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ManAtTheWindow



Joined: 29 Oct 2007
Posts: 247
Location: Inverness, Scotland

PostPosted: Fri Oct 10, 2008 2:02 pm    Post subject: Reply with quote

urbanspaceman wrote:
A good presentation. It's been mainly Griffin and Bill Still, 2 fiscal and religious conservatives, that have been vocal about the corrupt money system for almost 20 years.


There is also Eustace Mullin's book Secrets Of The Federal Reserve.
It's been a while since I read it but I remember it as being very good.

urbanspaceman wrote:
They're on record disagreeing with each other on how to fix the corrupt system. Both say to get rid of the FED, which, once you know the history and what it really does, is the obvious thing to do. After doing that, Griffin suggests returning to gold backed money. Still doesn't agree with this, as he suggests that we (or rather the government representing us) issue are own money (not the banks) and use that money for taxes to keep it circulating.

I agree with Still that gold-backed money is not a great solution. In this audio, Griffin seems to imply that gold has 'real' value, and gives the example that in the Roman Empire you could buy a nice outfit with a gold coin, and today you could buy a nice suit with it, so essentially it hasn't changed it's value. Not withstanding the problem that gold can be hoarded and be made scarce by the rich, and that perception about the amount of gold backing any currency can be manipulated (ie. you can lie about how much gold you have in order to pump more paper money in), it's not gold that has real value, does it? Can you eat gold, can you cloth yourself in gold, is it an energy source? Gold was probably chosen at one time because it was desired for its beauty, and that you can make pretty jewelry with it. But it has little more innate value than paper.


I think the arguments for using gold as a currency standard would be;
1. Physical stability. The relative indestructibility of gold means it can be stored in almost any conditions for a long time.
2. Finite supply. If someone discovered a way of producing gold from base metal, its agreed value would plummet. I believe that millions of diamonds are stored away from the market place for precisely this reason.
3. Portability. Apart from coins and bars, there are also gold rings, earrings, bracelets, etc. That's a very practical way of carrying assets around with you.
4. Acceptance. It's worth remembering that if nobody was prepared to deal in the stuff, it would just be another mineral. The consensus to recognise gold as a form of currency is an essential factor. I vaguely recall stories of explorers in bygone days coming across aboriginal peoples and being unable to use gold to trade with them. The natives had no use for this yellow metal and consequently attached no value to it whatsoever.



urbanspaceman wrote:
The problem is really one of oversight, to make sure the money in circulation actually represent things of value. Bill Still, being a patriot, believes returning to the American system as it was founded is the answer. A political system, though, is only as good as the people running it and the values they hold.


An essential point.

urb wrote:
So I was always scratching my head after these presentations, because although they exposed the Money=Debt scam, they never defined what wealth and money (backed by something OTHER than debt) was.

Wealth is really an abundance of well-being. Health, wisdom, love, beauty, power, freedom. If you have those things in high measure, you are wealthy. So then what is money?


Right on! Philosophically, I consider wealth to be fundamentally spiritual as opposed to money which is essentially material. The physical well-being of a person is transient. Our material lives are part of a dynamic process which is never the same from one moment to another and yet we try to base our trading system upon a questionable notion that a currency can have a permanent value if it is based on some specified material. It really matters not whether this material is a loaf of bread which will be stale by tomorrow or a bar of gold which remains the same forever. Unless our concept of wealth is informed by a spiritual insight into the value of anything in terms of its worth as a service to humanity, I simply can't imagine how any token of that wealth can be held to be valuable.

urbanspaceman wrote:
It wouldn't be quite right to say that money, when used ethically (as in early ancient Egypt, as I mentioned above, where that value of money barely changed over hundreds of years) is a direct representation of wealth (because some of these things are hard to measure). What money should be, or can be, is a representation of the units of human energy that directly create health, wisdom, love, beauty, power, and freedom.

What's extremely difficult is insuring that the money you have in circulation actually mirrors this flow of wealth-enforcing human energy. The money masters are the ones that have figured out how to direct that flow towards them, hoard some of it, and throw the rest of it into an abyss. They literally suck the well-being from everyone else. Sounds like a pretty good definition of the devil, isn't it? The well-being sucking force!

The more I think about that little Austrian town James D mentioned, the more it seems to have good solutions in it. Keep the control local, keep the money circulating...that's at least a good start, and is slightly more satisfying to me than the solutions proposed by Griffin and Still.


Energy is dynamic. It doesn't stand still. It rises and falls, radiates outwards, bounces back and forth, etc. That's the key distinction between our spiritual, human feelings of well-being, progress and contentment on the one hand as opposed to the concept of a stable, unchanging basis for a currency system (such as the gold standard) on the other hand.
Our lives are a process wherein we're constantly generating and regenerating those spiritual values and attributes which make us feel alive and vital. They're essentially subjective and abstract states, not objective, independent material forms. Thus, whatever token is used to represent those conditions probably ought to have an inherent ability to reflect fluctuations. To put it another way, a money system which encourages regular interaction, exchange and the flow of action is at least in tune with our needs to be active members of a community whereas a system which allows people to isolate themselves behind an impenetrable wall of hoarded wealth won't, in the long run, tend to produce well-balanced, happy people who contribute to a healthy society.

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jose



Joined: 23 Jan 2007
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PostPosted: Fri Oct 10, 2008 3:21 pm    Post subject: Reply with quote

Hi Guys!

Nice topic, money is one of the most fascinating creations...

Here is a nice take on what money is; please let me know your thoughts...

http://www.capmag.com/article.asp?ID=1826

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kathy



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PostPosted: Mon Oct 20, 2008 4:33 pm    Post subject: Reply with quote

Got this in an email Laughing

Quote:
After the recent teetering-on-the-edge-of-total-economic-and-financial-meltdown a friend
from rural Ireland has simplified 18 economic models using cows:

SOCIALISM
You have two cows.
You give one to your neighbour.

COMMUNISM
You have two cows.
The State takes both and gives you some milk.

FACISM
You have two cows.
The State takes both and sells you some milk.

NAZISM
You have two cows.
The State takes both and sh oots you.

BUREAUCRATISM
You have two cows.
The State takes both.
Milks one, shoots the other, then throws the milk away

TRADITIONAL CAPITALISM
You have two cows.
You sell one and buy a bull.
The herd multiplies and the economy grows.
You sell the herd and retire on the income.

SURREALISM
You have two giraffes
The Government requires you to take harmonica lessons

AMERICAN CORPORATION
You have two cows.
You sell one and force the other to produce the milk of four cows.
Later, you hire an expensive consultant to analyse why the cow has
dropped dead.

ENRON VENTURE CAPITALISM
You have two cows.
You sell three of them to your publicly listed company using letters of
credit opened by your brother-in-law at the bank, then execute a
debt/equity swap with an associated general offer so that you get all four
cows back with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a
Cayman Islands company secretly owned by the majority shareholder who
sells the rights of seven cows back to your listed company.
The annual report says the company owns all eight cows with an option on
one more.
You sell one cow to buy a new President of the United States leaving you
with nine cows.
No balance sheet provided with the release.
The public then buys your bull.

FRENCH CORPORATION
You have two cows.
You go on strike, organise a riot and block the roads.
Because you want three cows.

ITALIAN CORPORATION
You have two cows.
But you don't know where they are.
You decide you really must have lunch.

RUSSIAN CORPORATION
You have two cows.
You count them and learn you have five cows.
You count them again and realise you have 42 cows.
You keep counting and discover you have two cows.
You stop counting and open another bottle of vodka.

SWISS CORPORATION
You have 5000 cows.
None of them belong to you.
You charge the owners for storing them.

CHINESE CORPORATION
You have two cows.
You have 300 people milking them.
You claim that you have full employment and high bovine productivity.
You=2 0arrest the man who reported the real situation.

INDIAN CORPORATION
You have two cows.
You worship both of them.

BRITISH CORPORATION
You have two cows.
Both are mad.

IRAQI CORPORATION
Everyone thinks you have lots of cows.
You tell them you have none.
No one believes you so they bomb and invade your country.
You still have no cows but at least you are part of a Democracy.

IRISH ENTERPRISE
You have two cows.
You convince the EU that two cows = a thriving economy.
You take the EU billions and then forget to pay it back.
Laughing
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Fintan
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PostPosted: Mon Oct 20, 2008 6:59 pm    Post subject: Reply with quote

Here's a refreshing dose
of contrarian thinking:

Quote:
Extract from NO "RECESSION"

by Howard S. Katz - October 13, 2008

.......Modern economists made up the concepts of recession and
depression because they are the lap dogs of the paper aristocracy

(bankers, their loan customers, etc.). What actually goes on in the
economy are money/credit expansions and contractions. Since the
contractions are good for the vast majority of the people and bad for
the bankers, these economists consider them recessions/depressions.

But since recessions/depressions are virtually universal declines in
wealth, they don’t really exist. When the Fed eases up on the money
pedal, prices moderate and the wage earner catches up with the previous
price increases, then the majority of the country is better off. So to call
such a period a recession is completely inane.
That, by the way, is what a
degree in economics signifies today. In mid-century, a group of bankers
succeeded in getting control of the teaching of economics in America. The
real economists were kicked out, and a group of crackpots brought in to
replace them.

All these people know is, print money, ease credit......

READ ON:
http://www.gold-eagle.com/editorials_08/katz101308.html

Quote:
IN YOUR FACE

Howard S. Katz - October 18, 2008

In your face, Paul Volcker. In your face, Ben Bernanke. In your face, Al
Abelson. In your face, DeLong, Rogoff and Johnson. In your face, New
York Times. In your face, Wall Street Journal. You think you can take us
gold bugs down. We have just gotten off the canvas, and we are going to
knock you out.


For the past month, the New York Times has orchestrated a mass panic
where most people are running around in a state of hysteria. They are
not very precise in their description, but when they use phrases such as,
“Financial Crisis” (9-15-08 ) and “Day of Chaos” (9-26-08 ) and when Al
Abelson writes, “Chicken Little was right,” (10-06-08 ) we get the idea that
something is wrong.

And then when the stock market drops 3,000 points (DJI) in less than 2
weeks, we know that a lot of other people have that idea too.

1) Now there are basically two types of thing which can go wrong in an
economy. In the first type, there is not enough money. The (per capita)
money supply is declining. This causes high real wages (as nominal
wages do not decline as rapidly as prices) and is usually associated with
above normal real rates of interest (which is very good for retired
people). This is bad for the bankers (because they can’t make as many
loans) and for Wall Street (because stocks go down). Among modern
economists there is a great reluctance to call things by their correct
names and words are used for emotive content and political effect.
However, at the One-handed Economist we call a thing according to what
it is. And this first wrong thing is an appreciation of the currency (an
increase in the value of money). A modern term for the same thing is
“deflation.” However, this is a strange word because “deflation” outside of
economics means a going down (e.g., a balloon), and in this situation the
value of the currency is going up.

Most people will describe this wrong as a “recession” or “depression;”
however, these words imply a general decline in the whole economy. Why
should the whole economy, for no discernable reason, start going down?
Take the longest period of currency appreciation in world history, the U.S.
from 1866 to 1896. This was a period of repeated “depressions,” including
one almost as severe as that of the 1930s. And yet the U.S. emerged
from this “bad” period as the richest and most rapidly growing country in
the world. I have often pointed out that during the great “depression” of
the 1930s Americans switched from margarine to butter, ate more meat
and gave more to charity. Is this the behavior of people who are getting
poorer? Indeed, there was a popular song, “Tomatoes Are Cheaper,” by
Eddie Cantor pointing out that wages had not declined as rapidly as
prices; hence real wages had risen; and this was therefore a good time to
start a family.

2) The second thing which can go wrong in an economy is too much
money
. This causes low real wages (hence low unemployment) and low
interest rates. Prices of things rise faster than your ability to buy them.
But the initial effect of the increase in money is a big boost to the profits
of the large corporations and to the stock market. This is a currency
depreciation. Two examples of currency depreciation are Germany in
1914-1923 when prices rose one trillion times and Zimbabwe over the
past two years. According to the Hanke Index for Zimbabwe, prices rose
from an index number of 1 on Jan. 5, 2007 to an index number of 16.1
trillion on Oct. 10, 2008. They have been multiplying by 4-fold per week
for each week since Aug. 22, 2008. So they are probably at an index
number of 64 trillion right now.

Despite a lot of propaganda to the contrary currency depreciations are a
lot worse for an economy than appreciations. Right now in Zimbabwe
raising prices is illegal. But the government prints money; so everyone
ignores the law. Thus everything really is chaos because one can be
arrested for taking simple, everyday actions such as buying food. One
law which cannot be ignored because it is strictly enforced prohibits the
people of Zimbabwe from taking an amount of money out of their own
bank accounts greater than what in U.S. terms would be $1 to $2 dollars
per day.

The worst currency appreciation on record occurred from 1929-32 in this
country and saw a 30% decline in prices in 3 years. The worst currency
depreciation is Zimbabwe where prices, as noted, multiplied by (an
estimated) 64 trillion in less than 2 years.

Well, what kind of “financial crisis” and “chaos” is the establishment
threatening us with to cause such mass panic?
It is not always easy
to tell because their language is calculated to arouse emotions not to
convey facts or deal with reality. But we can get a clue. For example, Paul
Volcker says, “a full-scale recession appears unavoidable. “ (“We Have
the Tools To Manage the Crisis,” Wall Street Journal, 10-10-08, p. A-17.)

“Recession” in establishment lingo means “a bad thing associated
with currency appreciation.”
Evidently Paul Volcker thinks that prices
are going to go down.

It’s the current policy of the economic establishment never to define any
of their concepts. In this way, they can always argue that they were right
by switching the meaning of what they say. I remember in the early
1970s when they said that the price of gold would go down to $8 per
ounce (Chairman of the House Banking Committee Henry Reuss), and
then in November 1979 when they said that the gold bugs (who had been
brilliantly right) were a “lunatic fringe.” But back in the old days, when
they were just starting out, they slipped up. They actually defined one of
their concepts. Arthur Burns, of the National Bureau of Economic
Research, defined a recession. as 2 consecutive quarters decline in real
GDP.

As we saw above, there is no such thing as a recession, and anyway GDP
does not measure a country’s wealth
. But Arthur Burns blurted it out, and
I’m going to hold them to it. I am interpreting Volcker’s prediction of 10-
10-08 as meaning that he expects real GDP to be down for 3rd and 4th
quarter 2008.

Well, Mr. Volcker. You’re wrong. You’re wrong. You’re wrong.

Real GDP is a measure of activity not wealth. And since government-
stimulated activity is usually waste, it mostly happens that, when GDP
goes up, the country is getting poorer. (That is why in the 2nd half of the
20th century Italy could outproduce West Germany in GDP but not in
anything else.) In any case, you can closely approximate real GDP by
just watching the money supply. By this measure real GDP for 3rd
quarter ’08 should be only slightly positive, and it is possible that the
enormous panic at the end of the quarter will put it just barely into
negative territory. However, the 4th quarter of ’08 is a different story.

As we saw last week, Ben Bernanke is printing money as though he were
trying to ward off a massive appreciation of the currency. Bernanke
always talks about the 1930s “depression.” He is living in that era. It is an
obsession. But right now, of course, we are in the middle of a massive
currency depreciation. The U.S. dollar has dropped from 120 to 82 on its
index. The Commodity Research Bureau index has risen from under 200
to almost 400. And when the history of our age is written, it will look like
the 1970s with 2008 taking the place of 1973.

Ben Bernanke is fighting the wrong war, at the wrong place, at the wrong
time. He is in an era of currency depreciation, and he thinks he is in an
era of currency appreciation. By printing money like crazy, he is throwing
gasoline on the fire
. So the chances of a down 4th quarter in real GDP are
zero.

In your face, Paul Volcker and all the rest of you idiots who are predicting
recession or depression. You are wrong, and unlike the past when you
tried to weasel out of your mistakes, I am going to hold your feet to the
fire.

What is the import of this for gold bugs? It is very simple. Gold has held
up well in the general decline and looks poised for another autumn-winter
rally. But gold stocks have been carried down by the general panic and
by margin selling on the part of conventional investors (to protect their
other holdings). Thus the HUI/gold ratio has declined from 0.50 through
most of the century to 0.26 on the close Friday (10-17-08 ).

This is a fantastic buying opportunity. Gold stocks are cheap, cheap,
cheap. I have been wrong over the past few months as I did not predict
that they would get so cheap. But we will look back on October 2008 as
the buying opportunity of a lifetime. The New York Times has done us a
favor. They have thrown the nation into a panic and made people believe
in a currency appreciation when the truth is that the currency is about to
collapse and all prices explode. They are giving us the opportunity to buy
good quality gold stocks at half price.

There is a fire sale in gold stocks, and Ben Bernanke is throwing gasoline
on the fire.

There is a group of economists who present themselves as gold bugs and
use the gold bug forums to insinuate establishment propaganda. These
people are now screaming that the country is in a depression. When they
prove wrong, they will simply erase this from their minds and go on as
before. For shame on these people. There are only two possibilities.
Either the currency is appreciating (which has not happened since 1955),
or it is depreciating. If you are going to be an economic forecaster, you
have to know which. And it isn’t hard. Just look at the chart below of the
monetary base. Ben Bernanke is printing money, and I am on the lookout
for helicopters.

http://www.gold-eagle.com/editorials_08/katz102008.html

Quote:
More Articles by Howard S. Katz
http://www.gold-eagle.com/research/katzndx.html

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Spoonerian



Joined: 24 Jul 2006
Posts: 25

PostPosted: Mon Oct 20, 2008 11:11 pm    Post subject: Reply with quote

Back during the Panic of the late 1970's/early 1980's I read a book entitled "The Warmongers" written by the same Howard Katz that you cite above. As I recall his thesis was to trace the history of war and show how it was all impossible if not for state financing via debased currency and supplying soldiers via conscription. I remember that he made some bold predictions about a world war between U.S/China vs. Russia/Japan I think.

It seemed as certain back then that total collapse was imminent as it does today. I never would have dreamed that they could keep the ponzi scheme alive for 25 years like they did with more inflation and military Keynesianism.

The lesson is that no matter how well they seem to be able to stabilize things--whether because of advances in productivity, or bringing new imperial colonies on line, the theft and wealth transfer from the politically powerless to the politically powerful is just as large as it is during a full scale panic.

Looking at things this way, even though the CPI grew only a few percentage points annually during the 1980's and 1990's, we were really experiencing hyper-inflation, because with the extra productivity of fax machines, computers, etc., prices should have been falling rapidly.

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Spoonerian



Joined: 24 Jul 2006
Posts: 25

PostPosted: Mon Oct 20, 2008 11:23 pm    Post subject: Reply with quote

Quote:
This of course leads us to a more difficult question: What is wealth?

In the final analysis, wealth is not a tangible thing exactly. Wealth is another word for well-being. If I have more freedom, more love, more pleasure, more free time, more satisfaction, more beauty, and more enlightenment, I have greater well-being, and therefore I am wealthy. It seems very philosophical and abstract, but that is what wealth really is in hard fact.


Yes, goods are merely means to ends aimed at by individual human beings.

The important thing to remember is that ends exist only in the minds of individually acting human beings. Human ends are subjective. Each individual has his own scale of values.

So wealth and value are subjective. You can't point to a pound of hemp or gold or a car and say there's X amount of intrinsic value in there.

"Money" is a characteristic of certain commodities that humans choose to value for exchange purposes rather than for direct use.

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Fintan
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Joined: 18 Jan 2006
Posts: 8298

PostPosted: Wed Oct 22, 2008 3:42 pm    Post subject: Reply with quote

Quote:
Spoonerian:
Looking at things this way, even though the CPI grew only a few
percentage points annually during the 1980's and 1990's, we were really
experiencing hyper-inflation, because with the extra productivity of
fax machines, computers, etc., prices should have been falling rapidly.

Good you brought this point out. I've mentioned it in an audio, but people
are often incredulous when I say that our standard of living should be
more than double what it is. sadly, such is the scale of the outright
theft of productivity under greedy, myopic monopoly capitalism.

I'd like to post an extract from another Antal Fekete, bcause his
non-intuitive take on the reasons for the capital crisis are key:

Quote:
THE MECHANISM OF CAPITAL DESTRUCTION

Antal E. Fekete - October 16, 2008 - New York City

[extract]......

Destabilization of interest rates - wrecker of financial capital

The public’s perception is that declining interest rates are good for
you
, and they are good for the economy. Not so long ago academia and
media were ecstatic in singing the praise of Alan Greenspan and his Fed
for bringing about the Nirvana of the regime of falling interest rates.

This perception is a colossal mistake. A falling interest-rate structure
is lethal. It is an insidious destroyer of capital.
It means that wealth
is stealthily siphoned away from the capital accounts of the producers,
in order to enrich the latter-day pirates, the bond speculators who make
obscene profits in the falling interest-rate environment.

As is well known, falling interest rates and rising bond values march in lock-step, albeit in opposite directions. We are all familiar with the fate of TV manufacturers and steel-makers in America. What has hit them? Well, their capital was destroyed by the relentless fall of interest rates. The writing is on the wall concerning the fate of the auto-makers. What is ailing them? The same thing: the fading of their capital. Well-paid jobs in car-manufacturing will also migrate to Asia, leaving the only jobs, hamburger-flipping that cannot be outsourced, for the American workers.

For a time it appeared that capital devastation was confined to the productive sector, that it would spare the financial sector. After all, the latter was ready to try any and all innovations, fair and foul, in order to squeeze the last drop of profits out of the system by juggling mortgages, bonds, and equities. One of these innovations was derivatives, in particular, credit-default swaps.

The present crisis did not start in August, 2007, as widely assumed.
It started half-a-year earlier, in February, when the price of credit-default swaps (essentially the premium on insuring bond values) took off like a rocket. It dawned upon the world that the financial sector had no immunity to capital destruction. Bank capital has been devastated just as insidiously as productive capital has.

Falling interest rates mean that bank capital has been financed at rates far too high. The resulting shortfall in capital should be compensated in the balance sheet by repeated injections of new capital. If banks fail to do this, then they are paying out phantom profits in dividends and compensation. They pile more losses upon losses. When they run out of capital, as sooner or later they must, capital dissipation stops, for there is nothing left to dissipate. For the banks it means sudden death.


The wrecker’s ball of swinging interest rates

You may have seen the wrecker’s ball in action. It is lowered into the building through the roof. Once inside, it is made to swing wide enough to knock down the opposite walls. The action of swinging interest rates on the economy is similar. Rising rates destroy capital by rendering it submarginal. Falling rates, on the other hand, destroy capital by raising the liquidation-value of debt, making it an unbearable burden on the firm.

Interest rates have been falling for the past 28 years. The present banking and credit crisis is a direct consequence of this prolonged fall. A glance at the interest rate chart will convince you of that. It shows a fairly stable curve leading up to 1971. At that point the swinging of the wrecker’s ball started, driving the rate of interest to unprecedented extremes, first up, then down.

Liquidation value of bonded debt

Falling interest rates destroy capital in a way that is more subtle than destruction through rising rates. The liquidation-value of debt, contracted earlier at higher rates, rises. ‘Liquidation value’ is the lump sum it takes to liquidate debt, should it be necessary to retire it before maturity for example, in case of takeovers, mergers, shotgun marriages, bankruptcies, or the nationalization of the banking system. The point is that as the rate of interest falls, the liquidation value of debt rises. Why? Well, the stream of interest payments now has to be discounted at a lower rate. Therefore at maturity it falls short of liquidating the debt.

Here is a familiar example, the liquidation value of bonded debt. When the rate of interest falls, the market immediately bids up the price of bonds. The higher bond price represents the higher liquidation value of the underlying debt. The fall in the rate of interest, far from alleviating the burden of debt, aggravates it.

Bank capital has been eaten away by the fall of interest rates. The impairment has been ignored and, after 28 years of negligence the global banking system stands denuded of capital. Those shareholders who can read balance sheets see through the fancy values banks are putting on their assets. They dump the stock before bank capital goes all the way to zero.

This is not a real estate crisis, nor is it a sub-prime crisis. This is a crisis caused by the destruction bank capital across the board, through the wrecker’s ball of swinging interest rates. In the final analysis, it has been caused by exiling gold from the banking system.

Dissipating capital under false pretenses

People tend to have a religious faith in the Fed’s miraculous power to create something out of nothing. They think that the Fed is above capital requirement and accounting rules. They think that the Fed is above the law. They dismiss the idea that the Fed, too, can suffer from capital inadequacy, or that it may not be able to escape the ill effects of falling interest rates.

The Federal Reserve Act (as amended) explicitly forbids the Treasury from participating in the earnings of the Fed. The purpose of this provision is to retain the undivided surplus in the Federal Reserve System to meet emergencies precisely like the present crises. The conspiracy of the Treasury and the Fed ignores this provision of the law. Year in and year out the Fed remits about 90 percent of its earnings to the Treasury under false pretences, calling it the “franchise tax on Federal Reserve notes”. No sooner had the Treasury received the remittance than it spent the proceeds, and more, on consumption. As a result, the Fed is left with no undivided surpluses and no cushion to fall back on in hard times. And the Treasury has debt far greater than it has resources to retire. This high-handed disregard for the law is motivated by the desire to foster a public image of the Fed as an institution with supernatural powers.
The Fed has the magic wand and can wave it to solve any problem
by throwing money at it. In this view the Fed is not a bank, but the
embodiment of divine power.


The printing press is sputtering

Chairman Ben Bernanke is given to boasting publicly that the government
has given the Fed a tool, the printing press, with which it can print any
amount of currency necessary to stop any deflation and any depression.

I submit that the Chairman is wrong. The printing press is not everything. The Fed has to operate under the same rules as all other banks. It has to have capital; it has to have an unimpaired balance sheet; it has to observe capital ratios. Above all, the Fed has to put up collateral before it can print new Federal Reserve notes, or create new Federal Reserve deposits. The fact is that the Fed, in addition to dissipating its earnings decades after decades after decades, has also been digging its own grave by pushing interest rates ever lower. Its capital has been destroyed just as that of all other banks. Right now it is near the point that it cannot put new currency into circulation in want of collateral. The printing press is sputtering. The magic wand is broken.

Dead man walking

The Supplementary Financing Program of the Paulson-Bernanke duo
means that, in preparation for the $700 billion bailout, the Fed is given
securities by the Treasury directly, bypassing the open market. The last
time this imprudent departure from the principles of sound central
banking has been invoked was during World War II, when the exigencies
of war finance were used to justify the bypassing of the open market.

But what does it all mean in practical terms, if we strip away the jargon
created in order to mystify the public? It means that the Fed, just like all
other banks, has virtually zero capital. It means that the Treasury must
recapitalize the Fed by giving it $700 billion worth of newly issued
securities. It also means that the bad assets of the banks, some of which
have been absorbed into the balance sheet of the Fed, are monetized
through the back door.

But the worst part is that the Fed is now a dead man walking, propped up
by conspirators who want to conceal from the people the fact of its
demise. This is just the latest of conspiracies between the Treasury and
the Fed. In creating a central bank in 1913, the government usurped
powers not granted to it under the U.S. Constitution. One successful
usurpation calls for another. Now, 95 years later, the government is
frantically trying to resurrect its creature, the Fed, from the dead.

http://www.gold-eagle.com/gold_digest_08/fekete101808.html

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Rumpl4skn



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PostPosted: Wed Oct 22, 2008 3:55 pm    Post subject: Reply with quote

I know that the Zeitgeist video has become "media non grata" here, but Addendum Part 2 gets into this point quite well. How global wealth is being deliberately devoured by the fractional reserve banking system, one dollar at a time. The super rich are playing poker with no money at all laid on the table. When they lose, they lose nothing, when they win, they take it all.

The Trailer:


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bardobeing



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PostPosted: Wed Oct 22, 2008 6:43 pm    Post subject: Reply with quote

I appreciate the original question posed in this thread, that of asking what we can do other than to point out how we've been screwed by the bankers. I think we'll be seeing an acceleration soon in the way of community currencies. There is a new movie being released called "The Money Fix". I have only seen the trailer and a couple of interviews that were edited into the film. My understanding is that it begins as many of the others do, - exposing the flaws of the current central banking scheme, and then goes on in promoting community currencies as one solution. There is to be a 28-minute supplementary film called, "Wealth of Neighbors", which highlights a successful community currency called River HOURS in use by a small American town.

http://themoneyfix.org

At this site you can listen to a great interview with Bernard Lietaer, a prominent figure in central banking who is also a staunch advocate of community currencies.

The site has also created a world map marking the communities where experiments in local currencies are under way, and what method of currency they are trying.

The filmmaker will be showing the film in Seattle while advocating activism toward founding and propagating community currencies. I think that taking matters into our own hands is the best solution. Even if the Fed were shut down some equally unfair system would rise in it's place.

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bardobeing



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PostPosted: Wed Oct 22, 2008 7:16 pm    Post subject: Reply with quote

PatrickSMcNally wrote:

urbanspaceman wrote:
The more I think about that little Austrian town James D mentioned, the more it seems to have good solutions in it. Keep the control local, keep the money circulating...that's at least a good start, and is slightly more satisfying to me than the solutions proposed by Griffin and Still.

It's hard to see any benefit in penalizing people for trying to save money. That's what that proposition amounts to. When people are required to spend money to avoid losing it, they can never save anything.


This gets back to the title of this thread, - What is Money? Is money something to be horded to reward the horders not only with preservation of purchase power, but with real growth in value of their "money"? Or is money a neutral "marker" employed to facilitate the exchange of real goods and services?

There is more than one reason behind a monetary system that calls for horded money to gradually lose it's value. The one mentioned in this thread is to encourage spending/circulation, but there is another. In order for money to be neutral, i.e. to mimic the goods and services that it represents, it must, too, fall in value. Food goes bad over time. Cars and other technology wear out over time. Homes and furniture wear out over time. Money is a virtual representation of these items and a good design for money would take this into account. To not do so gives money a value-advantage over the real production and exchange of value.

Excess money can be invested back into the community in a way that can produce a yield or a stream of retirement income from the investment(s). Excess money can be spent charitably, fostering an essential quality in the community. A system can create exceptions to allow for some private savings without value depreciation. The proof is in the practice. The communities that use this system are quite enamored with it.

This is a complex subject. However, a monetary system that makes the accumulation and hording of money a profitable venture in itself will not likely promote fairness and equality. To the contrary, it will attract to itself the worst among us.

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RedMahna



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PostPosted: Wed Oct 22, 2008 9:33 pm    Post subject: Reply with quote

bardobeing:
Quote:
I appreciate the original question posed in this thread, that of asking what we can do other than to point out how we've been screwed by the bankers. I think we'll be seeing an acceleration soon in the way of community currencies. There is a new movie being released called "The Money Fix". I have only seen the trailer and a couple of interviews that were edited into the film. My understanding is that it begins as many of the others do, - exposing the flaws of the current central banking scheme, and then goes on in promoting community currencies as one solution. There is to be a 28-minute supplementary film called, "Wealth of Neighbors", which highlights a successful community currency called River HOURS in use by a small American town.

http://themoneyfix.org

At this site you can listen to a great interview with Bernard Lietaer, a prominent figure in central banking who is also a staunch advocate of community currencies.

The site has also created a world map marking the communities where experiments in local currencies are under way, and what method of currency they are trying.

The filmmaker will be showing the film in Seattle while advocating activism toward founding and propagating community currencies. I think that taking matters into our own hands is the best solution. Even if the Fed were shut down some equally unfair system would rise in it's place.


as they say in some circles, thanks for sharing! i just had no idea local currency is actually working in some areas. i am assuming you are an advocate? what is your opinion on this phenomenon? the hard-headed will stay behind and the open-minded will work locally? it kind of makes sense, if things get worse. you'd definitely need a lot of community cooperation and some people that have a lot of friends to get something like this started, no?

red

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bardobeing



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PostPosted: Thu Oct 23, 2008 10:48 am    Post subject: Reply with quote

RedMahna wrote:

as they say in some circles, thanks for sharing! i just had no idea local currency is actually working in some areas. i am assuming you are an advocate? what is your opinion on this phenomenon? the hard-headed will stay behind and the open-minded will work locally? it kind of makes sense, if things get worse. you'd definitely need a lot of community cooperation and some people that have a lot of friends to get something like this started, no?

red


Yes, I am an advocate. I see this movement as inevitable. Money, Energy and Food must be brought as close to home as possible. The Energy and Food movements are way ahead of Money today.

There can be several currencies in circulation at once. Some will not be used for transactions, per se, but will be used as a medium of exchange between currencies. Gold, for example, could serve this purpose. A currency backed by Kilowatts of energy could serve this purpose. It would allow people to travel or move and to exchange their money into the local currency of their new destination.

To succeed, it takes a willing population that, together, provide as broad a range of goods and services as possible. People have to be willing to accept the currency as compensation (it doesn't have to be 100% of their compensation to be effective, but the more the better). The currency has a better chance to succeed in a community of people who consume lightly and make a conscious effort to avoid goods and services produced outside the community. A digital community currency would allow the community to be spread all over the planet.

The community has a better chance of success if they are highly productive. If they can meet most of the needs of their community, yet produce goods and services in abundance that can be brought to open market, they can begin to accumulate wealth. In effect, they would have a central bank holding reserves of other currencies they receive in exchange for the excess production they generate. These currencies could be exchanged for gold or they could be used to invest in community assets, such as greenhouses, freeze dryers, solar and wind power technology, computer technology, education for it's members, land for farming and housing, sewing machines for clothing production, etc. As these new assets accumulate, new productive members can be brought in and the growth in wealth and productivity becomes self-perpetuating.

Humans are extremely productive animals. What hurts is the waste. 30-50% of all value produced is siphoned off for debt service (interest on borrowed money). 30-50% is siphoned off for taxes to be spent in the worst of ways. There is waste in maintaining police and military forces, drug wars, oil wars, in a massive civil litigation industry, a wasteful and harmful health care industry, excess material consumption, harmful & wasteful food & beverage consumption and so on.

A well-designed community will find itself accumulating enormous value reserves. The characteristics of a successful community would be, in addition to highly educated and productive:

1. low and healthy food and beverage consumption, drinking mostly pure water and eating mostly uncooked organic plant food.

2. resolve all disputes through mediation.

3. are honest/trustworthy requiring little in the way of expensive law enforcement.

4. practice natural wellness such that they don't get sick and, if they do, they don't require expensive, community-asset-depleting western medical services to get healthy.

5. light energy consumers, attempting to produce as much energy within the community as possible. this is now available via community solar and wind micro-energy plants.

6. light consumers of clothes, electronics and other consumer goods.

7. light consumers of expensive entertainment, opting for sport, games, walks, sex, meditation, creative expressions, naps, etc. as a means of entertainment.

Over the past few years I've been researching and then sketching out designs for sustainable communities and local currencies. To look to large, remote centralized state authority to solve our problems when we can solve them ourselves is a mistake we can't seem to stop making. The movements are finally under way. I'm very encouraged by all this.

There was a quote in one of those trailers regarding a benefit of community currencies that I loved. The man said to the effect, "the best thing about a community currency is that it will never be accepted at Walmart". Beautiful and so true.

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