| 5:39 pm on Nov 12, 2006 (gmt 0)|
Money is being created out of thin air and I think they will freely admit that to you. In the old days, the Fed controlled money supply by printing new money or destroying old money. These days they do it electronically through the overnight loans they make the Fed reserve member banks (BofA, Wells Fargo, etc).
The fed decides how much money should be available and changes the amount it loans accordingly.
It is no more a scam than paper money has been since it has been decoupled from gold and silver. At one point you could you dollar bill to the gov't and claim its worth in gold or silver. We haven't done that in years. Our money is backed by "the full faith and credit of the United States" (read your money!) AND the fact that we and most of the world buy that our currency is worth something.
| 6:41 pm on Nov 12, 2006 (gmt 0)|
On my five pound note it says:
"I promise to pay the bearer on demand the sum of Five Pounds"
and it's signed by Andrew Bailey - (who?) - apparently, the Chief Cashier of the Bank of England.
In my naivety, I assumed that if I were to go down to Threadneedle Street and pass the piece of paper across the counter, the staff would still be obliged to give me 0.0152 ounces of gold (yes, regardless of the departure from the gold standard back in the early seventies).
If that isn't correct, then what are they promising?
Also, if your dollars are worth something only because you and everyone else thinks they are... where does that leave you all when someone points out that the Emperor's clothes are looking decidedly new? (The same goes for us of course if that "promise" isn't worth the... err... paper it's written on).
| 7:28 pm on Nov 12, 2006 (gmt 0)|
|...and it's signed by Andrew Bailey - (who?) - apparently, the Chief Cashier of the Bank of England. |
>> Andrew Bailey [bankofengland.co.uk]
He's one of the keynote speakers at a business lecture I've been invited to. It takes place in just a couple of weeks - I wonder if I can get a definitive answer... ;-)
| 8:51 pm on Nov 12, 2006 (gmt 0)|
|then what are they promising? |
I believe they will exchange your 5 pound note for five one-pound coins.
I'm not an economist (although I have worked in the banking industry in another life) so I can't explain things particularly well, but the "money" must be a representation of real value which is present in an economy - goods, knowledge, stocks, whatever.
In particular, if you simply print extra money where no extra intrinsic value exists, the actual purchasing power of the pounds/dollars etc. will go down. This is called inflation, the effects of which are well-known. Good examples are Germany in the 1920s and 1930s, post-war Italy... in these cases the government, unable to meet its obligations, paid its bills by printing more cash. However, as the money supply rises, prices also rise, leading to situations where you needed a handcart rather than a wallet to pay for your groceries. Inflation is the counter-evidence supporting the purchasing power of the promissory note in your pocket.
For the UK, check out the Bank of England's "money supply" statistics - a stable economy requires a stable M0, or "narrow money". M0 is the amount of money in circulation outside of the Bank of England.
Now I'm going to get shot down by a passing economist who wil say I don't know what I'm talking about!
[edited by: encyclo at 2:33 am (utc) on Nov. 13, 2006]
| 1:15 am on Nov 13, 2006 (gmt 0)|
I'm holding in my hand a US $20 bill the states:
|This certifies that there have been depostied in the Treasury of the United States of America Twenty Dollars in GOLD coin payable to the bearer on demand |
Alas, the date is 1929
I also have some Confederate money backed by cotton, payable one year after the South wins the war.
| 1:31 am on Nov 13, 2006 (gmt 0)|
What American high school student doesn't know: "Do not crucify us on this cross of gold!"
| 9:15 am on Nov 13, 2006 (gmt 0)|
Can anyone put forward some counter-evidence to show that money isn't being created out of thin air?
There's no such counter-evidence, because that is exactly how the money in your bank account was created. It has been "virtual" for a long time now, nothing more but a tangible manifestation of trust.
In case you actually don't trust that system, you better go back to bartering your veggies for the milk of your neigbhour's cow... ;)
| 2:10 pm on Nov 13, 2006 (gmt 0)|
|What American high school student doesn't know: "Do not crucify us on this cross of gold!" |
Probably 99% of them nowadays. LOL
What William Jennings Bryan's followers wanted 100 years ago was money back by silver, leading to inflation which they saw as helping the poor farmer.
U.S. money is backed by a really useful thing: you can always use it to pay your taxes. (or other debts)
| 2:25 pm on Nov 13, 2006 (gmt 0)|
|U.S. money is backed by a really useful thing |
yep ..China ...until / if they decide to pull the plug on all the scrip they hold ..
| 6:50 pm on Nov 13, 2006 (gmt 0)|
|From 1792, when the Mint Act was passed, the dollar was pegged to silver and gold at 371.25 grains of silver, 24.75 grains of gold (15:1 ratio). 1834 saw a shift in the gold standard to 23.2 grains, followed by a slight adjustment to 23.22 grains in 1838 (16:1 ratio). |
In 1862, paper money was issued without the backing of precious metals, due to the Civil War. Silver and gold coins continued to be issued and in 1878 the link between paper money and coins was reinstated.
In 1900, the bimetallic standard was abandoned and the dollar was defined as 23.22 grains of gold. Silver coins continued to be issued for circulation until 1964, when all silver was removed from dimes and quarters, and the half dollar was reduced to 40% silver. Silver half dollars were last issued for circulation in 1969.
Gold coins were withdrawn in 1933 and the gold standard was changed to 13.71 grains, equivalent to setting the price of 1 troy ounce of gold at $35. This standard persisted until 1968. Between 1968 and 1975, a variety of pegs to gold were put in place. 1975 saw the U.S. dollar freely float on currency markets.
The federal reserve bank is not "Federal". It is a privately owned entity. They charge interest for every bill printed. The names of the "owners" of the Federal Reserve are protected by law (we can't know who they are).
|"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks...will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." |
| 7:45 pm on Nov 13, 2006 (gmt 0)|
The Rothschild Family?
| 7:55 pm on Nov 13, 2006 (gmt 0)|
Now if he was to answer ( either in the affirmative or the negative ) that would mean you would have to move ...so that the black helicopters could land real close and disgorge the guys in black ..
and you'd have to take off the tinfoil hat to hear the sound of the blades anyway ..
and this post would have to self destruct in 10 seconds ..
and Tom Cruise would have to learn to act , grow some and learn to keep his shilling to himself ...
dont hold your breath ..to avoid the smoke :)
| 9:19 pm on Nov 13, 2006 (gmt 0)|
Someone asked a question about the backing of the currency of the United States and England. I do not know about the UK, but I provided an answer for the US with a little tid-bit.
Saying that "you'd have to take off the tinfoil hat to hear the sound of the blades anyway" is not constructive to the conversation, no one was saying anything remotely similar to this.
If you think I said something wrong, please correct me on the specific point at hand; I will be more than glad to learn if I am wrong.
| 9:24 pm on Nov 13, 2006 (gmt 0)|
lighten up green leaves :))
in no way was I intending to offend you ( tend to like your posts ..they are not run of the mill ) ..
the same situation or almost it's twin pertains here in France ..the bank of France is also privately owned ..and has similar powers .( actually more extensive ) than the fed ...
| 9:25 pm on Nov 13, 2006 (gmt 0)|
Sorry Leosghost; I need coffee.
I like to read yours too.
| 9:38 pm on Nov 13, 2006 (gmt 0)|
I'm curious that no-one seems to be all that bothered that:
a) Not only are we all exchanging pieces of paper of imaginary worth but that...
b) To my mind much more seriously, new loans that are granted are not even backed up by those worthless bits of paper.
It's the latter point that I'm more worried about, not so much the departure from the gold standard.
Are we all to shrug our shoulders and say Hey ho, that's the way the world is?
What did everyone think of Griffin's proposal that inflation is deliberately and steadily manufactured? Is that also something we should just sit back and shrug our shoulders about?
I must confess I'm not much of an economist so I did think that inflation was the inevitable cause of real and concrete factors, not that it could be produced at will by a cartel of financiers who do so for the benefit of themselves at the expense of the majority.
I still don't wish to believe the above scenario because it does indeed sound rather too "black helicopters" to me... so I would be really happy if someone who knows about economics could point out the fallacies in Griffin's portrayal of how the Federal Reserve works.
| 12:52 am on Nov 14, 2006 (gmt 0)|
"The Federal Reserve Banks are nominally "owned" by the private member banks"
| 1:20 am on Nov 14, 2006 (gmt 0)|
Inflation is caused by more than just printing money. It is also caused by a heathy growing economy - cash flush businesses and individuals buy more goods. More buyers for limited goods drive up prices - inflation.
I don't think you can have a growing economy without a few points of inflation. But, as long as GDP growth AFTER adjusting for inflation is positive, we are in good shape.
| 2:19 am on Nov 14, 2006 (gmt 0)|
So....what SHOULD money be backed by?
In William Jennings Bryan's time: blocks of ice, street car company tokens, whale oil for lamps. Things that people will always need. LOL!
Diamonds were a great store of wealth until 130 years ago when it was discovered that the Congo was loaded with them.
Pearls: Immensely valuable 100 years ago. Then they learned how to culture pearls.
Gold? Oil? Hardly immutable stores of value as we've seen this year. At one time aluminum was much rarer than gold.
| 2:32 am on Nov 14, 2006 (gmt 0)|
I'll take a pound of gold/silver/diamonds over paper money any day!
| 9:08 am on Nov 14, 2006 (gmt 0)|
Rule to Secrecy by Jim Marrs (HarperCollins), is as good a book as any in the conspiratorial vein.
| 4:47 pm on Nov 14, 2006 (gmt 0)|
Reminds me of 20 years ago when several books hyping the Bermuda Triangle Theory were soaring on the Best Seller List.
At the same time, a well researched work debunking that theory was gathering dust on bookstore shelves.
|in the conspiratorial vein |
If it were a factual treatise on the Fed by a Nobel PhD, no one would read it.
| 7:08 pm on Nov 14, 2006 (gmt 0)|
No it is created out of thin air, I recall an econ class many years ago when a teacher should us how it all worked, which was pretyy amazing
| 8:10 am on Nov 15, 2006 (gmt 0)|
> I'm curious that no-one seems to be all that bothered that:
>a) Not only are we all exchanging pieces of paper of imaginary worth
Okay, Which would you like:
1). A certified bank cheque for 1 million dollars
2). One hundred thousand $10 dollar paper bills?
3). 166 Krugerrand gold coins?
| 3:14 pm on Nov 15, 2006 (gmt 0)|
|So....what SHOULD money be backed by? |
Personally, I don't know. But at least something more than imagination... right?
| 3:20 pm on Nov 15, 2006 (gmt 0)|
Full faith and credit of the issuer of currency, perhaps.
| 8:11 pm on Nov 15, 2006 (gmt 0)|
No matter what backed money, it would be controversial as it was in Bryan's day. Dick Chaney would have to replace his old friends with mining execs. Gold? Don't the Russians have tons of it? Silver? Bet Howard Hughes' estate owns half of Nevada. (Melvin Dumar LOL)
No one ever mentions that PAPER was once incredibly rare and valuable.
U.S. fractional currency, issued around and after the Civil War was backed by postage. Early fractional currency showed pictures of stamps.