The Mandrake Mechanism-(How the Fed Creates Money)

The Creature from Jekyll Island -Book Excerpt ^ | May 1998 | G. Edward Griffin

[antidisestablishment]

Thanks for the lesson in redundancy, but your textbook definition simply ignores current economic reality. The fact that we have a well-established fiat economy seems to escape hard currency ideologues.

How do you propose we convert today's fiat (debt) to tomorrow’s hard currency? Shall we declare a Jubilee as in the Old Testament or do you propose monetizing the debt with a hyper-inflated commodity?

Before you go into a tirade, let me assure you I have no bias against hard currency—in fact I support it heartily. It's just that the money changers own the temple and they are not likely to give it back without a struggle...

[Deuce]

How do you propose we convert today's fiat (debt) to tomorrow’s hard currency? Shall we declare a Jubilee as in the Old Testament or do you propose monetizing the debt with a hyper-inflated commodity?

This is a good question. Before I start to answer, I need to understand where you are coming from. You appear to believe that once established, fiat systems are hard to disestablish and your name may imply that you are opposed to any such efforts. You also state that the “money changers” are in control and are unlikely to yield such control. In this I completely agree. I am prepared to discuss either of the following two issues in some depth and would find either fruitful:

1. Given the current system, what reforms I would recommend, nibbling around the edges, to create a more honest monetary system; or

2. If the political will were there and the special interest resistance weren’t, what single massive reform could effectively replace the current system with an honest one to the betterment of the vast majority of citizens.

As I say, I will discuss either (with a slight preference for the latter). Let me know which is more likely to hold your interest.

[justshutupandtakeit]

Still pushing this crap?

There are dozens of mistakes, misunderstandings and outright falsehoods in this quotation. It would take weeks to correct them all and wouldn't stop you from posting the same article the next day.

[justshutupandtakeit]

I thought they were paid for mistakes or lies by the bushel.

[justshutupandtakeit]

Nonsense. There is not enough gold and silver in existence to support the world economic system's functioning. And NEVER HAS BEEN.

Apparently you have no knowledge of American monetary history or you would understand that without the creation of a National Bank our nation's economic development would have been greatly retarded.

Our greatest problem early on was NO specie. It was all drained away to Europe then after independence shortage of money led to tremendous experimentation with money mostly unsuccessful.

There has never been a gold standard in operation for more than a few years at a time. War breaks out and the GS is scrapped. EVERY time.

Most of those advocating metal money or metal backed money have little or no understanding of economics, finance or monetary theory. Wonder why?

[AdamSelene235]

There has never been a gold standard in operation for more than a few years at a time. War breaks out and the GS is scrapped. EVERY time.

Funny how that works. WWI for example would have been over in a matter of weeks if we had remained on a gold standard.

Similarly the North could not have continued its economic exploitation of the South without issuing funny money.

Its almost as if fiat is a tool used to get the masses to do things that are not in their interests.

[justshutupandtakeit]

No country has been on the gold standard for long. When they are recession is the inevitable result since there is insufficient metal supplies to provide for a currency which can expand with productivity and population growth.

Gold supplies shrink when in use as currency by about 2% per year just from wearing away. So old gold coins cannot be counted on to weigh what they are supposed to weigh.

Love of gold is just a supersition. It is not a viable currency as any real study of monetary history will show. No reputable thinker in this field wants to return to that mechanism.

If you prefer crackpots and know-nothings then nothing will help your understanding.

Socialism has nothing to do with the form of the money supply unless you change the definitions of words to fit your argument.

[AdamSelene235]

Most of those advocating metal money or metal backed money have little or no understanding of economics, finance or monetary theory. Wonder why?

I spoke with a Congressman the other evening who has served on the House Banking committee, had a excellent understanding of economics and endorses the GS.

PS - I'm not endorsing a GS. I'm simply opposed to government control of the money supply.

The moral hazard is too great.

[AdamSelene235]

Socialism has nothing to do with the form of the money supply unless you change the definitions of words to fit your argument.

But the opposition to the gold standard in any form -- from a growing number of welfare-state advocates -- was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale.

Alan Greenspan (another "crackpot and know-nothing" according to Justshutupandtakeit)

[justshutupandtakeit]

Don't insult ticks. When full they drop off and go away. Liberts never do they just keep posting superficial fantasies to ensnare the gullible.

[justshutupandtakeit]

Madison and Jefferson were complete numbskulls when it came to economics and finance. That is why Hamilton could make mincemeat out of them.

[justshutupandtakeit]

There were two Banks of the United States and you are equally wrong on the constitutionality of paper money. States were prohibited from issuing paper money not the federal government.

[justshutupandtakeit]

These ideologues are blind to distinctions.

Nazi=America=commie=GOP=RAT.

This is always the way they argue.

[justshutupandtakeit]

Even a cursuory review of history will show you that many banks issued currency prior to the Fed. Ever hear of "wildcat banking?"

[justshutupandtakeit]

The Bank of the United States was not a private bank but a private/public bank neither it nor the Fed was/is unconstitutional. Read Hamilton's essay on the Contitutionality of the National Bank to understand why.

Nor can it be said that the Fed is truly private. It's officers are appointed by Congress and its profits go to the Treasury. So it is in no way private.

We had national debt before the Fed and Hamilton again explains why.

[justshutupandtakeit]

Funny how the North could continue it "exploitation" of the south when the South voted for every tariff and controlled the Congress before the Civil War.

The South was exploited by the economic system of Slavery and the great planters who controlled all.

Where do I get the crystal ball that will show me that WWI would have ended quickly but for not being on the GS?

There is no fiat. It is a myth as Germany of 1922 showed.

[bvw]

Since in your incredible view, I have no validity, I'll just leave it at that. I don't bark back when a dog barks at me either.

[justshutupandtakeit]

Yeah, just ask those who lost everything in the 1820s due to wild cat banking about "moral hazard."

When one cannot make proper distinctions their arguments fall flat.

[justshutupandtakeit]

Use whatever excuse you want for an inability to respond.

[bvw]

I can respond, certainly. How should a person respond to your barking? Bow-wow! Is that to your likeing?