CongressmanRonPaul — This hearing, entitled “Fractional Reserve Banking and the Federal Reserve: The Economic Consequences of High-Powered Money,” will be held on Thursday, June 28, at 2:00 p.m. in room 2128 of the Rayburn House Office Building.
Witnesses scheduled to testify: Dr. John Cochran, Emeritus Professor of Economics and Emeritus Dean, School of Business, Metropolitan State College of Denver Dr. Joseph Salerno, Professor of Economics, Lubin School of Business, Pace University Dr. Lawrence H. White, Professors of Economics, George Mason University.
“Fractional reserve banking underpins the entire banking system, yet its effects on society are completely ignored. Our financial system consists of vast amounts of credit pyramided on top of very small amounts of real savings– all backstopped by explicit and implicit government guarantees. This poses significant risks to the stability of the economy and monetary system, which ought to give pause to any serious observer of financial markets. Hopefully this hearing will create a greater understanding among the American people about the nature of the banking system, and begin the movement towards serious systematic reform. The American people deserve a financial system that is stable and efficient; one that operates without taxpayer subsidies and bailouts.” – Congressman Ron Paul
Ron Paul is correct .
Long term price stability is possible only when the money supply is based upon the gold (or silver) supply without government interference.
For a nation to enjoy economic prosperity and political tranquility, the monetary power of its politicians must be limited solely to maintenance of honest weight and measures of precious metals.
A nation that resorts to use of fiat money has doomed itself to economic hardship and political disunity.
Fraction money will always degenerate into fiat money. It is but fiat money in transition
When men are entrusted with the power to control the money supply, they will eventually use that power to confiscate the wealth of their neighbors.
The Fed should be abolished when the hundred years charter granted to a private cartel of bankers by congress in 1913 expires next year 2013. It is the cause of all our economic difficulties
• It is incapable of accomplishing its stated objectives.
• It is a cartel operating against the public interest.
• It is the supreme instrument of usury.
• It generates our most unfair tax.
• It encourages war.
• It destabilizes the economy.
• It is an instrument of totalitarianism.
It is is not abolished the fourth collapse of the Fed since the Federal reserve Act of 1913 is imminent and unavoidable. God help America if the people continue to allow Congress to serve these bankers.
Marriner Eccles was the Governor of the Federal Reserve System in 1941. On September 30 of that year, Eccles was asked to give testimony before the House Committee on Banking and Currency. The purpose of the hearing was to obtain information regarding the role of the Federal Reserve in creating conditions that led to the depression of the 1930s. Congressman Wright Patman, who was Chairman of that committee, asked how the Fed got the money to purchase two billion dollars worth of government bonds in 1933.
This is the exchange that followed.
ECCLES: We created it.
PATMAN: Out of what?
ECCLES: Out of the right to issue credit money.
PATMAN: And there is nothing behind it, is there, except our government’s credit?
ECCLES: That is what our money system is. If there were no debts in our money system, there wouldn’t be any money.
Fiat Money
Fiat money is the opposite of honest money. Fiat money is money that is declared to have value even if it does not. Honest money has value regardless of what people say. Gold and silver are often referred to as honest money and since they have been dug out of the ground at considerable expense, they do have value regardless. People will pay variable sums for them.
Fiat money is also known as paper money, or electronic money. Since there is nothing behind paper money but the obligation of a state to redeem it in more paper or electronic money, fiat money’s ultimate worth is questionable at best. In fact, there is a history of states walking away from the face value of the fiat money that has been printed (created). But if one has it in one’s possession, it is impossible to walk away from the value of gold and silver – and contrary to fiat money, they have an inherent quality.
Mainly an outgrowth of central banking, in the modern age fiat money probably would not be attractive without state support. That’s because fiat money, unlike fractional reserve money, has no inherent value. Fractional reserve banking, in fact, is a private market phenomenon in which private banks provide paper notes, the face value of which adds up to more than the reserves held by the bank. There is a history of successful fractional reserve banking efforts within the private marketplace; however, fiat money ALWAYS collapses, as it is impossible to issue a substance of value that has no value year after year and generation after generation.
In the United States, the world’s largest and most dominant economy, the greenback became a fiat currency when President Richard Nixon broke the final link between gold and the dollar in 1971. He did this because the French were apparently threatening to redeem their dollars in gold – and neither the US central bank and/or Treasury did not have enough gold to redeem French dollars, or chose not to.
In any event, Nixon severed the dollar’s relationship to gold and ever since then the world has embarked on a “bold experiment” in which the global, anchor currency has no specific relationship to an underlying asset. Predictably, this has meant that the United States has continually created more and more fiat dollars, thus inflating the overall stock of dollars and making them worth less and less.
China, one of the world’s most ancient civilizations, is said to have had no less than eight separate interregnums of fiat currency – each collapsing and then being replaced by another. In the 1800s, fiat money was even banned by the Chinese. Today, however, the Chinese government is once again a user of fiat money along with the rest of the world. Fiat money has never been as prevalent perhaps as in the modern age. But that doesn’t make it any healthier or less prone to failure. Those who ignore history are doomed to repeat it.
Here is how it can be done:
1. Repeal the legal-tender laws.
2. Freeze the present supply of Federal Reserve Notes, except for what will be needed in step number six.
3. Define the “real” dollar in terms of precious-metal content, preferably what it was in the past: 371.25 grains of silver
4. Establish gold as an auxiliary monetary reserve which can be substituted for silver, not at a fixed-price ratio, but at whatever ratio is set by the free market
5. Restore free coinage at the U.S. Mint and issue silver “dollars” as well as gold “pieces.” They must not be drawn from the Treasury’s supply which is reserved for use in step number six.
6. Pay off the national debt with Federal Reserve Notes created for that purpose. Creating money without backing is forbidden by the Constitution; however, when no one is forced by law to accept Federal Reserve Notes as legal tender, they will no longer be the official money of the United States.
7. Pledge the government’s hoard of gold and silver (except the military stockpile) to be used as backing for all the Federal Reserve Notes in circulation.
8. Determine the weight of all the gold and silver owned by the U.S. government and then calculate the total value of that supply in terms of real (silver) dollars.
9. Determine the number of all the Federal Reserve Notes in circulation and then calculate the real-dollar value of each one by dividing the value of the precious metals by the number of Notes.
10.Retire all Federal Reserve Notes from circulation by offering to exchange them for dollars at the calculated ratio. There will be enough gold or silver to redeem every Federal Reserve Note in circulation.
11.Convert all contracts based on Federal Reserve Notes to dollars using the same exchange ratio. 12.Issue Silver Certificates. As the Treasury redeems Federal Reserve Notes for dollars, recipients will have the option of taking coins or Treasury Certificates which are 100% backed. These Certificates will become the new paper currency.
13.Abolish the Federal Reserve System. It would be possible to allow the System to continue as a check clearing-house so long as it did not function as a central bank.
14.Introduce free banking. Banks should be deregulated and, at the same time, cut loose from protection at taxpayers’ expense. No more bailouts. The FDIC and other government “insurance” agencies should be phased out, 1. Since the value of FRNs would be firmly established in terms of real dollars,
15.Reduce the size and scope of government. No solution to our economic problems is possible under socialism. It is the author’s view that the government should be limited to the protection of life, liberty, and property—nothing more. That means the elimination of almost all of the socialist-oriented programs that now infest the federal bureaucracy. If we hope to retain—or perhaps to regain—our freedom, they simply have to go. To that end, the federal government should sell all assets not directly related to its primary function of protection; it should privately sub-contract as many of its services as possible; and it should greatly reduce and simplify its taxes.
16. Restore national independence. A similar restraint must be applied at the international level. We must reverse all programs
leading to disarmament and economic interdependence. The most significant step in that direction will be to Get us out of the UN and the UN out of the US, but that will be just the beginning. There are hundreds of treaties and administrative agreements that must be rescinded. There may be a few that are constructive and mutually beneficial to us and other nations, but the great majority of them will have to go. That is not because we are isolationist. It is simply because we want to avoid being engulfed in global tyranny. Some will say that paying off the national debt with Federal Reserve Notes amounts to a repudiation of the debt. Not so. Accepting the old Notes for payment of taxes is not repudiation. Exchanging them for their appropriate share of the nation’s gold or silver is not repudiation. Converting them straight across to a sound money with little or no loss of purchasing power is not repudiation. The only thing that would be repudiated is the old monetary system, but that was designed to be repudiated. The monetary and political scientists who created and sustained the Federal Reserve System never intended to repay the national debt. It has been their ticket to profit and power. Inflation is repudiation on the installment plan. The present system is a political trick, an accounting gimmick. We are merely acknowledging what it is. We are simply refusing to pretend we don’t understand what they are doing to us. We are refusing to play the game any longer.
The Federal reserve is neither an arm of the government nor is it private. It is a hybrid. It is an association of the large commercial banks which has been granted special privileges by Congress A more accurate description would be simply that it is a Cartel protected by federal law The federal reserve Act of 2013 giving the banks the right to print money with nothing behind it will expire 2013 next year. Since they own Congress it will renew it . They money supply will continue to expand, inflation will continue to roar, and the nation would continue to die. Besides, issuing money without gold or silver backing violates the constitution
WHAT MUST NOT BE DONE
Let us begin with the negatives: what must not be done. The most obvious item in this category is that we must not turn to government for more of the same “cures” that have made us ill. We do not want more power granted to the Fed or the Treasury or the
President, nor do we need another government agency. We probably don’t even need any new laws, with the possible exception of those legislative acts which repeal some of the old laws now on the books. Our goal is the reduction of government, not its expansion.
We do not want to merely abolish the Fed and turn over its operation to the Treasury. That is a popular proposal among those who know there is a problem but who have not studied the history of central banking. It is a recurrent theme of the Populist movement and those advocating what they call Social Credit. Their argument is that the Federal Reserve is privately owned and is independent of political control. Only Congress is authorized to issue the nation’s money, not a group of private bankers. Let the Treasury
issue paper money and bank credit, they say, and we can have all the money we need without having to pay one penny in interest to the bankers.
It is an appealing argument, but it contains serious flaws. First, the concept that the Fed is privately owned is a legal fiction. The member banks hold stock, but it carries no voting weight. No matter how large the bank or how much capital is paid in, each bank has one vote. The stock cannot be sold or traded. Stockholders have none of the usual elements of control that come with ownership and, in fact, they are subservient to the central board.
The seven members of the Board of Governors are appointed by the President and confirmed by the Senate. It is true that the Fed is independent of direct political control, but it must never be forgot-ten that it was created by Congress and it can be extinguished by Congress. In truth, the Federal Reserve is neither an arm of government nor is it private. It is a hybrid. It is an association of the large commercial banks which has been granted special privileges by Congress. A more accurate description would be simply that it is a cartel protected by federal law. But the more important point is that it makes no difference whether the Fed is government or private. Even if it were entirely private, merely turning it over to the government would not alter its function. The same people undoubtedly would run it, and they would continue to create money for political purposes. The Bank of England is the granddaddy of central banks. It was privately owned at its inception but became an, official arm of the British government in more recent times. It continues to operate as a central bank, and nothing of substance has changed. The central banks of all the other industrialized nations are direct arms of their respective governments. They are indistinguishable in function from the Federal Reserve. The technicalities of structure and ownership are not as important as function. Turning the Federal Reserve over to the Treasury without at the same time denuding it of its function as a central bank—that is, its ability to manipulate the money supply—would be a colossal waste of time. The proposal of having the Treasury issue the nation’s money is another question and has nothing to do with who owns the Fed. There is nothing wrong with the federal government issuing money so long as it abides by the Constitution and adheres to the principle of honesty. Both of these restraints forbid Congress from issuing paper money that is not 100% backed by gold or silver. If you are in doubt about the reasoning behind that statement, it would be a good idea to review chapter fifteen before continuing. It is true that, if Congress had the power to create as much money as it needs without the Federal Reserve System, interest would not have to be paid on the national debt; but the Fed holds only a small portion of the debt. The majority of those bonds are held by individuals and institutions in the private sector. Terminating interest payments would not hurt those big, bad bankers nearly as much as it would the millions of people who would lose their insurance policies, investments, and retirement plans. The Social
Credit scheme would wipe out the economy in one fell swoop. And we still would not have solved the deeper problem. The bankers would be cut out of the scam, but the politicians would remain. Congress would now be acting as its own central bank, the money supply would continue to expand, inflation would continue to roar, and the nation would continue to die. Besides, issuing money without gold or silver backing violates the Constitution.
The Global Economy is weak because the tool with which it is attempted to measure it is a fiat form of currency that is unsound and the central banks of the world, all of which with the exception of Cuba, North Korea and Iran, are owned by the Rothschild therefore
are incapable of of accomplishing its stated objectives.
• It is a cartel operating against the public interest.
• It is the supreme instrument of usury.
• It generates our most unfair tax.
• It encourages war.
• It destabilizes the economy.
• It is an instrument of totalitarianism.
The Federal Reserve Act of 1913, which granted to a cartel of bankers the right to legally, but unconstitutionally, counterfeit money, caused the transfer of 50% of the annual incomeof the US to 1% of the population and ownership of more than half to world to 7% of the world’s population. The Fed is not a government agency.
The act expires nest year 2013. The public is waiting to see if Congress actually dares to take action to abolish the cause of the problem by rescinding the act. or whether the financing of campaigns with campaign contribution by the 1% who rule America, have ended any meaning to elections and turned government over to this 1% minority
The General public is gradually becoming more aware of what’s going on, especially now that the Indefinite detention bill have been signed declaring the United States a war Zone. the law specifically says detention and rendition do not require the approval of the judge of a civilian court. Anyone in a military uniform can kidnap anyone and no protections for innocents against this exist in law. Cannot everyone now defend themselves anywhere within the declared war zone against attacks by co-opted military forces or hired mercenaries? Because Obama has just signed a piece of legislation which says individuals no longer have any civil rights except the ones they can enforce themselves. We cannot depend on our own military to defend us.
The Fed has already collapsed three time during its 100 year charter and a fourth collapse is imminent and inevitable. The decline of American prosperity; the increase in the size of government; the decrease in personal freedom; the growth of taxes; evidence that this is according to plan by an elite ruling group which hopes to merge the United States into world government on the basis of “equality” with less-developed nations; the environmentalist movement shown to be an outgrowth of that plan. Let’s take one last look around us. The future is molded by the present. Where we are now will affect where we are going to be.
MIRED IN DEBT
One of the most obvious characteristics of our present time is hat we are mired in debt. Federal deficits have grown steadily since 1950, and the rate of growth is in a vertical climb It took 198 years for the government to borrow the first trillion dollars. Then, in just twelve years—mostly under the Reagan Administration—it borrowed another three trillion. By the first year of the George W. Bush Administration, even before the terrorist attack on September 11,(details upon request) the federal debt ( had risen to over $5.8 trillion. By 2010, it had risen to $202 trillion when all liabilities are included. 1 It is difficult to comprehend such numbers. If you had a stack of $100 bills 40 inches high, you would be a millionaire. $202 trillion would rise over 127 thousand miles into space. By the time you read this, after the expenditures of subsequent CFR administrations, it will touch the Moon.
By 2006, gross interest payments on the national debt were running $406 billion per year. That consumed about 17% of all federal revenue. It now represents the government’s largest single expense; greater than defense; larger than the combined cost of the departments of Agriculture, Education, Energy, Housing and Urban Development, Interior, Justice, Labor, State, Transportation, and Veterans’ Affairs. These charges are not paid by the government; they are paid by American taxpayers. You provide the money through taxes and inflation. The cost currently is about $5,000 for each family of four. All families pay through inflation but not all pay taxes. The cost to each taxpaying family, therefore, is higher. On average, over $5,000 is extracted from your family each year, not to provide government services or even to pay off previous debt. Nothing is produced by it, not even roads or government buildings. No welfare or medical benefits come out of it. No salaries are paid by it. The nation’s standard of living is not raised by it. It does nothing except pay interest. Furthermore, the interest is compounded, which means, even if the government were to completely stop its deficit spending, the total debt would continue to grow as a result of interest on that portion which already exists. In 2006, interest on the national debt was already consuming 39% of all the revenue collected by personal income taxes.’ Amazing, isn’t it? Without interest on the national debt, we would save enough to cut our personal income taxes by a third and we could reduce corporate taxes as well. Unfortunately, under present policies and programs, that is not going to happen
Peter Palms
BALANCED-BUDGET AMENDMENT
A so-called balanced-budget amendment to the Constitution is not the answer either. In fact, it is an illusion and a fraud. Some of the biggest spenders in Congress aresupporters. They know that it is popular with the voters but would not cramp their spending style in the least. If they were not permitted to spend more than they receive in taxes, they would have a perfect excuse for raising taxes. It would be a way of punishing the voters for placing limits on them
1. “The Future of Price Stability in A Fiat Money World,” by Jerry L. Jordan, Durell
Journal of Money and Banking, August, 1989, p. 24.
The voters, on the other hand, would collapse under the burden of higher taxes and demand that their Congressmen circumvent the very amendment they previously supported. And that would be easy. Most versions of the balanced-budget amendment have an escape hatch built for just that purpose. Congress shall balance its budget “except in cases of emergency.” Who decides what constitutes an emergency? Congress, of course. In other words, Congress shall balance its budget except when it doesn’t want to. So what else is new? A serious amendment would have to tackle, not balancing the budget, but limiting the spending. If that were done, the budget would take care of itself. But even that would be a waste of time considering the present composition of Congress. Instead of generating political pressure for a Constitutional amendment, we would
be better off directing that same effort toward throwing the big spenders out of office. As long as the spenders are allowed to stay in there, they will find a way to get around any law—including the Constitution itself. Another flaw in most versions of the balanced-budget amendment is that it would not affect the off-budget expenditures called
entitlements. They now represent 52% of all federal outlays and are growing by 12% each year. A strategy that ignores that back-breaking load is not worth even considering.
Even if Congress could be forced to stop deficit spending, the balanced-budget amendment would not solve the problem of inflation or paying off the national debt. The Federal Reserve can now inflate our money supply by using literally any debt in the world. It does not have to come from Congress. Unless we zero in on the Fed itself, we will just be playing political games with no chance of winning. Every year, a few concerned Congressmen submit a bill to investigate or audit the Federal Reserve System. They are to be commended for their effort, but the process has been an exercise in futility. Their bills receive little or no publicity and never get out of committee for a vote. Even if they did receive serious attention, however, they could actually becounterproductive.
On the surface, it would appear that there is nothing wrong with a Congressional investigation or an audit, but what is there to investigate? We must assume the Fed is doing exactly what it says and is in total compliance with the law. A few minor improprieties probably would be discovered involving personal abuse of funds or insiderprofiteering, but that would be minor compared to the gigantic fraud that already is out in the open for all to see. The Federal Reserve is the world’s largest and most successful scam. Anyone who understands the nature of money can see that without
a team of investigators and auditors. The danger in a proposal to audit the Fed is that it would delay serious action for years while the audit is going on. It would give the false impression that Congress is doing something. It also would give the monetary technicians an opportunity to lay down a smoke screen of verbiage and confusing statistics. The public would expect that all the answers will be forthcoming from the investigation, but the very groups and combines that need to be investigated would be conducting, or at least confounding, the investigation. By the time fourteen volumes of testimony, charts, tables, and exhibits finally appear, the public would be intimidated and fatigued. We do not need a bill to audit the Fed. We need one to abolish it.
All that would be required to abolish the Federal Reserve System is an act of Congress consisting of one sentence: The Federal Reserve Act and all of its amendments are hereby rescinded. But that would wipe out our monetary system
overnight and create such havoc in the economy that it would play right into the hands of the globalists. They would use the resulting chaos as evidence that such a move was a mistake, and the American people then likely would welcome a rescue from the
IMF/World Bank. We would find ourselves back in the Pessimistic Scenario even though we had done the right thing. So I supplied great details over first what not to do, which can be repeated.
The Council on Foreign relations has approximately 4700 member. Annual dues $25,000, fully tax deductible. The CFR, which was initially dominated by J.P. Morgan and later by the Rockefellers, is the most powerful group in America today. It is even more powerful than the federal government, because almost all of the key positions in government are held by its members. In other words, it is the United States government. It is the the brain trust for implementing the Fabian plan in America it is important to know at this point that almost all of America’s leadership has come from this small group. That includes our presidents and their advisers, cabinet members, ambassadors, board members of the Federal Reserve System, directors of the largest banks and investment houses, presidents of universities, and heads of metropolitan newspapers, news services, and TV networks.
It is not an exaggeration to describe this group as the hidden government of the United States. CFR members have never been shy about calling for the weakening of America as a necessary step toward the greater good of building world government. One of the CFR founders was John Foster Dulles, who later was appointed Secretary-of-State by CFR
member Dwight Eisenhower. In 1939, Dulles said: Some dilution or leveling off of the sovereignty system as it prevails in the world today must take place … to the immediate
disadvantage of those nations which now possess the preponderance of power…. The establishment of a common money … would deprive our government of exclusive control over a national money…. The United States must be prepared to make sacrifices afterward in setting up a world politico-economic order which would level off inequalities of economic opportunity with respect to nations.”
CFR member Zbigniew Brzezinski was the National Security Adviser to CFR member Jimmy Carter. In 1970, Brzezinski wrote: … some international cooperation has already been achieved, but further progress will require greater American sacrifices. More intensive efforts to shape a new world monetary structure will have to be undertaken, with some consequent risk to the present relatively favorable American position.
At the Spring, 1983, Economic Summit in Williamsburg, Virginia, President Ronald Reagan declared: National economies need monetary coordination mechanisms,
and that is why an integrated world economy needs a common monetary standard…. But, no national currency will do—only a world currency will work. The CFR strategy for convergence of the world’s monetary systems was spelled out by Harvard Professor Richard N. Cooper, a CFR member who had been the Under Secretary of State for
Economic Affairs in the Carter Administration: “I suggest a radical alternative scheme for the next century: the creation of a common currency for all of the industrial democracies, with a common monetary policy and a joint Bank of Issue to determine that monetary policy”…. How can independent states accomplish that? They need to turn over the determination of monetary policy to a supranational body. [Emphasis in original]… It is highly doubtful whether the American public, to take just one example, could ever accept that countries with oppressive autocratic regimes should vote on the monetary policy that would affect monetary conditions in the United States…. For such a bold step to work at all, it presupposes a certain convergence of political values….
Phrases such as, monetary coordination mechanisms, modern world economic order, convergence of political values, or new world order are not very specific. To the average person, they sound pleasant and harmless. Yet, to the insiders of the dub, they are code phrases which have a specific meaning: the termination of national sovereignty and the creation of world government. CFR member, Richard Gardner—another adviser to President Carter—explains the meaning of these phrases and also calls for the Fabian strategy of deception and gradualism. In short, the “house of world order” will have to be built from the bottom up…. An end run around national sovereignty, eroding it piece by piece will accomplish much more than the old-fashioned frontal assault. As for the programmed decline of the American economy, CFR member Samuel Huntington argues that, if higher education is considered to be desirable for the general population, “a program is then necessary to lower the job expectations of those who receive a
college education.” 1 CFR member Paul Volcker, former Chairman of the Federal Reserve, says: “The standard of living of the average American has to decline…. I don’t think you can escape that.” By 1993, Volcker had become the U.S. Chairman of the Trilat-eral Commission. The TLC was created by David Rockefeller to
coordinate the building of The New World Order in accordance
with the Gardner strategy: “An end run around national sover-eignty, eroding it piece by piece.” The objective is to draw the
United States, Mexico, Canada, Japan, and Western Europe into
political and economic union. Under slogans such as free trade and
environmental protection, each nation is to surrender its sover-eignty “piece by piece” until a full-blown regional government emerges from the process. The new government will control each nation’s working conditions, wages, and taxes. Once that has happened, it will be a relatively simple step to merge the regionals into global government. That is the reality behind the so-called trade treaties within the European Union (EU), the North American Free Trade Agreement (NAFTA), the Asia-Pacific Economic Coop-eration agreement (APEC), and the General Agreement on Tariffs and Trade (GATT). They have little to do with trade. In the Trilateral Commission’s annual report for 1993, Volcker explains: Interdependence is driving our countries toward convergence in areas once considered fully within the domestic purview. Some of these areas involve government regulatory policy, such as environmental standards, the fair treatment of workers, and taxation.
THE NEED FOR CONVERGENCE
This sets the stage for understanding the next phase of the game which is unfolding as these words are being written. It is the inclusion of China and the former Soviet bloc into the Grand Design for global government. As with all the other countries in the world, the primary mechanism being used to accomplish this goal—at least in the field of economics—is the IMF /World Bank.’ The process is: (1) the transfer of money from the industrialized nations—which drags them down economically to a suitable common denominator—and (2) the acquisition of effective control over the political leaders of the recipient countries as they become dependent upon the money stream. The thing that is new and which sets this stage apart from previous developments is that the apparent crumbling of Communism has created an acceptable rationale for the industrialized nations to now allow their lifeblood to flow into the veins of their former enemies. It also creates the appearance of global, political “convergence,” a condition which
CFR theoretician, Richard Cooper, said was necessary before Americans would accept having their own destinies determined by
governments other than their own.
Peter Palms, you have obviously put a lot of thought into your words. But I think our problem is that no one has figured out how to communicate this in layman’s terms for Average Joe to make him care about how important it is. Ron Paul is so smart that many people just don’t have the brainpower to grasp his wisdom.
I say this as a history teacher who would love to figure out how to simplify fractional reserve banking. I found a link that covers Congressman McFadden’s remarks from 1932, and I like his colorful examples describing why fractional reserve banking is dangerous. We actually have the CHANCE now to get Audit the Fed passed in the House which is a testament to RP’s tenacity. I think communicating its value to Average Joe is the biggest hurdle.
http://home.hiwaay.net/~becraft/mcfadden.html
I’m not convinced: in history Gold has never protected from crisis if so there would have been no crisis under the roman empire.
The Roman Empire debased its currency just as the Fed does.
The Socialist Anti-Semitic Myth of the Creation of Money out
of Thin Air
http://iakal.wordpress.com/2014/07/04/the-socialist-anti-semitic-myth-of-the-creation-of-money-out-of-thin-air/
It is not a “myth” that banks create money out of thin air. See the article.
I have read your articles and I agree on many things with you. And of course banks create money. All I am saying is that they create it for governments and not for the jews as many people believe. Thank you very much for your reply
I didn’t say banks create money for Jews, so that point is entirely irrelevant here. Also, if you recognize that it is not “socialist”, not “anti-Semitic”, and not a “myth” to point out that banks create money out of thin air, then you might want to change that title.
It was not a correction. It was a contribution. And even though it is not only socialist governments that create money to finance their expenditures, it is with the socialist principle of redistribution that money creation is more compatible.
It is a very convinient way of taxation. And it is socilialists who believe in excessive taxation. Therefore it is with the socialist and not the libertarian ideology that it is compatible.
Moreover, I call it anti-Semitic, because most people believe that the Jews control the banking system and the world. So the “greedy banker” term, is translated to “Jewish banker” by most people.
This essay is more an advise to Jewish socialists, who should have known better. Milton Friedman was asking in what countries did Jews survived and prosper? He re was replying “in the free and not in the socialist countries” i.e. U.S.A. and Great Britain. Then he was asking which countries helped Israel, and he was replying that it was again the free countries and not the socialist ones. And he was surprised that the majority of Jews was inclined towards socialism.
To summarize, maybe the money creation principle is not a socialist principle, but it is mostly favorite by socialists. And maybe the term “greedy banker” does not mean “Jewish banker”, but that’ s how it is translated by most people. It is called propaganda. But it is not a correction to your article. I did not wright it for you. I wrote it mainly for Jewish people. I posted it here to get some publicity. Thank you for the hospitality.
https://www.youtube.com/watch?v=DuutIm1dWDg
I appreciate your wanting to dispel this view, but I doubt that very much.
Again, contrary to your post title, it is not a “myth” that banks create money out of thin air and to point out that they do is in no way “anti-Semitic”.
It is not anti-Semitic when you say that it is governmnets who are responsible for the money creation. As libertarians say. And you are libertarian.
It is anti-Semitic when it is said that “greedy private” bankers create money and control governments. As socialists say (both communists and nazis). You doubt that most people believe the Jews control the world and the banking system, but I believe you are wrong to doubt it.
You are an economist and educated man, and you should not think that your understanding of the economy is the average person’s understanding.
You keep missing my point. Again, contrary to what your title states, it is not a “myth” to say that banks create money out of thin air, and it is not in the least bit “anti-Semitic” to simply point this fact out. Perhaps you should correct this.
You are wrong to believe that I don’t
understand your point. Strictly speaking, you are right. But you have to admit
that the statement “creation of money out of thin air” is a very important
one. And as a result, one has to answer a very important question, which is
“for whom is this out of thin air money created for”?
Libertarians correctly claim that this money is
created for the government. I will remind you the title of a book which was
written by a Jewish economist, namely “what has government done to our money”?
This economist was Murray Rothbard.
Socialists on the other hand claim that this
money is created for private bankers. Socialists of Bolshevik origin call them
“greedy bankers”, and socialists of Nazi origin call them “Jewish bankers”. The
problem is that most people believe that the banking system is controlled by
the Jews. And therefore it does not make much difference whether you call them
“Jewish” or “greedy” bankers.
Therefore the statement “money creation out of thin
air” is not anti-Semitic and it is true, when used by libertarians, but it is false
and anti-Semitic when used by socialists. Because at the end of the day an
action is anti-Semitic if it increases anti-Semitism. And the socialist banking
propaganda is definitely increasing anti-Semitism. And I do not believe that it
does so unintentionally. Stalin was killing the Jews, and Hitler was killing
the Jews.
The only difference was that in Germany Jewish people had more economic power
than they had in Russia,
and their extermination was more profitable. Had it been the other way round,
it would have been the Russians who would have developed an industry for the
extermination of the Jews. To summarize, my judgment on whether something is
anti-Semitic or not is not based on grammar and syntax, but rather on whether
it increases anti-Semitism or not.
If we judge on a grammar
and syntax basis, I will have to agree with you that the “creation of money out
of thin air” thing, has nothing to do with anti-Semitism
What I don’t understand, is how is it possible that Jewish people don’t get it and fall for socialism? Who knows…..
Again with the invalid generalizations. Murray Rothbard wasn’t a socialist.
Murray Rothbard was the opposite of a socialist. If socialism is black, Rothbard was white