reply to post by TheWalkingFox
...Basically, the US government is cutting checks for its multitudes of employees; they are giving the government their labor, and in return, they get
these banknotes, tokens, etc, that basically say "Trust me, I'm good for it.".....
This is long but I suggest you read every word of it. It is the poor Factory workers and sales clerks that are getting fleeced and this is how it is
Those pretty green slips of paper in your wallet commonly known as U.S. dollars are Federal Reserve Notes. Bank scrip. The Fed can print as
much of it as it wants or needs to. With this in mind, consider that fully eighty percent (80%) of U.S. Treasuries (U.S. government debt) sold in 2009
were bought by the Fed because there were no other willing buyers. factsnotfantasy.blogspot.com...
When the Bernanke doubled the US money
supply it was done by banks LENDING the new money into the system. That is how "new money" is created in a fiat money system.
Of course those in the know were not about to get "sheared" along with the sheeple so when Nixon took the USA off the gold standard they made sure
their wages kept up with inflation unlike the poor smucks in the factories and offices. In 1976 A typical
American CEO earned 36 times as much as the average worker. By 2008 the average CEO pay increased to 369 times that of the average worker.
This evidence from 1939 gives a very concise view of how 1% of the population transferred wealth from the other 99% of the population directly into
their pockets. And Bernanke just switched from Alan Greenspan's teaspoon to a fleet of bucket
Appendix E – Money Is Created by Banks Evidence Given by Graham Towers
Some of the most frank evidence on banking practices was given by Graham F. Towers, Governor of the Central Bank of Canada (from 1934 to 1955),
before the Canadian Government's Committee on Banking and Commerce, in 1939. Its proceedings cover 850 pages. (Standing Committee on Banking and
Commerce, Minutes of Proceedings and Evidence Respecting the Bank of Canada, Ottawa, J.O. Patenaude, I.S.O., Printer to the King's Most Excellent
Majesty, 1939.) Most of the evidence quoted was the result of interrogation by Mr. “Gerry” McGeer, K.C., a former mayor of Vancouver, who clearly
understood the essentials of central banking. Here are a few excerpts:
Q. But there is no question about it that banks create the medium of exchange?
Mr. Towers: That is right. That is what they are for... That is the Banking business, just in the same way that a steel plant makes steel. (p.
The manufacturing process consists of making a pen-and-ink or typewriter entry on a card in a book. That is all. (pp. 76 and 238)
Each and every time a bank makes a loan (or purchases securities), new bank credit is created — new deposits — brand new money. (pp. 113 and
Broadly speaking, all new money comes out of a Bank in the form of loans.
As loans are debts, then under the present system all money is debt. (p. 459)
Q. When $1,000,000 worth of bonds is presented (by the government) to the bank, a million dollars of new money or the equivalent is created?
Mr. Towers: Yes.
Q. Is it a fact that a million dollars of new money is created?
Mr. Towers: That is right.
Q. Now, the same thing holds true when the municipality or the province goes to the bank?
Mr. Towers: Or an individual borrower.
This is the nitty gritty of how the transfer is made.
As the pro-socialist and millionaire economics textbook author Robert Heilbroner finally admitted
in The New Yorker in 1990, "Mises was right."
New money does not appear magically in equal percentages in all people's bank accounts or under their mattresses. Money spreads
unevenly, and this process has varying effects on individuals, depending on whether they receive early or late access to the new money.....
Mises argued that the losses of the late-coming losers are the source of income for the early arrival winners....
...This indicates a fundamental aspect of Mises's monetary theory that is rarely mentioned: the expansion or contraction of money is a zero-sum
game.... The economic benefits obtained by the early users of new money, even gold, are made at the expense of those who gain access to it after it
has altered the array of prices.... www.lewrockwell.com...
if you have any doubts at all about the CRIMINAL INTENT of those who conspired on Jekyll Island to bring about the Federal Reserve Act of 1913. Here
are the words of the organizer Nelson W. Aldrich, United States Senator, the worst traitor in the history of the USA.
Of all the contrivances for cheating the laboring classes of mankind, none is so effectual as that which deludes them with paper money. It is
the most perfect expedient ever invented for fertilizing the rich man’s fields by the sweat of the poor man’s brow. Ordinary tyranny, oppression,
excessive taxation, these bear lightly on the happiness of the community compared with fraudulent currencies and the robberies committed by
depreciated paper. [inflation cv] Our own history has recorded enough, and more than enough, of the demoralizing tendency, the injustice and
intolerable oppression on the virtuous and well disposed, of a degraded paper currency, authorized by law, or in any way countenanced by Government.
~Nelson W. Aldrich, United States Senator, at a New York City dinner speech on October 15, 1913 IV Proceedings of the Academy of Political Science #1,
at 38 (Columbia University, New York (1914)). [He was quoting Andrew Jackson. cv]
The Average credit card debt per household is $14,687 this does not include education loans, car loans and house mortgages. 97% of the US money
supply is in the form of banks loans.
- Interesting that the US dollar has lost 96% of its value since the Federal Reserve Act.
So what do we get in return for our obligation to pay all those loans with money we earn through our labor??? The US banks are now operating on an
effective ZERO reserve
In other words they loan us NOTHING and
the entire US is paying INTEREST on 97% of the US money supply!
On june 1st 2011,the money supply was
The banks are earning interest on $2568.53 billion dollars!
First National Bank of Montgomery vs. Daly (1969)
Mr. Morgan, the bank's president, took the stand. To everyone's surprise, Morgan admitted that the bank routinely created money "out of thin air"
for its loans, and that this was standard banking practice. "It sounds like fraud to me," intoned Presiding Justice Martin Mahoney amid nods from
the jurors. In his court memorandum, Justice Mahoney stated:
Plaintiff admitted that it, in combination with the Federal Reserve Bank of Minneapolis, . . . did create the entire $14,000.00 in money and
credit upon its own books by bookkeeping entry. That this was the consideration used to support the Note dated May 8, 1964 and the Mortgage of the
same date. The money and credit first came into existence when they created it. Mr. Morgan admitted that no United States Law or Statute existed which
gave him the right to do this. A lawful consideration must exist and be tendered to support the Note.
So given we are stuck with a fiat currency and the FED more than doubled the money supply, why hasn't the USA seen hypeinflation??? I finally found
a reasonable explanation.
...Given the previous hyperinflation, clearly there was ample reason for currency revulsion. So you can consider this argument a necessary but not
sufficient precondition. What makes the universal acceptance stick is that government accepts its own money to expunge liabilities to it. In plain
English, fiat money has value because it is the only money you can use to pay taxes. ....The fact that this money is also the medium of exchange
only entrenches its use. So the tax liability is a necessary pre-condition for fiat currency to work, something I will return to....
[No wonder Amendment 16 - Status of Income Tax Clarified was Ratified 2/3/1913, a couple months after the Federal Reserve Act. cv]
Weimar Germany 1919-1923
The key to Weimar's hyperinflation was two-fold.
1. The German government had a large foreign currency debt obligation.
2. The German economy lost huge amounts of productive capacity causing prices to soar as demand outstripped supply....
While the facts in Zimbabwe are different, the underlying causes for hyperinflation were the same: foreign currency obligations and a loss of
Zimbabwe had established Independence from Britain in 1980. Yet, by the late 1990s 70% of productive arable land was still held by the small
minority 1% of white farmers in the country. After years of talk about redistribution, in 2000, the President Robert Mugabe began to redistribute this
The redistribution process was a disaster, .... With agricultural production having plummeted, Zimbabwe was forced to pay to import food in hard
Meanwhile, the government turned to the printing presses to fulfil its domestic obligations. as in Germany, the foreign currency obligations, the
loss of productive capacity and the money printing was a toxic brew which ended in hyperinflation.
Hyperinflation in the USA, May 2010
As you can see from the two most severe cases of hyperinflation, the problem in each case was a loss of productive capacity, foreign currency
liabilities, and a loss of the ability to tax....
In the German example, the Germans had a huge foreign currency liability that it had to pay, meaning it could not make good on the liability by
printing money. It was a currency user as far as these liabilities went. Meanwhile, with productive capacity limited, the government was then unable
to ease price pressure through the tax lever. The shortage of goods drove up prices inexorably and the government was forced to turn to the printing
press in order to meet its domestic obligations.
In the Zimbabwe example, taxes were again central. Unable to recoup enough tax revenue and with large foreign currency obligations and a loss of
productive capacity, the government resorted to printing money in an environment where prices were rising.
So, hyperinflation has very specific preconditions that are not apparent in the U.S..
1. No foreign currency liability: The U.S. dollar is the world's reserve currency so the U.S. can pay for trade goods in U.S. dollars.. The U.S.
does not have a peg to gold or some other currency which acts as a de facto foreign currency liability. And the U.S. government has substantially no
foreign currency liabilities. All of the debt is issued in domestic currency.
2. Price pressures are still anchored: While commodity prices are rising, they are rising in all currencies, not just in USD. Moreover, their rise
will create demand destruction before any hyperinflation could occur. Why? Unemployment is high and capacity utilization is low, meaning there are no
inflationary pressures on that front to help push inflation higher before demand destruction sets in.
3. Currency revulsion has not set in: Tax compliance is high in the U.S. We are not talking about Russia, Greece or Argentina where government has
had a difficult time in raising tax. Moreover, as the USD is still the world's reserve currency, there has been no freefall sell off of dollars, nor
do I anticipate any in the near-to-medium term.
In short, there will be no hyperinflation in the U.S. any time soon.... www.creditwritedowns.com...
The article states tax compliance is high in the U.S yet the Grace Commission Report
President (1984) states"...one-third of all their taxes escapes collection from others as the underground economy blossoms in direct proportion
to tax increases and places even more pressure on law abiding taxpayers, promoting still more underground economy-a vicious cycle that must be
Now we have a 20% unemployment rate and the retiring of the baby boomers as well as a federal debt increase from fiscal 1983
deficit of $195 billion to over $14 TRILLION (Interestingly the report projected $13 trillion by the year 2000)
Second when the price of fuel rises there is a corresponding rise in the price of everything else.
Third the Russians, China and others are calling for a different world reserve currency than the dollar.
Fourth the OPEC oil countries are moving to the Euro instead of the US dollar, that is the real reason for the heating up of the middle east.
The Real But Unspoken Reasons For The Iraq War
If the US dollar ever losses reserve currency status all those inflationary birds are going to come home to roost and we are going to be in a world of