The Fallacy of Collectivism - Ludwig von Mises

And this thread and what people like you have posted in it prove beyond any shadow of a doubt how right I am about that, navy doc.

No, English is not my first language. It finally dawned on you?

Here, maybe this dude can get through to you:



None are more hopelessly enslaved than those who falsely believe they are free.

reply to post by Pejeu

...Precisely. And how is that a good thing, as your ideological brethren claim when they reminisce of that golden period of "true" capitalism they were oh so unlucky to be born too late to actually live through?....

I drive everyone nuts because I am neither a socialist nor right-wing.

I think both Right and Left can agree that Fractional Reserve Banking (FB) is fraud, if not down right evil.

So ask yourself this? How come in a period of 100 years only a very very few of our politicians have every even QUESTIONED FRB? How come those who do question it are both on the "right" and the "left" but get NO WHERE?
Congressman McFadden - (R) (Shot at twice then poisoned)
Congressman Charles Lindbergh, Sr. (R) (Grandbaby kidnapped)
Congressman Wright Patman - (D)
Congressman Henry Gonzalez (D)


According to Congressional record the U.S. Government can buy back the FED at any time for $450 million.  That's about half the amount of money we pay them daily. www.libertyforlife.com...

Now isn't that a kicker!


"Capitalists with government help are the worst of all economic phenomena." A. Rand

Rand was wrong, the absolute worst economic phenomena is "Capitalists with government help paid for by counterfeit money printed by Robber Baron Banksters"

I am FOR capitalism as long as it is paid for with the owners (and his buddies) REAL WEALTH and as long as the size of the corporation is kept small. I am also for a small diversified government with most governing done on as local a level as possible.

The reason is to keep the power hungry frustrated. You will ALWAYS have the power hungry trying to consolidate power and wealth. The best counter to that is KEEP IT SMALL.

On the other hand I think the government should stay out of peoples business, like marriage, abortion, drugs, alcohol and smoking (I am allergic to tobacco smoke)

We also need social safety nets but again keep them small and local with the goal of making people self-sufficient. I also have no problem with a state run pension system as long as politicians keep their mitts OFF.

Dude, whatever ideological differences we might have I feel I can talk to you without it being an exercise in futility, as talking to a wall or those dudes throughout this topic that vehemently deny banks create money.

In the face of all the evidence I brought to bear on them. They're impervious to reason.

There is no discussion to be had with someone who insists a square has three corners.

Pejeu
Dude, you're missing the crux of my argument.

Banks issue money out of nothing each time they extend a loan....

We're all basically slaves on the banking system's plantation. Serfs paying rent for the privilege of using their money that they themselves pull out of thin air to loan to us at interest.

edit on 2013/10/15 by Pejeu because: (no reason given)

As far as I can tell that is exactly what Mises is saying. (And I agree we all are slaves to the bankers.)

FIRST POINT: NO Fractional Reserve Banking!

Mises recommended no "scientific" government monetary policy whatsoever. He recommended private ownership, the State's enforcement of all contracts, and legal sanctions against private violence. As he wrote in his 1927 book, Liberalismus, "This is the function that the liberal doctrine assigns to the state: the protection of property, liberty, and peace" (Liberalism in the Classical Tradition [1985], p. 37). Providing money of stable purchasing power was not on the list.

No government agency or committee can design and operate a monetary system that would avoid the problems associated with wealth redistribution from those who gain access to new money late in the process to those who gained access early.

"The Return to Sound Money,"

The first step must be a radical and unconditional abandonment of any further inflation. The total amount of dollar bills, whatever their name or legal characteristic may be, must not be increased by further issuance. No bank must be permitted to expand the total amount of its deposits subject to check or the balance of such deposits of any individual customer, be he a private citizen or the U.S. Treasury, otherwise than by receiving cash deposits in legal-tender banknotes from the public or by receiving a check payable by another domestic bank subject to the same limitations. This means a rigid 100 percent reserve for all future deposits; that is, all deposits not already in existence on the first day of the reform (p. 448).

SECOND POINT: Make Banks abide by contracts like the rest of us.

In Human Action, Mises said that the government's task is to enforce contracts. Among these contracts are contracts for redeeming money-certificates for money metals on demand. He defined a money-certificate a receipt for a money metal that has 100% of the promised metal in reserve. He said that banks should not be favored by the government. They should not be allowed the right to break contracts, which is what a refusal to redeem money-certificates on demand is. "What is needed to prevent any further credit expansion is to place the banking business under the general rules of commercial and civil laws compelling every individual to fulfill all obligations in full compliance with the terms of the contract."

THIRD POINT: Money has no intrinsic worth except as a facilitator of trade.

Mises concluded that money is neither a consumption good nor a capital good. He argued that production and consumption are possible without money (p. 82). Money facilitates both production and consumption, but it is neither a production good nor a consumption good. Money is therefore a separate analytical category.

"It is illegitimate to compare the part played by money in production with that played by ships and railways. Money is obviously not a 'commercial tool' in the same sense as account books, exchange lists, the Stock Exchange, or the credit system"

Because money is not capital, he concluded that an increase of the money supply confers no identifiable social value. If you fail to understand this point, you will not be able to understand the rest of Mises's theory of money. On this assessment of the value of money, his whole theory of money hinges.
An increase in the quantity of money can no more increase the welfare of the members of a community, than a diminution of it can decrease their welfare. Regarded from this point of view, those goods that are employed as money are indeed what Adam Smith called them, "dead stock, which . . . produces nothing" (p. 85).

FOURTH POINT: The gains of early users of bank issued money is from the losses of the late comers.

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

It is these losses of the groups that are the last to be reached by the variation in the value of money which ultimately constitute the source of the profits made by the mine owners and the groups most closely connected with them.

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. Mises did not use this terminology, but he used the zero-sum concept. Because the free market always maximizes the utility of the existing money supply, changes in the money supply inescapably have the characteristic features of a zero-sum game. Some individuals are made better off by an increase in the money supply; others are made worse off. The existing money is an example of a "fixed pie of social value." Adding to the money supply does not add to its value...

SOURCE: Mises on Money

Hopefully that puts us all on the same page. "The enemy of my enemy is my friend."

Now if only Occupy Wall Street and the Tea Party could understand that basic concept. I really do not think the rank and file 'Socialist' is all that far apart from the rank and file "Right-winger" The Banker owned News media just picks the points of controversy like abortion to keep us at each others throats while hiding all the points where we do agree.

A while back I proposed 3 or more alternatives to the current monetary system.

I'm too lazy to find the posts and quote them so I'll just summarize here.

1. No more money issuance, by anyone. Ever. For all time.

Have a static money supply but (practically) infinitely sub-divisible. That's all you need to enable growth.

A money supply whose resolution increases to accommodate that growth and diversification of the economy.

By resolution I mean the ratio between the total money supply and it's smallest subdivision or constituent unit.

This would be achieved by using electronic currencies such as Bitcoin.

One bitcoin can be subdivided down to 0.00000001 of itself. There is an asymptotic upper limit to the Bitcoin money supply of around 21 million. It's hard-wired into the algorithm itself.

2. Go back to the Constitution and have Congress issue the money in lieu of or as complementary to regular taxation as a means of financing expenditures.

3. Static money supply but keep cash around and move the decimal point one place to the left every so often.

4. Allow any firm to issue its own money (and use it to pay its employees, its subcontractors and its suppliers), backed by (/redeemable in) its own manufactured products. But make all money, by law, expire (become unredeemable) if not redeemed within one year of its issuance.

The reasoning for this is two fold.

First to force all users of a currency to periodically and continually check that the issuer of their preferred currency is not committing fraud/counterfeiting their own money.

And to prevent the gradual accumulation of wealth in the hands of a plutocratic oligarchy.

At any one time you can only have as much money as you earn in a year before it starts to poof out of existence if you don't spend it.

Unredeemed production, after one year, has new money issued against it and that money is then paid as dividends to stock holders.

Firms may not issue money before they have produced goods and services to issue it against.

Let currencies compete until a few clear favourites emerge. And afterwards.

To earn profits companies will need to insure that they pay their employees, contractors and suppliers less money than needed to redeem all of their last year's (or month's) production (against which they issue the money they pay them with).

5. A combination or variation of two or more of the above.

Please forgive me for not going into more depth. Just tired of saying the same things over and over again, in depth.

There are a lot more details to outline regarding the final alternative but I'm just too weary of the subject.

I would personally be ok with any one or combination of more than of the above.

What I am not okay with is maintaining the current system of taxation through inflation by private corporations, with no accountability, no representation, no consideration, no profit participation and no freedom to opt out.

We eat both the cost of lending and the cost of their profits through inflation but we get none of the profits.

crimvelvet
FIRST POINT: NO Fractional Reserve Banking!

What people who think that the money supply needs to grow with the economy don't understand is that work itself has temporal value.

Doing today what you should have done yesterday makes the work less valuable.

Doing today what you ought to be doing tomorrow makes the work more valuable.

Without the work of the people who invented the wheel, discovered fire, metallurgy, writing, algebra and geometry, the ball bearing etc. where would we be today?

Would we have put a man on the moon in the '60?

Of course not.

Isn't the work of the fireman who arrives quickly at the scene of a fire, in time to save much valuable property and perhaps even lives not worth more than the work of the fireman who arrives late and can only hope to contain the fire, after significant property damages and loss of life have already been incurred?

That is why money should become more valuable as time passes.

Money should buy more as time passes, not less.

If I worked my ass off for 40 years contributing to the level of advancement and prosperity we enjoy today all the while saving a quarter of my monthly wage all these years then does that not entitle me to enjoy the fact that the money I saved and not spent for 40 years buys more today than it did when I earned it?

Because of the growth, expansion, advancement and diversification of the economy that I myself contributed to for 40 years through my work as well as not consuming all I was entitled to for the work I had done so that that sacrificed consumption could be used as capital to fuel development?

Isn't that only fair and proper?

Instead of earning nominal, token interest that doesn't even cover real inflation (not official statistical inflation)?

Shouldn't we compensate those who have laboured (produced) in the past and sacrificed some of the consumption they were entitled to already back then for the work they performed at the time by allowing them to consume more today, after waiting all this time, for the same amount of money that they chose not to spend in the past though they were entitled to so for having earned it through work?

You can't have that with a money supply that continually grows exponentially.

You rob earned purchasing power from the people who worked yesteryear to give to the people earning money today (not necessarily through hones, productive work).

You take from those far away from the faucet to give to those huddled next to it.

reply to post by Pejeu

A while back I proposed 3 or more alternatives to the current monetary system.....

Intriguing ideas. I would have to think about them.

One of the problems I see is retirement. But that could be solved by using the excess "corporate money" to buy stock. My favorite company to work for had a "Stock Purchase Plan" where the company matched 50% of the stock you purchased up to 10% of your salary. That plan stood them in good stead when the Corporate Raiders came calling since much of there stock was voted by employees/retireees instead of Mutual Funds.

I have zero problem with the idea of a corporations being ~51% owned by the original owners plus employees. It keeps everyone focused on what is best for the corporation which is keeping the customers happy.

(By the way I am a Dudette. - female.)

reply to post by Pejeu

...A money supply whose resolution increases to accommodate that growth and diversification of the economy....

That is one reason for gold/silver/copper to be the money supply. It can not be easily inflated but if the gold to commodities ratio gets out of kilter it becomes economically viable to mine more and add to the supply. It is not perfect because again the mine owners get first use. On the other hand they did have to dig it out of the ground and if you are smart and know where to look, as an 'Amateur' you can actually make a living panning for gold. I have a geologist friend who supports himself that way.

reply to post by crimvelvet


I haven't entirely decided myself whether the unredeemed production, the one left unclaimed using the money issued against it after more than a year since that money was issued (and hence expired), should have new, permanent money issued against (and that money given to stock holders as part of the dividends paid to the) or whether that new money that is issued to stock holders against unclaimed past production should also expire after a year.

But then what do you do after 2 years?

Do you issue new money again against it and again give that money to stockholders?

An alternative would be to have currency exchanges where you buy new money, with 7, 8, 9, 10 months or more left on its clock, with old money, that only has 3, 2 or a month left on the clock.

The money that has only one month or week left until expiration would be used to actually redeem the products backing it before it loses this ability (it expires, perishes).

Of course, there would be a slight penalty in that you would get slightly less of the new money than what you pay in new money.

Just like right now you get slightly fewer euros if you buy them with dollars than you'd have to have euros to buy back just as many dollars as you just spent.

And that's how the exchange makes money.

Yet another alternative would be to have both this system and Bitcoin.

You buy bitcoins for your life savings (and enjoy the natural inherent appreciation over time that a fixed money supply provides in a continually growing and developing economy) but receive your monthly wage and conduct your expenditures in the perishable money issued by Exxon Mobil, for instance.

You buy bitcoin with perishable money and sell bitcoin for perishable money, when you want to spend your savings.

But you aren't allowed to legally actually buy or pay anything to anyone using bitcoin. Neither do you pay any taxes whatsoever in bitcoin (it would also be illegal for the government to either tax or spend bitcoins).

You are only allowed to buy into bitcoin with perishable money or divest from bitcoin in exchange for perishable money.

Capital gains tax from the net appreciation of bitcoin between the moment of purchase and the moment of sale would be very low.

Bitcoin would become the new physical gold, an entirely safe asset to keep your savings in.

Perhaps even safer as you wouldn't be risking buying Chinese forged ingots, with Tungsten cores, when you invested in it.

And nor will there be any more bitcoin mined after we reach 21 million basic units.

reply to post by Pejeu

...That is why money should become more valuable as time passes.

Money should buy more as time passes, not less....

Now there I am in complete agreement.

I had a knock down drag out fight with an economist on the subject of FRB. He was with us up to a point but insisted there had to be some mechanism for money expansion.

However THAT is ALWAYS ALWAYS a tax on those who save. The new money is being invested in what ever the bankers are loaning money for but the BANKERS get the interest and the savers get the shaft.

A classic example is the early 1970's. At that point a home in the USA was ~$20,000. A couple earning a bit above minimum wage could earn ~ $6,000 a year and if frugal could save half. That means in seven years a young couple could buy a home free and clear! However add in inflation and the same couple would be lucky to save the down payment to the house.

People do not realize that between taxes, mortgage on shelter (You still pay even if you rent) car payments, Student Loans (You didn't think all the hype about a college education was for YOUR benefit now did you?) Credit card debt... most people spend 80% to 90% of their time laboring for the banksters!

As you said 97% of the US money supply is loans not actual cash. Worse it is dangerous to hold cash because of Asset forfeiture laws. If you have a lot of cash it is assumed it is for buying drugs and can be confiscated on the spot by the police and KEPT by the police department. YOU then have to PROVE the money is yours! SEE: Forfeiture Endangers American Rights Foundation

reply to post by Pejeu


On a gold standard (Actually the use of metal coins)

That would eliminate nothing.

That would just be repeating history.

You seem to think that fractional reserve banking would somehow magically stop working if you just used gold instead of notes printed on cotton for reserves and as underlying asset.

As if by magic.

Except, you forget, that's where we got here from.

The only way to prevent banking is to outlaw it as the brazen fraud it is....

The problem was not the use of gold and silver coins, the problem was Fractional Reserve Banking. (FRB)

The European Bankers came over bring the blasted fraud with them. That is why the early history of the USA was full of 'Bank Runs' (and a few linchings) Instead of doing the smart thing, making FRB ILLEGAL with stiff prison sentences to kill FRB and ban runs forever, the US Congress gave the bankers a free pass to steal the population blind as long as they got their share.

The problem is ALL governments (and Politicians) need money and freshly printed fiat currency is just so much easier than money that actually represents wealth/labor/goods.

However you are correct. At this point, since gold was confiscated from US citizens by FDR and the bankers in the 1930's, the rank and file people do not have gold, the bankers do. Again it was ILLEGAL for a private citizen to own gold but legal for bankers and governments to own gold.

In other words we are screwed as far as metal money goes.

reply to post by Pejeu

.... Let me close by quoting a few noteworthy people's takes on the issue:

The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.

-Abraham Lincoln

It is interesting to note that North Dakota is doing fine.

North Dakota has had the nation's lowest unemployment ever since the economy tanked. What's its secret?

...North Dakota has had the lowest unemployment in the country (or was tied for the lowest unemployment rate in the country) every single month since July 2008.

Its healthy job market is also reflected in its payroll growth numbers. . . .

A number of other mineral-rich states were initially not affected by the economic downturn, but they lost revenues with the later decline in oil prices...

If its secret isn’t oil, what is so unique about the state? North Dakota has one thing that no other state has: its own state-owned bank.

Access to credit is the enabling factor that has fostered both a boom in oil and record profits from agriculture in North Dakota. The Bank of North Dakota (BND) does not compete with local banks but partners with them, helping with capital and liquidity requirements. It participates in loans, provides guarantees, and acts as a sort of mini-Fed for the state. In 2010, according to the BND’s annual report:

The Bank provided Secured and Unsecured Federal Fund Lines to 95 financial institutions with combined lines of over $318 million for 2010. Federal Fund sales averaged over $13 million per day, peaking at $36 million in June.

The BND also has a loan program called Flex PACE, which allows a local community to provide assistance to borrowers in areas of jobs retention, technology creation, retail, small business, and essential community services. In 2010, according to the BND annual report:

The need for Flex PACE funding was substantial, growing by 62 percent to help finance essential community services as energy development spiked in western North Dakota. Commercial bank participation loans grew to 64 percent of the entire $1.022 billion portfolio.

The BND’s revenues have also been a major boost to the state budget. It has contributed over $300 million in revenues over the last decade to state coffers, a substantial sum for a state with a population less than one-tenth the size of Los Angeles County. According to a study by the Center for State Innovation, from 2007 to 2009 the BND added nearly as much money to the state’s general fund as oil and gas tax revenues did (oil and gas revenues added $71 million while the Bank of North Dakota returned $60 million). Over a 15-year period, according to other data, the BND has contributed more to the state budget than oil taxes have.

North Dakota’s money and banking reserves are being kept within the state and invested there. The BND’s loan portfolio shows a steady uninterrupted increase in North Dakota lending programs since 2006.....
www.webofdebt.com...

crimvelvet
reply to post by Pejeu

 

...A money supply whose resolution increases to accommodate that growth and diversification of the economy....

That is one reason for gold/silver/copper to be the money supply. It can not be easily inflated but if the gold to commodities ratio gets out of kilter it becomes economically viable to mine more and add to the supply. It is not perfect because again the mine owners get first use. On the other hand they did have to dig it out of the ground and if you are smart and know where to look, as an 'Amateur' you can actually make a living panning for gold. I have a geologist friend who supports himself that way.

Yes but again, the problem is how do you prevent or limit issuance of Drawing Rights against gold or silver or copper that doesn't exist or is not the banks' to issue Drawing Rights against? How you do you control and protect against that?

To address this issue you have to either:

1. Outlaw banking (all banking is Fractional Reserve, it's our very understanding of what banking is).

2. Have actual gold/silver/copper coins be the only legal tender. But this exposes you to physical counterfeiting. And this would also be an implicit de facto outlawing of banks. This would also be problematic because these metals are very needed by industry, especially high tech industry.

3. Force people to periodically but continually check the entire money supply to see whether it has backing or not, whether money was issued fraudulently, with fictitious backing.

4. Make banks choose between providing either lending services or financial safekeeping and payment intermediation / clearing house services.

Again a de facto outlawing of banking.

reply to post by crimvelvet


Another important aspect seldom mentioned when the subject of banking and their money creation through loans is discussed is the simple fact that the very inflation that the banks produce through their very practice of extending loans out of new money freshly conjured up out of thin air coerces people into borrowing from the banks instead of saving.

It is cheaper for them to borrow from the banks than to save against inflation. Borrowing which leads to even more inflation.

Whereas a system where money would grow more valuable with time (its purchasing power increasing over time with economic growth) would be conducive to saving instead of borrowing.

reply to post by Pejeu

On the contrary, navydoc.

It's you and greencmp who are simply too bloody thick to understand how all banks issue money, not just the central bank....

Straight from the horse's MOUTH!

Money is Created by Banks: Evidence Given by Graham Towers


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. 287) 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 238) 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: Yes. (p. 286)

Q. Will you tell me why a government with power to create money, should give that power away to a private monopoly, and then borrow that which parliament can create itself, back at interest, to the point of national bankruptcy?
Mr. Towers: If parliament wants to change the form of operating the banking system, then certainly that is within the power of parliament. (p. 394)

Another words the FED prints money and then collects interest (taxes on your labor) on the money from the government, instead of the government printing the money and putting it into circulation interest free. The money is also loaned out as mortgages, business loans and credit card loans. You know those credit cards with interest rates as high as 30% or more so you pay the bankers the entire amount in three years and STILL owe the principle!!!

Now that you understand that consider the amount money the bankers are collecting from interest rates of 5%,10,% or 30% on the following money they printed out of thin air!!! (the interest being your labor)
For Example:

What amount of Government securities have the private banks acquired with bank-created money?
On January 31, 1964, all commercial banks in this country owned $62.7 billion in U.S. Government securities. The banks have acquired these securities with bank-created money. In other words, the (banks have used the Federal Government's power to create money without charge to lend $62.7 billion to the Government at interest.

On January 29, 1964, commercial banks had total assets amounting to $304.7 billion, and all of these had been paid for with bank-created money, except $25.4 billion which had been paid for with their stockholders' capital. In other words, less than 10 percent of the banks' assets have been acquired with money invested by stockholders in the banks. [pg 46]

Congressman Wright Patman, Chairman of the House Banking and Currency Committee, wrote the above and also wrote in a 1964 treatise called A Primer on Money
“The Federal Reserve Banks create money out of thin air to buy Government Bonds from the U.S. Treasury . . . [creating] out of nothing a . . . debt which the American people are obliged to pay with interest.”

Also see: www.villagevoice.com...

reply to post by Pejeu

4. Make banks choose between providing either lending services or financial safekeeping and payment intermediation / clearing house services.

This is what I suggested to my economist friend. Two 'types' of 'banks'


A 'Warehouse' with a warehouse receipt and you pay for the service of warehousing just like you do for any other warehousing service.

A lending service that would be similar to a venture capitalist. Wealth would be pooled from several sources and then lend out to business or individuals at an interest agreed upon by all concerned or for ownership of part of the business.

Neither of these is FRB. Any one caught practicing FRB would get the same penalty as for counterfeiting since that is EXACTLY what FRB is.

In "The Good Old Days" people did not go into debt. Instead they saved up and then bought or in a pinch borrowed from relatives/friends. Actually this is how small business still functions in the USA they are mostly self financed. Heck banks will not even give a home loan to a small business person! LINK

Once you have a decent amount of inflation/currency depreciation it makes more sense to have goods instead of money. For example, my parents bought a house near NYC for $3,000. Today a similar house sells for $500,000. Which would you rather have the $3,000 or the house?

reply to post by Pejeu

...Another important aspect seldom mentioned when the subject of banking and their money creation through loans is discussed is the simple fact that the very inflation that the banks produce through their very practice of extending loans out of new money freshly conjured up out of thin air coerces people into borrowing from the banks instead of saving....

Good grief, we must have been writing about that concept at the same time

reply to post by crimvelvet


It seems the rest of that post got eaten by the internet black hole.

Luckily I have a copy.

Straight from the Bankers MOUTH:

Money is Created by Banks: Evidence Given by Graham Towers


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. 287) 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 238) 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: Yes. (p. 286)

Q. Will you tell me why a government with power to create money, should give that power away to a private monopoly, and then borrow that which parliament can create itself, back at interest, to the point of national bankruptcy?
Mr. Towers: If parliament wants to change the form of operating the banking system, then certainly that is within the power of parliament. (p. 394)

Another words the FED prints money and then collects interest (taxes on your labor) on the money from the government, instead of the government printing the money and putting it into circulation interest free. The money is also loaned out as mortgages, business loans and credit card loans. You know those credit cards with interest rates as high as 30% or more so you pay the bankers the entire amount in three years and STILL owe the principle!!!

Now that you understand that consider the amount money the bankers are collecting from interest rates of 2%, 5%,10,% or 30% on the 97% money that is 'debt' and not cash that they printed out of thin air!!! Money you pay back WITH interest using your labor.

For Example:

What amount of Government securities have the private banks acquired with bank-created money?
On January 31, 1964, all commercial banks in this country owned $62.7 billion in U.S. Government securities. The banks have acquired these securities with bank-created money. In other words, the (banks have used the Federal Government's power to create money without charge to lend $62.7 billion to the Government at interest.

On January 29, 1964, commercial banks had total assets amounting to $304.7 billion, and all of these had been paid for with bank-created money, except $25.4 billion which had been paid for with their stockholders' capital. In other words, less than 10 percent of the banks' assets have been acquired with money invested by stockholders in the banks. [pg 46]

Congressman Wright Patman, Chairman of the House Banking and Currency Committee, wrote the above in a 1964 treatise called A Primer on Money. He also wrote

The Federal Reserve Banks create money out of thin air to buy Government Bonds from the U.S. Treasury . . . [creating] out of nothing a . . . debt which the American people are obliged to pay with interest.

www.villagevoice.com...

crimvelvet
Neither of these is FRB. Any one caught practising FRB would get the same penalty as for counterfeiting since that is EXACTLY what FRB is.

I happen to hold the view that the appropriate penalty for that offence would be a good'ole beheading.

Plain old gaol is not enough of a deterrent given the potential gains of this crime.

To make it not pay out overall you need to actually execute those you catch.

crimvelvet
reply to post by Pejeu

 

On the contrary, navydoc.

It's you and greencmp who are simply too bloody thick to understand how all banks issue money, not just the central bank....

Thanks for engaging our friendly neighborhood communist, it is nice to take a break. I think centralized state (or near state) banking is the problem. I think there should be a gold standard, lots of independent banks and very little regulation.

So, if you have any agreement with Pejeu, I am surprised. He thinks there shouldn't be any banks (frankly, I don't know what he thinks since he has voiced a variety of non-sequiturs) or that the state should own the banks(?).

I think you are saying that, with government control through regulation, banks could be able to do the least amount of harm if they are carefully directed by a team of super-nerds toward or away from a particular set of transactions, I disagree.

There is no substitute for competition, the regulators always get bought or aren't smart enough to see when they are out-witted.

Why is ATS eating your posts, people?

greencmp, the quote tags seem to be ROFLSTOMPING you.

She is saying banking the way we know it should be outlawed.

She is concurring with me, basically.

Enjoy your cognitive dissonance.