Monetary Reform: What needs to be done
Jere L Hough
Refuting the “Gold Standard” Proposals:
Gold is NOT money!!
Once people accept the compelling premise that our dysfunctional monetary systems need to be reformed, the most popular solution, by far, is the cry for a return to the gold, or gold and silver, or some other precious metal base, like platinum. The case for doing so is SO flawed that it is an instance of “the cure being worse than the disease”.
This essay will be an examination of the solutions to the monetary crisis, which is in turn leading to an economic catastrophe, or series of disasters the likes of which our world has never previously experienced. Excellent books, videos, websites, and articles have more or less accurately outlined or detailed how we, the people, were suckered into the high stakes confidence game that got us in this predicament.
The biggest question, or issue to be determined now, as in the past 230 years, is this one:
Should money be created, issued and regulated by public or private entities?
This is the “mother” of all controversies surrounding the history of money, and reaches back as far as can be traced. My investigation has revealed that there has been a massive campaign of misinformation and negative anti-government propaganda that reaches back to Colonial America, and even further back into European history. It’s the story of how private bankers became the central bankers to the Monarchs of Europe as well as financiers of many of the revolutions against those Monarchies, including those by Napoleon and the Bolsheviks. In the USA the struggle for private Vs public money creation began with the colonial governments, the money exploitation by King George leading up to the American Revolution, the Continental Congress and the drafting of the Constitution. The two sides were epitomized by the ideas of Jefferson, Franklin, Paine, and Madison versus Hamilton, and the private Bank of England model. Over time Hamilton and the Bank of England vision prevailed, even though we give much philosophical lip service to Jeffersonian ideals.
There has been much poison thrown into the waters of this debate, and it’s hallmark is attack, negative labeling, and the relentless questioning of the “patriotism” of any deviation from the current status quo since 1913, and the Federal Reserve Act giving a private monopoly to the bankers to create money with little or no real oversight or regulation.
The private money monopoly can be maintained only by secrecy and deception about the true nature and source of all money: labor and resources! To maintain public confusion about the real nature of money, civilizations are literally infused with disinformation, mis-education, propaganda, and obfuscation. The central mantra is that government is evil and cannot be trusted with anything important, least of all money-creation, and that only those private entities with gold, silver or other hard commodities to use as “backing” should be responsible for money creation and distribution. The money monopoly (actually the right to conterfeit money) is responsible for the most gigantic transfer of wealth in world history during the 20th and 21st centuries, and by “transfer of wealth” I essentially mean theft. The theft is legal because the banking cabal has written its own set of rules and laws that enable the giant Ponzi Scheme to continue. Many will dismiss these claims as hyperbole, but unfortunately they are the plain unvarnished truths.
So this private money monopoly, or financial cartel, spends unimaginable sums of money they steal from YOU in order to keep you deceived about thier system of wealth transfer – your wealth to their vaults. The fact is hidden and obscured that all wealth comes from some form or combination of labor and the earth’s resources, or that it is the right of sovereign entities to create the means to exchange the fruits of the land and their labors. This statement probably confuses you, because of the massive misinformation campaign that has been waged against the truth for the sole purpose of exploiting the citizens of nearly every nation on earth, and it has been going on for hundreds, if not thousands, of years.
This negative rhetoric has been an escalating phenomenon in recent elections over the last half-century, and it a main reason why we are now on the brink of financial and economic ruin and collapse.
Before we begin, some clarification of terminology is in order.
Public literally means “people”, as in “We the People” as stated in the Declaration of Independence that delineated the principles upon which this nation (the USA) was founded.
Private generally means some other human or corporate entity, outside of the public sector.
This discussion can get into some weighty issues revolving around what the proper dividing lines should be between public and private functions and enterprises, and even what properties should be privately or publicly held or owned. There is much misinformation and confusion surrounding these issues, and much of that is deliberate. Confused. misinformed citizens can be easily led and controlled. That is much of our current problem – deliberate deception. Let’s see if we can cut through the deceptions and misdirections and get to the heart of the matter in plain English, avoiding “coded” economics terminology where ever possible.
All other questions pale in comparison to this one, and it is our failure to properly settle this question, both in legal theory and in practice, that has led to this crisis of the US Dollar, and its erosion of value as the world’s reserve currency. This is the issue that must be properly addressed and identified as the root of the monetary problem for not only the USA, but for every nation on earth. This paper will attempt to clarify, demystify, and point to the correct answer to this root problem for the reader. We are at the crossroads between economic slavery and economic liberation. Future generations are depending on us for the right choices.
Another unfortunate but necessary quartet of definitions is in order here. When discussing or debating these concepts, deceptive labels are often tossed into the discussions as “red herrings”, “straw men”, or “ad hominem” (against the person) attacks. If words such as communism, capitalism, socialism, fascism, and other heated labels are going to be introduced in the discussion, as they invariably will, then some basic definitions are absolutely necessary. Here they are in their most basic and uncomplicated forms:
* Socialism: Government ownership of the means of production, land, resources, and many businesses. Various forms are practiced with no pure form anywhere. Some theorists assert that Socialism is an intermediate step toward “pure Communism”. http://en.wikipedia.org/wiki/Socialism
* Communism: Collective joint communal ownership of property, land, resources, and the means of production. Private property either does not exist or is extremely limited. Various examples abound with no pure example found anywhere, primarily because “use” or “possession” of property is far more important than “ownership. A theorectical part ownership of a tractor or automobile is meaningless if one never gets to use or possess it. http://en.wikipedia.org/wiki/Communism
* Capitalism: Private ownership of the means of production. Free markets for goods and services are essential. Private capital accumulation for investment in plant, equipment and other means of production. Many complexities and schools of thought, and various forms are found intermingled in varying degrees. My view is that the USA and UK stopped being “capitalists” decades ago, and that we have instead been moved to something I might name as “Creditism”. Western Economic Systems no longer run on “capital” which is “surplus produced wealth, or savings, that are set aside for increased production. It runs on credit, or borrowed money. And informative starting point: http://en.wikipedia.org/wiki/Capitalism .
* Free Markets: Open and free competition of supply, demand and price within an economy with a minimum of government or monopolistic intervention, monopolistic price fixing or manipulation, or manipulation and control of supply and demand by any private or govt entity. http://en.wikipedia.org/wiki/Free_market
The above definitions are brief, but in reality there are mixtures of these systems, depending on the degree of natural monopoly involved for commonly needed and used infrastructure and services. Examples abound: public schools, libraries, media centers, roads, sidewalks, land based telephone services, water and.or sewer, electric power, TV cable service, etc.
Before getting far into our discussion it is always desirable to define principal terms.
“Money” for this discussion, in its broadest sense primarily means a “legally accepted medium of exchange” that is used in place of barter for goods, services, wealth, commodities, or other items of value that can be exchanged. That medium or token of exchange can be physical or abstract, such as an accounting entry, electronic entry, or verbal promise to pay.
Money = Legal Medium of Exchange. All money is therefore “Fiat Money” as the word fiat means legal, or more specifically, “by edict of law”. If it isn’t legal, it isn’t money. This is disputed by advocates of commodity money, and will be given fuller treatment below.
Currency is a particular form of money that circulates in general use.
Further concepts about money may be helpful:
* A key factor that validates something as currency, or fiat (legal) money, is that it be universally accepted within that particular “defined economy” as payment for all commerce and/or debts. Currency is physical (coin or paper) money, but 97% of all money is an accounting notation, or electronic bookkeeping entry of the credit/debit variety..
* That acceptance requires that said money or currency be accepted in payment for taxes and other government (public) fees or assessments.
* That acceptance must be based on the confidence that the currency can be trusted. It must have the backing of the public trust.
* A big part of the public universal acceptance of money is that money is stable. It’s value should theoretically and ideally be the same today as it was yesterday or will be tomorrow. It should not be given to either inflation or deflation of value, although there may be validity to arguments for a small degree of inflation..
* Although arguably more controversial, money should ideally be a measured unit of value. A “Dollar”, if that is the monetary unit, should be worth some basic and constant unit of value that can and should be standardized or fixed, until the monetary authority has sound reasons to adjust the standard of value, and such adjustments should normally be infrequent, as say, every decade or so.
* Money may or may not be “a store of value”, depending on its stability and the stability of the issuing authority or government.
Here is a big stumbling block for so many people, because they have been deliberately misinformed:
Capital is NOT money! The words are not synonymous. The money monopolists and deceivers want to make it seem like the words are interchangeable, because treating them as the same obsures the fact that “capital” is a form or money or wealth that is “surplus” – more than immediately needed. Only surplus money or savings and accumulated wealth are properly called “capital. If this were widely known it would be apparent to all that we are no longer operating an economy of surplus capital, but of credit – borrowed money that may have been leveraged many times, even tenfold or a hundredfold. Those who hold the real wealth are mostly those on the top rung of the money pyramid scheme. What we are left with is mostly an inflated, bloated, over-leveraged house of cards built on shifting sands of boom and bust.
It should be added that money is an evolving abstract concept, that is refined as human experience with it grows. The earliest forms of money, direct barter, have been improved upon over time, and in various places. Plato, Aristotle and Solon are ancient philosophers who better realized the true nature of money than most citizens today.
My conclusion: Public entities should be responsible for creating our money, primarily because they alone are directly accountable to the people, and can be “unelected” or removed from office by the electorate by petition or regular elections. At least this is true if the form of government is a representative republic or constitutional democracy, and the “treasury” or exchequer” department or branch of government can be held accountable for the stability of the monetary system. In other forms of government such as Monarchies or Dictatorships the tyrant or chief despot in charge has usually held that it was the “sovereign right” of the state, or tyrant, to issue and regulate money, or currency or all kinds. Only with the rise of private central banks and international private central banking cartels and the economic philosophies and distortions thereof, of Adam Smith, did private banking monopolies take root in the world. It appears to be an evil root indeed, as we will see, based in the ancient evil of usury.
But we are getting ahead of ourselves. Let’s see if we can look at all the pros and cons objectively and see how I reached my conclusion regarding public Vs private money creation. Once we have resolved that primary question, we can then get into the finer details of what kinds and forms of money would best serve the public local, state, national, and international interests, how and by whom it would be created, distributed and regulated, and what persons or groups would benefit or suffer from each method we consider. I am more than willing to revise my opinion if the evidence points to such a revision.
As a way of introduction to the discussion of what is or isn’t honest or stable money, or hwo to achieve it I’d like to introduce a dialogue between myself and an impartial and unbiased interviewer. I easily concede that a biased goldbug or advocate for another money system might not have been as helpful with the softball questions.
See also, Ellen Brown’s case against gold: http://www.webofdebt.com/excerpts/chapter-37.php
Q & A Summary on Money:
The answers are the opinions of Jere L Hough. (JLH)
Q: Is mankind capable of self-government? JLH: Yes, if citizens are educated and informed on the issues and fundamentals of government.
Q: What form of Self Government is best?
A: A Constitutional Democratic Republic, assuming it is one that strives for fair and just representation of the economic and social well-being and equality of opportunity and access to the laws and courts. Such a government must have adequate protections, checks and balances against monopolistic power from any source, public, corporate or private. Among of the areas that must be balanced are the competing interests between land, capital and labor, employer and the employed, land and tenant relationships, and the regulation of commerce, trade, and markets.
Q: What is the proper role of government versus the private or corporate sector in a balanced republic?
A: That is still being resolved, but the question must be seen through the lens of all undelegated sovereignty residing with the individual person, and that the legitimate authority (sovereignty) of all governments arises from the collective assignment of a portion of the individual sovereignty to government on ascending levels.
Q: Does that answer the previous question?
A: It does, if ones understand that the basic principle is to retain to the individual or the most local community or government as much freedom of choice of thought and action as is possible, without infringing on the same freedoms of choice of others. The essence of good balance in government is that it insures that power is retained by the people, from the individual up to local, regional, state, national and international authorities, and only enough power is delegated upward to accomplish the essential tasks that cannot be better performed at lower echelons of government, or by individuals.
Q: So should water, sewer, gas, electric, telephone, radio, TV, and other utilities and community services be best served by the public or private sectors?
A: Where legitimate competition between providers is possible I would favor private operations. Where the complexity and cost of infrastructure is prohibitive of free and open competition, monopolies arise. Then I would think public ownership is appropriate. In each case this should be a community decision made on levels as close to the affected individual as possible.
Q: What about public safety, police and fire protection, and defense?
A: These should be resolved on the level most appropriate to individuals and communities. Local protection should be handled by local governments, national matters at the national levels, and so on. However, they are all public functions that benefit all, so they should be in the realm of government. Private fire companies and private mercenary armies have all been tried and found wanting.
Q: How can you keep corruption out of government at all levels?
A: Make violation of public trust a serious crime, with harsh penalties, perhaps even capital punishment if the violation is serious enough. Reform the elections process so that the best and brightest citizens will be encouraged to run for office. Eliminate the two-party winner take all spoils system, and allow proportional representation among competing parties or platforms. Improved oversight, regulation and citizen control are components of the answers.
Q: What about money? Doesn’t that contribute to political corruption?
A: Yes. Money is probably our current public enemy number one! Until we address and correct the money issues in our society there will be corruption on all levels and in all political processes. And this is true in nearly every community, state and nation on earth. As this is written, money corruption is resulting in the beginning of another worldwide depression similar, but far worse, than the one we saw in 1929.
Q: So what is the problem with our money, and how do we correct it?
A: This is the most important issue of our world at this time. The failure to properly address and solve the mysteries of money creation, distribution and regulation are leading to world-wide cascading financial disasters that will only widen and worsen.
Q: Again, what is the problem with our money?
A: The root problem is that it is controlled by private, for-profit interests, instead of by the public that should be served by the money. This fundamental flaw in how we allow money to be created and controlled has blocked a more universal prosperity for centuries, and has created untold poverty, misery, hunger and want of the basic essentials of life for many people on our planet.
Q: Wow. That is a broad and sweeping indictment. Can you present sound evidence for your case? A: Yes, sound and compelling evidence, for those who are open to the truth, and are willing to look at the evidence objectively. There is a large portion of our population who have vested interests in closing their minds to truth, and protecting the unjust status quo. There is even a larger portion of our citizenry that is under the sway of the spin and propaganda that the private money interests have passed off as economic “education” or media “information”.
Q: How is that possible? Could so many people be mistaken or misled? A: As difficult as it is to believe, it is also true. People can easily be misled when the same private interests that control the creation of money also control the news, information and education systems. When the same people that control the money and banking systems can make or break local, state and national economies at will, and control the paychecks, bank accounts, and credit cards, then those that are dependant on all these things will accept spin and propaganda as the truth. In other words, it is easy for those higher up the economic food chain to mislead those who are lower on it.
Q: But people can think for themselves, can’t they? A: Yes, but certain assumptions and attitudes often help one stay employed, especially if they agree with those who do the employing. So called “free-thinkers” have a hard time finding and keeping employment. Certain attitudes and values that an employer might label “un-American” or “unpatriotic” or “socialist”, etc., quickly discourage lines of thought that are outside certain approved “boxes” or paradigms. This also happens in company environments that shape our “news” stories, and how they are reported.
Q: What does all that have to do with our money problems? A: Glad you asked. Since our nation was founded, and even before that, the private international banking fraternities that controlled the monetary systems of Europe and England has been trying to gain control of the money in the new world “colonies”. It was then that the smear campaign against the public (or government) control of money began, and therefore against government itself. But since the governments of Europe and England were mostly monarchies, convincing the public and the broke monarchs, that private bankers should have a monopoly on money and banking was easy. The people did not feel connected to, or as if they were a part of, the existing governments of Europe. But the new world concept of democratic government and publicly issued “Colonial Script” money was a serious threat to their entire financial power base.
Q: So what did they do? A: They (the British royal, banking and financial interests) fought militarily to prevent a new republic from being established, and they also waged propaganda and currency warfare in the “Colonies”, before, during and after the American Revolution. They counterfeited colonial money, and debased the currency right up to and through the “Continental” currencies that served our new nation so well until they were debased by British interests. They spread the propaganda that governments were irresponsible, and could not be trusted to control our money.
Q: Is that all?
A: No, the Hamiltonian faction that included NY banker Robert Morris, and other agents of the English Central Bank did their best to get constitutional authority to control US money. They were partially successful, keeping the government’s authority over money to vague and unclear language, insufficient for the proper control of money our new nation needed. The divide between those siding with Hamilton, the royalists, and the international bankers, and those who wanted public control over our money was the issue that created our two opposing political parties. The party of Hamilton and the bankers evolved into the Republican Party of today. The party of the Democratic Republicans evolved into the current Democratic Party.
Q: So what happened to the control of our nation’s money?
A: The battle between the two opposing monetary philosophies resulted in the USA developing a hybrid system, with some authority, that of coining money, going to the Treasury, but the bulk of it, the issuing of paper money and credit money, was retained by the private bankers. A tug of war continued for the first hundred or more years over the control of money, with two short-lived central banks being created, each lasting 20 years, and various mixtures of gold, silver and paper money issued by the Treasury, US Mint and the banks. This went on until in 1913 the central banks finally engineered a congressional coup to pass the banking legislation that has wanted so long. It was known as the Federal Reserve Act, a very misleading name for a private institution. This conspiratorial coup is fully described in GE Griffin’s thoroughly researched and documented book, “The Creature from Jekyll Island”, among many other excellent sources. It makes the truth appear stranger than fiction. (*)
Q: So you still haven’t said why you oppose the private banking solution as a way to control our money. Are we getting to that?
A: Yes, but what happened as a result of the Federal Reserve Act of 1913 illuminates that point.
Q: So, what happened? World War I was the immediate result, and the Bolshevik Revolution and its ensuing bloodbath. Then an period of easy credit and expansion, reckless investment, and the resulting monetary contraction that led to the Great Depression in 1929, and all that it entailed. World War II was the next agenda of business, with tens of millions killed, and another post-war boom, followed by wars in Korea and Vietnam, along with the Cold War, and numerous other undeclared wars and invasions. US military bases were established in over 140 countries. Most people would say many of those events were not caused by the Federal Reserve or European Central Banking systems. Your take?
A: Direct links are difficult to establish, and even more difficult to prove. Still there is abundant evidence of financial mischief, profiteering and greed, along with power grabs, that the Central Bankers either engineered or aided and abetted. Unregulated and unchecked financial power is perhaps the ugliest form of control over nations and individuals.
Q: Back to private control of money? What’s wrong with it, and why is public control better?
A: Private money creation always involves debt creation and interest payments for the use of money put into circulation.
Q: That can’t be true! Certainly not for all of it.
A: But it IS true. All money the the US, or any other Western nation, has in circulation, either as currency, checks, or electronic accounting entries, is “rented” to the public via its government. That “rent” is interest paid on government bonds at the Federal Reserve level, and as interest on money “loaned” into existence by banks at the lower levels.
Q: Money is “loaned” into existence? How can that be? Someone or some bank has to have it, or own the money first, right?
A: No, it is actually created when it is “loaned”. Either the government or some other customer gives the bank an asset such as a bond, or promissory note, and the bank writes a check against that asset, and money is created. Poof! Just like that! It’s magical, seemingly.
Q: So why can’t the government just do the same thing, without paying interest on the money that is created?
A: Exactly. Why can’t they? The best answer I can provide is that the banks have a lucrative racket going, and will do whatever it takes to keep it going. It is an unimaginably profitable system for the bankers, and a very costly one for taxpayers, the citizens, the public, the government, and everyone else but the bankers.
Q: So the government can generate bonds that pay interest to the bearer, and then swap the bonds for money that is printed and distributed, but the government cannot simply issue the money directly without paying interest to a middleman? That doesn’t make any sense.
A: It makes perfect sense to the bankers. It doesn’t make any sense at all to anyone else.
Q: Where does all the interest on money go? Who collects it, and who gets it?
A: Most of it winds up as a part of the national debt that has to be paid by the taxpayers eventually. Or if loaned into existence by local or regional banks, it become credit card or mortgage debt. Some of it is borrowed by local governments and is debt owed on municipal bonds or other muni loans. It’s all interest-bearing debt money. And that is what needs to be changed, and to be changed the real nature of money must be understood.
Q: What is the “real nature of money”?
A: This brings us to the most crucial point, and that is the quality of the “DEFINITION of MONEY” being used in an economy or culture. Real money is NOT “credit money” or “debt money” that is created or brought into existence via a promissory notem as most US money is created today. That is “credit money”, and is based on a debt obligation of the borrower to the lender, or holder of the note. Credit money nearly always carries an interest burden in our current system, and that interest must be repaid out of the pool of non-credit, or “REAL” money in existence. That will ultimately create a problem, unless enough “real” money is created to cover the interest that must be repaid the lender, along with the original principal. So the definition of money is at the root of the money tree. It is the heart of the matter. The real definition of money is what has been well-hidden from the people of this world by those who run the world’s “Money Monopolies” – the national and international central bankers, or bankers bankers. It is they who now create almost all of the world’s money as interest bearing debt.
Q: So, if interest bearing “Credit Money” is not “real money”, what IS real money? What is a better definition, or way of looking at “money”?
A: Glad you asked 😉 Real money is created by government “FIAT”, or edict of law. It is as if some creative being called “We the People” said, “Let there be Money” and there was money. The form it takes doesn’t matterl it can be coins, paper or script, special issues, or electronic credits and debits. The essential factor is that there is an honest and reliable accounting system, preferably multiple dublicate systems, that can be used to properly allocate the Fiat Money that “We the People” (or Govt) created. The initial allocation would be different than the ongoing allocations and management, and the way the initial allocations are done is crucial to the justice and fairness of the entire system.
Q: How would the initial issue be different, and why?
A: Because of the need to replace all current “credit money” within the system with “real money” created by the Public, or issuing sovereign Govt. Money would have to be exchanged. As the devil is always in the details, the fairness and justice of the initial exhange is most crucial. Much thought and discussion should go into this process. My thinking is that there should NOT be an accross-the-board one to one exchange in all instances. Less that one-to-one exchanges should be for reasons of fairness, justice, and social balance. There should be some correction of the massive transfers of wealth that have taken place in the past decades and centuries, from the poor and middle income groups to the banker-lender-investment-corporate classes.
Q: Wealth redistribution?
A: Yes, in a sense. But I’d more accurately think of it as a restitution, the repayment of that which was extorted or stolen, the “making whole” of victims of crimes. I think that picture comes far closer to the truth than “wealth redistribution”, which carries the implication that honestly earned wealth or savings would be stolen from the rich and given to the poorer segments of society, for which I would in no wise endorse. Massive amounts of wealth and money have been swindled from the people via the criminal behavior of Wall Street and City of London. These latest Trillions of dollars in bailouts for criminally mismanaged “Too Big To Fail” corporation is just the recently visible tip of the iceberg. These are the visible triggers that are beginning the global economic meltdown that will grow to far larger and more dangerous consequences. Tens or hundreds of millions of lives will be lost because of these criminals. No “restitution” can compensate for such horror, but justice demands that these banksters and their corrupt govt cohorts not be allowed to keep the poisonous fruits of their ill-gotten capital gains.
Q: Weighty stuff. I sure hope you are wrong about all that. If the government loaned, or even better, spent the money into existence directly, then any interest charged could be used to run the govt banks, and the excess profits could be used to fund government operations, like roads, bridges, schools, parks, police and fire departments. Couldn’t taxes be reduced or eliminated?
A: Of course. Property taxes, income taxes, sales taxes and most other taxes could be paid for by public banking and money creation.
Q: It’s sounds so easy. There must be a catch. Where the flaw?
A: The flaw is that the bankers would call that “socialism”, or “communism”, so it must be a bad idea. Proponents of such a system would be attacked, called unpatriotic, and all sorts of other unkind labels.
Q: Well, isn’t government money creation and either spending or loaning money into circulation an instance of socialism?
A: It depends on the definition you choose to use. There is no shortage of definitions, and critics can find one that fits any plan they oppose. In it’s most basic form, socialism is the government ownership of the means of production. The “means of production” are composed of natural resources and labor. It would be a stretch to include the traditionally sovereign prerogative of coining, printing and regulating money into those areas of private enterprise that entail the production of goods and services. Money creation was nearly always a function of the state, or sovereign, of any geographical area or region.
Q: What about the backing of money that gives it its stability, and confidence as a trusted means of exchange of goods and services? Wouldn’t government banks have to borrow, buy, or otherwise obtain gold, silver or other precious commodities to “back” their money?
A: No more than private banks are doing today – which is not at all – while charging usurious interest. Arguments that stable money requires a commodity backing simply fail to hold up under scrutiny. It is not necessary that a currency be exchangeable for a given quantity of a commodity, or basket of commodities, whose value can rise or fall with circumstances, natural or otherwise. It is only necessary that its value is trustworthy and reliable among those that use the currency. Commodity prices can be manipulated. Weather can play a role, as can floods, transportation costs, and other factors.
There are three things that give any money or currency stability: 1) The general faith and trust that the money will be worth as much tomorrow as it is today; and, 2) The general faith and trust in the reliability of the issuing institution or authority, public or private. If an entire community, state or nation is behind the money, then the faith and trust of the entire community is invested in its money. That trust gives it its value. 3) The volume of money in any given economy or economic community must be in proper proportion to the per capita population and “productive capacity” or resources, goods and services available. There must be some reliable means of keeping track of the available labor and goods, or GEP (Gross Economic Product) within that economy, and adjusting the supply of money up or down so as to maintain monetary stability. All this can be done by computer programs if the input data is sound and reliable.
Q: But what would initially determine the value of such a currency, if not some fixed commodity?
A: Many things could be used as a starting point for money valuation. How about an hour of basic labor? Or a tenth of an hour of labor? Take the minimum wage in that community and call that your basic unit of money, say a Dollar, or a Peso, or even an Hour. Then a more skilled professional might charge 4 “hours” or 10 “hours” for his or her services. The point is that everything would be valued in relationship to that basic “hour” of labor that would represent a minimum wage for unskilled work or time invested. I only suggest an hour because it is the most universally available standard of measure. Not everyone has eggs, or chickens, or cows, or gold, but everyone has time. A measure of the worth of one’s time is about as basic as it get. Your time is worth more than my time, you say? Well, that’s what the marketplace is for; the free market determines all such things, or should, if the playing field is kept level. But a reliable Cost of Living Index could also be used as a beginning valuation, as could a Basket of Commodities or a parcel of land, or land rents. No system will begin in its perfect form. All will have to be adjusted or modified with experience and changing social or environmental conditions.
Q: So are you saying that any community can form a government that includes a bank that could create and regulate own money, free of charge, and without interest?
A: Yes, to the extent that it was allowed to do so legally by higher sovereign authorities. However, I deem this a basic and fundamental right that should be reserved to all people. It is as fundamental as having the right to breath the air, or to enjoy the fruits of one’s labor. In fact, taxation on labor, or the Income Tax, is patently UNCONSTITUTIONAL! One ot the greatest principles of the US Constitution, and one of the most disregarded, is the provision that all powers not specifically delegated to the National government be retained by the individual states, or by the people themselves. There is no way to overemphasize the importance of this principle that ultimate sovereignty belongs to the people, and that the only sovereignties that any government possesses is that freely given to it by its citizens. There is so much of crucial importance in the above that they should be an entirely separate discussion. But for now let me just list the salient points in concise fashion:
1. The US Constitution gives the US govt, via congress, the responsibility and right to issue the nations money. That right has never been recinded or overruled. It originally gave the states the right to issue its own money (coin), but that has apparently been recinded – the constitutionality of which is questionable.
2. The USC claims ultimate “sovereignty” belongs to the people – the individual natural citizen.
3. The USC states that all higher sovereignties or government associations are formed by the individual voluntarily giving up specific parts of that sovereighty to various levels of government. On other words, all governments get their specifically enumerated powers from the people.
4. All sovereignty (the power of choice or decision) NOT specifically delegated to higher government associations are to be RETAINED by the people – the individuals – themselves.
5. People have a right to dissolve or modify governments that abuse their delegated authorities.
6. The “Income Tax” was never intended to be a tax on labor, and such a tax on labor was consistently ruled as unconstitutional by the Supreme Court – SCOTUS.
7. The law that was passed that gives government the right to tax labor is patently unconstitutional, for both national and state governments.
8. With proper money reforms and the elimination of interest bearing debt or credit money, no income taxes would be needed at all. Other, fairer taxes could provide all the legitimate needs of governments for a small fraction of what US citizens are paying now.
9. We are in dire need of constitutional, governmental and money reforms. The very continuation of our civilization may depend on it.
Q: You mentioned “interest” above. Interest implies credit. So is credit the same as money?
A: We had to get into this question sooner or later. As it is now, all money is credit money in one form or another. However under a stable and honest mony system the issue is a bit more complex, but not overly so. It depends on whether the credit extended, or the loan made, was from an existing pool of real (non-fractional reserve) money, or was “created” as an offset to a real asset or a promissory note. If credit money creation is allowed, it would have to be supervised and tracked, and the fractional reserve system would, of course, have to be abolished, or controlled by governments. Otherwise the current money pyramid schemes would someday again corrupt and consume the system.
Q: Would this mean that a local community would have to have one currency that was locally accepted, and yet have access to other larger communities, states, or nations?
A: Yes, to some extent, perhaps. Yet that is the way it is now, in a collapsing world economy with multiple currencies that trade against each other on the (supposedly) free and open market. Each community would have to weigh the pros and cons and make a decision about the benefits. That should be the right of each community just as it is the right of each individual to negotiate his or her economic situation. Likewise each region, state or nation should have that choice. I believe the benefits would far outweigh the disadvantages. In fact, I think those communities that went to such an economic and monetary system would quickly develop real prosperity and increased wealth and well-being.
Q: Could such a system stop wars and massive expenditures on weapons of destruction?
A: No, not by itself. But I think it’s effects could go a long way toward making it easier to stop such destructive behaviors. It would remove some of the profit incentive, in that the interest on weapons and military expenditures would be eliminated. Government would be spending its own money into existence, remember? But there would also have to be a monetay authority, or branch of government that would have to approve any such expenditures, and hopefully, along with the changes in the way we control society’s money, we would have better controls over ways it is spent or loaned into circulation. There would have to be new laws, and severe penalties for violating them.
Having introduced a brief Q & A about what I might think is an improved monetary system that does not involve commodity money, let is now consider the gold, silver, PM, or any other form of commodity money, and the problems or relative disadvantages they impose over the public system of moeny creation outlined above.
First, and perhaps most obvious, is that any community starting from scratch, would have little or no gold to use as money, and so would have to obtain some at a cost to the community. This one handicap could be discussed at great length, and remedies raised, analyzed and accepted or rejected. I have done these mental exercises, and have found them so far unprofitable. The same objections would obtain with silver, platinum, or any other commodity PM.
Second, all commodity money is inherently unstable and is subject to price controls and market manipulation. Yes, market manipulation is real, and on a scale large enough to be inconceivable to most “outsiders” and even many “insiders”. Both silver and gold prices have seen huge price swings of 50, 100 or 200 percent or more within short periods of months or a few years. Huge disparities in the ratio of silver to gold has existed in different parts of the world, and those disparities have been exploited by empires, rulers, priests and traders going back thousands of years. That these disparities were closely guarded secrets is evidenced by the fact that the famous “Silk Road” between east and west was not named the “Gold & Silver Road”, which was by far the more profitable reason for the trade along that route.
Would you really like to understand the current financial meltdown and coming world depression, Global NWO, Centralralized money control by private banksters, and worldwide economic blackmail?
Would you like to become part of the solution rather than remain a part of the problem? If so, you must educate yourself beyond simplistic partisan positions, and this is no easy task amidst such an imposing sea of confusion, misinformation, and deliberate disinformation and deceptions. Lies and special interests are everywhere, but you must dig deep for the truth that will set you, and all of us, free from the economic bondage in store for us and our descendants.
My main suggestion would be to obtain the book, Web of Debt, by Ellen Brown. She has done more to “demystify” the subject of money more than anyone else I have read. Stephen Zarlenga’s The Lost Science of Money had been my favorite until I recently finished Web of Debt. Both books have excellent road maps to get out of the disaster we have scripted for our nation, and the world. The important thing is to begin the needed discussions and debates. For further education and information on what you are not being told by mainstream media or official sources, I ask you to read these books or watch the online videos.
The first two videos are very educational, and highly recommended for basic starting information:
Comprehensive Video = MoneyMasters (3.5 hrs) – watch it free here The Money Masters is more comprehensive, longer (3.5 hours and 2 disks). These videos will very accurately indentify the root causes of our financial meldown and the coming Greatest Depression. You may have to watch them several times before the big picture really sinks in.
Once you have the basics, these next two videos are the real comprehensinve truths you need to know to protect you and your loved ones:
Video: America: Freedom to Fascism by Aaron Russo – bipartisan and shocking.
Aaron Russo Inverview … the most shocking video you may ever see. It ties all of the above together into a chilling view of “The Matrix” or what is happening “behind the curtain”. These may not be available for very long. Please download them if possible.
Another outstanding free online series of short video presentations is by Chris Martenson. This series is one of the finest I’ve yet seen, and jam packed with good and reliable info. I suggest watching lessons 6, 7, 8 and 9 (each about 6 to 8 minutes) of this outstanding presentation by one of the brightest teachers I’ve ever heard on the subject. The series of video lessons is not yet finished, but if you watch 6,7, 8 and 9 on money, you will want to watch the entire series over time, and explore the gold mine of references on the coming financial tsunami. You need to prepare for the events ahead. Your faith will be tested.
For real comprehension of our monetary and economic problems, and how to get out of the money trap we are now caught up in, you will need to obtain the best books written on thise subjects, and devote some time to study them. You simply cannot fully wrap your mind around the enormity of these issues without doing some serious homework. Trust me when I say that almost everyone who claims to have solutions to our problems, don’t, and their “solutions” will in fact only make things far worse by playing right into the hands of those who have designed the grand chess game we are all playing. And we are all playing, like it or not.
For instance, a popular solution advanced by certain schools of economics teach that the way out is a return to the gold or silver money standards. This is simply untrue, and the worst move that humanity could make, because it returns the money power to the Money-Moguls, the parasites who are now sucking our nation dry. All I have time to do now is impress the reader that ALL major schools of economics are owned and controlled by the archetects of the NWO! The methods that will deliver us from our bondage have been systematically suppressed and ridiculed by the power brokers who are destroying our independence and liberty. In 99% of the cases what the economics experts will advise is wrong, because that is what they are paid to teach and to advise.
John Kenneth Galbraith, in a moment of candor, spoke truly: “The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it (p15). The process by which banks create money is so simple that the mind is repelled.” – John Kenneth Galbraith, Money: Whence it came, where it went – 1975, p29.
With that in mind, here are the books I urge people to read:
Best Book (By Far) and most recent I’ve yet found on up to date events: Web of Debt (Publisher’s website reviews and comments) Author Ellen H. Brown’s website packed with good info and the best articles
Amazon Reviews of Web of Debt are extremely useful to guage the opinions of others on any book one is considering. My own review of this book is among over 40 posted there.
Another Revealing Book = The Lost Science of Money – The Mythology of Money – The Story of Power. Author Stephen Zarlenga’s website on Monetary Reform I attended their annual monetary reform conference in Chicago this September, 2008. Zarlenga’s book would be the best if it were simpler for the average person to follow and understand. It is deep, philosophical, scholarly, and a priceless treasure for those who really want to gain in-depth comprehension of the secret and hidden history of money and the power that flows from its control.
Best History, Comprehensive = Carrol Quigley – Tragedy and Hope: The History of the World in our Time: This is an amazing expose’ on the inside workings of the forces behind the NWO now being created in our world. It is actually now already an accomplished fact, and has been for about 40 or more years. It’s big, long and complex, but it’s the most educational book about the modern history of the NWO in existence, IMO. Quigley is a brilliant historian whose credentials are impecable. He was Bill Clinton’s most influential professor and mentor.
An excellent capsule summary of many very important books that bear on the coming economic collapse: “How the World Really Works” This book is especially important for its capsule summaries of the highlights of a handful of the most important books written in the last 50 years: A Century of War, Tragedy and Hope, The Naked Capitalist, The Tax-Exempt Foundations, The Creature from Jekyll Island, The Politics of Heroin, Dope Inc., and others. Disclaimer: I do not agree with most of the author’s solutions. The book is valuable only for highlighting the problems.
These are factual resources of the highest integrity and scholarship – all of them.
Additional comments from Jere (FedNix)
The choice of where we spend each US budget dollar is between “guns and butter”, as stated by a true conservative, Pres. DW Eisenhower, in 1961. He also warned the US citizens about the present and ever-growing dangers that our nation was being taken over by a “Military- Industrial Complex”. He may or may not have been aware how the private central banking control over our money funnels taxpayer funds into non-productive spending, and bombs and bullets fit that category better than anything else I can think of. They are built to be destroyed in war and battles or become quickly obsolete in the arms races the financial banking interests sponsor.
This is not a left – right or Democrat – Republican issue, as some on this forum strive so hard to portray it. We will never solve the problem as long as we remain deluded that this is a partisan political issue. This is an issue of the survival of our culture and even our civilization. Our current economic system is in collapse, and that collapse will escalate despite the Fed and central bankers frantic behind-the- scenes financial chicanery to make sporatic “recoveries” seem to occur. The private central bankers control the printing presses that crank out our dollars, at taxpayer expense, and can use them in very creative ways in the global NWO economy to “prop up the dollar” and depress the prices of gold, silver, and other precious metals and commodities. They use taxpayer money (debt) to massively manipulate the stock markets through “naked short sales”, buy-backs, and other manipulation schemes far too complex to go into here. The the books I recommed, or at least watch the online videos on Youtube, Google, Yahoo and personal websites to see for yourselves how real this all is.
BTW, I am an investor in Precious Metals, mostly silver, retired for the past 10 years and have followed the global markets since I was a kid. I have a bachelor’s degree, and have done extensive post-graduate sudies in many fields. I have a positive net worth, and I listen to or watch a huge variety of news and information sources. I subscribe to at least 40 or 50 information services via the internet and email. All of the information I relay here is factual and reliable. The fact that our economy is collapsing like a house of cards has been broadcast for many years by numerous authorites, economists, insiders and whilstleblowers, and the case they make is ironclad, if one takes the time to follow it. For instance, David Walker, Comptroller General of the Government Accountability Office, is touring the nation warning citizens of the impending national bankruptcy, and has done so since 2003. Please watch just one or two minutes off this 7 minute video and you will begin to understand the economic truth. I do not agree with all of Walker’s opinions and positions, especially on his recommended solutions, but at least he fully realizes that the problem is real and imminent.
There are numerous videos and articles on the web, YouTube, Brasscheck, Google Video, etc, that reveal various aspects of the NWO menace. However, only a few that I know of really encompass the big picture. However, before we can ever solve our problems we must see clearly what they are, and what led to them.
No complex problem can ever be solved until its true nature and deepest root causes are fully understood. We are a long way from realizing that goal, and the NWO forces intend to keep us from ever doing so.
God will help those who are determined to help themselves and those they love. But until a critical mass of humanity makes a firm decision to do so, we will suffere the consequences of laziness, selfishness, neglect, greed, and ignorance. Our first task is to discover the root causes of our financial and economic problems, and underneath it all lies the proper and advanced conceptualization of money. It is that ignorance and lack of comprehension that the archetects of the NWO most exploit in order to enslave humanity in their debt service. Ellen H. Brown and Stephen Zarlenga do the best job I have yet found in showing us the way out of the maze and back to the potential utopia that is our ultimate destiny.
Please read their books, and as many other good ones as you can find on this most important of human material problems.
Jere L Hough (FedNix or FedFixNix on public forums)
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” -Henry Ford
The Government should create, issue, and circulate all the currency and credit needed to satisfy spending power of the Government and the buying of consumers. The privilege of creating and issuing money is not only the supreme prerogative of Governments, but it is the government’s greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest. The financing of al public enterprises, and the conduct of he Treasury will become mattes of practical administration. Money will cease to be master and become the servant of humanity. ABRAHAM LINCOLN
“The Federal Reserve (Bank) is one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this Nation is run by the International Bankers.” ― Congressman Louis T. McFadden
My agency in promoting the passage of the National Bank Act was the greatest financial mistake of my life. It has built up the monopoly which affects every interest in the country. It should be repealed; but before that can be accomplished, the people will be arrayed on one side and the banks on the other, in a contest such as we have never seen before in this country. SALMON M. CHASE, Treasury Sec. under Lincoln.
Under the Federal Reserve Act panics are scientifically created; the present panic is the first scientifically created one, worked out as we figure a mathematical problem.
HON. CHARLES A. LINDBERGH SR., writing of the Panic of 1920
The few who can understand the system (check, money and credits) will either be so interested in its profits, or so dependent on its favors, that there will be no opposition from that class, while on the other hand, the great body of the people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interest. — ROTHSCHILD BROTHERS OF LONDON
“THE EYES OF OUR CITIZENS ARE NOT SUFFICIENTLY OPEN TO THE TRUE CAUSE OF OUR DISTRESS. THEY ASCRIBE THEM TO EVERYTHING BUT THEIR TRUE CAUSE, THE BANKING SYSTEM!” ― Thomas Jefferson 1819
“ALL THE PERPLEXITIES, CONFUSION, AND DISTRESS IN AMERICA arise, not from defects in the Constitution or confederation, not from want of honor or virtue, so much as from DOWNRIGHT IGNORANCE of the nature of coin, credit, and circulation.” ― President John Adams
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