Ron Paul Says 1.3 Trillion Dollar Debt Owed To Federal Reserve Is Not Real! Amazing Plan To Save A T

reply to post by memarf1

The FED was young and inexperienced at the time of the Great Depression and undertook a disastrous restrictive monetary policy. They learned from that and have since had a very conservative expansionary policy(until recently), hence why we have not had any new Great Depressions directly related to the FED. If you wish to count the recent major recession, okay, but that too was because of a dumb decision to deregulate the banks, not sinister plans to take control of the world...

First, I am not an economist. My training is Chemistry/Quality Engineering so my information is from what I read. I generally try to cross check because there is a lot of dreck out there with the nuggets.

in regards to the FED and the Great Depression, I was using different sources. One is Congressman Louis T. McFadden who was a banker and Chairman of the Banking and Currency
Committee for more than 10 years.

Congressman McFadden's Speech On the Federal Reserve Corporation
..."Mr. Chairman, we have in this Country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks, hereinafter called the Fed. The Fed has cheated the Government of these United States and the people of the United States out of enough money to pay the Nation's debt. The depredations and iniquities of the Fed has cost enough money to pay the National debt several times over. "This evil institution has impoverished and ruined the people of these United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the mal-administration of that law by the Fed and through the corrupt practices of the moneyed vultures who control it.

"Some people who think that the Federal Reserve Banks United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lender. In that dark crew of financial pirates there are those who would cut a man's throat to get a dollar out of his pocket; there are those who send money into states to buy votes to control our legislatures; there are those who maintain International propaganda for the purpose of deceiving us into granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime.

"These twelve private credit monopolies were deceitfully and disloyally foisted upon this Country by the bankers who came here from Europe and repaid us our hospitality by undermining our American institutions. Those bankers took money out of this Country to finance Japan in a war against Russia. They created a reign of terror in Russia with our money in order to help that war along. They instigated the separate peace between Germany and Russia, and thus drove a wedge between the allies in World War. They financed Trotsky's passage from New York to Russia so that he might assist in the destruction of the Russian Empire. They fomented and instigated the Russian Revolution, and placed a large fund of American dollars at Trotsky's disposal in one of their branch banks in Sweden so that through him Russian homes might be thoroughly broken up and Russian children flung far and wide from their natural protectors. They have since begun breaking up of American homes and the dispersal of American children. "Mr. Chairman, there should be no partisanship in matters concerning banking and currency affairs in this Country, and I do not speak with any.

"In 1912 the National Monetary Association, under the chairmanship of the late Senator Nelson W. Aldrich, made a report and presented a vicious bill called the National Reserve Association bill. This bill is usually spoken of as the Aldrich bill. Senator Aldrich did not write the Aldrich bill. He was the tool, if not the accomplice, of the European bankers who for nearly twenty years had been scheming to set up a central bank in this Country and who in 1912 has spent and were continuing to spend vast sums of money to accomplish their purpose.....

McFadden brought charges of treason against the FED officials an then lost his seat but continued to speak against the FED. He was shot at twice and later poisoned.

Justice Martin Mahoney the Presiding Justice who found against First National Bank of Montgomery in First National Bank of Montgomery vs. Daly (1969) thereby setting a dangerous presidence in foreclosure cases, was also poisoned "less than six months after the trial, in a mysterious accident"

Congressman Lindberg said in a Congressional Record dated, December 22, 1913, vol. 51, "This new law [the Federal Reserve Act] will create inflation whenever the trusts want inflation. It may not do so immediately, but ... if the trusts can get another period of inflation, they figure they can unload the stocks on the people at high prices during the excitement and them bring on a panic and buy them back at low prices... The people may not know it immediately, but the day of reckoning is only a few years removed."

"That day of reckoning, of course, came in 1929," said Perloff, "and the Federal Reserve has since created an endless series of booms and busts by the strategic tightening and relaxation of money and credit." Speaking about the historical disinformation regarding the crash, Perloff said, "Establishment historians present the '29 stock market crash as they do most events: an accident, evolved from erroneous policies, not from deliberate planning. We have all heard how foolish speculation bid stock prices high, but that the bubble finally burst, plunging brokers out of windows and America into the Depression."

"Having built the Federal Reserve as a tool to consolidate and control wealth, the international bankers were now ready to make a major killing," stated Allen. "Between 1923 and 1929," he described, "the Federal Reserve expanded (inflated) the money supply by sixty-two percent. Much of this new money was used to bid the stock market up to dizzying heights. At the same time that enormous amounts of credit money were being made available," continued Allen, "the mass media began to ballyhoo tales of instant riches to be made in the stock market. According to Ferdinand Lundberg: 'For profits to be made on these funds the public had to be induced to speculate, and it was so induced by misleading newspaper accounts, many of them bought and paid for by the brokers that operated the pools.'" [note Congressional record of 1917 shows J.P. Morgan bought controlling interest in all the important papers in order to control the news. cv]

Perloff concurred, writing, "The Federal Reserve prompted the speculation by expanding the money supply a whopping sixty-two percent between 1923 and 1929. When the central bank became law in 1913, Congressman Charles Lindbergh had warned: 'From now on, depressions will be scientifically created.' Like two con men working a mark, the Fed made credit easy while Establishment newspapers hyped what riches could be made in the stock market." "Curtis Dall," he continued, "himself a syndicate manager for Lehman Brothers was on the floor of the New York Stock Exchange on the day of the Crash." Perloff quotes Dall as declaring, "Actually, it was the calculated 'shearing' of the public by the World-Money powers triggered by the planned sudden shortage of call money in the New York money market."

The "shearing," wrote Allen, caused a "despair [which] produced a willingness to accept a major expansion of government controls over the economy. ... In 1929, America was a long way from total government." He advised, "The next depression will be used as the excuse for complete socialist-fascist controls at home and the creation of a World Superstate internationally."

Congressman Louis McFadden, Chairman of the House Banking Committee, declared of the Depression, "It was not accidental. It was a carefully contrived occurrence." He warned, "The international bankers sought to bring about a condition of despair here so that they might emerge as rulers of us all." The Great Depression is another example of the Problem-Reaction-Solution formula.

"Plummeting stock prices ruined small investors, but not the top "insiders" on Wall Street," wrote Perloff. "Paul Warburg had issued a tip in March of 1929 that the crash was coming. Before it did, John D. Rockefeller, Bernard Baruch, Joseph P. Kennedy, and other money barons got out of the market. ... Early withdrawal from the market not only preserved the fortunes of these men," said Perloff, "it also enabled them to return later and buy up whole companies for a song." ... www.thehiddenevil.com...

This story tallies with what Col. Dall, FDR's son-in-law stated in FDR, my exploited father-in-law

...Actually, it was the calculated "shearing" of the public by the World-Money powers, triggered by the planned sudden shortage of the supply of call money in the New York money market....

The Democratic politicians who were looking for a "target" in Washington pointed their finger at President Herbert Hoover. The crash was his fault! He was the goat; certainly not the One-World Bankers with their curtailment of credit and their short selling, performed by well rewarded "fronts."

The World-Money managers had figured in mid-1929 it was time to cause a change in the Administration in 1932. They saw to it that "recovery" from the Crash was delayed until after the Inauguration of their candidate, President Franklin D. Roosevelt, in 1933 to take the most profit financially and politically.

Even to many amateurs, it was manifest the "drivers" of the Democratic political vehicle did not wish to cooperate with President Hoover to save many banks from failing in late 1932 and early 1933; they wanted the financial mess to deepen in severity, both for beneficial political effect starting on March 4th, and for maximum profits to accrue to insiders, in picking up desirable "pieces" at rock-bottom prices. Many people felt, however, that President Hoover made a strong, bi-partisan effort in behalf of all citizens whose holdings.were lodged in "shaky banks". In return, he was rebuffed and confronted with narrow, political opportunism by the incoming Democratic Administration and their financial helmsmen....

Col. Dall's Dedication and the rest of the book are well worth reading for an inside glimpse of politics.

SECRETS OF THE FEDERAL RESERVE: The London Connection By Eustace Mullins member of the staff of the Library of Congress, also collaborates that the Great Depression was a calculated "Shearing" and not some sort of "mistake"

...The collaboration between Benjamin Strong and Lord Montagu Norman is one of the greatest secrets of the twentieth century...

Lord Montagu Norman was Governor of the Bank of England from 1916 to 1944. During this period, he participated in the central bank conferences which set up the Crash of 1929 and a worldwide depression. In The Politics of Money by Brian Johnson, he writes, "Strong and Norman, intimate friends, spent their holidays together at Bar Harbour and in the South of France." Johnson says, "Norman therefore became Strong’s alter ego. . . . "Strong’s easy money policies on the New York money market from 1925-28 were the fulfillment of his agreement with Norman to keep New York interest rates below those of London. For the sake of international cooperation, Strong withheld the steadying hand of high interest rates from New York until it was too late. Easy money in New York had encouraged the surging American boom of the late 1920s, with its fantastic heights of speculation."

..The House Stabilization Hearings of 1928 proved conclusively that the Governors of the Federal Reserve System had been holding conferences with heads of the big European central banks. Even had the Congressmen known the details of the plot which was to culminate in the Great Depression of 1929-31, there would have been nothing they could have done to stop it. The international bankers who controlled gold movements could inflict their will on any country, and the United States was as helpless as any other.

Notes from these House Hearings follow:.....

...On February 6, 1929, Mr. Montagu Norman, Governor of the Bank of England, came to Washington and had a conference with Andrew Mellon, Secretary of the Treasury. Immediately after that mysterious visit, the Federal Reserve Board abruptly changed its policy and pursued a high discount rate policy, abandoning the cheap money policy which it had inaugurated in 1927 after Mr. Norman’s other visit. The stock market crash and the deflation of the American people’s financial structure was scheduled to take place in March. To get the ball rolling, Paul Warburg gave the official warning to the traders to get out of the market.....

The revelation of the Federal Reserve Board’s final decision to trigger the Crash of 1929 appears, amazingly enough, in The New York Times. On April 20, 1929, the Times headlined, "Federal Advisory Council Mystery Meeting in Washington. Resolutions were adopted by the council and transmitted to the board, but their purpose was closely guarded. An atmosphere of deep mystery was thrown about the proceedings both by the board and the council. Every effort was made to guard the proceedings of this extraordinary session. Evasive replies were given to newspaper correspondents."

Only the innermost council of "The London Connection" knew that it had been decided at this "mystery meeting" to bring down the curtain on the greatest speculative boom in American history. Those in the know began to sell off all speculative stocks and put their money in government bonds. Those who were not privy to this secret information, and they included some of the wealthiest men in America, continued to hold their speculative stocks and lost everything they had....

[This part of a destroyed book is also included. cv]

* "The Federal Advisory Council has great influence with the Federal Reserve Board. Conspicuously upon that council is J.P. Morgan, the leading member of J.P. Morgan Company and son of the late J.P. Morgan. Every one of the twelve members of the Advisory Council, as you well know, was educated in the same atmosphere. The Federal Reserve Act is not only a special privilege act but privileged persons have been placed in control and are its advisors in its administration. The Federal Reserve Board and the Federal Advisory Council administer the Federal Reserve System as its head authority, and no one of the lesser officials, even if they wished, would dare to cross swords with them."

(FROM: "Why Is Your Country At War?" by Charles Lindbergh, published in 1917). The above paragraph explains why Woodrow Wilson ordered government agents to seize and destroy the printing plates and copies of this book in the spring of 1918.
www.apfn.org...

I included the above by Charles Lindbergh because of government agents to seize and destroy the printing plates and copies of his books. - So much for freedom of the press! This is the same Lindbergh
whose grandbaby was kidnapped and killed.

On a spring day in 1918 several government agents entered a print shop at Washington, D. C., where the original edition of this book was being printed. "Destroy all the Lindbergh plates in your plant," they told the head of the institution. He was forced to comply. The hysteria of war-time brooked no delays. Not only were the plates of this book "Why Is Your Country at War?" destroyed, but also the plates of Congressman Lindbergh's book "Banking and Currency," written in 1913 and attacking the big bankers and Federal Reserve Law. So was the painstaking effort of months wiped out. Only a few hundred copies of this book had been printed, and they were sent to Minnesota for use in Congressman Lindbergh's campaign for the governorship of that state....

With the possible exception of Robert M. LaFollette, Sr., no man has been more pilloried in modern American politics than Lindbergh. Until 1907 he had a lucrative law practice at Little Falls, living on his splendid farm fronting the Mississippi river. He decided to run for Congress in 1916 in the Sixth Minnesota district, comprising the north central part. Even to this day some of this territory is primitive and wild. Lindbergh was a lover of the out of doors; born in Sweden he was brought to America when one year old and spent his boyhood days tramping the newly developing wilderness of Minnesota, where he developed a splendid physique. In his first campaign he did not have an automobile but covered some territory on bicycles some with a team and a large part by canoeing up and down numerous lakes and rivers, calling upon the isolated settlers who seldom had visitors. They were impressed by his sincerity and personality and he was returned to Congress for four more terms.


Shortly after reaching Washington he became interested in the money question and with the advance of years his absorption in this problem was almost fanatical. Every speech and writing was devoted at least in part to discussions of finance, the Federal Reserve System and "international bankers." Early in his political career he introduced a resolution to investigate the so-called Money Trust. There was a bitter fight but it resulted in the Pujo investigation. To his last illness he opposed the system of having the Federal Reserve Board control the business, transportation and finance of the country. For this fight Lindbergh was punished by the press, receiving at times a national condemnation which would have discouraged a less courageous fighter,,,,, WALTER E. QUIGLEY Minneapolis, Minn. January 1, 1934 www.campaignforliberty.com...

Sorry, memarf1, but the FED is not the nice altruistic bunch you think they are. I think Megalomaniac Sociopaths is a lot closer to their true nature especially given the millions of people they have destroyed through their game playing. The more you read about these people the more obvious that becomes.

Take the Rockefellers for a simple example: sourcewatch.org on the Rockefeller Foundation

As I said Bloody handed Megalomaniacs responsible for the death and suffering of millions.

How about declaring the entire debt to the Fed Private Consortium of International Banks, a meaningless number, and then KILL THE FED by repealing the Federal Reserve Act?

Yes, it would all come tumbling down, briefly - then, start it back up again by giving Congress the Authority to Issue money on behalf of the people of the USA. In other words, replace the old US dollar, with a new one, and win the day..

What would be the implications of that? Just curious, since we all know that money is just perception.

reply to post by memarf1


Glenn Beck came over from CNN after the election of Barack I believe.... just to show you didn't do all your homework.

reply to post by ThirdEyeofHorus

I'm not sure what your point is? Okay, he came from CNN to FOX, why is this significant?

reply to post by memarf1


The point being that Fox didnt start out with Glenn. Glenn was at CNN even during the election cycle. I remember thinking how cool it was that Glenn left CNN for Fox. You made it sound like Glenn was there at the beginning of Fox news lol. It would be like saying Ed Schultz made MSNBC what it is.

reply to post by Observor


Not to mention he doesn't understand what we have against the Fed

reply to post by ThirdEyeofHorus


hahaaha, My apologies, I didn't mean to make it sound that way. I was merely pointing out that FOX has personalities and that is what made it big and popular, definitely not news. Its pretty sad what the media in our country has become. Even the British media, whom we could rightly trust for quite some time, is becoming corrupted by buyouts and a Rupert Murdoch invasion. Disturbing indeed.

Originally posted by fltcui
I love Ron Paul but.... the Federal Reserve is a private bank. It's not owned by the US. So why would a private bank tear up those bonds and lose the interest on them?
Correct me please if I'm incorrect.

They can`t...all Ron is saying is if they did we would be better off. In my opinion " get rid of the federal reserve.PERIOD.... until we take back what is ours ...ours will be theirs. Ron Paul thinks with his head and not his wallet. One day the people will stand up and fight the gov. Question- what would happen if we just did not vote?
not elect anyone one person and said to the gov. we will not go into the night we will...oopps that was from a movie...lol POINT IS... until we take control of those we vote into office, it will not change even if we elect Dr Paul
as he is just a pawn. we need to bank rubt the elite. show them the people have the power. untill we stand, the gov. won`t fall.

reply to post by memarf1

Its pretty sad what the media in our country has become.....

The media was corrupted before you were born.

I worked for a company owned by a guy who "Angered" the world power mongers. A media campaign - nation wide - sprung up out of nowhere and darn near bankrupted him. It caused the shutting down of five factories in one state alone. There was even a book written about the incident. The only problem is the book is a mass of lies. I know I was THERE.

Remember the Kent State Riot where students were shot and killed????

I was at a big ten University and shortly after Kent State there was a huge riot on my campus. It was so big it made national news with film footage of the riot. My parents, half the country away saw that film on the 6:00 news and I got a phone call making sure I was alright. AGAIN it was a pure fabrication, a mass of LIES. I know I was THERE. (Note no one else in my dorm got a call so there was a blackout of that "news" in the state where the college was located.)

The USA does not have "News" what they have is PROPAGANDA!

The takeover of the media
U.S. Congressional Record February 9, 1917: J.P. Morgan interests bought 25 of America's leading newspapers, and inserted their own editors, in order to control the media. www.mindfully.org...

JP Morgan: Our next big media player? (April 13, 2010) JP Morgan controls 54 U.S. daily newspapers,and owns 31 television stations. www.newsandtech.com...

Media Conglomerates, Mergers, Concentration of Ownership: www.globalissues.org...

Who controls the media www.nowfoundation.org...

Interlocking Directorates
Media corporations share members of the board of directors with a variety of other large corporations, including banks, investment companies, oil companies, health care and pharmaceutical companies and technology companies. This list shows board interlocks for the following major media interests:
www.fair.org...

I agree with EVERYTHING Ron says accept ONE !

Eliminating an independent Fed and putting the purse strings in the hands of a usually Demonicrat dominated congress as the constitution originally specified the congress controlling the money supply IS A RECIPY FOR UNMITIGATED DISASTER, EVEN MUCH WORSE THEN WE HAVE NOW, no wonder the Demonicrats have not had Ron bumped off yet by their UNION THUGS

THIS part of his plan NEEEEDS to be changed, there is better plan in the works which I hope he will adopt, you may find it in the news soon in the next week or two.

If the central bank of the United States is actually a Federal entity, why cant they forgive debt owed to them by the Treasury? It wouldn't make sense not to. Stop all principal and interest payments to the "Fed" immediately.

Lets stop the nonsense already. The "Federal Reserve" is a for profit private bank that was setup by agents of the Rothschild banking cartel. Pick your source, Money Masters, The Creature from Jekyll Island, Zeitgeist, its all well documented.

reply to post by ModernAcademia


The 1.3 trillion dollars is NOT real because money is not worth anything. America has been playing with monopoly money for a long time now. BUT....All you people not paying your mortgages are taking with country to the ground.. The banks will want their money next year, will YOU have it? I DON'T THINK SO!!! That's when its going to hit the fan people...one more year....

vote ron paul for president

Originally posted by blood0fheroes
reply to post by fltcui

 

So why would a private bank tear up those bonds

I think with this, as with all action Ron Paul takes on the Fed, is the one area where he has ulterior motives.
This proposal would be a win/win for him. Should the Fed do this, it's a win by means of having 1.6 trillion less debt. Should it be mandated that the Fed does this, and they refuse - it will prove to many people that they are, in fact, a private bank.....and an organization that does not work for the people's interests

This is, in my opinion, what he has been working for for a few years now.......to kill the bank.

'
Star for you but it goes further then this. What most don't know is the Fed is claiming they do not own the bonds but they are holding them for the US treasury despite claiming them as assets. This was their excuse for not owning gold either. So Ron Paul is backing them into a corner. Ok fine if you are just holding them for the US treasury great we don't need them so destroy them thank you... The fed will never destroy them for it is in fact essential to thier ponzi scheme. Making this a president election topic may expose them but the media will bury this and I am sure they will have some lap dog analysts ridicule it.

I have been telling people for years the debt is phony and most think I am insane when they here it...

Originally posted by MACchine
I agree with EVERYTHING Ron says accept ONE !

Eliminating an independent Fed and putting the purse strings in the hands of a usually Demonicrat dominated congress as the constitution originally specified the congress controlling the money supply IS A RECIPY FOR UNMITIGATED DISASTER, EVEN MUCH WORSE THEN WE HAVE NOW, no wonder the Demonicrats have not had Ron bumped off yet by their UNION THUGS

THIS part of his plan NEEEEDS to be changed, there is better plan in the works which I hope he will adopt, you may find it in the news soon in the next week or two.

of course there is a better plan but getting congress to act is near impossible. getting rid of the fed would be a huge step. Because even though congress is not trust worthy this will eliminate the interest they charge on creating money through printing and loans. In other words we would eliminate the national debt in one felled swoop if congress took back the creation of money. Which is of course why it will never happen since to many congressmen are in the pockets of the banksters

Ron is 75 this is his last campaign and it looks like he is pulling out the stops and letting it all hang out. Good for him maybe we'll get lucky and enough people will wake up and elect him President.

reply to post by hawkiye

Ron is 75 this is his last campaign and it looks like he is pulling out the stops and letting it all hang out. Good for him maybe we'll get lucky and enough people will wake up and elect him President.

That has the Banksters scared and that is why they have thrown Sarah Palin at the Tea Party.

Unfortunately it worked. Last poll I saw Ron Paul was about 30% and Palin was about 30% So if Palin had not been wooing the Tea Party (who started as Ron Paul for pres 2008) he would have probably had upward of 60% of the poll votes.

With a split like this they can slip in another puppet or keep the Palin puppet.

Originally posted by crimvelvet

SLAVES

It makes us "slaves" - actually serfs because we are obligated to work and give up the wealth we create in return for NOTHING.

What is a serf/slave??? Someone who must work for another human being and who gets nothing in return for that work while the "owner" sits on his duff and enjoys the fruits of the first persons labor.

Slaves have no choice in what they do. If you do not wish to use the notes issued by the banks or the metals mined by the mine-owners, you don't have to. When you want those notes/metals, you are voluntarily surrendering that part of your wealth for those notes/metals.

What about the other half of what we earn??? The Average credit card debt per household is $14,687 this does not include education loans, car loans and house mortgages.

Did anyone hold a gun to the debtors' heads and make them borrow the money? If not, they voluntarily entered into the debt.

GOLD vs FIAT

Humans originally used "barter" or the direct exchange of goods. This was cumbersome so a certain type of trade good became the generally agreed upon medium of exchange. This could be metals such as Gold, Silver and Copper as well as many other things such as cowry shells or obsidian points (Arrows). All these things used as "money" had elements in common.

... money exists to facilitate trade when basic barter isn’t practical....

Perhaps I am in one group with a surplus of dried meat and you are in the other with a surplus of tubers. It would stand to reason that we would agree to trade some quantity of one for the other. But what if I don’t want your tubers? ...

Eventually you show me some flint knife blades and I don’t need them because I have plenty of my own knife blades but I realize the following…

* They never go bad, rot, etc.(durable)
* I can trade them later for something I do want (intrinsic worth)
* It took me less energy to get my meat then to make a blade (profit)
* I can trade multiple blades with multiple individuals (divisible)

www.trtam.com...

The KEY is
* durable
* intrinsic worth
* profit
* divisible

I am going to add two more characteristics to the list.
* relative scarcity - a part of intrinsic worth
* easily transported

Metals have all of these characteristics but does paper money??? When the paper money was a SILVER (or gold) certificate, that is a contract obliging the bank/government to exchange it for metal upon demand, then yes paper money had intrinsic worth. Fiat currency which is NOT backed by metal has NO intrinsic worth. It has no more worth than toilet paper as has been proved in countries such as Germany and Zimbabwe. Note that while US citizens were not allowed to own gold when in 1933 President Franklin D. Roosevelt outlawed private gold ownership, the BANKS could demand US dollars be exchanged for gold. (Bankers are not dumb THEY wanted GOLD not pieces of paper and still do to this day) This had Congressman, McFadden, Chair of the House of Representatives Committee on Banking and Currency, hopping MAD. Finally in 1971, President Richard Nixon ended trading of gold at the fixed price of $35/ounce. At that point for the first time in history, formal links between the major world currencies and real commodities were severed". Even About.com Economics "glossary defines [FIAT MONEY] as "money that is intrinsically useless; is used only as a medium of exchange".

Nothing in the world has "intrinsic" worth. Yes there are some that have held value historically over long periods of time, but nothing has intrinsic worth. All value is dependent on someone wanting it. It doesn't take a genius to realise that metals command more value than paper. However certain kinds of paper are valued more than other kinds. For example, when the paper is printed with something useful and is called a 'book' people are willing to part with more than the value for the paper and ink taken separately. Similarly a piece of paper that is popularly accepted as a token of value also carries a value that is much more than the value of the paper and ink used to bring it into existence. Yes, it is extremely important to ensure that such tokens whose only value exists in their popular acceptability be not created in excess supply than is there a demand for them. That is the whole trick to Central Banking, ensuring that these coloured pieces of paper/entries in a book, retain their value over a reasonable period of time.

And there is the key: GOLD has intrinsic worth while fiat money is intrinsically useless. If you had converted to gold, then as the US dollar was devalued your savings would remain relatively constant. In 1972 about $2,000 US dollars (57 oz of gold) bought a nice new car. Today it is $30,000 (19 oz of gold) and up. The $1000 I saved in 1972 now has a buying power of less than a hundred dollars. I should have splurged and bought gold jewelry!

Not sure you would want to buy a "fine car" of 1972 make for US$ 30,000.

But yes, your point is correct, fiat currency notes are not good form of saving in. They are always to be used for current transactions, since they are not designed to hold their value over a long term. So put your savings in assets known to retain their value/appreciate over time. Yes, gold is a good investment vehicle, but there are many others as well.

So why are we stuck with a fiat currency and why hasn't the USA hit hyper inflation given the Fed is printing money like mad??? I finally found a reasonable explanation.

It may be news to you, but every currency in the world and not just US$ is issued by fiat and backed by nothing. No currency is hit by hyper inflation until the volume of the currency far exceeds the demand. Often hyper inflation is by design, not by accident.

If the US dollar ever losses reserve currency status we are going to be in a world of hurt because hyperinflation is going to hit. Reserve currency status is the only thing that has kept us from following in the foot steps of Germany and others.

All the US$ held by outsiders represent the wealth the US imported and has not yet paid anything for. But same is true of all the US assets held by outsiders. So if foreign holders of US currency or assets decide to disinvest it could create problems and hyper inflation is one of them.

If you are holding it against Central Banking, here is something to think about. Central Banking is merely a tool to keep the money supply on par with the demand. Like any tool it can be misused. It is an extremely powerful tool and extreme caution should be exercised when using it, especially when assuming the factors not under one's control. The US for long has assumed the status of its currency as the world's reserve currency and decided to abuse this status to consume well beyond what it produced. Such an abuse can continue only for so long and it is no surprise that many expect it to end soon and with drastic lessons for Americans. Don't find any problem with it.

Originally posted by crimvelvet
reply to post by Observor

 

Paper currency and fractional reserve banking became popular under market forces because they served a dire need, a money supply that can keep up with industrial production without leading to monetary deflation.

Did the bankers enjoy their new found power to create money out of nothing? Quite likely. Did they conspire with governments to give themselves that power? Quite unlikely.

" Did they conspire with governments to give themselves that power? Quite unlikely. " I suggest you read a well researched article on a different subject before making that type of statement. That Article made a permanent change in my view of how this country is actually run.

Again just for your information, fractional reserve banking and Central Banking happened all over the world and in every country. In several of them there were no "banksters" to conspire with the government, the governments own the Central Banks.

HMMMmmm, I wonder what the "velocity of money" idea does to your theory that we NEED to expand the money supply.

When you look at it carefully, it confirms what I said. When the 'velocity of money' doesn't change rapidly enough to meet the increasing commerce, the supply of money needs to increase to meet the denads of increasing commerce.

But you are right, there is really no "need" for commerce and production to grow. People could simply stay at the same level of production, commerce and consumption. However most seemed to desire a higher level of consumption enabled by industrialisation, which required greater commerce, which in turn required higher/faster money supply and when the velocity of money didn't increase rapidly enough to keep pace with increased production made possible by new technologies and resources, increased supply of money, even when backed by little or nothing became popular. You may dislike the fact that people want more things and perhaps prefer they stay at a pre-industrial level of existence so that their savings never disappear in hyperinflation, but most preferred the risks and rewards that came with fractional reserve banking and fiat money.

It seems like Mises (Austrian School of Economics) is not the only one who is not real enthusiastic about expansionary monetary policies.

Monetary expansion makes sense only when there is a potential for creating new wealth, otherwise it results in inflation. Monetary contraction is what is needed when the actuall welath production is falling. Both are possible with fiat currency. With metals based currency monetary expansion may or may not be able to keep pace with the potential for wealth creation. Monetary contraction is possible with metals, since people would simply hoard the metals rather than put them into circulation.

Now even the head of the bank of England is backing off. more on the ongoing debate UK Proposal for Banking Reform: Fractional-Reserve Banking versus Deposits and Loans

Seems Fractional Reserve got the boot in the UK over a hundred years ago. Too bad the sheeple keep falling for the same con job.

No, fractional reserve banking didn't get the boot in the UK over a hundred years ago, it was regulated since then.

Yes, I can see why Bank of England doesn't want to increase the money supply any more, there is little room for any domestic growth in wealth.

But that doesn't mean the monetary expansion that happened for hundreds of years in the UK was a conspiracy of bankers.

I guess I am not the only one who hates the banksters

Yes, you are not the only one who wants shift the blame for the consequences of decades of irresponsibility of whole populations and their political leadership on to a few identifiable "villains".

Originally posted by crimvelvet
reply to post by Observor

 

I doubt the banks of the day violated any contracts. I fear they may never have promised to protect the deposits (current or savings) under all circumstances. Otherwise they would practically be the equivalent to loans and not deposits.

Under your terms, if all the accounts were current accounts, banks cannot lend even a penny, since if the borrowers default or go under the banks reserves would be a fraction of their committments. Historically that is how banks operated for centuries....

Loans and deposits are not the same and were not treated as the same even back in Roman and Greek times. As I said this is a matter of CONTRACT LAW, and the bankers are committing what is in actuality a breech of contract. Only the fact it has become such a common practice has kept Judges from hang bankers out to dry. LINK

Despite what you seem to think the idea of a "business contract" has been with us for centuries and that includes "Banking Contracts"

Roman and Greek laws are applicable in Rome and Greece of that day.

For someone to have violated a law in a country there should have been a law in force in that country at that time. Instead of guessing why the judges didn't punish the bankers resorting to fractional reserve banking in the USA, you could quote the exact law they were violating, tried under and what reasons the judges gave for clearing them of the charges.

If the bankers entered into an explicit contract not to lend out the deposits, but did they would have been in violation of the contract. Even an implicit contract doesn't exist, once banks started paying interest on deposits. An assumption of a contract on the part of the depositor isn't good enough to make it a legal contract.

How can any government debt be real. Just print more money and make the american dollar worth less. Lmao I make my self laugh sometimes.