personal profits.  This is the main reason the retail prices are constantly rising at a faster rate than the wages, or raw materials.  If you want to have stable prices that are in-line with wages, we are going to have to get the cost of doing business out of the picture.

  • Sun, Feb 07, 2010 - 04:20am

    #102
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    Re: For or Against Usury

The  US Treasury directly issuing paper money is not new  (Greenbacks).          Legal Tender Act of 1862   

Emergency Banking Act of 1933 confiscated American monetary gold and stored at Fort Knox   (created for the purpose).  The irritating  American people  keep redeeming FRN for gold and that had to stop.        The astonishing fact is Congress passed the measure without reading it.        

And you wanted the government to do what again?

Can you please explain what your solution is?

  • Sun, Feb 07, 2010 - 05:16am

    #103
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    Re: For or Against Usury

JK121,

Interesting post.

The people cannot get out of debt due to our tax code, which basically forces people to go into more debt (credit card and so on), Plus I don’t understand how putting some extra principal would help get ride of P+I when it’s only P in existence, true it may put a dent in the P+I, but it will not end it on a collective scale.  Maybe I’m getting things mixed up.

Ron Paul never said specifically debt-free currencies, he just mentioned competing currencies.  Sorry about that misunderstanding.

Our tax code does not create nor destroy any money, it mearly takes it from one party and transfers it to another.  It does not force people to get credit cards or more personal debt, but it can leave them with less credit.

Plus I don’t understand how putting some extra principal would help get ride of P+I when it’s only P in existence

Here is where things get so simple it’s almost tough to understand.  Currently “…the actual creation of money always involves an extention of credit by a private commercial bank” Russel L. Munk U.S. Treasury. 

What Mr Munk is saying is that there is no money until somebody (government, business, or individual) goes to a bank and goes into debt.  All ‘money’ is created as a debt but not all debt is money.  This is a fact because as soon as time and interest kick in on the borrowed money (the only kind we can get) the debt will grow, but the money supply will not.  The key concept is that when the Principle part of that loan is paid back, it is extinguished and written off the books.  This is the exact reason why we have a 59 trillion dollar interest bearing debt and a 7.7 trillion dollar money supply.  It’s true that individually we can get out of debt but collectively we cannot because IF you can capture back all that you borrowed plus some enough of someone else’s borrowed principle you can get out of debt, but only by shifting your interest load onto them.

“Money is created when loans are issued and debts incurred; money is extinguished when loans are repaid.”

“Some exsisting money in circulation must be acquired by the borrower to repay the capital of the loan; when that is returned to the bank it is withdrawn from circulation.”

John B. Henderson Senior Specialist in Price Economics – Congressional Research Service.

  • Sun, Feb 07, 2010 - 05:22am

    #104
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    Re: For or Against Usury

 

 

As a voter I would favor abolishing the central bank and legal tender laws.      I can’t speak for the others. 

 

  • Sun, Feb 07, 2010 - 05:35am

    #105
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    Re: For or Against Usury

As a voter I would favor abolishing the central bank and legal tender laws.

If we get rid of the central bank what are we going to use for money in America?  Who would you have control it?

Since legal tender laws have zero effect on increasing or decreasing the money supply in America, why do you support this?

 

  • Sun, Feb 07, 2010 - 06:02am

    #106
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    Re: For or Against Usury

 

Control the money supply?    Why?

 

 

  • Sun, Feb 07, 2010 - 07:07am

    #107
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    Re: For or Against Usury

Well somebody has to control the money supply since money does not just exsist, it is a made made concept.

  • Sun, Feb 07, 2010 - 01:47pm

    #108
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    Re: For or Against Usury

[quote=Thomas Hedin]

 

Our tax code does not create nor destroy any money, it mearly takes it from one party and transfers it to another.  It does not force people to get credit cards or more personal debt, but it can leave them with less credit.

[/quote]

 

 

 I think our tax code does destroy money (personal), based on the aspect that it goes out of our pockets and into the Crooks in D.C. which you have stated, to me that develops a propensity to obtain more debt because money was transfered in an unconstitutional way and is a form of robbery.  

  • Sun, Feb 07, 2010 - 05:43pm

    #109
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    Re: For or Against Usury

goes211 wrote:

Sometimes I am left wondering if there is a solution to the money system problem. Could it just be too complex of a problem, with at goals that are at times contradictory ( means of exchange vs. store of value )? I wonder if expecting money to be a true store of value may be asking too much for anything but short periods of time. After all money is just another commodity and commodity prices fluctuate due to supply and demand all the time.

Hello goes, I know what you mean, we can see the problems with our current system but replacing it is more difficult.  Government created money is a better route as it eliminates the national debt, income taxes and it is the only way to hold our financial sovereignty.  But, a possibility (likelihood?) exists that too much money may be created if no restraints exist.

One axiom that I hold is that all new money created by the government should be backed by tangible assets.  The discipline to endow the money with the value of collateral seems to be a good way to prevent abuses.  Not everyone will agree, for example Steve Zarlinga would simply spend the money into existence on social programs and such.  Yes, this could help but it seems to me that it may open Pandora’s box.

I may be too conservative but I would eliminate any unsecured loans and on private loans, a down-payment should be required to help offset asset value fluctuations.  In my perfect world, collateral assets would deprecate no faster than the amount of open debt.  From my perspective, it doesn’t matter if gold or some other tangible asset endows our money with value. 

JK121 wrote:

Plus I don’t understand how putting some extra principal would help get ride of P+I when it’s only P in existence, true it may put a dent in the P+I, but it will not end it on a collective scale.

Hi JK, I think you hit the issue square on.  If we were to simply add more “principal” (interest free debt money) it wouldn’t make the existing debt problems worse but it wouldn’t help bridge the gap between money and debt (the addition of “I”).  Maybe we can categorize new money in three forms:

  1. Negative Money, P + I, “Debt Money”  – current system of usury – Money borrowed into existance with interest charges added by private banks.  There will always be more debt than money making it mathematically impossible to ever repay all debts as an inherent flaw.  Perpetual debt.   
  2. Neutral Money, P, “Debt Money”  – Money borrowed into existance without any interest charges.  Debts may be repaid but as they are, the money would be extinguished.  We would still require continuous borrowing to maintain or increase the amount of money in circulation.
  3. Positive Money, “Wealth Money”  – Money spent into existance without any debt or interest.  Permanent money in the sense that it is not extinguished by repayment.  It could be used to repay existing interest, in which case almost all of it would be be spent back into circulation. 

We’re stuck in a “P + I” money system which is the main reason for our current crisis.  We have more debt than money and the gap is growing beyond our ability to sustain the interest.  Mathematically, I think there is only one way out (other than default) – we need some “Positive Money” injected into circulation.  

We may disagree on how this should be accomplished but I think the math is concise and irrefutable.  Please let me know if my math is wrong.

Carl Veritas wrote:

The Greenback

During the war (civil war) the purchasing power of greenbacks fell by 138%  Prices more than doubled while wages rose by less than half.  Confederate notes increased in volume by 214% per year, while the volume of all money, including bank notes and checkbook money, rose by over 300% per year.  In addition to the confederate notes, each of the Southern states issued each own fiat money, and by the end of the war,, the total of all notes was about a billion dollars.  – E.Griffin 

Many historians suggest that the north could not have won the war without greenbacks.  The alternative was borrowing at over 30% which would have bankrupted the nation regardless of what happened on the battlefield.  With the greenbacks, the north fought the war with one hand tied behind their backs.  The north was able to field a well supplied army while building infrastructure and sustaining an industrial boom.

As far as inflation, Griffin makes his analysis from the jaded spectacles of Austrian economics which greatly over simplifies, to the point of distortion, the concept of inflation.  To Griffin, inflation takes place when prices rise – which must be because too much money was created. 

There are many other factors, for example, there were severe shortages on many products through-out the Civil War which caused prices to go up. The rising prices would have occurred no matter what money was used, the greenbacks helped minimize the problem by keeping industry running but could not be expected to eliminate all shortages.

John Galbraith said “it is remarkable that without rationing, price controls,or central banking; Treasury Secretary Chase could have managed the federal economy so well during the Civil War.”  The U.S. Treasury estimated that $400 million in interest charges were saved by the greenbacks.  The North also issued bonds and IOUs which increased the money supply. 

Carl Veritas wrote:

After Appomattox, of course, Confederate notes and bonds alike were totally worthless.

The south’s economy was totally devastated during the Civil War.  Like most wars, the Civil War quickly became a war of financial attrition that the south simply could not win.  They would have fared better had they followed the North’s example in issuing some debt free money.  Instead, they chose to issue bonds and promises to pay which everyone soon realized could not be honored.

The Bank of England wanted a war that would return the U.S. to colonial status.  The bankers preferred the “European plan” which could exploit labor by controlling the money supply, while letting the laborers feed themselves.  In 1862, the “Hazard Circular” was circulated to American banking interests by their British counterparts:

“Slavery is likely to be abolished by the war and chattel slavery destroyed.  This, I and my European friends are glad of , for slavery is is but the owning of labor and carries with it the care of the laborers while the European Plan, led by England, is that capital shall control labor by controlling wages.  This can be done by controlling the money.

The great debt that capitalists will see to it is made out of war, must be used as a means to control the volume of money.  To accomplish this, the bonds must be used as a banking basis…It will not allow the greenback, as it is called, to circulate as money any length of time, as we cannot control that.”

In 1865, prior to Lincoln’s assassination, The London Times warned:

“If that mischievous financial policy which had its origin in the North American Republic during the late war in that country, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off its debts and be without debt.

It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.”

Great discussion!

Larry

  • Sun, Feb 07, 2010 - 06:09pm

    #110
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    Re: For or Against Usury

Larry 

I think you hit the nail on the head with this quote.

“But, a possibility (likelihood?) exists that too much money may be created if no restraints exist.”

In looking at the charts of the CC in relation to inflation it is obvious that money supply expanded in response to war.  As Mr. Martenson points out the price of a loaf of bread  was little changed for hundreds of years. 

The only restraints will be internal, that is a well educated and informed public to keep us from engaging in inflationary wars…………..we are doomed

V

PS With a defense contractor and defense related factory in every state if not every Congressional district we simply cannot afford not to be at war. More Americans will suffer and perhaps die if we do not kill people elsewhere. We can not afford peace. Therefore we have a President who wins a Nobel for fighting wars.

” there is much to be earned from a government which has no money”

James Rothschild to Nathan Rothschild

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