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“In some ways I think it’s relevant,” Paul said. “You know, the markets are much more powerful. They’ll downgrade whatever they need to. But for the moment, and for traders, you know, this can be a big deal. And politically it can be a big deal.
“But if one announcement like that from somebody like Standard & Poor’s, who didn’t have any idea what was going on with Fannie Mae and Freddie Mac, could change things — so, if that announcement pushes the dollar down and causes chaos in the stock market, they’re destined to do that anyway. So those are just excuses.
“[W]hat I worry about the most is the consequence of currency destruction and violence,” Paul said. “And, boy, every day there’s more and more violence whether it’s in London, a demonstration in Israel, all around the world, revolutions going on. And this is all related to sometimes prices of food going up. This is all related to the fictitious notion about what money is and what it should be.”
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] www.linuxtoday.com...
Originally posted by RUSSO
It would be fun to see a one on one debate between Ron Paul and Obama. I almost can hear the Ob's screams crying for his mama.
Gold is the money of kings, Silver is the money of gentlemen, barter is the money of pesants and DEBT is the money of slaves
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.
...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 productive capacity.
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 land.
The redistribution process was a disaster, .... With agricultural production having plummeted, Zimbabwe was forced to pay to import food in hard currency.
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 shocking admission Ft Knox holds very little good delivery gold was made to Mr. Durell by the chief official of the General Accounting Office (GAO). This happened a few months after the September 1974 tour.
Jim Rickards lays out a plan to commandeer Germany’s and all foreign depositors of sovereign gold at the New York Fed as currency wars heat up... maxkeiser.com...
The Wall Street Journal reports Friday that gold prices are soaring to record highs as a new powerful factor has emerged as a driver of that rally — China.
According to the Journal, China is now buying huge amounts of gold ...
key data released by China’s state-run Xinhua news agency showing that China imported 209.7 metric tons of gold in the first 10 months of this year. That’s a five hundred percent increase compared to the same period in 2009... www.moneynews.com...
Jun 18, 2010 ... As the world's largest producer of the metal, China often buys gold from its own mines and doesn't report those sales publicly... www.businessinsider.com...
The People's Bank of China(PBOC) recommended yesterday that 1 billion Chinese consider buying gold as a hedge against inflation ; blogs.forbes.com...
...This is why the opponents of liberty must by whatever means necessary stop Ron Paul from becoming the Republican nomination, because if Ron Paul becomes the republican candidate there is no way Obama could stand up to him....
...The three most prominent leaders in the early days were Sidney and Beatrice Webb and George Bernard Shaw.  A stained-glass window from the Beatrice Webb House in Surrey, England is
especially enlightening. Across the top appears the last line from Omar Khayyam:
Dear love, couldst thou and I with fate conspire
To grasp this sorry scheme of things entire,
Would we not shatter it to bits, and then
Remould it nearer to the heart's desire!
Beneath the line Remould it nearer to the heart's desire, the mural depicts Shaw and Webb striking the earth with hammers. Across the bottom, the masses kneel in worship of a stack of books advocating the theories of socialism. Thumbing his nose at the docile masses is H.G. Wells who, after quitting the Fabians, denounced them as "the new machiavellians."
The most revealing component, however, is the Fabian crest which appears Between Shaw and Webb. It is a wolf in sheep's clothing!