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Alternatives to the Fiat Currency Regime

Posted on March 20, 2006
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This post is a follow-up to last week’s post and open thread, The Roots of Consumerism. This post offers alternative ideas to the current fiat money regime by examining effective, alternative money systems from the past, spawned by the worldwide Great Depression of the twentieth century. Your comments welcome below.

Excerpted and adapted from pp.151-157 of The Future of Money, © Bernard Lietar

The Wörgl Stamp Scrip

[Editor’s note – the core idea behind stamp scrip currency is to encourage people to circulate it, rather than hoard it by using an anti-hoarding fee, known as a “demurrage.’ With stamp scrip, the back of each note typically has 12 boxes, one for each month, where a stamp must be affixed. To remain valid, any bill must have all of its stamps up to date. The stamps must be purchased typically at 1% of the face value of the bill. Demurrage is the opposite of interest, and it has the opposite effect. Interest encourages people to hoard their money – demurrage encourages them to spend it.]

Stamp Scrip

One of the best-known applications of the stamp scrip idea was applied in the small town of Wörgl, Austria, with a population of about 4,500 people at the time. When Michael Unterguggenberger (1884-1936) was elected mayor of Wörgl, the city had 500 jobless people and another 1,000 in the immediate vicinity. Furthermore, 200 families were absolutely penniless. The mayor-with-the-long-name (as Professor Irving Fisher from Yale would call him) was familiar with Silvio Gesell’s work and decide to put it to the test.

He had a long list of projects he wanted to accomplish (re-paving the streets, making the water distribution system available for the entire town, planting trees along the streets, and other needed repairs). Many people were willing and able to do all those things, but he only had 40,000 Austrian shillings in the bank, a pittance compared to what needed to be done.

Instead of spending the 40,000 schillings on starting the first of his long list of projects, he decided to put the money on deposit with a local savings bank as a guarantee for issuing Wörgl’s own 40,000 schillings worth of stamp scrip.

He then used the stamp scrip to pay for his first project. Because a stamp needed to be applied each month, at 1% of face value, everybody who was paid with the scrip made sure to spend it quickly (so as not to be the one assessed the charge), automatically providing work for others. When people had run out of ideas of what to spend their stamp scrip on, they even decided to pay their taxes, early.

Wörgl was the first town in Austria that effectively managed to redress the extreme levels of unemployment brought about by the depression. They not only re-paved the streets and rebuilt the water system and all of the other projects on Mayor Unterguggenberger’s long list, they even built new houses, a ski jump and a bridge with a plaque proudly proclaiming that “This bridge was built with our own Free Money”. Six villagers in the neighborhood copied the system, one of which built the municipal swimming pool with the proceeds. Even the French Prime Minister, Edouard Dalladier, made a special visit to see first hand the “Miracle of Wörgl”.

It is essential to understand that the majority of this additional employment was not due directly to the mayor’s projects as would be the case, for example, in Franklin Roosevelt’s contract work program described below. The bulk of the work was provided by the circulation of the stamp scrip after the first people contracted by the mayor spent it. In fact, every one of the schillings in stamp scrip created between 12 and 14 times more employment than normal schillings circulating in parallel (more information in the book). The anti-hoarding device proved extremely effective as a spontaneous work-generating device.

Wörgl’s demonstration was so successful that it was replicated, first in the neighboring city of Kirchbichl in January 1933. In June of that year, Unterguggenberger addressed a meeting with representatives of 170 other towns and villages. Soon afterwards, 200 townships in Austria wanted to copy it. It was at that point that the central bank panicked and decided to assert its monopoly rights. The people sued the central bank, but lost the case in November 1933. The case went all the way to the Austrian Supreme Court, but was lost again. After that, it became a criminal offense in Austria to issue “emergency currency.”

So Wörgl had to go back to 30% unemployment. In 1934, widespread social unrest exploded throughout Austria. During the crackdown against the civil disorder, all political parties to the left were outlawed….

US Depression Scrips

In the 1930’s there were complementary currencies all round the world; in the Baltics, Bulgaria, Canada, Denmark, Ecuador, France (the Valor project), Italy, Mexico, the Netherlands, Romania, Spain, Sweden, Switzerland, even China and Finland. Not all of them were suppressed. At least one of them survived the war and is successful to this day (the WIR system in Switzerland)

But the ‘mother of all stamp scrip applications’ and the place where the implementation came the closest to becoming official public policy was in the US.

The US, in fact, has a much longer history of issuing complementary currencies than is generally known. With clockwork regularity, people under similar circumstances of duress seem spontaneously to reinvent the same solution. Complementary currencies sprang up during the Panic of 1837, the Civil War years, and the Panics of 1873, 1893 and particularly of 1907.

Professor Irving Fisher of Yale, author of a classic book on interest rates, and widely considered the most prominent American economist of his time, heard about the Wörgl experiment and published several articles about it in the US. At the time he was advising several communities on starting their own stamp scrip systems and was so inundated with additional requests that he quickly decided to publish a little monograph to meet the demand.

This sets the stage for some key conversations between Professor Irving Fisher and Dean Acheson, then Undersecretary of the Treasury. Fisher was convinced that stamp scrip was the way out of the Depression, and brought his considerable knowledge to bear to prove this. He went on record with the statement that “The correct application of stamp scrip would solve the Depression crisis in the US in three weeks.” Dean Acheson, a prudent man, decided to refer the whole concept to one of his own economics professors at Harvard, the well respected Professor Russel Sprague. The answer came back that in his opinion this approach would indeed succeed in bringing America back to work out of the Depression. But it also had some political implications about decentralization that he might want to check with the President…

We know what President Roosevelt’s final reaction was from a speech he made a few weeks later. This is probably his most famous address, the one including the phrase, “the only thing we have to fear is fear itself.” In it, he announced a series of impressive centralized new initiatives to counter the crisis: the expansion of the Reconstruction Finance Corporation, and a series of large-scale Federally managed work projects – Basically what came to be known as the New Deal. He also announced that by executive decree he would henceforth prohibit all “emergency currencies.” This was the code name for all the complementary currencies already in existence, and all those in preparation.

This is how the road was not taken in the US in the 1930’s.

Excerpted and adapted from pp.151-157 of The Future of Money, © Bernard Lietar

Future of Money

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89 Comments so far
  1. Marc Authier March 20, 2006 3:44 pm

    Anyways the USA will not the one to decide the fate of the monetary system. As time goes by, each day the USA is becoming more and more dependant on Japan and China. The fate of your currency or any currency, will be decided in Tokyo, Bejing and very soon New Delhi. For the moment Asia is content on leaving the US dollar as the currency reserve of the world. But will this last? Answer:No. When China and India will have become the dominant powers in manufacturing, and it is coming real quick, the US dollar will be just what it is, another paper currency of one country amongst others.

  2. Ron March 20, 2006 5:03 pm

    I believe the answer lies in where the developing (read China, India, etc.) will put their excess currency. Yes, there will come a day when the US currency will no longer be desired, but it will be because the other nations economys will have cooled down and will no longer be generating excess currency.

    As these countries grow, they tend to use savings until such time as there is redundancy in the marketplace. For example, China is currently said to be producing more shirts than they can sell because there were profits to be made. No longer, now there are too many shirtmakers. The money has to find another place to go.

    The aging of the Japanese population has the effect of increasing savings. These savings must be put to use in either developing new industries in their own countries, or exported to find better safty and returns in other places, such as the US.

    We are safe for a while, but nothing lasts forever.

  3. Christopher Day March 20, 2006 5:13 pm

    Returning to topic: “Alternatives to the Fiat Currency Regime.” I imagine the following historical piece never fails to send a chill down the jellied spines of Central Bankers (and their faceless aristocratic masters).

    The Guernsey’s Monetary Experiment
    by Louis Even

    Guernsey is a small island located in the English Channel. An Anglo-Norman population. This island is located closer to the French coast than to the English one. At the close of the Napoleonic wars, the island, like several other countries, was in pitiful condition, both physically and financially.

    No money

    Sea walls, roads, markets were needed. There was no manpower shortage. But there was no money to pay for these works. The money used by the people on the Island was the money from England, the pound sterling. But, like after any war, the financiers were calling back the money advanced to finance the slaughter, and the pounds sterling were very scarce everywhere.

    The Island had an autonomous government, “the States of Guernsey.” So it had the rights inherent in all sovereign government, among other rights, that of regulating the volume of money in circulation in the country. But, no more than any other country, the States of Guernsey had thought of exercising this sovereign prerogative.

    An intelligent governor

    The Island was especially in need of a new market house, and a committee was set up to take care of it. The committee went to see the governor to explain the situation to him:

    “We need a new Market, but we have no money to build it.”
    “With what material are you going to build a market?” asked the governor.
    “With stone and wood.”
    “Do you have it in the island?”
    “Certainly, and in plenty.”
    “Do you have workers?”
    “Yes again. But it is money that is lacking.”
    “Could not your parliament issue the money?” asked the governor.

    A new idea!

    This idea had never occurred to the committeemen, who had never analysed the money question. They knew where to get money when there was some: but they never wondered where money begins or can begin. The method of taxing when there was money was quite familiar. But the method of infecting the money that is lacking, and of taxing only after, was something new to our administrators.

    Issues of national currency

    An estimate of the cost was prepared and the States printed the money required, which was paid to those who either worked on the project or furnished materials for it.
    As the new currency was paid out into circulation among the people, exchanges were being expedited. The wage-earners went to the shopkeepers, the shopkeepers went to the producers, the producers bought enough to increase their production.

    The currency was accepted everywhere. The government took measures against inflation by decreeing hat money would be withdrawn by taxes, so it does not accumulate. And, in fact, the money was retired on schedule by taxes. But, as the increasing activity required a corresponding volume of money, other issues were brought out by the government for other works.

    On October 12, 1822, the new Market House was completed and opened. Not a penny of public debt on this public enterprise.

    The bankers intervene

    At the time of the original issue, there was no bank upon the Island. This explains, without doubt, why there was no opposition to the issue of State money. But ten years after the first issue, the Island had become so prosperous, thanks to the activity allowed by a sufficient volume of money, that the banks of England had an eye on this island.

    English bankers set up branches in the island and brought the population around to orthodox rules. “It was unsound,” they said, “to let the government finance its enterprises without getting into debt.”

    The bankers did everything to stop further issues, to introduce the system of interest-bearing loans to the government, and to withdraw from the island the State money that had been paid out into circulation. There was some resistance, but the bankers won their point, with their usual methods; and on October 9, 1836, the States of Guernsey had abdicated their sovereign prerogative over the control of the volume of money. From then on, the amount of the national currency decreased gradually, and was replaced by money issued by private bankers in the form of loans getting the island into debt.

    Nevertheless, there is still about 40 000 pounds sterling ($200 000) of national currency outstanding at this date in the Island (according to Gertrude M. Coogan in Money Creators, published in 1935).

    Why a financial problem?

    As we can see, with natural resources, workers, and a bit of common sense, there is no financial problem. But when shrewd exploiters want to regulate economic activities according to their power and their profit, there the financial problem arises.

    Of course, minds in search of arguments to justify the present regime will say that Guernsey was only an insignificant small island; that the control of the volume of money by the representatives of the people is good for a small country, but not for a big country.

    All right. Take note of what these gentlemen object to you today. Next week, these same gentlemen will tell you that the money problem cannot be solved properly in a small territory or a province, but must be brought to a federal or even an international level!

    It was not Social Credit yet in Guernsey from 1820 to 1836. No doubt that the development of that time and that place would not have allowed to go as far as to give a dividend to consumers. But it was already a non-debt-bearing national currency, issued in accordance with the possibilities in front of the needs.

    The issues of national currency by the States of Guernsey caused neither inflation nor idleness. They created activity and prosperity. But these issues did not make any slaves, and that is why the bankers intervened.

  4. Nish March 20, 2006 5:49 pm

    Great Stories Chris and Mike. I liked the 11th round also very much. Poeple is the US as in any country are inovative enough to solve the money problem, whenever it occurs as evidence by your stories. However, every so often someone exploits this great situation for his power and greed by being the sole issuer of money. And this cycle repeats over and over again.

    My solution is to educate and train people of this situation, that as soon as a head rises above others in society, they will “chop it off”. There is no need to be violent here, but communities and societies need to find a way to control this EGO, lust for power of their peers.

    I believe this is the only way to break this, “business” cycle.

  5. Nish March 20, 2006 6:28 pm

    A little secret to you all regarding Good Money. Even the Ex FED believes in the yellow metal.

    http://www.usagold.com/gildedopinion/Greenspan.html

  6. Emily Cragg March 20, 2006 6:32 pm

    We have Ithaca Money in Ithaca New York, and possible as many as forty other alternative currencies in the USofA.

    The one with which I am most familiar is the Useful Services Exchange (USE) in Reston, Virginia.

    All you need is TRUST, to set up an exchange like this; and naturally, TRUST is what the schools, the media and the Coverment ALL attack at once.

    Heaven forbid, that we should trust each other enough to form cooperatives, co-housing, and skills exchanges. That would undo all the Globalist planning, now wouldn’t it?

    Tsk tsk tsk.

  7. Administrator March 20, 2006 7:26 pm

    Thank you, Chris, for the excellent story. The Great Depression was very much like the island at the beginning of the story. There were needs. There were people who could fill the needs with their labor. There were factories and materials sitting idle. The only thing lacking was money. The same is true for run-down areas in urban inner cities.

    It is that people have come to value money - paper - over the quality of their own lives. I believe that this is largely the result of ignorance of what money is, and that other monetary systems are possible. This is why I have been quoting so liberally from the Future of Money book, and I highly recommend anyone interested in the topic to read the entire book.

    Michael

  8. m_astera March 21, 2006 12:20 am

    A few comments on this theme:

    It has been said that WWII was started when the London bankers declared war on Germany because Hitler was bartering goods for goods, as Germany had no money at the time. The specific example I recall was trading German locomotives for beef from Argentina. This cut the bankers out of the picture.

    I’ve also read quite recently that there are only four countries in the world that do not have a Rothschild controlled central bank: North Korea, Libya, Iran, and I think the other one was Sudan.

    I was thinking today about a concept that I encountered while reading Charles Walters, who is an excellent economic theorist as well as publisher of AcresUSA (and if you don’t read AcresUSA, you have no idea what you are missing. Right now it is the only hard copy publication that I still subscribe to. An amazing paper).

    Walters talks a lot about parity, and says that even 5% of low-cost imports can wreck a nation’s production base. One thing he advocates is that all imports be taxed up to the level of parity of the country they are being imported into, i.e. the cost of production at home including fair wages and profits. What makes this idea very interesting is that he further says that the duty paid should be put in a special drawing account that the exporter could then use to purchase any product they want at parity from the home country. The duty paid wouldn’t go to the government to piss away, it would be credited to the account of whoever paid the duty and could be spent by them. Make sense?

    Sorry, I’m getting off topic here. But I wanted to toss the idea into the mix.

    m_astera

  9. Christopher Day March 21, 2006 1:29 am

    Exposing Fiat Credit

    Over 10 years ago I wrote the following letter to Australia’s only national newspaper. Of course it wasn’t published. When you read it you will understand why?

    ____________________________________________________________

    February 22, 1996

    The Editor
    The Australian

    Michael Prowse of the Financial Times maintains that, “most people hold money claims that cannot, in the aggregate be redeemed (”Reserving Judgement,” The Australian, February 7, 1996).

    He quotes a prominent American economist, the late Murray Rothbard who argued that, “banks were guilty of implicit theft if they promised to redeem notes or deposits on demand but in fact lacked the reserves to meet more than a fraction of the possible claims.”

    This article encouraged me to ask several pertinent questions in regard to the creation of what we loosely call “money.” I have asked a variety of people from many walks of life, professionals to tradesman (even a couple of bank managers), and no one can give me definitive answers.

    Perhaps one of your economists or a knowledgeable reader may be able to provide clear, concise answers to the following.

    1. What is the difference between bank credit and legal tender?
    2. If all “money” is ultimately borrowed into existence via a bank, where and how does the community procure the interest component?
    3. If banks don’t actually lend their depositors money, (as no individual account is actually debited), then what do they lend?

    The distinguished US economist, John Kenneth Gailbraith asserts, “that the process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent.”

    Perhaps it’s time we all understood this “deeper mystery,” I certainly don’t!

    Sincerely,

    Christopher Day

  10. tjofpa March 21, 2006 5:07 am

    The following quote seems appropriate;

    THOMAS A. EDISON: “People who will not turn a shovel full of dirt on the project (Muscle Shoals Dam) nor contribute a pound of material, will collect more money from the United States than will the People who supply all the material and do all the work. This is the terrible thing about interest …But here is the point: If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an additional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way. It is absurd to say our Country can issue bonds and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the People.”

    Not only was he a genius inventer, but he knew how to make
    money also.

    Let me see if I’ve got the answers to the above;

    1) There is no diference… they are one and the same.
    2) Only labor or the forfeiture of assets can pay the interest.
    3) They don’t actually “lend” anything, they “create” the
    means for purchasing power.

  11. River March 21, 2006 5:58 am

    Not only did Jefferson understand the difference, President Kennedy did as well. Some say it is why he was killed:

    “It was in 1963 that John F. Kennedy, who was then the reigning president of the United States, made the decision to create his own money to run the country, for he knew the Federal Reserve Notes that were being used as the legal currency of the country went against the Constitution of the United States. He must have thought to himself: “Why should a rich country like the United States, a country full of all kinds of natural resources, of all kinds of human potential and know-how, become enslaved with a debt-money system?

    “President Kennedy issued what they called “United States Notes”, in the amount of approximately $4 billion, to be used as the legal currency of the country. This was an interest-free, debt-free money. It was issued as money was needed to finance new production, and withdrawn from circulation when this production was bought and consumed.

    “In the illustrations, we can compare a “Federal Reserve Note” issued from the central banks of the United States, with a “United States Note” issued by President Kennedy. They almost look alike, except one says “Federal Reserve Note” on the top while the other says “United States Note”. Also, the Federal Reserve Note has a green seal while the United States Note has a red seal.

    “Unfortunately, President Kennedy was assassinated in November 1963. The “United States Notes” he had issued were taken out of circulation, and the Federal Reserve Notes continued to serve as the legal currency of the nation, even though the original Federal Reserve Act of 1913 could still be declared unconstitutional.

    http://www.prolognet.qc.ca/clyde/kennedy.html

    - River

  12. Rich March 21, 2006 11:11 am

    This country, and the rest of the world, needs to understand what the founding fathers did to try to protect the people from usury and privatized central banking.

    It really is that simple.

    If a government is for the people and by the people, and the means of creating money is maintained by that government (whether backed by gold or some other commodity/basket of commodities) then that nation controls its own financial destiny and block the monopolists/usurists from taking them over and then the world.

    Of course, the issue we face now is that the government and the creation of money have been hi-jacked and the only way to solve the problem now is to hi-jack them back.

    So, where is the leadership going to come from that is prepared to challenge the established order of secret societies, interlocking directorates and sold-out politicians that are truly our masters right now????

    Who is the next John Adams or George Washington?

    So far the most likely candidates appear to be alternative musicians like BillyJo from Green Day and Eminem - at least these guys have been prepared to stand up and tell the nation exactly what is going on.

    I see no one in the political forum, excluding Ron Paul perhaps, who is prepared to tell it as it is, and certainly there is no one willing to stand up and take a leadership position. Of course, the stakes are kind of high!

    Rich

  13. patrick March 21, 2006 11:19 am

    When people get on the subject of fractional reserve lending they often misunderstand how it works. The only banks that create money from thin air are the central banks because that is their job. To increase and decrease money supply to their nation as needed to create stability.(Although this can and does get abused)

    Fractional reserve lending works like this: You deposit £100 in a bank account. They lend out £90 and retain £10 as a reserve. This is because history shows that people don’t all want to withdraw their money at once and a reserve of say 10% should be enough to cover withdrawals and general cashflow. The rest is lent out to earn interest, from which interest to depositors is paid. Some authors through either ignorance or sensationalism twist this by saying that banks are lending out ten times more money than they have and are creating it out of thin air. That everything is just a book keeping entry. when you draw a cheque on your account which has just received a loan from your bank, to pay for say a new car and that cheque is banked with another bank, do you not think that your bank is going to have to transfer funds to the other bank for it to clear? If everything were just bookeeping entries and money from thin air then how could the cheque be honoured? If banks had to hold 100% of the money deposited as a reserve then no banks would exist as they would have no money to lend out, and could pay no interest. In fact you would have to pay them for the privilage of holding your money to cover their overheads.

    Governments create money via their Central banks from thin air by borrowing from them. If they don’t raise enough taxes to cover spending they issue bonds (ious) to the central bank who monetises them by issuing currency in exchange for the bonds.

    It is often quoted that because principal debt is created and not interest to repay it that this means that eventually all the money will end up with the banks as the interest must be found from other peoples principal. This is a very simplistic view whereas the reality is more complex. This view assumes that the amount of money is finite which it is not. Most years the money supply increases because governments issue bonds to cover expenditure and therefore the pool of money increases. Also people and companies die. When this happens, their assets are redistributed as inheritances or cheap assets in a fire sale, which circulates money. Also people go bankrupt, in which case debt gets destroyed when it cannot be repaid. Finally most banks are not private companies anymore. They are listed. Banks have staff, premises and overheads and pay interest and dividends to shareholders and therefore some of the interest collected is recycled back into the money pool.

    As for the worgl stamp scrip this is not as simple as it appears. It is presented on the basis of a poor village that was broke being transformed into a wealthy village. However here are some issues to think about. The stamp scrip money has to be validated by paying 1% per month of it’s value, so that it remains spendable. This means that the issuers are effectively taxing the holder at 12% per annum, the purpose being to encourage people to spend rather than hoard money. It’s like being charged interest on your savings!

    However who would except payment in such a currency if they had a choice? Surely only people who could not afford to save anyway.(the poor) If you were a merchant and the villagers were buying merchandise from your store (which you had previously paid for in real currency)with a currency that could not be used outside the village and that was decreasing in value by 12% per annum, would you want to accept it as payment? If you did, I’m sure that you would increase the price of your goods to offset the loss you might incurr by holding it. You would then probably use it to pay your taxes to get rid of it. This type of arrangement would have to be permanent because if the issuer took the stamp money back out of circulation then the money supply would dry up again which was the original problem. The only way this could work would be in a self sufficient society which did not import anything and therefore only needed to circulate currency within it’s own boarders. This arrangement is also inflationary. Inflation is not so much prices increasing but the value of money decreasing relative to goods. There is a lot more to this than meets the eye.
    Any comments welcomed.

  14. Christopher Day March 21, 2006 1:35 pm

    The US people don’t understand that since 1792 the US financial system has been “switched’ from wealth to debt. This lack of understanding is due primarily to the misleading explanations and cute spin proffered by the system’s apologists. Perhaps it is the ‘blind leading the blind,’ or maybe something more sinister — the spin is applied by professional lurkers to confuse and/or limit the parameters of debate.

    How money is put into circulation is the most important principle. The real issue is not gold and silver vs. paper, not commodity money vs. fiat money, but wealth vs. debt, honesty vs. fraud.

    Let’s follow the trail of United States “money,” from when it was gold and silver commodity money, put into circulation as a wealth to the people, by the people — to what it has become — a monetized debt, put into circulation by the banks, as interest bearing debts to the people, for the personal profit of bankowners.

    The real reason gold and silver coinage initially worked well as “money” for the people, is that the people produced the gold and silver, a raw resource of the earth, through their labor. The 1792 Coinage Act allowed anyone to take that resource to the United States mint and have it monetized (coined) free of charge.

    The US people furnished their own “money,” based on production, as a wealth to themselves and spent it into circulation as a benefit to all of society with no debt attached to it.

    Gold and silver are very heavy metals and not as convenient to carry as paper money. If people didn’t want to own gold and silver coins, they could store/deposit them into the United States Treasury. The Treasury would issue depositors gold and silver certificates as receipts; each certificate stated that there was X amount of gold or silver coin on deposit in the Treasury, payable to the bearer on demand.

    Now the US had paper money. As long as just this principle was followed, the US people still had good, honest, wealth money with no debt, no excessive profit, nor excessive purchasing power to anyone.

    The ten dollar gold certificate

    However, when someone deposited their gold and silver coin in a fractional reserve bank, a totally different principle went into action. The bank held the coins as a reserve and expanded the money supply by making new loans equal to (initially) 10 times the face value of the coins deposited.

    At that point, money switched from wealth to debt.

    On January 24, 1939, Robert H. Hemphill, credit Manager of the Federal Reserve Bank of Atlanta stated:

    “If all the bank loans were paid, no one would have a bank deposit and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have into circulation — cash or credit. If the banks create ample synthetic money we are prosperous: if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture the tragic absurdity of our hopeless position is almost incredible, but there it is. It (the banking problem) is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.”

    At first glance, fractional banking looks like a good deal for everyone. The banks get more profit. The people can get quicker and easier loans. More capital is available to engage in commerce. Production picks up. But, sooner or later, more and more people can not make their loan payments.

    An unseen by-product of fractional banking is: it makes some people rich, and leaves many more people very poor. All the while, fractional banking creates compounding, unpayable public and private debt, which causes the cost of living to constantly go up.

    Throughout the nineteenth century, larger banks worked to get laws passed that would consolidate all fractional banking under the control of just a few. They did so under the guise of a standardized national money. They were successful in 1863 with the passage of the National Banking Act. It allowed newly chartered national banks to create a uniform national bank currency.

    A few years later the federal government taxed state bank notes out of existence. In 1873, the government stopped all free coinage of metals. They began to use United States Certificates of indebtedness — United States Bonds — as security for the national currency.

    The note states on it’s face “The Federal Reserve Bank of Minneapolis Minnesota will pay to the bearer on demand one dollar — Federal Reserve Bank Note.” However, it no longer said a dollar of what, like the gold and silver certificates. It also says “secured by United States Certificates of indebtedness”

    You can now clearly understand why the US government and private sector are so deeply in debt. All we use for money is (monetized) DEBTS.

    The switch from wealth based money to debt-based money had been completed. All that was left was to change the bills.

  15. Barter-This March 21, 2006 3:12 pm

    http://www.givemeliberty.org/FreedomDrive/Redress/PetitionFed.htm
    We could all read this. It is a petition for Redress of the Federal Reserve…

  16. River March 21, 2006 3:21 pm

    Rich and Barter-This,

    Ron Paul IS the only honest politician in America. In 2002 he introduced legislation to abolish the Federal Reserve!

    Mr. Speaker, I rise to introduce legislation to restore financial stability to America’s economy by abolishing the Federal Reserve. I also ask unanimous consent to insert the attached article by Lew Rockwell, president of the Ludwig Von Mises Institute, which explains the benefits of abolishing the Fed and restoring the gold standard, into the record.

    Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve’s inflationary policies. This represents a real, if hidden, tax imposed on the American people…

    Complete article here:
    http://www.lewrockwell.com/paul/paul53.html

    We need more like him! For those of you who don’t know who Ron Paul is, “He serves on the House of Representatives Financial Services Committee, and the International Relations committee. On the Financial Services Committee, Rep. Paul serves as the vice-chairman of the Oversight and Investigations subcommittee. He continues to advocate a dramatic reduction in the size of the federal government and a return to constitutional principles.”

    http://www.house.gov/paul/

    Peace,
    River

  17. Bob March 21, 2006 8:19 pm

    Hey Folks,

    I just found this link for a movie called America, from Freedom to Fascism, and it looks like it’ll be a great one. Due out this summer. You can watch the trailer here:

    http://www.freedomtofascism.com/

    Spread the word.

    Thanks for the site, and keep up the good work, Michael.

  18. Rich March 21, 2006 10:24 pm

    That is a great link. After 5 or 6 years of researching this issue FINALLY there is a movie coming that embodies, seemingly, all of the major current players and issues.

    Everyone on this site should watch the trailer and eagerly await the movie, although no one should be fooled in to thinking that the movie will change much……..but it could be the beginnings of something???

    http://www.freedomtofascism.com/

    Cheers Rich

  19. Barter-This March 22, 2006 5:56 am

    So explain to me, please, if “Counter-fite” bills are printed and curculated who is it really hurting and if the FR (private business)is the owner of said bills why is the “government so involved in the recovery of said bills? I am new to this line of thought and I want to learn…

  20. Doug March 23, 2006 8:49 am

    There is another point to be made. Don’t let the banks hold power over you. When I was young , I decided not to use credit-it causes too much drag on your personal economy.This caused a few struggles in my life, but ultimately I saved more than my peers, paid cash for my cars and houses and retired young.You can, too. Of course, the government doesn’t help , but I live relatively free in a small town and avoid conflict, so life is good.

  21. Barter-This March 24, 2006 5:12 am

    That is my belief as well, Doug.
    We deal mostly in cash with some bartering in our business.
    Hour house is paid for, no car payments, only utility,insurances, phone with SLOW Dial up and COUNTRY TV…LOL
    I know it sounds like we are hicks from the country, that isn’t the case. Of all our friends we are the only ones NOT in debt and I am just 45. We can’t go to the Coast for vacation at the drop of a hat.
    We manage just fine without all the MUST HAVES shoved in our faces constantly by the Drug Pushers Of The Mind…our government,lobbist,big business,FDA, and the list could go on.
    I say STAY UNDER THE RADAR…As much as possible and you can’t go wrong…

  22. m_astera March 24, 2006 10:22 pm

    We had two versions of how banks get the money to make loans in this thread. One version said that the banks create money to the tune of 10x deposits. The other version was that banks can loan out 90% of the funds on deposit.

    So what’s the difference and who is right?

    In an honest money system, one where the paper is backed by a commodity, the second version is true. One cannot loan money that does not exist, and money in an honest money system cannot exist without some commodity to back it. Ten ounces of gold on deposit, nine ounces can be loaned at interest. This still creates the usury problem: the borrowers must be efficient enough to produce the goods/income to pay back the loan and the interest plus make a living themselves. But it can and has worked for a long, long time, and many arguments can be made in its favor.

    But!! This is not the present sytem of world banking, and the poster “Patrick” is being disingenuous when he tells us:

    “Fractional reserve lending works like this: You deposit £100 in a bank account. They lend out £90 and retain £10 as a reserve. “

    That is the system of honest money, not the present fiat money system. It is really very simple: When what you loan is backed by a commodity in limited supply, one that cannot be created out of thin air, the amount of money loaned out cannot exceed the amount of gold, silver, or whatever that has been physically deposited in the bank.

    What is going on today, and what those like Patrick are trying to keep us from understanding, is that under the present system if a local bank has $100 in paper money in someone’s account, it can borrow $1000 or $2000 from the Federal Reserve to make loans with, collect the interest as the loans are paid back, pay back the principal to the Fed along with some interest, and make a profit on the remaining interest.

    Note that none of this is real money backed by anything- the original $100 deposit is just paper or accounting entries, and the $1000 or $2000 from the Fed is just paper or accounting entries. None of it is backed by anything on the bank’s side, and the only thing of value is whatever collateral (house, land, car) the borrower put up as security for the loan, if anything. The local bank, and the Fed, put up nothing but paper/account entries. They are just gambling, betting that the borrower will pay back more than they borrowed, and if the borrower doesn’t, they can sieze the collateral, if any. If the local bank screws up,i.e. “fails”, they can lose their assets and reputation, which may or may not be worth 5% or 10% of the outstanding loans. Any other money owed to the depositors (and the Fed) will be paid by the US (or UK or other) government from taxes collected. The central bank (Fed) risks nothing.

    The system “Patrick” describes is the midieval goldsmith’s system, and it was flaky enough when it ruled. The present system is orders of magnitude worse.

  23. Christopher Day March 25, 2006 3:58 pm

    USA Banker’s Magazine, August 25, 1924

    “Capital must protect itself in every possible manner by combination and legislation. Debts must be collected, bonds and mortgages must be foreclosed as rapidly as possible.

    When, through a process of law, the common people lose their homes they will become more docile and more easily governed through the influence of the strong arm of government, applied by a central power of wealth under control of leading financiers.

    “This truth is well known among our principal men now engaged in forming an imperialism of Capital to govern the world.

    “By dividing the voters through the political party system, we can get them to expend their energies in fighting over questions of no importance. Thus by discreet action we can secure for ourselves what has been so well planned and so successfully accomplished.”

    Game, Set and Match!

    The ‘Patricks’ of this world are either disingenious (liars) or confused. Are you still there Patrick? What say you?

  24. m_astera March 26, 2006 7:04 am

    There’s an old joke: “If we had ham, we could have ham and eggs, if we had eggs”. It is difficult to have a realistic and enthusiastic discussion of what one will do once one is out of prison if one has no plan for or hope of escaping. Meaningful discussion of freedom is even less likely among those who don’t realize they are imprisoned. The inmates debate whether they will play tiddlywinks or checkers when next they are given an hour of free time. They debate whether real cigarettes or cigarette coupons are the better form of money.

    May I submit that the very problem is the acceptance of a need for a government mandated currency? More specifically, why do we think we have an inescapable need for a monetary system to be imposed upon us?

    Is this really neccessary? Is it the inevitable end product of ten thousand years of societal evolution to be a slave to the bills that arrive every month without fail, bills that can only be paid with government approved scrip? Or is it a trap that we have been lured into with the promise of “happiness” to be gained by the accumulation of possessions? The promise of “security” from those who would take our possessions away? We pay a very, very steep price for this illusory security, and the only entity in life who consistently threatens to, and does, take our possessions, freedom, and security away is the government that is supposedly protecting us. Why is it so impossible to just live one’s life in a way that brings happiness to one’s self without the constant struggle to pay the government and financial parasites their protection money? I assure you it is not the political affilitation of the parasite that is the problem.

    The crux of the problem is that we are enslaved and arguing over who would make a kinder master, which slaveowner would allow us to keep a larger share of the fruits of our own labor. It is time we realized this and asked ourselves if we deserve to be slaves and have willingly chosen it, for ourselves and our children and their children.

    m_astera

  25. Barter-This March 26, 2006 7:09 am

    The government is about to be swamped with dollars.
    There will be no public accounts of how much paper money will be in the system……”It will cost a wheel barrel load of cash to buy a loaf of bread.” This is what one of my teachers told us as students in High School way back in in 1979. That day has come….

    March 9, 2006
    Release dates | Historical data | About

    ——————————————————————————–

    Discontinuance of M3
    On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.

    Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

    M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits.

    Statistical releases

    ——————————————————————————–

    Home | Economic research and data
    Accessibility | Contact Us
    Last update: March 9, 2006

  26. Barter-This March 26, 2006 7:27 am

    Here is a site with an articleI just found. I know you all know about this, but as a NEW thinker on this matter it scares the H**L out of me. What are we to do?

    http://www.journalinquirer.com/site/news.cfm?newsid=15671763&BRD=985&PAG=461&dept_id=161556&rfi=6

  27. Rich March 26, 2006 8:37 am

    Helicopter Ben Bernanke is the perfect new chairman of the Fed Ponzi Scheme. He has spent a lifetime researching the First Great Depression. Clearly his role is to do all in the Fed’s power to stop the Second Great Depression - which could lead to some big questions being asked of our elite by the people if it did happen.

    So you can expect massive, “undetected” market and monetary manipulations designed to inflate away some of the debt pressure on the system.

    Wage inflation will have to occur in order for this to work, otherwise the sheeple will experience a huge loss in purchasing power with no relief from their pay packet.

    When the ARM’s come due in the next few years, with some of them rising 3, 4 and 5% overnight, them we’re going to SEE the outcome of the past couple of decades of Greenspan economics and a fiat currency system coming to an end.

    Of course, by then, we may be under martial law with a permanent president and a 50 year war on terrorism just entering it’s second phase.

    Cheers Rich

  28. Doug March 26, 2006 1:07 pm

    Do you really think wages will keep abreast of inflation?They’ve been going down for the last three.(in real terms) But you could be correct, since other developed countries seem to be inflating in competition with the US.

  29. Rich March 26, 2006 9:49 pm

    Hey Doug.

    I know wage inflation won’t keep up with real inflation, and that in some segments wages will go down, but overall I do believe wages will have to rise over time.

    On a separate note, has anyone seen V for Vendetta yet. I just saw it today, it was amazing - - it didn’t touch on money issues, but the geo-political stuff was unreal. Those Wachowski brothers know how to make a movie (they did The Matrix).

    Cheers Rich

  30. patrick March 27, 2006 12:36 am

    Oh dear what a reaction I have prompted. Firstly to reply to M Astera : There are two issues that you are looking at and treating them as one, whereas my post was about only one issue. These are fiat currency Vs gold standard (which I did not comment on) and fractional reserve banking which I did.

    My desciption of fractional reserve banking is accurate. You are clouding the issue by talking about fiat currency in the same breath, which is another issue in it’s own right. My point is that commercial banks in themselves do not create money from thin air, only central banks can do this. 200 years ago when individual banks issued their own banknotes this was possible but not today when only a central bank of a country can issue currency and therefore has a monopoly on fresh air money.

    You say that a bank can use the fact that a depositor has $100 in an account to borrow $1000 from the Fed to lend out. So lets look at the bank’s balance sheet:

    Liabilities: Assets:

    cash deposits 100 cash held (reserves) 110
    fed loans 1000 Loans to customers 990

    Totals 1100 1100

    So what collateral will the fed need to make huge loans to banks? Have you ever heard of securitisation? ABC bank lends out all it’s money and in order to grow, is assigns the benefit of those loans to a third party (in this case the fed)in order to borrow more money to lend out. The above balance sheet is of course simplistic and does not take account of the banks own capital (retained profits.)

    You accuse me of being disingenuous, whereas the truth is that you really appear to operate on the basis of “if you are not with us then you are against us.” That unless I agree with everything you say then I am the enemy which is just ludicrous. I have explained my belief of how things work in a rational manner whereas you just make statements such as “The system “Patrick” describes is the midieval goldsmith’s system, and it was flaky enough when it ruled. The present system is orders of magnitude worse.” You do back up your comments with anything or explain any thought process behind your statements. This is the problem with people who tell half a story and then won’t enter into rational debate. If anything I feel that your understanding of the banking system is somewhat lacking and whereas I am sure that your motives in this are idealistic, I think a bit more knowledge of the subject matter would help.

  31. patrick March 27, 2006 12:52 am

    To Chrsitopher Day:

    You appear to quote from some bankers magazine from 1924 although who you are quoting and the context of the article are not given.

    What has any of that quote got to do with anything which I have said?

    You are another example of the with us or against us ilk. There are many dubious practises going on in central banking which are going to land everyone in the cart sooner or later, and if these issues are to be taken seriously by the general population then they have to be brought to people’s attention in a rational manner.

    People who make sensational statements without being able to explain themselves, who have no knowledge of the subject and who just resort to personal attacks because someone happens to disagree with what they say, only undermine this whole debate. If you are genuine in wanting people to take this subject seriously then you must engage with other people, share ideas and increase your knowledge otherwise people will view anyone talking on this subject as little more than cranks. If however your just wish to use petty schoolboy tactics to try to score points for your own personal satisfaction, then I have to wonder who really is disingenuous.

  32. bp March 27, 2006 6:02 am

    Patrick, I would like to know what your thoughts are on the viability of the fiat system now in place. You seem to be avoiding the issue of what the currency and lending is based upon.

  33. patrick March 27, 2006 8:48 am

    Sorry about the long post but when you get me talking……..

    I wasn’t avoiding the issue of fiat currency, I was posting in responce to some of the rubbish people post about commercial banking. Personally I think that fiat currencies are unsustainable and a correction will happen in the next couple of years. I would like to see a return to some form of gold standard. The gold standard was invented by Sir Issac Newton, one of the finest minds of all time. He was given the task of finding ways to keep stability in the financial markets not long after the Bank of England was formed because there was no history to financial markets and no one understood the consequences of monetary policies which caused several crises in the early years. He devised the gold standard, which kept monetary stability for nearly 300 years.

    Since the early 1970s when the USA came off their gold standard, we have lived in a fiat world. During this time notice how inflation has become a constant thing, whereas during the time of the gold standard there was little or no price inflation because the currency was stable and money supply fairly finite. The fact that we have inflation today as a constant, is directly due to the fact that the supply of money is being increased each year by central banks. The problem with this is that it debases the money already in existance and people with savings lose it’s value over time. In effect it taxes the money already in existance without people noticing. Politicians love fiat money as it allows them to overspend their budgets and hide it.

    If USA were to run a balanced budget, then this would spell an end to the American dream. It would involve huge tax rises across the board, cutbacks in the armed forces and government expenditure, huge losses of jobs in government and the abolition of things like medicare. The Country is $800bn per annum overspent and so just to balance the budget some or all of the above would probably need to be implemented permanently (and that does not even pay off the debt.) Now no politician will win office by suggesting the above, which is why the problem just gets ignored. The US government can decide to save the fiat dollar, by doing the above. Or it can destroy it and a lot of the debt (and people financially)by it’s current course of action, followed by a reinvented dollar. Either way there will be serious numbers of financial casualties. Unfortunately I think we have gone past the point of no return and the world economic system is just a series of huge powderkegs waiting for a spark.

    The figures produced by central banks for inflation are generally unreliable as a measure of inflation because as the saying goes, there are lies, damn lies and statistics.
    The items they use as a measure of inflation are usually things like foodstuffs, clothes, toiletries etc. Unfortunately whereas 20 years ago these were locally produced, most are now imported from cheap labour countries and this has kept down their prices, and hence low inflation figures. Notice how items which have been inflating such as the cost of housing (whether rent or mortgage payment)are excluded from the figures.

    Politicians hate the gold standard because it constrains their ability to overspend their budgets, and for this reason it will take a very good reason for them to wish to implement it once again.

    There appears to be only trouble ahead and so I think you should fill your larders, get some gold and silver coins and reduce your lifestyle and outgoings as much as possible now rather than wait for it to be forced on you.

  34. bp March 27, 2006 10:48 am

    patrick, i tend to agree with you in general - one thing i don’t understand is how a gold standard could cope with an increasing population and increasing productivity. It seems overtime that the gold basis would be stretched thinner and thinner amongst the population. I would think a gold standard would better serve a static economy and population - how would it address a dynamic situation?

  35. Christopher Day March 28, 2006 1:28 am

    Patrick, please accept my sincere apologies if you felt my observations regarding your post were offensive. I take no satisfaction in creating personal emnity with those who sincerely express their understanding (or misunderstanding) of the issues that give rise to the present complex fiat “money” system imposed upon us by an “old boy” interlocking network of powerful connected usurers.

    Regarding the “fractional reserve” banking system established by the Goldsmiths Guild of London and their institution, the Bank of England: my understanding is that by the early 1700s, the Goldsmiths realized that only one ninth (1/9) of the physical gold in their custody was being redeemed by their clients to be used in circulation.

    The predictable greedy response of the “Goldsmiths” was to create (and lend at compound interest) approximately nine time more gold receipts — “money” notes that became currency, foolishly deemed by their trusting clients as “good as gold.”

    This primitive swindle collapsed in the early 1700s when the suckers (their customers) became suspicious and tried to redeem their gold certificates en masse (musical chairs).

    Bottom line: If you and I lend “money” that we don’t have, it’s called FRAUD. When central banks “engineer” their loan capital, the huckster apologists who live of the scam proclaim it as an “important fiduciary intrument.”

    We were denied the non-inflationary gold standard because the racketeers realized that the global supply of physical gold needed to securitize their exponentially ever-expanding supply of “engineered money” was unobtainable.

    Pure Ponzi!

    Perhaps Patrick has another take on the historical machinations that have contrived to implement the current unsustainable “system.”

    All the best, Chris

    How say you Patrick?

  36. patrick March 28, 2006 3:40 am

    I agree with what you say about the goldsmiths of old issuing receipts (early banknotes) for gold they did not have and in the same way individual banks hundreds of years ago also issued their own banknotes, for more cash than deposits, and it was for these reasons that central banks later with held the right to issue banknotes unto themselves to prevent this. This would be like you issuing unlimited cheques against your current account if you knew that only a small number of people would cash them and the others (thinking you were good for the money) just kept the cheque as a store of value.

    The present system exists because of 1. the absence of anything to replace it at the moment 2. people’s willingness to accept fiat money in payment for goods and 3. the system appears to be working. When it breaks down then maybe alternatives will be looked at.

    There are of course some consequences to a return to a gold standard. One will be a reduced liquidity generally.
    As money was finite then, people tended to hold onto money when they had it, and in such a system it is likely that people would have to live reduced lifestyles, and credit would be harder to obtain (which is not really a bad thing.) Also in a no inflation economy, debts would not be reduced by inflation (but neither would savings)and pay rises each year would become a thing of the past. However as living more frugally would reduce the cost of living for most people, this would not really present too much of a hardship. For the fiscally prudent this would not be a problem, but these days they seem to be outnumbered by the fiscally irresponsible.

    During the gold standard problems such as trade deficits and budget deficits could not be ignored as they are today. Problems had to be dealt with immediately. Then, a trade deficit literally meant that the country’s gold was being exported abroad and therefore the money supply in that country was drying up and a recession would follow very quickly. This would usually mean that the price of manufactured goods would fall in that country which would improve exports and so reverse the problem. The Country may also readjust it’s gold standard by requoting the value of 1 ounce of gold in that Country’s currency (depreciation.)

    BP a gold standard probably would serve a static population and economy better than a growing one and I take your point about stretching the gold thinner in a growing population. However due to the supply of money in a gold standard system being relatively finite, it is therefore less likely that a dynamic economy could exist in the way it does today. People would save/hoard money more than today because they know it will be harder to obtain. During the time of the gold standard, economic booms generally tended to follow the discovery and mining of new gold fields in the same way that booms now occur when money supply is increased.

    Maybe the solution is a hybrid of both systems with some kind of contraints or pre conditions on issuing money as a % of GDP or something. However this would require some overseeing body to enforce the standards, and also as Governments are not always the most honest of folk, then checking the figures could prove difficult.

    However I am sure that the economists of this world have puzzled over these same issues over the centuries and found as we have that there is more to this than initially meets the eye and that there is no easy solution. Just be aware of how the system works and what is happening and how that affects you. Protect yourself and your assets and be ready to ride out a storm. Fixing the world’s economic problems is beyond any of us posting here but if we can protect ourselves and our loved ones from the coming storm then that is what we should do.

  37. Christopher Day March 28, 2006 5:17 am

    Patrick, I’d like to respond to SOME selected material in your post in point form:

    “I agree with what you say about the goldsmiths of old issuing receipts (early banknotes) for gold they did not have and in the same way individual banks hundreds of years ago also issued their own banknotes, for more cash than deposits, and it was for these reasons that central banks later with held the right to issue banknotes unto themselves to prevent this.

    WHO GAVE THEM THIS RIGHT? READ “THE JEKYLL ISLAND CONSPIRACY”:

    http://www.amazon.com/gp/product/customer-reviews/0912986409/ref=cm_cr_dp_pt/002-9727794-0252825?%5Fencoding=UTF8&n=283155&s=books

    … TO UNDERSTAND HOW THE BIG USURERS USURP THE BOTTOM FEEDERS RIGHT TO WORK THE SCAM BY CREATING FICTICIOUS CREDIT CREATION.

    This would be like you issuing unlimited cheques against your current account if you knew that only a small number of people would cash them and the others (thinking you were good for the money) just kept the cheque as a store of value.

    SEVERAL YEARS AGO A MAJOR AUSTRALIAN BANK POSTED A 115 BILLION DOLLAR PROFIT FROM 6 BILLION IN SHAREHOLDERS FUNDS. REMEMBER CREDIT CREATION BANKS AREN’T ALLOWED TO LEND THEIR RESERVES

    The present system exists because of

    1. the absence of anything to replace it at the moment

    WOULD THAT HAVE ANYTHING TO DO WITH THE WISHES OF THE MOST POWERFUL OWNERS OF THE PRESENT SYSTEM? IS IT IN THEIR INTERESTS TO CANVAS ALTERNATIVE — MORE EQITABLE — CURRENCY SYSTEMS?

    2. people’s willingness to accept fiat money in payment
    for goods

    WHAT OTHER ALTERNATIVE DO THEY HAVE? I SUPPOSE THEY COULD TAKE THEIR CUSTOM TO A MOSLEM “RIBA”-FREE BANK (THE MOSLEM CROOKS DON’T CHARGE INTEREST, THEY DEEM IT A “COMMISSION… ER… CONCESSION… ER …

    3. the system appears to be working.

    FOR WHO? FOR THE 500 ODD MILLION WHO LIVE HIGH-ONNA-HOG? LOOK AROUND YOU, THE U.N. MAINTAINS THAT OVER 1 BILLION PEOPLE DRINK FILTHY WATER EVERY DAY! “THEY DON’T GET NO CREDIT MASSER!” USELESS EATERS?

    When it breaks down then maybe alternatives will be looked at.

    THIS LEND-10-PAY-11 PONZI SCHEME DESTROYED BABYLON AND ROME. IN THE REAL WORLD — IN NATURE — NUTHIN’ GETS SOMETHIN’ FOR NUFFIN’. COLLECTIVELY WE WILL ALL (TO A GREATER OR LESSER DEGREE) PAY FOR THE GREED OF THE FEW. I BELIEVE PATRICKS USE OF THE WORD ‘WHEN’ IS THE RIGHT WORD.

    – SNIP –

    BP a gold standard probably would serve a static population and economy better than a growing one and I take your point about stretching the gold thinner in a growing population.

    DIVIDE THREE JUMBO JETS OF GOLD BY 6.25 BILLION. PERHAPS WEALTH WILL BE MEASURED IN GRAINS, AS OPPOSED TO OUNCES. DO YOU KNOW HOW TO USE A GUN?

    – SNIP –

    Maybe the solution is a hybrid of both systems with some kind of contraints or pre conditions on issuing money as a % of GDP or something. However this would require some overseeing body to enforce the standards, and also as Governments are not always the most honest of folk, then checking the figures could prove difficult.

    OVERSEEING BODY? WILL THE SAME ILK WHO ATTEND AND FORMULATE POLICY AT THE CFR, BILDERBURG, TRILATERAL, ANNUAL PRESS-FREE PRIVATE GET-TOGETHERS HAVE ANY INFLUENCE IN THE SELECTION OF THIS “OVERSEEING BODY?”

    However I am sure that the economists of this world have puzzled over these same issues over the centuries and found as we have that there is more to this than initially meets the eye and that there is no easy solution. Just be aware of how the system works and what is happening and how that affects you. Protect yourself and your assets and be ready to ride out a storm. Fixing the world’s economic problems is beyond any of us posting here but if we can protect ourselves and our loved ones from the coming storm then that is what we should do.

    AMEN

  38. Keith March 28, 2006 5:28 am

    Interesting blog.

    I always thought money was just money. Until I looked at it from a very simple angle.

    Lets say we are on a big island and we have just started a new Gov etc.
    The government mints the money. OK nice and simple so here is a pile of money
    Lets say only one bank exists in this country. So the Gov gives the Bank the pile of money.
    No lets say the bank then gives an even share to everyone to use.
    They all take their money and go do their usual work and a fair trade system falls into place (damn I want to live here already) The more one person works the more money they get and the more they can laze around if they wish spending their hard earned cash.

    Cool great country. So far I’ve ignored Tax and I’ve ignored interest. For now let’s look at interest.

    The bank has this big pile of money but instead of giving it to people they loan it to everyone and they are so generous they say at the end of the year just pay us 1% extra back. Wow that is generous I still want to live here.

    Ok everyone goes about their everyday bits and pieces and come the end of the year a lot of the people have more than the 101% to pay back their loan. But a few lazy people couldn’t get enough work to get their 1% and they actually have less money than they started with. How do they get their money and give it back to the bank? Hold on. Where did the 1% actually come from? The bank was given a pile of money that was a very specific size but somehow they have now forced the pile to be bigger but it is only bigger on paper as the Lazy people now have an IOU.

    Debt. The pile of money is the same size. But the bank now has more money?

    How? The Gov didn’t print any more money? But somehow in 1 year they just took the pile and enlarged it by 1 percent even though the pile is still exactly the same size.

    Well the Bank needs the extra money now for next year so the Gov will have to print more. Well the Gov ain’t gonna do that for free so they are gonna charge taxes. Wow. Now after you pay your tax you still have to pay for your loan from the bank but now the pile is even smaller? Someone is gonna have to loose their house.

    Pretty simple way of looking at it but the man who showed me is posting in this blog. :)
    Banks create money from nothing. It is so simple. It is so effective. And it can’t be stopped. I can see posts here that are from people that are saying it can’t be done that the banks don’t do it. Show me in simple terms as I have here a scenario where interest does not create money from thin air and thereby force the mint to pump out more bills? Good luck.

  39. bp March 28, 2006 6:38 am

    ah patrick, and therein lies the rub, eh - “some overseeing body to enforce the standards” - it seems it is hard to create an effective system of standards, and checks and balances that is beyond corruption and abuse. I am not being critical of your comment, I too think that is neccessary to have some oversight, but how to achieve it is the mystery, especially in the current climate of mistrust and fear. It seems obvious to those of us posting here that the current “system” is broken, perhaps beyond repair, due to all the reasons already discussed. Perhaps some of the solution will lie in the decentralization of power and the creation of “local” currency. If we have an economic collapse decentralization seems a distinct possibility, considering all the other problems concurrently coming to a head, i.e., peak oil, global warming, pandemic flu, religious/ethnic intolerance, water shortages, and the breakdown of our current institutions. I can’t imagine the federal government holding things together very well, even with all the prisons they are building. The problem with the establishment of local economies seems to be the difficulty in overcoming mistrust and fear. It is definitely interesting times we live in.

    How to make it through this coming storm is hard for me to imagine. Obviously there will be disruptions - and in a situation like that it is unclear to me how silver or gold coins will function. Perhaps at first one will need to get by as best one can until a local system can be built up - stocking the larder and living simply seem prudent, so does establishing cooperative efforts with others. Hopefully things don’t decend into total chaos!

    Good luck.

  40. River March 28, 2006 6:46 am

    There are some other excellent resources on this website as well, including:

    Billions for the Bankers, Debts for the People
    http://www.bullnotbull.com/archive/billions.html

    The Mandrake Mechanism - How the Fed Creates Money from Nothing
    http://www.bullnotbull.com/archive/mandrake.html

    And Alan Greenspan on Gold and Economic Freedom
    http://www.bullnotbull.com/archive/gold-greenspan.html

    (from 1967, long before he became Fed Chairman, and he was a clear thinking intellectual - before he was corrupted by money and power. In short, back when he was one of “us”)

  41. Michael Goldman March 28, 2006 8:03 am

    This is a small brainchild of mine that is still in its infancy: Let mew know what you think
    The New Neighborhoods Project
    Sponsored by the New Neighborhoods Foundation

    Our current system is flawed.

    The new system will work.

    Its simplicity is what makes it work.

    One Dollar = One hour of work

    One hour of work = One Scrip

    The Value of one Unit is determined by the average number of working hours are needed to make that item.

    i.e. If a company that makes shovels employs 100 people at 40 hrs a week for 50 weeks (2 weeks vacation) or 50 x 40 x 100, (200,000 hrs) and produces 100,000 shovels in that time period, the cost of one shovel is 2 scrip

    (200,000 hrs work ÷ 100,000 units produced) = 2 hrs per unit, or 2 Scrip

    It takes 2 hrs of work to make so one must work 2 hrs to buy said good.

    Let’s take it one step further.

    If the average person works for 40 hrs a week for 50 weeks he, (and everyone else) earns 2,000 units of Scrip.

    If an average house takes 6 men a full year (50 wks) to build, than the house will cost 12000 Units to own. Or, for the one purchasing, six full years of employment at 40 hrs a week.

    The Simplicity of the system is that your present day money can be converted to vouch for up to 20,000 dollars for 20,000 scrip, giving everyone the opportunity to buy a home and to even have extra scrip left over.

    Instead of being paid weekly, bi weekly or monthly, all payments occur at the end of the business day, everyone earns the amount they work, no more, no less. The richest people today become the innovators and the ones who fund for tomorrow.

  42. patrick March 28, 2006 9:47 am

    BP you’re right. The big problem is trusting the overseer, who is there to protect the integrity of the system. At present I think that trust has gone.

    As for gold and silver coins, I think that this depends on how bad an economic downturn became. 15 years ago when the last bad recession hit, central banks rountinely raised interest rates 1% at a time whereas now they raise rates 0.25% a time. They are trying to do things at a slower pace to prevent a shock that would bring it all crashing down. However this means that the boom goes on longer and if there is no crash, then there will be a very long period of stagnation, like in Japan. If we are talking of a new depression like the 1930s (which is my own view,) then I think gold and silver will be invaluable as a store of wealth, because economic activity will continue but at a lower level than at present, and some form of safe money will be needed.

    If you look through the past at the really big historic
    events that have occurred in the last 100 yrs, from 2 world wars to revolutions to the flu pandemic of 1918, and the great depression of the 1930s life still continued despite all that adversity and I am sure that whatever happens people will have to deal with it, life will continue, but the future will be a lot poorer for the unprepared.

  43. patrick March 28, 2006 10:00 am

    Chris, who was the Australian bank you refer to? Are you sure that the profit was $115bn? I have searched on google for the most profitable corporations in the world and the highest for 2004 was £25bn for Exonn/mobil here is the link

    http://www.geohive.com/charts/charts.php?xml=ec_corp50p&xsl=ec2

  44. patrick March 28, 2006 10:01 am

    sorry that should be $25bn

  45. patrick March 28, 2006 10:12 am

    Michael your system might need a bit of tweaking, as although the end price of the items reflects the labour expended you haven’t included the cost of the materials used or company overheads. Would the Companies make a profit under your system? These could be difficult to factor in.

    Also what about the different skills and their values. If one person spent years at university to qualify for his skilled work, would he get any recognition over say an unskilled labourer or would their labour be viewed as equal on this scheme?

  46. Christopher Day March 29, 2006 1:55 am

    Responding to Patrick,

    I humbly offer a retraction. Working from memory, I confused ‘profit’ with ‘gearing’… “the ability to have $127 billion of income-generating assets on an equity base of just $6 billion.” But read on, the piece is still absolutely pertinent to our discussion on the iniquities of ‘fractional reserve banking.’

    The following extract is from an article headlined, ‘The Day Corporate Governance Died’ (The Weekend Australian, November 23-24, 1996) It was written by Terry McCrann, one of The Australian’s senior economic commentators. It was actually an analysis of Australian bank margins in regards to the Federal Government’s “Wallis Inquiry.”

    “…So what of banking power, as demonstrated by the succession of record profits from the NAB [National Australia Bank], the ANZ and Westpac? [major aussie banks]

    “Simply and without engaging in bank-bashing, they are all able to generate very high returns on their shareholder equity — 17 to 18 per cent in the case of the NAB and ANZ — because of their privileged position.

    “The high returns are a direct product of their gearing — in the case of ANZ in particular for instance, the ability to have $127 billion of income-generating assets on an equity base of just $6 billion.

    “In theory, there’s nothing wrong with that. You pays your money and you takes your risks, and in early years of this decade bank shareholders discovered that high gearing — married with bad lending — could destroy their returns.

    “Nevertheless, the banks operate literally with a licence to print money, supported by a de facto guarantee against failure (but not shareholder losses) around, importantly, a not so de facto guarantee against their lenders (depositors) losing money.

    “The arguments of costs and benefits of this are complex, and beyond the scope of this commentary — except to note that on balance, in historical terms, the benefits have probably outweighed the costs.

    “The important question, probably the single most important question for Stan Wallis and his inquiry colleagues to answer, is whether it is sustainable, or should be.

    “On two levels. The simple dynamics of the rapidly changing world we all, including bankers and their customers, live in. Simply and crudely, can banks survive?

    “But in a more direct sense, can their licensed position continue to deliver them 17 to 18 per cent returns on equity in a low-inflation, modest growth world?

    (extract ends)

    I will post my reply to the paper if you wish.

    Chris

  47. m_astera March 29, 2006 2:12 am

    Michael Goldman, your system has been tried many times. In one of its latest incarnations it was called Communism. It doesn’t work because there is not room for personal initiative beyond the amount of hours worked. As Patrick pointed out, where is the value for education and skill? Where is the motive (beyond personal pride) to acquire education or skill? And how about efficiency? If I can make three shovels in the time it takes someone else to make one, should I not be credited for three shovels, instead of one hour? Are all shovels equal in quality, materials, and workmanship?

    A few years ago I was in Seattle and saw a sign in a co-op grocery store advertising a local neighborhood system just like you describe. I thought the same thing then that I think now: Why would I trade my skills, that I have spent thirty years learning, hour for hour with someone who is completely unskilled?
    Answer: I wouldn’t, unless someone were forcing me to.

    It works out to be a great deal for ditchdiggers, not so good for encouraging skilled craftsmen.

    Let’s take a look at trading in hours worked. Hours are what make up our lives. Culture arises when man can find time for something other than survival. Some cultures have evolved on the backs of slaves, our present one included. Slaves work so the upper classes don’t have to. This might be OK if the “upper classes” then spent their time bettering the lot of everyone, so that eventually even the slaves didn’t have to work, but they don’t. They have ever and always throughout history become parasites; what happens is that those who are lazy parasites by nature find a way to insinuate themselves into the parasite class. The usual tools are force and fraud.

    Most so-called primitive people, meaning those who live a relatively simple lifestyle in accord with Nature, do not “work”. They provide for their own needs, depending on the environment, and that does not take anything like forty or fifty hours a week, fifty weeks a year. Much of their time is free to do what they enjoy, and the community naturally evolves so that all are doing what they enjoy and are suited for most of the time. This leaves plenty of time for everyone to be involved in creative pursuits if they so desire. Introduce Government (i.e. parasites), and it’s all over.

    Imagine what our world could be if our knowledge, technology, and resources were devoted to freeing everyone for creative and enjoyable pursuits instead of accumulating power, wealth, and junk. Imagine if our educational systems educated for creativity and happiness instead of jobs. Imagine if the accumulation of wealth and power were as meaningless (and faintly disgusting) as the accumulation of toenail clippings. This would not require an enforced agreement that everyone’s hours of work are equal. It would, however, require that all agree not to lie, cheat, or steal, or tolerate those who do.

  48. m_astera March 29, 2006 2:49 am

    Patrick: Might I suggest that you go back and read my critique and compare it with your reply? One cannot make a special exception for the central bank, that they are allowed to create money from thin air while no one else is, and have the rest of your arguments hold water.

    Your introduction of double-entry accounting as an explanation does nothing but further obfuscate things, but then that’s one of the beauties of double-entry accounting. What you actually did was give us the bank bookkeeper’s version of what I wrote. Same-o same-o.

    I stand by what I said.

    A fiat money system can work and work well in a community of honest people where the focus is on the well being of all. In a system that tolerates liars, cheats, and thieves only a commodity-based currency can work for long. In a system that encourages, rewards and exalts liars, cheats, and thieves, well, I guess we end up exactly where we are right now.

    m_astera

  49. Christopher Day March 29, 2006 4:32 am

    m_astera HAS EXPRESSED SOME OF MY DEEPEST ASPIRATIONS REGARDING THE CREATION OF AN EQUITABLE FAIR-TRADE SOCIETY-SYSTEM THAT WE CAN ALL SHARE, AS OPPOSED TO THE CURRENT USURERS UTOPIA BUILT ON THE TREADMILL OF OUR ‘WORKING LIFE.’ AN IMPOVERISHED, BEATEN, DEFEATED PEOPLE GRAPPLING WITH THE USURY CONTRACT IS NOT EQUIPPED TO BUILD A BEAUTIFUL BETTER FUTURE WORLD.

    WHEN WILL WE FINALLY SHAKE THIS MONKEY OFF OUR COLLECTIVE BACKS, FOR GODS SAKE! I DON’T LIKE PLAYING THIS ROTTEN GAME WHERE I AM EXPECTED TO PROFIT FROM THE MISFORTUNE OF OTHERS.

    WHY CAN’T I PLAY A KINDER, MORE EQUITABLE GAME? ANSWER: GREED!

  50. Christopher Day March 29, 2006 10:21 am

    http://www.axisoflogic.com/artman/publish/article_21569.shtml

    FEDERAL RESERVE ORDERS TWO TRILLION DOLLARS TO BE PRINTED AND PUT INTO CIRCULATION!
    By Special Report
    Mar 28, 2006, 21:05

    TWO TRILLION $$

    SOURCES WITHIN THE UNITED STATES TREASURY ARE FLABBERGASTED!

    INFO CORROBORATED BY THREE SEPARATE U.S. TREASURY SOURCES

    Six months ago, the Federal Reserve quietly announced that as of March 20, 2006, they would no longer publish “M3″ Data. The “M3″ was the amount of cash the government printed to put into circulation, propping-up the U.S. economy.

    As of eight days ago, M3 data is no longer being reported, so there is no way for the public, investors or bond holders to know how much currency exists - and no way to gauge how much a “dollar” is truly worth.

    Three separate sources in the U.S. Treasury have told me that this week, the federal reserve ordered TWO TRILLION dollars to be printed! The U.S. Treasury is allegedly running printing presses 24/7 to accommodate that order. Treasury employees were specifically ORDERED not to talk about this to anyone because it could cause economic collapse.

    Even worse, I was also told that the whole Immigration Amnesty Debate (especially the well-funded well-attended protests) was deliberately scheduled to take place now, to divert attention from this massive printing/devaluation of the U.S. Dollar. The feds allegedly figured that by the time anyone found out, they could smooth things over. They figured wrong. Surprise, boys, you’ve been exposed!

    Watch for Gold and silver to skyrocket in price within days as the world wises up and begins dumping the U.S. Dollar.

  51. Doug March 29, 2006 1:22 pm

    YOW! O.K. so what is a good move aside from the obvious gold investing/buying? What are YOU doing for your own self preservation? Need recommendations!

  52. m_astera March 30, 2006 1:01 am

    Hi Doug-

    As I posted last week, gold is good, but I think that silver is better right now. There is a lot of gold out there, but silver is an industrial metal and has been used in amounts greater than what has been mined for the last sixty-plus years. By some estimates there is more gold available in the world than silver, yet silver is selling for 1/50th the price of gold.

    That said, there really isn’t that much of either, probably less than 2/3 oz. of gold per person alive, and maybe, maybe, an ounce of silver per person.

    Today, when silver went over $11USD per ounce, I took some of the little bit of cash that I still have on hand and bought 29 ounces of silver dimes, almost $300 worth. I paid 79 cents per dime. Yup, I bought 360 dimes. The reason I bought dimes was that if the paper money becomes worthless, small change may be in very short supply. Most of what people buy and hold is in ounces. I already have a few ounces of gold and more than that of silver, not a whole lot. I’m a working man who gets paid by the hour, but I’ve made a habit of buying gold or silver when I get paid. It is definitely not too late to start doing this; most people still don’t have a clue, and they won’t think of silver or gold until it is too late. Most people have been well programmed to believe that money is paper and bank account entries.

    If this country’s economy really is going to tank, as it appears, then the next thing after gold and silver is food, and I believe it’s a good idea to have some non-perishable food stored. High-protein high-fat canned food like sardines, chili, hash, corned beef are going to be incredibly valuable if we go through a shake-out period. I don’t see that happening right away; even after the big crash of 1929 it took a year or two for things to get really bad all around. It’s a lot easier to buy those things now, though, than it will be when it takes $1,500,000 to buy a tube of toothpaste, as it does in Zimbabwe right now.

    Another thing you could look at is trade goods, comfort foods, maybe even luxuries like soap or toilet paper. I’ve done a little research on past crises, and it seems that sugar, matches, and cooking oil are always in short supply in a crashing economy. Chocolate, tobacco, and booze are great trade goods too.

    Keep you gas tank full. If you live in the big city, have a plan to get out and a place to go to, some place you have been before and know is pretty safe, not just a location on a map.

    Even if things keep on struggling along like they have been, and we don’t get into an economic crisis, you will always feel more secure knowing that you have some food and precious metals stashed away.

    m_astera

  53. qrswave March 30, 2006 2:29 am

    excellent discussion; outstanding site/blog!

    usury on top of fraud on top of private monopoly is the cause of our current predicament, as m_astera and chris day so masterfully point out.

    at the bottom of it all, of course, is selfish greed and arrogance.

    unless we work with the goal of COMMON interests in mind, we will always end up at the same cannibalistic end result in which special interests with the most guile/greed/power prevail

    the American Monetary Institute is proposing an Act to nationalize the fed and issue interest free currency. It’s open for public comment.

    Ron Paul is not the only representative pushing to abolish the fed, Dennis Kucinich supports AMI. AMI is holding an annual conference in Chicago this September that I hope to attend and recommend that everyone attends.

  54. Rich March 30, 2006 8:52 am

    Yeah, but Kucinich is a socialist - he’s all for spending our way out of the current mess in an FDR kind of way, and there is something kind of creepy about him.

    Hey Michael, how about a new thread on the current rise in Gold, or the Iranian developments, or V fo Vendetta (you all have to go see this movie), or where Oil is going.

    There is so much going on out there right now, it truly is an amazing time to be alive!!

    Cheers Rich

  55. patrick March 30, 2006 9:50 am

    M astera

    I am not trying to defend the current system, and as for your question about why central banks should have a monopoly on money creation, I am not an apologist for them, I am just reporting facts so that this discussion is fact based and balanced. With many types of blogs on any subject people make statements for which they provide no evidence which others then absorb as facts, which can mislead people.

    A perfect example was a couple of days ago Chris Day reported that an Australian Bank made $115bn in profit from $6bn in capital. However he graciously retracted this and confirmed that it was not profit but that the $6bn allowed them to gear their assets to $115bn. I know that his intention was not to mislead people but this is an example of how people can start quoting things as fact that others then read on these blogs and believe without any evidence.

    In term of double entry book keeping, if you don’t use double entry book keeping then you can only see half of the story. Example. You buy a $200,000 house to rent out,with a $10,000 downpayment (5%.) (devil’s advocate)”Hey that’s fraud you have just created $190,000 out of thin air. You are receiving income on $200,000 of assets yet you only have $10,000 capital.” That is the kind of argument that follows from only seeing half the story i.e. the asset side of the coin. Anyone can clearly see the flaw here in that the balance was paid with the use of a mortgage and although there is $200,000 of assets producing rent there is also $190,000 of liabilities charging interest. If you accept that you should be able to mortgage a property instead of paying cash, then why do you not accept that the bank’s assets (i.e. it’s outstanding mortgage loans) cannot be similarly mortgaged, by the bank to another institution in order to obtain further money to lend out?
    (devil’s advocate)”ah but those mortgages are just pieces of paper and not real.” They are pieces of paper, but paper that gives the right to take possession of something that is real if the money is not repaid pronto. This further money that the bank has borrowed, it pays interest for, and provides collateral for by way of it’s existing loan book.

    It is the fed(central bank) which creates the new money. So where am I going with this? I am trying to purge this blog of all the Crap that gets talked on this subject to clear the way for the real discussion point. That is the central banking system. To quote an excerp from the banking magazine of 1924 (credit to Chris Day:)

    “we can get them to expend their energies in fighting over questions of no importance.”

    The really big story is the central banking system and how that works. That is what is going to cause the depression. Anyone interested in hearing about that?

  56. Doug March 30, 2006 11:09 am

    Yes, but in your argument , the bank can repo a house that may or may not be worth $200,00.Some portion of that newly created money is potentially no better than paper when values are arbitrary.
    When central banks around the world race to inflate, what is the value of underlying assets?No one knows until the entire house of cards collapses. Of course we may see all other goods inflate to catch up with housing and that is what I believe is happening(abetted by the Fed)

  57. Rich March 30, 2006 11:37 am

    Hey Patrick.

    Can you explain the structure of the Fed, who owns what and who has access to what information?

    I know you guys are debating the principles of central banking in an almost academic fashion, but my understanding is the Fed is NOT Federal and there is NO reserve.

    In addition, I understand the Fed to be a QUASI-governmental body that is actually privately owned. There is an age old debate about who the original shareholders are, it appears to be a secret.

    There is a question as to whether the individual board members, some of which belong to major commercial banks (NY Fed) can actually leverage the knowledge they gain in their capacity as Fed Full Board Members, on behalf of their commercial entities.

    Finally, is there any gold in Fort Knox (yeah I know, it’s not run by the Fed, but it’s a related question).

    Cheers Rich

  58. River March 30, 2006 8:37 pm

    An excellent article:

    Economics: Religion Masquerading as Science
    http://wakeupfromyourslumber.blogspot.com/2006/03/economics-religion-masquerading-as_26.html

    - River

  59. Rich March 31, 2006 7:38 am

    Hey River.

    That is perhaps the very best article I’ve ever read on the history of money and how we got in this massive pickle with the bastards that be - - and I’ve been reading everything I can get my hands on for years!

    Thanks for the education.

    Cheers Rich

  60. Scott March 31, 2006 8:41 am

    Gold prices… wow

    Ok, so here’s a question for all…

    I’m sure some people here think that the government will attempt to confiscate gold in the event of a 1929 repeat. I am also sure that some people have even gone to some lengths to buy gold in relatively small amounts in ways that will leave no record of their purchases, so that the government is not able to confiscate that gold. Some people here imply that they might use gold to buy and sell in such a situation, which does not seem to take into account the apparent contradiction that gold (silver?) ownership is illegal.

    The only use of gold I can see if its ownership is illegal is to indefinitely hold on to an asset of lasting value, without taxation or depreciation.

  61. qrswave March 31, 2006 9:08 am

    The only asset with lasting value that neither depreciates nor can ever be taxed or confiscated, is your good deeds.

    Rich, please articulate exactly what you don’t like about socialist ideas and exactly what you find “creepy” about Kucinich. I can’t respond intelligently to vague, unsubstantiated rhetoric.

    Also, spending our way out of economic crisis FDR style is the only way to go. If it’s done with INTEREST-FREE capital, the debt incurred would be paid in full within a generation.

  62. Rich March 31, 2006 1:04 pm

    Hey qrswave.

    Socialism doesn’t work, here’s the classic definition:

    Socialism: 1. Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.
    2. The stage in Marxist-Leninist theory intermediate between capitalism and communism, in which collective ownership of the economy under the dictatorship of the proletariat has not yet been successfully achieved.

    Socialism is doomed, that’s my opinion. Collectivism is fine when its voluntary, like Findhorn commune in Scotland - I like that kind of collectivism because it’s just a bunch of like-minded people choosing to live together and share. However, when the government is the entity doing the collectivizing (I just made that word up) life becomes a cluster! I don’t want to be forcibly collected in to anything, and I personally believe the human spirit rejects that notion wholesale - - its against human nature in my opinion. I NEVER understood how China was a Communist country for so long, I spent 5 years in Singapore as a kid growing up with local Chinese folks and they were the most rabidly capitialist people I ever met.

    As for Kucinich, well he’s a socialist, and I don’t like socialism because it doesn’t work. I like his stand on the war and on a bunch of issues, including some of his position on sound money (although I somehow doubt his sincerity when it comes to the money issue, you can’t simultaneously espouse Austrian Economic Money Theory and be a collectivist!).

    Finally, the reason it seems creepy to me is because its a contradiction (his stand on sound money and his socialist tendencies). Advocating massive spending means printing more money which we all have to pay back. FDR, arguably, was the beginning of the end in terms of sound money. He pushed the US towards socialism. His programs were/are not sustainable, that is becoming clear around about now as everyone can see that Social Security is not going to be fundable 10-20 years.

    I gotta run, more later.

    Cheers Rich

  63. bp March 31, 2006 4:46 pm

    I would be interested in someone answering Scott’s question - it seems that there could be a difference in definition of what can conficated as gold - it seems gold coins before 1933 were legal tender, and silver coins were legal tender. These might be harder to confiscate than bullion - anyone have an insight into this.

  64. m_astera April 1, 2006 12:08 am

    Hi Scott and bp-

    I’ll tackle the gold question, no real answers here but some informed opinions.

    When the gov’t confiscated the gold they took the legal tender coins and the bullion, but they didn’t confiscate two categories: jewelry and numismatics (collector coins). They made it illegal to use gold as money, legal tender. Why didn’t they confiscate jewelry and numismatics? Likely they would have had a revolution on their hands if they had tried to take women’s jewelry away, and numismatics are rather rare and probably not worth bothering with. Another factor was that they were supposedly paying for the gold at its true value, and weren’t willing to pay the steep premium that jewelry and numismatics command.

    So one argument goes that if the gov’t does it again, they will again leave the numismatics alone. For that reason, some people buy and hold pre-1933 gold coins graded MS63, MS64, or MS65, mostly American “Walking Liberty” or “St. Gaudens” $20 gold pieces. They go for a steep price, usually 3 to 5 times spot. (I’m working from memory here, so don’t quote my numbers without doing a google search.)

    As for using gold or silver as money after/if it has been declared illegal, well there are lots of things that have been declared illegal that people still continue to do, especially things that are doing no harm to anyone else. Recall that the US Constitution says that only gold and silver shall be legal tender, and also recall that in the early US if a man owned more than 40 acres he was required by law to grow hemp. (Not to belabor the point, but you start to see why I keep saying that government is the problem.)

    One may not be able to go to the store and buy bread with silver if it’s been confiscated and declared illegal, but there will be plenty of transactions that don’t need to be made at the store. I haven’t run into any research on just how much of this went on in the 1930s, but one can be sure that there were plenty of people who were outraged and didn’t give up their gold easily. By 1933, however, the country was in deep depression, and there wasn’t much money in circulation period.

    The US gov’t managed to keep gold ownership illegal for about forty years, 1933-1973, two generations, which was long enough for most people to forget that gold ever had been money. When they made it legal again, few paid any attention, most have yet to pay any attention and won’t until they wish they had.

    I don’t see that sort of situation happening these days. We are not going to slowly slide into a depression in peacetime. The US is not at peace, it is at war with a number of countries and trying to pick a fight with others. All branches of the government are completely corrupted, willing tools of corporate nazis and international bankers. They have sold out the American people and are actively trying to destroy the country socially, economically, and morally. I’m not preaching here, just stating it as I see it. They have built detention camps to hold “troublemakers” and quite recently hired Halliburton to upgrade and maintain the camps. They have poisoned the world with Uranium aerosols (DU) and it appears they are planning to introduce a plague, likely one based on the 1918 flu and/or smallpox. Something like 80% of the soldiers who served in Gulf War One are on medical disability, and having used 1,000 times as much DU in Iraq and Afghanistan this time around, any US soldiers who make it back in one piece won’t be able to defend their country or stand up for their rights for long, and they sure won’t have to worry about the soldiers’ deformed children being a threat, if they can even have children. On the other hand, very few well-educated or informed Americans have volunteered for military duty this time around, and there are still a whole lot of firearms and ammo out there.

    There are some other things that make this time different, an important one being that in the 1930s most Americans still lived on farms, or their parents or relatives did, so there was a place to go to for many where they could still be fed or feed themselves. Not now. Family farmers are such a small part of the US population that the Census Bureau doesn’t bother to have a category for them. Another “food factor” is that many of the major crops have been GMO-ed. All of the soy, corn, and canola seed is contaminated, and we’ll just have to wait and see what happens after people eat cauliflower mosaic virus and antibiotic-resistant genes for a few more years.

    Worth mentioning here also are the widespread drugging of the populace with pharmaceuticals, cell phone microwave irradiation to the brain, rampant illiteracy and induced ADHD, and constant brainwashing/propaganda by the fully-controlled media.

    So we have quite a different situation today, and how it’s going to fall out is anyone’s guess, but I doubt that it will be orderly, and I very much doubt that, should the present criminal government continue in power, it will be able to hold on to much more than the major cities. Outside the cities will be a lot more wild and woolly, but that is where the survivors will be and I doubt that anyone will be bothering about whether some are transacting with precious metals.

    It’s kinda funny that qrswave above is extolling the virtues of FDR’s socialist spending, when as I recall he was the prez in 1933 when the gold was confiscated.

    I did go to the link that river posted and read Steven Varlenga’s piece on Economics as Religion. It is excellent, and I want to read his book, The Lost Science of Money. I have heard good things about it before. There is another link mentioned in a comment on the same page, The Money Myth by Louis Even that is about the Social Credit system and is worth reading.

    I could be convinced that a fiat money system would work; the only problem is how do we keep the overseers honest?

    great discussion here, y’all. I appreciate your efforts. Including you, Patrick.

    m_astera

  65. Christopher Day April 1, 2006 4:20 am

    Incidentally Patrick, do you work with - or for - “commercial bankers?” (as opposed to “central bankers”)

    I ask this respectfully because as a self-taught econo-observer I don’t have the pre-requisite professional economics background to be able to fully understand your primary position on this forum.

    I am genuinely interested in what you have to say, but I need to appreciate your position by seeing it in point form with a brief explanation regarding “Alternatives to the Fiat Currency Regime.”

    Obviously small socially connected communities can agree to a local currency and its relative ‘worth’, (be it shells, pigs, rum, salt, gold, tokens, notes, etc., but how can this local implementation be instituted globally?

    You’ve obviously given social currency much professional thought, so if perhaps there is, “less than 2/3 oz. of gold per person alive,” are a couple of matchboxes of powdered metal really going to be a viable alternative to the present mass production of hard-to-counterfeit tangible notes?

    How do 6.25+ billion people establish and store wealth to facilitate fair trade globally. It alleged that by the late 1800s no more than 1 billion humans existed on planet earth.

    It’s easy to deconstruct the deceitful usurers ‘pea and shell games’ but I can’t comprehend how the same checks and balances that exist within a small closely connected community can be extrapolated globally.

    WHICH ALTERNATIVE SYSTEM WILL REALLY WILL WORK?

  66. Christopher Day April 1, 2006 4:23 am

    oops… “WHICH ALTERNATIVE SYSTEM WILL REALLY WORK?”

    Disclaimer: The contents of this article represent the opinions of Christopher D. Day. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Christopher D. Day is not a registered investment advisor. Information and analysis above are derived from sources and using methods believed to be reliable, but Christopher D. Day cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. This article may contain information that is confidential and/or protected by law. The purpose of this article is intended to be used as an educational discussion of the issues involved. Christopher D. Day is not a lawyer or a legal scholar. Information and analysis derived from quoted sources are believed to be reliable and are offered in good faith. Only a highly trained and certified and registered legal professional should be regarded as an authority on the issues involved; and all those seeking such an authoritative opinion should do their own due diligence and seek out the advice of a legal professional. Lastly Christopher D. Day believes that the expression of true love can satisfy the deep longing in the hearts of all people on earth. Amen.

  67. bp April 1, 2006 4:38 am

    m_astera,
    Thanks for the response. I tend to agree with you, but the use of labels and categorical statements throws me off. To me it isn’t so much government as the abuse of position and power that is the problem. I have worked in government most of my working life and I can tell you that most of the people at the bottom are fine. It is just the people that claw their way to the top for power’s sake that are the problem, and it is that way in most organizations I’m aware of.

    But all in all, I think we’re in agreement. Building a system that can be trusted seems to be the problem with this economic model we’re after. That and dealing with sociopaths that seek power for powers sake - seems we have to have some way of derailing these idiots.

    And I’d have to agree that spending are way out of this is going to be problematic - we could end up like Germany when it went through that hyperinflation since our dollar is being seriously devalued by the Feds.

    I have seen sites out there, many of them referenced here, that give me hope for the future, even if it will be a painful transition. About all I can think now is the quote - “Keep your powder dry and don’t shoot until you see the whites of their eyes”. Surly this is going to be a long drawn out affair.

  68. Rich April 1, 2006 6:59 am

    You all need to go and see V for Vendetta. So much of what m_astera is saying is contained in that movie, it is astounding. Fahrenheit 911 was wishy washy due to Moore’s corrupted world view, V says it as it really is. When you combine The Matrix (first movie) with V, you can see that the Wachowski brothers are trying to educate the people

    R

  69. m_astera April 1, 2006 10:30 pm

    Hi bp-

    Yes, this will be a drawn-out affair. The good old days are right now, and in retrospect I think we’ll look at the 1990s as a golden decade.

    I was putting a good dose of doom and gloom reality in my last post, but it is what I see as the most likely mid-term future. Those reading this blog are educating themselves far beyond what most will bother to do, and those who care enough to do that will be in the best position to survive what is inevitably coming. Things are not just going to continues down the same rosy path for the US. I take no joy in that prediction.

    If I offended you with my sweeping characterization of government as the problem, I apologize. It was not meant as an attack on all government workers, any more than telling the truth about the Fed and its owners would be an attack on every employee at the Fed. Most are just doing the job assigned to them, and many are doing their best to do a good job.

    Here is the crux of the problem, as I see it: The basis of an economy is raw materials and production. This means goods, commodities, manufactures. People do not begin an economy by trading in haircuts or accounting. Those things are services, and they can only be sold when there is enough wealth accumulated from trade in goods. There can be no such animal as a “service based economy’. The classic satire on the idea is the town where everyone makes a living by doing each other’s laundry. Can’t happen.

    Government doesn’t even provide many useful services, and it definitely provides no goods, commodities, or manufactures. Nonetheless, government has set itself up as a monopoly, and uses force or threat of force to prevent any competition for the few services that it does provide. It also uses force or threat of force to collect unearned money from the people, and gives no guarantee of useful service for the money it extorts. Extorts is the exact, correct word.

    I have never had experience of any government function that was not better executed by a competitive private source. The key word here is competitive; when government grants a monopoly to a privately held company, as is seen in our present push for “privatization”, the problem only gets worse, because then we have the motive of maximizing profit added on.

    One way of looking at it would be to say “In an ideal world we wouldn’t need …” and then fill in the blank. In an ideal world we would still need farmers, and craftsmen, and foresters, and mechanics, and builders. We would also need services like teachers and barbers and tansportation. In an ideal world I don’t see a need for police, courts, prisons, legislators, tax collectors, soldiers, or bureaucrats. So, by my logic, the less need we have for the “functions” of government, the closer we approach an ideal society, and I think that should be the goal: creating a better society for everyone. I realize that there are some who claim that is what government is supposedly doing, but I see very little evidence of it. On the contrary, what I have seen of government in my lifetime (and in studying history) is a self-serving, self-aggrandizing, and self-perpetuating parasite.

    I worked in state government for less than a year when I was in my twenties, and I’ve definitely had plenty of opportunity to observe it from the outside. Let me ask a few questions: How many of the people that you work with in government have as their daily goal and focus serving and helping the citizens to the best of their ability? How many are just showing up for a paycheck, doing as little as possible? How many are trying to increase their own power and wealth through whatever means they can?

    Certainly in a private economic enterpise one will find all of the above types, but in private enterpise their faults or strengths will be self-correcting. If they don’t give their customer what the customer wants they will sooner or later get fired or go out of business. Private enterprise does not have the option of enforced monopoly or enforced taking of a citizens wealth and property.

    I happen to live in the Capital city of my state, and I deal with State employees daily. They have full benefits and generous retirements and get paid quite well, generally better than their equivalents in private enterprise, yet they have few of the uncertainties or demands put on them that employees in private enterprise do. They will never lose their job or take a pay cut because of poor sales or failure to meet a production quota. They produce nothing. They have raised my property taxes yearly, until now I am being taxed seven times as much as I was fifteen years ago, yet they have done nothing to earn this. The State, however, will take my property if I don’t pay this extortion, and I have no recourse.

    So again, I apologize if I offend. These observations are not meant as a personal attack on you. I would hope that you do the best you can in the government job you have, just as I would hope that a mafia accountant would do their best. But it is a choice they make, to work for a criminal organization, and unless they are doing their best from the inside to dismantle that criminal organization, they are part of the problem.

    m_astera

  70. m_astera April 1, 2006 10:40 pm

    Hi Rich-

    If V for Vendetta really is about the things that I’ve been saying here, I guess I’ll actually have to see it. Maybe the Wachovskis read the same things I do? I watch a movie about once every three or four years (really). I may be the last person in the US to not have seen The Matrix, not that I haven’t heard and read a lot about it.

  71. bp April 2, 2006 4:37 am

    Hi m_astera-

    hehe, no offense taken - it’s hard for me to argue with you about the quality of government today - my point, though, was that it is people and how the work is organized that is the problem, not government per se. In an ideal world government would contend itself with helping society function. To me part of the problem is the nature of bureaucracy - there are problems with every very large organization - one can look at GM and see this. I get the feeling that your view of private enterprise is based on small enterprise - which I favor, too - but lets not confuse government with bureaucracy. I’d like to see a better way of organizing work than through bureaucracy - perhaps the move toward open source code can provide some inspiration concerning more efficient ways to organize work. Definitely transparency would be nice to see in government functioning.

    From what I’ve seen in the past 30 years government has become increasingly politicized with politic decisions working their way further and further down into the functioning of standard operations - I no longer believe any statistics now coming out from federal or state government so I won’t defend government as it now is…but if you want an ideal society, you’re going to have to have some government - the point is to make it better than it now is - not throw the baby out with the bath water.

  72. Doug April 2, 2006 5:16 pm

    It really boils down to finding a way to insure the people we elect are honest and motivated to honor their committments to “WE THE PEOPLE” This doesn’t seem to be the case at present. I’d like to think it’s possible, but self interest is a strong force.

  73. Rich April 3, 2006 5:50 am

    m_astera.

    You are right on the money, I can’t add or subtract from your thoughts, thanks!

    R

  74. Barter-This April 3, 2006 1:14 pm

    IF we as a nation are to survive, we are to establish a democracy of truth and the truth is… those in charge have an agenda…That agenda is to create a one world government thats purpose is simply to dumb down and weaken 98% of the world populations to a level of surfdom and seritude not seen in a 1000 years. Plain and simple.

    To change all this we are to create stability, by bringing together leading minds of diverse life, simple to the educated, all have something to contibute.
    This organization of people should have experience of work ehtics in their businesses, what ever their businesses, to build companies that thrives. Balance budgets, pay bills, using the gold standard as a backer no usurery.

    For a business to thrive the people who work there are happy and see themselves as member of something bigger then themselves, contributing to a higher calling.

    I know this sounds utopic but I believe the people are starting to wake up and are ready for something better and a OWG is not it.

    According to Devvy Kidd, “Why A Bankrupt America?” The Federal Reserve pays the Bureau of Engraving & Printing approximately $23 for each 1,000 notes printed. 10,000 $100 notes (one million dollars) would thus cost the Federal Reserve $230. They then secure a pledge of collateral equal to the face value from the U.S. government. The collateral is our land, labor, and assets… collected by their agents, the IRS. By authorizing the Fed to regulate and create money (and thus inflation), Congress gave private banks power to create profits at will.

    Outlawing the Fed. Res. is the One thing that would start the utopic life.

  75. Rich April 3, 2006 4:58 pm

    Peak Oil may put a big dent in Utopia!

    Here is the famous quote from Hubbert on his prediction of Peak Oil back in 1956:

    “According to the best currently available information, the production of petroleum and natural gas on a world scale will probably pass its climax within the order of a half century (i.e., by 2006), while for both the United States and for Texas, the peaks of production may be expected to occur with the next 10 or 15 years (i.e., 1966 to 1971).”

    Hubbert nailed it! The US peaked in 1970ish and I believe the world is peaking around about now!

    Once we fix the Fed we’ll then have to spend the next 40 years of what’s left of the oil to rebuild our entire global economy.

    Of course, we’ll have to survive global warming and all of the whackiness we’re all experiencing on a continually escalating basis.

    R

  76. Christopher Day April 4, 2006 8:07 pm

    Hey Patrick, where are you?

  77. Christopher Day April 4, 2006 8:22 pm

    Yo Rich,

    Just thought I’d throw the following piece into the “Peak Oil” Punch and Judy Show.

    I survive the ubiquitous polemic deluge of contentious data by considering everything but believing nothing. It works!

    __________________________________________________________

    ‘Fossil fuel’ theory takes hit with NASA finding

    New study shows methane on Saturn’s moon Titan not biological

    ————————————————————
    Posted: December 1, 2005
    11:48 a.m. Eastern

    © 2005 WorldNetDaily.com

    NASA scientists are about to publish conclusive studies showing abundant methane of a non-biologic nature is found on Saturn’s giant moon Titan, a finding that validates a new book’s contention that oil is not a fossil fuel.

    “We have determined that Titan’s methane is not of biologic origin,” reports Hasso Niemann of the Goddard Space Flight Center, a principal NASA investigator responsible for the Gas Chromatograph Mass Spectrometer aboard the Cassini-Huygens probe that landed on Titan Jan. 14.

    Niemann concludes the methane “must be replenished by geologic processes on Titan, perhaps venting from a supply in the interior that could have been trapped there as the moon formed.”

    The studies announced by NASA yesterday will be reported in the Dec. 8 issue of the scientific journal Nature.

    “This finding confirms one of the key arguments in ‘Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil,’” claims co-author Jerome R. Corsi. “We argue that oil and natural gas are abiotic products, not ‘fossil fuels’ that are biologically created by the debris of dead dinosaurs and ancient forests.”

    Methane has been synthetically created in the laboratory, Corsi points out, “and now NASA confirms that abiotic methane is abundantly found on Titan.”

    The realization that hydrocarbons are produced inorganically throughout our solar system was a key insight that led Cornell University astronomer Thomas Gold to write his 1998 book, “The Deep Hot Biosphere: The Myth of Fossil Fuels.” Gold wrote:

    It would be surprising indeed if the earth had obtained its hydrocarbons only from a source that biology had taken from another carbon-bearing gas – carbon dioxide – which would have been collected from the atmosphere by photo-synthesizing organisms for manufacture into carbohydrates and then somehow reworked by geology into hydrocarbons. All this, while the planetary bodies bereft of surface life would have received their hydrocarbon gifts by purely abiogenic causes.

    Gold wryly noted that he was sure there had not been any “big stagnant swamps on Titan” to produce the biological debris that conventionally trained geologists think was required on Earth to produce oil and natural gas as a “fossil fuel.”

    “If petroleum and natural gas are abiotic as we maintain in ‘Black Gold Stranglehold,’” Corsi commented, “then the ‘peak oil’ fear that we are going to run out of oil may have been based on a giant misconception.”

    Paradigms in science change slowly and with great resistance, he noted, “But NASA has given us today incontrovertible evidence that Titan has abundant inorganic methane.”

    “If the scientists have ruled out that biological processes created methane on Titan, why do petro-geologists still argue that natural gas on Earth is of biological origin?” Corsi asked.

    Related special offer:

    “Black Gold Stranglehold: The Myth of Scarcity and the Politics of Oil”

    Previous stories:

    Huge natural gas field ‘discovered’ in Texas
    Abandoned oil wells uncapped
    ‘Black Gold’ strikes Big Oil ‘nerve’
    ‘Hundreds of years’ of oil available
    Forget everything you know about oil

  78. Joe April 5, 2006 1:05 pm

    The comments I’ve read here are insightful to say the least,
    as well as the banter and somewhat opposing opinions if not only intertaining but cirtainally informative. There are many here who are in my humble opinion, are better informed and more educated than I, particuarly in the two major
    catagories being discussed here, namely economics and
    government. But, having said that, I should like to add a few thoughts, one of which is the notion that any govern-
    ment cannot exist without taxing, or as one respondend said, by an “extortion” method. Imposible you say, well,
    purhaps for Humankind. But the was, at one time, just such
    a model in existence for a brief time as mentioned in the Bible, wherein God gave to the new nation of Isrial (not
    that abominable modern Zionist creation that passes for Isrial today) a method of wealth redistribution and exchange
    not requiring a tax man. It was based on giving freely, not
    subject to force, of which all taxes are. To be sure, social
    sanctions and the Mosaic law were in place to “incourage” giving, to include God Himself. But I mention this, because if God thought to offer such a profound way of conducting commerce and money flow as it were, then it must be more than possible, even with our generally scewed up and sin like nature, to make such an equatble economic model not only function, but prosper without the current wealth disparities we have today. I realize such an idea won’t fly
    in todays geo-political climate as there are simply to many
    who have too much to lose as things are and won’t give up
    without a fight. That said, is falls to a sellect few to
    maintain the resistance until the currect system collapes
    by it own weight. Keep the Faith, and keep up the good fight.

  79. Rich April 5, 2006 7:25 pm

    Hey Christopher, thanks for the thought provoking article on the possible creation of our fossil fuels, I remember as a kid thinking that perhaps oil was not just dinosaurs and ferns, but perhaps past civilizations as well, and that we were potentially burning our distant relatives! It was just a silly thought, but if we were burning dinosaurs, then perhaps the essence of some of our human ancestors crept in there too!! Hehe!

    Anyway, I don’t profess to know enough about geology to know if Titan methane can conclusively disprove current geological theory regarding the creation of our gas. Seems to me though that if the origin of gas is to be brought in to question that there would be plenty of evidence here on earth to refute current conventional wisdom.

    Finally, I’m not dogmatic about my beliefs, I’m open to change on pretty much every level, life is like that. If we were asked to change our views on fossil fuels tomorrow, based on convincing new evidence, then I’d be one of the first to become a contrarian and buck the conventional wisdom!

    Now a couple of other thoughts. Michael posted a link about 911 on the home page today, I think its worth folks taking a look at that movie. I’ve studied the subject quite a bit. I didn’t believe the official story from day one and it cost me a lot of credibility with people at the time, now it seems there is a growing belief that the official story of 911 is potentially very bogus. I agree.

    Finally, I just found a list of foreclosures across the country, here is the link (which is very long) if you want to see the number of foreclosures in your area you may have to cut and paste the entire link manually in to a new browser. It is pretty interesting to look at the chart of foreclosures.

    http://prnewswire.com/cgi-bin/stories.pl?ACCT=SPIRLT.story&STORY=/www/story/03-22-2006/0004324973&EDATE=WED+Mar+22+2006,+09:00+AM

    That’s it, cheers Rich

  80. Rich April 6, 2006 5:54 am

    Hands up who want a new blog??!!

  81. mutual fund April 6, 2006 8:18 am

    Howdy everyone, I’m Cleo, I live in Dallas, the article on your site contained the information that I needed for my book report, Thanks

  82. Doug April 6, 2006 9:17 am

    Yes-new blog. Regarding abiotic oil; I agree that some oil is of abiotic origin but don’t forget to ask at What rate is it produced.Our current rate of use may well be unsustainable no matter which is true.

  83. m_astera April 6, 2006 11:43 pm

    I’m glad you are not offended, bp. I know that a lot of that rant sounded like libertarianism, but I can argue against libertarianism just as easily.

    What we need to overcome is that those who desire power over others are allowed to rise and gain power over others, (if that made sense).

    When we can be assured that the motivation of those in power is service to others, we can have systems that work. This doesn’t mean that we only allow Mother Theresa candidates; it is just fine to serve yourself as well as others, and that is what most of us do. Unfortunately history is all about those who serve only themselves and try to force others to serve them too. The modern term is sociopath, or more correctly, psychopath. We have a worldwide need to prevent psychopaths from gaining any position of responsibility, and then the next goal will be to stop making psychopaths. I, for one, believe that most of them are made, not born.

    m_astera

  84. m_astera April 6, 2006 11:45 pm

    I’ll vote for a new blog on energy.

    How about it, Mr. Administrator?

    One last thing, though: Got silver?

  85. bp April 7, 2006 4:02 am

    m_astera, I would agree in general with what you say - knowing human nature for what it is, I tend to think a good system of transparent checks and balances is necessary, along with the breaking up of power concentrated in too few hands - I would think we have to come up with a differnent way of organizing people, other than hierarchial (that is a big problem for our current institutions where the people at the top are disconnected from the people at the bottom) - I would think part of the problem lies in the enculturation of a population to conform to the culture’s norms - perhaps our culture favors cultivating psychopaths - an established cultural pattern is hard to break, especially if the elite don’t want it broken. I figure only a crisis can break that kind of thing, an extreme crisis, a world wide crisis - not an enticing thought - I’m not sure how far silver will carry one in a future like that, but one must try to persevere as best one can, and owning silver can’t hurt - especially if there is a world-wide economic collapse.

    If we are voting for a new blog - I am interested in getting off the power grid - or at least reducing my dependency on it - or for that matter obtaining power in a collapsed economy - any ideas

  86. Doug April 7, 2006 8:30 am

    That sounds a bit like states rights you’re advocating.I believe we started with a good system, but didn’t guard the gates.We have allowed it to be perverted to other goals.

  87. JiggaDigga April 7, 2006 7:33 pm

    Great reading, keep up the great posts.
    Peace, JiggaDigga

  88. Maggie April 11, 2006 4:12 am

    The last Depression caught my young mother teaching school in a one-room schoolhouse in rural Montana. If I recall correctly, it was near Missoula. The county went broke as did the school district. To keep the schools open, various school board members agreed to provide teacher’s room and board - and either the school district or county printed their own script which teachers were paid with for three years.

    My mother always talked of not being able to write home for three years because she didn’t have 3 cents to purchase a stamp. There was only one general store near where she lived that accepted the script but the PO didnot. When the economy improved, the school district redeemed any leftover script for 50 cents on the dollar. My mother had enough script saved to buy her a bus ticket out of town so she fled for the bright lights of Denver and took a retail job for the May Company.

    ….and so it goes…

    Maggie

  89. [...] What would happen if we reversed the financial analyst’s glasses? Remember the demurrage charges mentioned at the end of the previous chapter? Demurrage was the brainchild of Silvio Gesell (1862-1930), and was most recently used as an anti-hoarding device for the stamp scrip currencies of the 1930’s. Gesell’s starting premise was that money is a kind of public service, like a bus ride. So a small fee is charged for the time that one hoards it. [...]

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