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  • Sat, Jul 25, 2009 - 07:46pm

    #41
    Peak Prosperity Admin

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    Re: Our financial solutions are right in front of us if we …

 [quote]Patrick, maybe we are quibbling over semantics.  When I said "arbitrarily" I meant valued by something other than true market forces.  From my perspective, if you are going to "design" a system by valuing gold as a ratio to money then you are designing by decree – fiat.  This seems to be the thing you wanted to avoid in the first place?[/quote]

It is not the gold we are decreeing to be worth $58,000, it is the money we are decreeing to be worth 1/58,000 of an ounce each.  We are backing our money up with the gold we own (assuming we really own 5.7 million ounces).  Right now, the money is backed by nothing, so what is so difficult about saying that we are abandoning the paper money standard and are moving back to a gold standard.If we did so, how else could it be done?  

Logic seems to dictate that if our dollar supply/gold ounces = 58,000, then our dollars are worth 1/58,000th of an ounce of gold per note.  What’s so difficult about opening the doors to the nations gold reserves so everyone can count it and everyone can be sure that we really have 1/58,000th of an ounce for ever dollar issued, and that every dollar issued can and will be redeemable in specie upon request?  That is still infinitely more valuable than what it is now, since it is worth nothing.  If you want to misuse the word "fiat" as it relates to money and simply say any money legally enforced is fiat, be my guest, I don’t own the rights to the word.

[quote]Count me in, I’m willing to sell my gold at $58,000 and ounce!  One problem here, where would we get the money to buy the gold?  If it is borrowed, then our asset has an off-setting liability that is greater than the value of the asset (principal + interest).[/quote]

Wait a  minute?  Didn’t you say we actually own 5.7 million ounces of gold?  We don’t have to borrow or buy any of it.  But because the US government values it currency at that rate, I can guarantee you nobody will be selling it for anything less.

Also A) the government collects tax receipts.  It can use those for expenses, or, if they were to ever run a surplus, they could use them to buy gold, at $58,000 per ounce.  Now, I highly doubt they’ll ever run a surplus, but the only way they ever will is if they are disciplined by a gold standard.  B)  Debts owed to the government (private or public) could be paid in gold, valued at $58K per ounce, allowing the government to issue more dollars.  

No need to borrow gold.  I am assuming of course, that we own 5.7 million ounces.  If we do not own any gold, I have a solution for that too, but that doesn’t seem to be the argument right now.

  • Sun, Jul 26, 2009 - 06:44pm

    #42
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    Re: Our financial solutions are right in front of us if we …

Patrick,

Thanks again for the discussion, I am learning as we go.  We seem to fundamentally disagree as to "who" should issue a national currency.  A private banking cartel controls and issues our currency.  I want to restore the power of the purse to the people through their elected government.  The private banking cartel that we subscribe to is the reason for this crisis – there is no viable solution unless we break free from the Federal Reserve. 

This is nothing new as the anglo-american banking cartel has destroyed many economies; including the U.S. during the last depression, and they are doing it again in much greater scale.  The plan is for a global financial monopoly, the BIS, to take control of every nation’s economy.

In my opinion this is crazy as we are signing away our sovereignty and our ability to control our own destiny.  There is no reason for a national debt, most taxes and huge government interest payments.  It all comes down to who issues and controls a nations monetary system.

  • In 2006, M3 (broadest measure of the money supply) was nearly $10 trillion. Of that, treasury securities were around $1 trillion which means that banks expanded the money supply by a factor 10:1 through fractional lending. And they are collecting interest on every penny while "We the People" provide all collateral.
  • Had the U.S. government issued the expanded money, by loaning it to banks at 3% interest, we would have made $270 billion in interest for just one year’s new money. When you add multiple year carry-overs, that number gets much bigger. 

One interesting topic that you brought up is the need to make foreign trade more equitable through creative exchange mechanisms (How I Learned to Stop Worrying About Fractional Reserve Banking and Start Hating the Fed Even More than Ever).  Trade concerns are an integral part of developing a sustainable currency.

Our current "free trade" practices are unfair and wide open for the quiet financial wars that take place daily.  By pegging to the dollar, nations create a nightmare in maintaining the value of their currency: 

  1. By pegging to the dollar, other nations are highly vulnerable to the irrational economic policies of the U.S.
  2. Currency exchanges have become international casinos, Bernard Lietaer (The Future of Money) said "$2 trillion are traded per day in foreign exchange markets, 100 times more than all the stock markets of the world combined."
  3. Currencies are routinely attacked by highly leveraged "shorting."

China can teach us some important lessons, they pegged their currency to the dollar but do not support it’s free conversion to other currencies.  They were spared the Asian currency crisis of 1997-1998 and have been growing at a robust rate.

Professor Henry C.K. Liu said that "China was saved from such a dilemma because the yuan was not freely convertible.  In a fundamental way, the Chinese miracle of the past decade has been made possible by its fixed exchange rate and currency control.

The record of the past three decades shows that neo-liberal ideology brought devastation to every economy it invaded…China will not be exempt from such a fate when it makes the yuan fully convertible at floating rates."

The bigger reason for China’s success is that the government issues the currency (though some private banks are being brought in the system).  Unlike the anglo-american BIS cartel client nations, China does not need to borrow from any private bank.  They directly benefit from issuing their own currency and utilizing this power in building their infrastructure and industry.

Dr. Shun Yat-sen is called the "father of modern China" (by nationalists and communists alike).  According to Ellen Brown, he was a protege of the Lincoln/Carey "greenback" faction.  His monetary philosophy is credited with "waking the sleeping giant."  Eventually the communists took over but they kept his banking fundamentals and respect his history.

Patrick said:

You cannot have a lack of gold or silver anymore than you can have a lack of inches, pounds, or seconds. Our monetary units fill the role of a measurement of value. Just like inches measure length, pounds measure weight, and seconds measure time, gold or silver measures the value of all other things weighed against them.

I agree that to conduct foreign trade, some accepted measure is needed but gold alone is not stable enough.  And the price of gold is easily manipulated.  The gold standard was not abandoned, it simply failed as our gold reserves where whittled away by other nations.  Had the U.S. not closed the window to gold redemption in the 1970’s, we would have run out of gold anyways.

If you are not going to make your commodity currency redeemable, then it is only representative of intrinsic value – fiat by decree.  Why not embrace a fiat currency and value it based on energy BTUs or an international basket of commodities broad enough to be representative of national products.  Gold could also be used to clear account deficits in foreign trade.

Hope I didn’t stray from the discussion too much – cheers…

Larry

  • Sun, Jul 26, 2009 - 07:49pm

    #43
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    Re: Our financial solutions are right in front of us if we …

[quote=DrKrbyLuv]

 The gold standard was not abandoned, it simply failed as our gold reserves where whittled away by other nations.  Had the U.S. not closed the window to gold redemption in the 1970’s, we would have run out of gold anyways.

Larry

[/quote]

The USA when off the gold standard in 1933 because the govt had been caught with its hand in the till.

A $20 bill had "may be exchanged for one ounce of gold" on it, problem was they had printed at least 2 notes for every ounce then had.

Think of it at a gold storage vault and the $20’s as receipts for depositing an ounce of gold.But  the depositary went on to print extra receipts and spent them for themselves. Imagine if you did that, then you were found out…. you wold be having a loooooonnngggg holiday.

 

Internationally in 1971 the same situation applied. France had caught on and was converting noted to gold. USA realized they were about to have their pants pulled down.

 

And why were their gold reserved being  whittled away ??? it is simply called  LIVING BEYOND YOUR MEANS or EATING INTO YOUR SAVINGS.

You cant do that for long with honest money, but cheap to print FRN’s, you can scam the world for longer ( and dig yourself a bigger hole )

 

Cheers Hamish

  • Mon, Jul 27, 2009 - 02:42pm

    #44
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    Re: Our financial solutions are right in front of us if we …

gyrogearloose said: 

The USA when off the gold standard in 1933 because the govt had been caught with its hand in the till.  A $20 bill had "may be exchanged for one ounce of gold" on it, problem was they had printed at least 2 notes for every ounce then had.

Hamish, what you are saying is implausible when one recognizes that the Federal Reserve issued and controlled our money since beginning operation in 1914.  The government, like the people they are supposed to represent, were victims of the international banking cartel.  The Fed had opened the money supply during the "roaring" twenties with low interest rates.  Money seemed to be plentiful but it was "credit" or "debt" that was actually plentiful. 

According to Carroll Quigley, Benjamin Strong (Governor of the Fed) and Montagu Norman (Head of Bank of England) were determined in the 1920’s to force all major countries to go on the gold standard and to operate it from central banks free of any government control.

Gold was flowing out of Great Britain as the result of WW1 debt.  By creating the credit bubble of the 20’s through low interest rates, gold began flowing from the U.S. to Great Britain where the returns were higher.  Then suddenly, the Fed began selling government securities reducing the money supply.  The panic was on, the stock market crashed and people began withdrawing their money from banks and foreigners began withdrawing their gold – which depleted the money stock foundation.

The money supply fell by over 30% in just a few years leading up to 1933 – the depression was in earnest.  According to Steve Zarlenga, Strong said that the problem could be easily corrected by adding money.  Ben Bernanke later admitted it was the policies of the Fed that led to the first great depression:

As everyone here knows, in their Monetary History Friedman and Schwartz made the case that the economic collapse of 1929-33 was the product of the nation’s monetary mechanism gone wrong. Contradicting the received wisdom at the time that they wrote, which held that money was a passive player in the events of the 1930s, Friedman and Schwartz argued that "the contraction is in fact a tragic testimonial to the importance of monetary forces [p. 300; all page references refer to Friedman and Schwartz, 1963]."

…Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again."

gyrogearloose said:

And why were their gold reserved being whittled away ??? it is simply called LIVING BEYOND YOUR MEANS or EATING INTO YOUR SAVINGS.

Our monetary system was doomed to fail from day one and has failed a number of times since the Federal Reserve act.  The Federal Reserve and the elite cartel that controls it have been sucking the vitality out of the U.S. like a lamprey on a fish.  As long as we allow others to have a money making monopoly on our currency, we will never have an opportunity for national prosperity again.

Soon, the interest payments alone will smother our ability to pay.  We are being impoverished to allow the final consolidation of the anglo-american banking cartel which will mean tyrannical world government.

Larry

  • Mon, Jul 27, 2009 - 09:16pm

    #45
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    Re: Our financial solutions are right in front of us if we …

[quote=DrKrbyLuv]

gyrogearloose said: 

The USA when off the gold standard in 1933 because the govt had been caught with its hand in the till.  A $20 bill had "may be exchanged for one ounce of gold" on it, problem was they had printed at least 2 notes for every ounce then had.

Hamish, what you are saying is implausible when one recognizes that the Federal Reserve issued and controlled our money since beginning operation in 1914.  The government, like the people they are supposed to represent, were victims of the international banking cartel.  The Fed had opened the money supply during the "roaring" twenties with low interest rates.  Money seemed to be plentiful but it was "credit" or "debt" that was actually plentiful. [/quote]

You make my argument while saying it is implausible.

If the only $20  in existence get into the system by a person with a one ounce coin handing it across to the treasury department in exchange for a $20, a run on the gold reserves,  where people start exchanging notes for gold coins, there will be no problem because there is no change in the amount of money, just what the money is "printed from" ( gold or paper ) and treasury could meet EVERY single demand to swap a note for a gold coin. No problem could result from that.

 

Enter the fed system "opening the money supply". How did they actually do that? in the end, "extra" notes got printed and into  general circulation without any gold being handed across into the vaults of treasury in exchange.

Eventually people got suspicious that that was what was happening and started to ask for gold. In the end what they were doing was pointing out that the emperor was wearing no clothes and would be unable to meet all demands for gold, hence gold confiscation etc.

New rule was that only sovereign governments could swap notes for gold, but the govt and fed did it again and in 1971, same thing happened….

 

 

 

[quote=DrKrbyLuv]

…..foreigners began withdrawing their gold – which depleted the money stock foundation.

[/quote]

But the only way they could withdraw the gold was by handing across dollars, net effect on the money supply  ZERO.

 

Blaming foreigners as a cause, for withdrawing gold, is nothing more than shifting the focus of peoples ire away from the real cause of the problem.

 

A bit short on time to add more, right now, ( and dealing the frn’s vs gold coins in isolation ) but what are your thoughts on the above ?

 

Cheers Hamish

 

 

  • Tue, Jul 28, 2009 - 03:00am

    #46
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    Re: Our financial solutions are right in front of us if we …

I agree with you 100%, Hamish.  Of course there wouldn’t be anything to fear from a "run" on gold unless some genius issued more IOUs than there was gold for.  Same goes with France – they called our bluff and started redeeming paper for gold.  Once again, we’d printed more notes than we had backing them up and then broke international law by refusing to honor our commitments.  I’m surprised nobody went to war against us over that.  

So let’s see.  So far, the government has said, "I’m gonna take your gold, and then charge you double to buy it back.  Better yet, I’ll make you move overseas, and then you can buy it back for double.  Ah, hell with it.  I’ll never sell you or anyone else their gold back."

These are actions of the US Government, not the Fed (which I am not defending by the way).  Now how exactly is it, Larry and Thomas, that you would give this body the power to issue currency, unbacked no less?  They already took your gold, made you move to France and pay double if you wanted to buy it back, then made that impossible, and now they’ve wrecked everything.  The LAST thing I want to do is give these people ANY power over money.

  • Tue, Jul 28, 2009 - 07:24am

    #47
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Patrick, those are the actions of the government under the puppet guidance from global financiers. Why do you think the things you mentioned only happened in the 20th century, after the Fed?  Do you really think the US government has the gold because they’re the ones that stole it?  If so, we wouldn’t have the Fed.  We wouldn’t have a debt-based monetary system run by bankers.  The problem is that our national government is just the group of stooges fronting for the bankers. So, sure, on the surface government officials are the ones that dictated the policies.  But that’s sort of like blaming a cop for telling you to wear your seatbelt…yes he’s an annoying stooge, but he’s just the messenger.

It was the Fed’s inflation/deflation that kicked off the Depression that caused the first confiscation of gold…that wasn’t FDR making it up…it was the Fed’s gun being held to his head.  Likewise it was the Fed that got Nixon to shut gold down for good.  Presidents don’t do those things on their own…they’re ignorant about high finance…they do what the finance masters tell them because that’s the avenue to maintaining power.  

The government (Congress, not President) is precisely who should control money…the Constitution says so.  But that assumes an actual representative republic.  Now that we’re a financial empire, you’re right they shouldn’t control the money because that just means they hand it over to the Fed (the emperor).  The more Ron Paul, Kucinich, Grayson, et al inspire colleagues to start doing their job and stop serving Wall St, the more it’s clear that in an actual functioning Congress, they should control the monetary standard as article 1 says.  

 

  • Tue, Jul 28, 2009 - 07:31am

    #48
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    Re: Our financial solutions are right in front of us if we …

Strabes,

I really liked reading your last reply.

  • Tue, Jul 28, 2009 - 03:34pm

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gyrogearloose said: 

If the only $20  in existence get into the system by a person with a one ounce coin handing it across to the treasury department in exchange for a $20, a run on the gold reserves,  where people start exchanging notes for gold coins, there will be no problem because there is no change in the amount of money, just what the money is "printed from" ( gold or paper ) and treasury could meet EVERY single demand to swap a note for a gold coin. No problem could result from that.

There was a huge problem with people and nations redeeming their gold as the amount of money available contracted accordingly.  If you have gold backed money and your gold reserves are reduced, the amount of money in circulation is also reduced.

But there was even a bigger problem.  The U.S. was gamed by the ponzi scheme of the central bankers – that is that the money to pay the interest on our debts was never created (the compound interest paradox).  The federal reserve was taking our gold to satisfy mounting debt.  The federal reserve act of 1913 made bankruptcy inevitable.

It did not matter that our money was backed by gold, the bankers were taking it regardless of the specie.   

Finally, in 1933, the U.S. officially declared bankruptcy.  The receivers of the United States Bankruptcy are the International Bankers – our national and private gold were seized by the bankers and shipped abroad or held as collateral in U.S. vaults.  The government cannot allow a physical inventory and an audit of our gold because what little is left, doesn’t really belong to us. 

They want to keep citizens stupid; if people ever figure out that their nation was stolen in a ponzi scheme they might finally get rid of the rotten international bankers.  (As an interesting side story, read what Rep. James Traficant, Jr. (Ohio) said about our bankruptcy in 1993)

Some in government saw exactly what was happening and offered solutions to avoid bankruptcy.  Louis McFadden for example, quoted an article by Hemphill (credit manager of the Atlanta Federal Reserve bank) on the floor of the house on 1933:

We are rapidly approaching a situation where the government MUST issue additional currency. It will very soon be the only move remaining. It should have been the first step in the recovery program. Immediately upon a revival of the demand that the government increase the supply of currency, we shall again be subjected to a barrage of skillfully designed and cunningly circulated propaganda by means of which a small group of international bankers have been able, for two centuries to frighten the peoples of the civilized would against issuing their own good money in sufficient quantities to carry on their necessary commerce.

By this simple, but amazingly successful device these `money changers’ — parasites in a busy world intent on creating and exchanging wealth — have been able to preserve for their private and exclusive right the monopoly of manufacturing an inferior substitute for money which they have hypnotized civilized nations into using, because of their pressing need to exchange goods and services. We shall never recover on credit. Even if it were obtainable, it is uncertain, unreliable, does not expand in accordance with demand, and contracts unexpectedly and for causes unrelated to the needs of commerce and industry…In our present situation the issue of additional currency is the only way out.

Franklin Roosevelt is often credited for getting us out of the great depression.  The reality is that instead of taking the needed action; eliminating the fed and issuing our own debt free money, he was a treasonous coward and sold our nation to the international banksters.

We have the exact same problem before us today.  Will we have the courage and fortitude to finally issue our own currency and prosecute the federal reserve for crimes against humanity?

Larry

  • Tue, Jul 28, 2009 - 05:13pm

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    Re: Our financial solutions are right in front of us if we …

Thanks Thomas.

Here’s a link to the Traficant speech Larry mentioned:  

http://home.hiwaay.net/~becraft/CRTraficant.htm

Great stuff, but too bad all the anti-Fed guys are odd.    We need some normal-hair folks to lead the fight.  

 

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