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America Is In Trouble -- BIG Trouble

Your Opinion/Questions Editorial Keywords: AMERICA
Published: 7/7/2001 Author: SM
Posted on 07/07/2001 18:35:20 PDT by spoosman

The primary reason America is in trouble is that the value of assets are secured with and denominated by fiat currency. Fiat currency needs no collateral as security. Fiat currency is backed only by faith. If you believe it is worth exchanging your valuable productivity for, than you will make that trade. If you do not believe it, you won’t. Fiat economies explode the size of government, foster socialism, destroy savings through guaranteed inflation, and leave equities at certain risk of deflation collapse when there is not enough productivity left to support it’s predecessor, inflation bloat.

In our present system, fiat currency is the product of a private banking cartel. The definition of a cartel is: a combination of independent commercial or industrial enterprises designed to limit competition or fix prices. That is all the euphemistically named federal reserve system is. Prior to December 24th, 1913, America had freely competing and independent banks, that were required by law (based upon the constitution -- after all, why have such a law?) to have a gold reserve to collateralize their currency.

What this meant was, as long as a bank had the gold in reserve, it could issue its own currency and serve its clients as the need for capital, savings and investment demanded. There was no central banking authority to report to. Banks were regulated by the states, and, to the best of my knowledge, there was no direct federal regulation. Inter-state banking was not allowed.

Private banking interests in New York, some having European ‘parents’, by the time 1907 rolled around, did not like the competition. ‘Lucky’ for them, there happened to be a banking ‘crisis’ just about that time, creating the pretext and setting the stage for banking ‘reform’. The leaders of the reform effort were the banking interests, who arrived at a juncture where they realized that some form of cooperation amongst their titanic selves was better than competing amongst themselves and not gaining control over all banking throughout the United States.

By December of 1913, they got what they wanted -- complete control over banking in the United States. What a sweet deal it was. Not only were they able to subjugate the once independent banks of America to their control, they were able to market their own currency, dictating that every bank, every man, every woman, and every child use it. To make the deal even sweeter, this cartel was empowered by the federal government to do what the states prohibited their banks from doing; issuing currency by fiat.

Banks that were previously disallowed from issuing credit beyond what their gold reserves could cover, are now suddenly put out of business by another banking power than can. That means they are not able to extend credit to their customers unless they first obtain the credit (in the form of the cartel’s fiat) from the new central banking authority, an ‘authority’ simply being a small group of politically and economically powerful individuals who are very ambitious, as well as equally thirsty, for earthly glory and power.

Now that the cartel has been granted an unfettered license to monopolize banking in America, now that they represent the ‘official’ currency of the United States, being a private banking concern, it just would not be fair for them to take upon themselves all that ‘risk’ (heaven forbid!) at running this vital enterprise for the (tears running down the cheek, flags waving, salutes all around, patriotic goose bumps rising) United States of America. “Don’t be silly!” the US government said to their new creation, “we would not think of such a thing. Whatever you need, we will get for you!” “Great,” said the cartel, “because in order for us to take on this risk, and since we are going to be issuing all the currency, we are going to need that gold.” By the time the year 1934 had ended, they got it -- they got it all.

Not a bad trade, really. The cartel prints a fancy piece of paper, and they get gold in exchange.

The government, of course, just loves this deal. Now the government can expand indefinitely without having to raise taxes. All Right!! Just call up the cartel and they’ll print up whatever you need. Oh, it is a loan of course. They structured it as a loan game as not to create the appearance of the government just printing money. That would just not do. “We are not just printing money,” the government reassures us. “We are getting a loan. By all means we will pay it back. This is a sound financial transaction.”

For a government, fiat money is fabulous, because it can be created right now, without any dependency on current supply of an underlying security (like gold), or any current level of productivity. Fiat is all about ‘buy now; pay later’. Government expansion based upon fiat bloat creates inflation. Inflation is the hidden tax. Inflation is taxation without representation. This has been going on for 88 years.

Since inflation-taxation without representation has been going on for 88 years, we should expect to see the prices of the fundamentals at sky high levels compared to what they were in 1913. They are. Fundamentals are housing, energy, transportation, food, clothing, medical, and education. More importantly, the percentage of income these gobble up under inflation-taxation without representation should be much higher as well, as represented by total cost of the fundamental necessity versus annual income. It is.

The tricky part in the fiat money game is that it takes productivity to support the bloat. If the balance of productivity and bloat are out of whack, than the value of the excess bloat collapses. Where does productivity come from? My answer is it starts with somebody thinking. An idea turns into an action that converts some part or parts of nature into a product that the producer believes he can trade for something of value, and thereby make a profit (hopefully). Often, that involves a considerable amount of time, hard work, and investment. Inflation-taxation without representation means productive people have to work much harder, and produce much more to obtain that profit they hope to obtain in their quest for life, liberty, and happiness.

What happens, though, when our productive people simply cannot keep up? They lose their ability to support the bloat. They lose their ability to afford it. If they cannot afford it, they do not buy it. And if enough productivity ceases for any reason, then lots and lots of affording and buying stops at the same time. When that happens, prices should fall until the productivity picks up again, and can manage the new bloat level. In a fiat system, especially one that has been bloating for 88 years, this can be very dangerous, and is why the cartel has been frantically bloating recently to avoid equity deflation. With no underlying security to the fiat, if the productive people can’t support the bloat anymore, a price decline could turn into a massive price collapse. If that were to happen, it might get people thinking “hey, there is something wrong with our economic system.”

The fiat cartel’s response to this is to pump even more bloat into the system, hoping that the lower cost of obtaining money will get those back broken producers back into action. What if the producers are already saddled with so much debt, that no matter how low the cost of borrowing, they simply cannot take on any more? Even if they could, is the difference of 3.75% to 4% really going to make that much of a difference? Not likely in the real world.

The word productive to some people is a good word. It means something positive and desirable. Yet when we get behind the word and take a closer look at what it takes to produce, we’ll discover that producing something of marketable value is often very difficult, to say the very least. In our Era of Chronic Irony, the bloated government that depends upon the producer has waged what is tantamount to a regulatory war with producers. There has never been a time in the past where the level of government regulation has been so high, and made it as difficult for a producer to create their product and bring it to the market. To say that the bloated government is out of touch is putting it mildly. The government just assumes that the productive people will always be there, and will somehow find a way to produce as the government inflicts even more regulatory strangulation on producers.

A classic illustration of this could be seen on a recent news show. The department of transportation has a new regulation of which auto companies must comply. There is an interview with the company. Clearly they are struggling to comply with the new regulation. It involves a massive R&D effort, When they finally get the prototype to do the government’s bidding, they will have to retool all their factories, at a staggering cost of billions of dollars, which will make the price of their cars even higher. Then we see an interview with a dumpy looking, pale, balding, old man, sitting behind a desk. He is the ‘official’ at the department of transportation. When asked about the difficulty this new regulation is causing for the auto companies, and the huge expense involved for compliance, the ‘official’ glibly replies, “they’ll figure it out, they always do; they are in the business to make a profit, and so they do what they have to do.”

In the meantime, our fat, balding bureaucrat is sucking up a salary of $120,000 a year, and he has a staff of 100 sucking up $60,000 a pop, and that is just in his corner of the building. Yet the government official is right. The productive people he sucks off of are always compliant. They do not know how to tell the government to blank off. They just hope they can pass the cost on to the buyer of their product, and the inflation-taxation without representation game in this mutation rolls on.

It is not that there will be any protest, mind you. It is just that the compliant sheep at some point will just get buried alive under the weight of a fiat bloatation system. The fiat system is the mother of the gigantic regulating monster of us all, and by it’s regulations adds an exponential component to the inflation-taxation without representation game. When the fiat cartel starts sniffing out that the productive people out there ( who by their back breaking work and effort are the ones who foot the fiat bill and enable the fiat masters and its evil step-sibling, government, to live high off the hog), then they rush into the market and flood the system with more money, money, however, that has to be borrowed in order for it to get into circulation. The cartel ‘parks’ the money by means of various intermediaries, and it usually ends up inside of certain index funds and futures hedge funds. But the money won’t stay there forever. If there are no takers for it (suckers) than the intermediaries pass the ‘money’ back to the cartel, because they do not want to assume the risk of holding it. That is what was behind the selling in NASDAQ and what was behind the after the rate-cut-fact selling in the DOW particularly, but in all markets as well since January of this year. There are no takers.

The cartel has come full circle since January. Actually, they have been moving in reverse. They are advertising low rates, but the lack of takers has resulted in contracting the recent injections of capital into the marketplace. Although the cheek turning Christian would not say anything, or dare rebel against the system, they do get burned out supporting the never ending escalation of inflation-taxation without representation. There is only so much weight a mule can carry. One more ounce will break their back. People are being crushed economically by inflation-taxation without representation. The only people that count are the productive ones. The beneficiaries of the fiat cartel bloat game is the cartel itself, and the government, a government that has glommed onto that easy money to enlarge itself to a grotesque size that never would have been possible without fiat money.

For those of us who are productive (that is a person who is not a government employee, or whose source of income is not exclusively government contracts) this is a bad deal. When we factor in the eco-fanaticism, and socialist mentality of nearly 60% of the population, and the millions of illegal aliens who come into this country to suck off producers, the net result is a historical squeeze on producers and productivity. If productivity starts to go in reverse, than the money bloat cannot be supported, and then by a slow process of attrition, our nation will discover that there are in excess of 60 million individuals whose lives were financed by the work of others. 60 million leaches, whose blood-sucking lifestyle is going to come to a crushing end. 60 million people, who are pathologically dependent on someone else to support them, incapable of producing anything themselves, will be clamoring to the government for a ‘solution’. The producers, squeezed out by the inflation-taxation without representation game, boxed out by eco-fascism, paralyzed by the overly aggressive dictates of government regulation, will not be there to bail out the blood-suckers.

All of this is going to lead to an unprecedented level of civil unrest, which will be followed by government crackdowns, martial law, and whatever else the government deems ‘necessary’ to keep the ‘peace’.

The surest sign of the end is all these ‘rate-cuts’ by the cartel at a time when the markets (DOW) is hanging around the all time highs, as the futures (SPs and NDs) are leading a resistant, and in deep denial DOW lower. The United States is headed for a very serious collapse, socially and economically, as a result of all the forces mentioned above. The depth and duration of the collapse is unknown, but there will be a collapse. That is the bottom line. If you are one of the smart ones who would say that the collapse is happening already, I am saying to you that you ain’t seen nothing yet.

To the rest of those in the denial class, I’ll let you argue amongst yourselves whose fault it was, and why it happened when the cold hand of reality shakes you out of your denial on the day you realize that the collapse did in fact happen. I am telling you right now that the cause of the collapse is an economic system based upon fiat, controlled by a private cartel of blood sucking thieves. The sooner we get rid of them, the sooner we can shrink the size of government, the sooner we can de-fang socialism, and the sooner we can restore America to its former glory. Unless that happens, America will continue to descend from one new level of trouble to another.

1 Posted on 07/07/2001 18:35:20 PDT by spoosman
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Can someone send me some Prozac? I feel a massive depression coming on.

2 Posted on 07/07/2001 18:43:53 PDT by Lizavetta
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"The sooner we get rid of them, the sooner we can shrink the size of government, the sooner we can de-fang socialism, and the sooner we can restore America to its former glory."

Sorry, much too late, my friend. The socialists have wormed their way into every aspect of our institutions. You couldn't blast them out with dynamite. The public is so uneducated, not one person in 100 understands fiat money. Anyway, isn't Greenspan going to save us with yet another rate cut? LOL.

3 Posted on 07/07/2001 18:47:42 PDT by mrgolden
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LOL! I guess I'm lucky. After reading this article all I need is two asprin.

4 Posted on 07/07/2001 18:48:07 PDT by Cagey
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All of this is going to lead to an unprecedented level of civil unrest, which will be followed by government crackdowns, martial law, and whatever else the government deems ‘necessary’ to keep the ‘peace’.

They better hurry up and get those face recognition systems in place.

5 Posted on 07/07/2001 19:01:00 PDT by Soren
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This article is absolutely true. There's a myriad of books out there about it. One is called "The Federal Reserve isn't Federal" (I think), and there's several written by other authors. Try these: Devvy Kidd, (Titles unknown), "None Dare Call it Conspiracy" by Gary Allen.

Out of print for years, the Gary Allen book is the BEST. It can often be found in used book stores for .50 cents to one dollar, or you can look for it at some online stores that sell used books. (Amazon) But then, larger corporations may not carry these. Gee I wonder why.

6 Posted on 07/07/2001 19:43:53 PDT by Goldi-Lox
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I just wish there was another "New World" to be shipped off to. Where oh where are all the habitable planets to colonize with groups of like minded individuals. We've been -stupidized- out of controlling our own government.

7 Posted on 07/07/2001 19:48:13 PDT by doubtfullyhopefull
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The Federal Reserve Note is worthless. It only has value because we are forced to use it by the banks/vatican/etc. This is the biggest scam and fraud foisted upon an unsuspecting populus EVER!

8 Posted on 07/07/2001 19:48:55 PDT by GREYGOST
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I read a piece like this and tears practically come to my eyes. Why? I remember why I started coming to Free Republic in the first place before it became a Dubya/Bush Dynasty/RNC cult site; intelligent and insightful posts.

You got it, spoosman, and you got it right. Hard times are acomin', and the surviving boomers will find "retirement" in a world shaped by the unintended consequences they themselves accelerated most unpleasant, if not downright lethal.

The 1930s were just a dress rehersal.

9 Posted on 07/07/2001 19:58:42 PDT by Anochka
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10 Posted on 07/07/2001 20:22:48 PDT by Nick Danger
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Oh God Nick, I am so with you on this. I read this post and had the same reaction. It's all bullcrap. I wasn't going to post a reply for fear of being flamed by those that will claim to know exactly what this fool is trying to say and have reams of data/facts to back it up. Well I don't have any facts to back up my bullcrap claim other than the head on my shoulders and the good sense not to believe at least 50% of what I read. Even if it is posted on Free Republic.

11 Posted on 07/07/2001 20:34:32 PDT by Brad
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In this case you are wrong. Just like those who laughed at Noah were wrong. It's coming. All the signs are there.

Now how does that go ...

Mark 4-23: If any man have ears to hear, let him hear.

To scoff at evidence of impending doom, is not something to do lightly. Better to be prepared, than to be surprised.

12 Posted on 07/07/2001 20:40:33 PDT by Goldi-Lox
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Wasn't this plotted on Jeckyl Is. off the coast of N. Carolina? Looks like they gave us a Hyde-ing.

13 Posted on 07/07/2001 20:44:15 PDT by rightofrush
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Whew! Voices of sanity at last. Thanks. I couldn't read the whole thing either. I was too afraid that somewhere in there it probably says the bankers are all . . . (whisper) . . . Jews.

P.S. I am, however, intrigued by considerations of the gold standard, Jack Kemp's or anyone's. I am no economist, but it does seem to make sense that a currency have some other basis or standard than the price of a pizza.

14 Posted on 07/07/2001 20:50:21 PDT by MrChips
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The primary reason America is in trouble is that the value of assets are secured with and denominated by fiat currency.

Are you aware that the above sentence is gibberish? I admit that I did not get much farther than that; if yours was something other than the usual 'fiat currency' tirade, then I suppose I missed something. But probably not.

What's so hard to understand? All the author is trying to say is that the system (money) we use is to assign value to goods and services is flawed.

When my parents came to Alaska in 1976, carpenters made $15 an hour. Last month I talked to a friend of mine who was a carpenter and he told me that he makes a little over...well...$15 an hour. Don't tell me nothing is wrong with the US economy.

15 Posted on 07/07/2001 20:54:34 PDT by Pissed Off Janitor
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I did try to read the whole thing but I must admit to bailing 2/3 of the way through. I just couldn't stand another misused "than". The word is then. Hey! Spoosman. Get a dictionary! It'll only cost you half a goat.= ;^D

16 Posted on 07/07/2001 20:55:21 PDT by Brad
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If you guys were really so smart, instead of stating how foolish this is, you might get some background on economics, and money. Fiat money is the most dangerous money ever conceived by the mind of man. If you don't understand it, you and the rest of you are fools to scoff at it.

Try starting your education in economics by looking up this subject: "fractional banking." When you find out that banks are only required by law to have one percent or less of their depositors balance on hand at any time, you'll see how scarey this situation can be. Think about it. If only two percent of the population decided to withdraw 60% of the money in the bank, the banks would collapse as insolvent. And that is only the TIP of the iceberg.

That's really FUNNY isn't it? Ha ha ha.

NO Wonder that they refer to us all out here as the "great unwashed." Should be the "great brainwashed."

17 Posted on 07/07/2001 20:58:05 PDT by Goldi-Lox
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It has been my experience that all these folks preaching that gold is the only way to go are perfectly willing to accept our "worthless" dollars in exchange for this precious commodity. Why is that?

18 Posted on 07/07/2001 20:59:28 PDT by SamAdams76
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Don't tell me nothing is wrong with the US economy.

I don't believe Nick was trying to say there's nothing wrong with our economy. It's not a perfect system. Heck, the perfect system would be for everyone to be productive and give and get everything fo free. But then, that's communism, isn't it? And that sucks too. I dunno. I'm tired. Flame me later. I'm going to bed.

19 Posted on 07/07/2001 20:59:36 PDT by Brad
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Spoosman may have spelling problems, but you have a comprehension problem.

20 Posted on 07/07/2001 20:59:41 PDT by Goldi-Lox
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What banks are required to have on hand and what they do have on hand are two different things. No, I am not an economist, but you do engage in something of an alarmist tirade. If you want to educate people you need to explain yourself with better clarity and logic.

21 Posted on 07/07/2001 21:03:38 PDT by MrChips
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The stupid government has either paid off France with most of our gold many years ago, after they collected all our gold certificates and cashed them in, or given it to the Federal Reserve Bankers. We still have a tiny room full at Ft. Knox for the tourists to see. For a while it was ILLEGAL to even own gold, that's how they got it away from the citizens.

Now, they've made gold personna non gratta in transactions, and labled folks who deal in gold or cash as suspected drug dealers, and confiscate any that they find.

22 Posted on 07/07/2001 21:03:42 PDT by Goldi-Lox
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I agree with your post, thanks.

But, I have been asking this question to a number of scholars and conservatives everywhere. Who or what exactly set the interest rates for the country before the Federal Reserve Board and Alan Greenspan? Nobody can answer my question. Was it the president, secretary of the treasury, etc. Who??

23 Posted on 07/07/2001 21:07:00 PDT by Coleus
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Spoosman may have spelling problems, but you have a comprehension problem.

I didn't say Spoosman had spelling problems. It's his usage of the word "than" that I got tired of.
And why are you being so insulting? Do you think that perhaps now that you've buttered me up, I'll be more receptive to your teachings on the finer points of macro-economics? I'll scoff at whomever I like. So just keep on ranting.

24 Posted on 07/07/2001 21:08:12 PDT by Brad
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And so are you going to tell us that while that there is this cartel of evil people, there are also many thousands of less than evil, brilliant, and highly knowledgeable people making a living in the financial world who have no clue?

25 Posted on 07/07/2001 21:11:39 PDT by MrChips
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The interest rate BEFORE the FEDERAL RESERVE, and for many hundreds of years, was 6% simple interest per year.

Why? Because that was the rate of discovery and recovery of new sources of gold and silver. People used gold and silver coins then, and they had to have the raw material to make the coins.

Haven't you read historical books taking place in historical England, where the kings men were visiting the homes of all the noblemen and confiscating and melting down the silverware? That was for wars, when they needed to buy additional arms, pay or feed the sailors/soldiers, etc.

26 Posted on 07/07/2001 21:23:56 PDT by Goldi-Lox
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You forgot the "Gold Bug Nut" alert in the title.

27 Posted on 07/07/2001 21:26:26 PDT by Moonman62
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Hey man, some of us have eaten from trash can catering stuff while the rest of you were not even thinking about anything but the buck, civil rights/wrongs, and de good old welfare check...we are tough...now the rest of you will have to learn how to find the good stuff...lol...I'll be there before ya'...Ya' get up, ya' go to work (if you can find some), ya' go to school, ya' eat egg salad sandwitch and peanutbutter.. tell you can't stand the smell of it......it was just a worthless piece of green paper all along. poof!

28 Posted on 07/07/2001 21:26:47 PDT by Back at Ya'
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29 Posted on 07/07/2001 21:28:45 PDT by Nick Danger
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fyi

30 Posted on 07/07/2001 21:28:56 PDT by LSJohn
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The interest rate BEFORE the FEDERAL RESERVE, and for many hundreds of years, was 6% simple interest per year.

Do you care to cite a source for that?

31 Posted on 07/07/2001 21:29:19 PDT by Moonman62
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Out of print for years, the Gary Allen book is the BEST. It can often be found in used book stores for .50 cents to one dollar, or you can look for it at some online stores that sell used books. (Amazon) But then, larger corporations may not carry these.

Sounds like a major case of deflation. Maybe he should have put something of value in the book.

Gee I wonder why.

Maybe because people have more sense than we give them credit for. You don't think it's some kind of conspiracy do you?

32 Posted on 07/07/2001 21:32:32 PDT by Moonman62
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Just answer these question: Who IS the Federal Reserve? Who are the people who own the stock?

Look it up. The Federal Reserve is a Privately Owned Corporation. Who owns it? Name names. It's SECRET. You won't be able to find out. Why? Why is it secret? If everything were ok-fine/no-problemo why not release the names of the owners? They fund the entire country...who are they?

I get severe indigestion when confronted with lies. Everything I have ever found out about the Federal Reserve is based on lies. Lies and secrets. We are the OWNERS of this country...we the people. The government is an institution WE put in place to do OUR business and a nation...a nation of people. Why are we being lied to? Why are these critically important facts being withheld from us?

Yes. I rant. I have been studying this since 1991. There is darn little about it I haven't read, and still darn little that can be found out. I don't like it when the "elites" make fools of us. I don't like it one bit. And I hate it when some of us "People" (sheeple) scoffs and acts like everything is just fine, just move on, nothing to see here.

This "fiat money" is the smoking gun that could bring down the entire country. And it worrys me a great deal. It is more serious than our problems with China, than our problems with the Middle East, and more serious than Energy and the Environment. It is the most serious issue facing our nation today.

Finally, just pretend...pretend that all your money is worthless. What will you do? What can you do? Think of what will happen to your life, your children. Food; shelter; clothing; education. Now what if that really happened? Problem is: it very likely could.

33 Posted on 07/07/2001 21:38:10 PDT by Goldi-Lox
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Well, if our money becomes worthless, then EVERYONE's money becomes worthless as well. Then we are trading goats and cigarettes, as Nick pointed out.

What I can see that would happen is that assets in securities would be zapped. Even then, I am not sure whether that would cause problems or not.

34 Posted on 07/07/2001 21:49:15 PDT by Miss Marple
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I have a couple of volumes of Statistical Abstracts of the United States. I had to do a paper on it a few years back, and found it in there then. Just check the 1800s, nearly any year. Those books are found readily in any library. I also had a few old history books, but not with me now (at another location where I do volunteer research work) that showed what the early colonists used for money. In Maryland, a common medium of exchange was Tobacco. (We grew it then and it was a big crop.) Many other places used whiskey. Coins were in short supply, since England imposed many regulations which kept the Colonies from actually acquiring coin, and barter was common. Spanish pieces of Eight were favored because of the ridges on the sides (like on our dimes/quarters edges). That way people knew they were getting the full weight of the coin, as it was common to slice off a little piece of gold/siver coins.

Colonies experimented with paper money then. They were called Continentals. When they became worthless, the phrase "Ain't worth a Continental" became equivalent to "worthless".

It was due to the Colonies experiences with the Continentals that made them so adamant to use only gold and silver as the currency. In our Constitution, you'll read that only Congress has the power to coin money, and only of gold, silver and precious metals.

Printing ain't coining money.

35 Posted on 07/07/2001 21:52:29 PDT by Goldi-Lox
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See post #25

36 Posted on 07/07/2001 21:53:27 PDT by MrChips
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Everything I have ever found out about the Federal Reserve is based on lies.

LOL! Freudian slip?

37 Posted on 07/07/2001 21:53:33 PDT by Moonman62
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excellent article. I've been wondering what needs to be done to get to a zero or near zero inflation rate. Didn't we used to have a zero or near-zero inflation rate? Even today at 3% it is pernicious.

38 Posted on 07/07/2001 21:55:05 PDT by Red Jones
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No... no slip. The FEDERAL Reserve is NOT Federal

Why use the word "FEDERAL"??? Because it appears to be a governmental agency. This is the kind of lie that I refer to. It is no more Federal than is Federal Express. Now you don't think that Federal Express is a Government agency do you? Or are you more gullable than I think?

The Federal Reserve is a private, secret, privately owned corporation. I don't have to assert that there is a cartel. The evidence is right there staring you in the face. Look it up.

And for those "educated" people in the stock markets...well, where did they go to school? Who taught them? Government and government funded schools... Why would they teach them the truth, if they've been lying about if for 88 years? Silly man.

39 Posted on 07/07/2001 22:02:41 PDT by Goldi-Lox
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Red...
There was no "inflation" until we began using PAPER money, and then the deflation began. Inflation is a misnomer. It is really a progressive devaluation of the dollar. By excusing it a an "out there" inflation, it points the attention away from the real issue...the dollars' constant loss of value over time. This always happens with fiat money.

40 Posted on 07/07/2001 22:05:34 PDT by Goldi-Lox
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Red...
There was no "inflation" until we began using PAPER money, and then the deflation began. Inflation is a misnomer. It is really a progressive devaluation of the dollar. By excusing it a an "out there" inflation, it points the attention away from the real issue...the dollars' constant loss of value over time. This always happens with fiat money.

41 Posted on 07/07/2001 22:08:56 PDT by Goldi-Lox
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I think I'm going to throw up....either it was to much information....or my brain and my stomach believe our economy is going to hell.

I think I better start hording gold (I just so happen to have one of those secret gold closets in my 1870's house)

42 Posted on 07/07/2001 22:13:27 PDT by ms.ohioan
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Hey Mr. Danger,

I didn't read the first post and I didn't read your post entirely because of the length, and it easy to get the gist of both, but I believe the first post is about right after scanning it, because I have studied the subject of money, and why I'm so poor in such a rich nation.

Conclusion is simple: Read the Protestant Bible and it will explain it all. We are commanded to use only gold and silver at a fixed rate in comparison to the average weight of a kernel of wheat, which gives you your labor and commodity standard.

Then you would increase your wealth by work and innovation, not robbery through high taxes, extorting loan interest, phony IOU's pay checks for yourselves while the public must make a profit, and others who have gained power through deception like insurance, force of arms, but not by consent of the governed.

Paper money? Give me a break! Just one more joke that is immoral, like so many other insults, to God and His Once Free People.

If I were as far in debt as the government they would be calling in on that debt and taking property, right? But then I do not have the ships, planes, and armies to say, "I don't think so."

Hey Mr. Danger, freedom use to mean not owing anyone, fair trials, and land to survive on, but what does it mean today, immorality?

Yes it's a long post, the subject takes time to prove true or false, but once you do take the time you will know what must be done; follow the Holy Scripture and forgive all debts every fifty years on the Jubilee, and use gold and silver like the Constitution says. There is a reason they call it a Jubilee!

But it might be hard, keeping all one hundred and fifty of God's laws, unlike those fair and easy to understand million plus laws of man, which not to know is no excuse when before a judge. But someone has got to stand up for common sense sometime, rather than just being dangerous.

43 Posted on 07/07/2001 22:13:35 PDT by Bob Todd
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That is not a reason to return to the days of bartering goats for sheep

Seems a lot more honest than taking people's money at gunpoint to fund entitlement.

44 Posted on 07/07/2001 22:14:44 PDT by nunya bidness
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Colonies experimented with paper money then. They were called Continentals. When they became worthless, the phrase "Ain't worth a Continental" became equivalent to "worthless".

The problem with the Continental was that it was easily counterfeited. The British did the evil deed, but it inadvertantly helped the colonies for awhile by adding liquidity.

As to who set interest rates before the Federal Reserve, I believe that the correct answer is individual banks, or maybe at the state level, since I believe they had to have a state charter. Of course, individual banks still set rates for consumers today. The rates that the Federal Reserve set are for loans between banks which didn't really exist before the Federal Reserve was created, although there were clearing houses that served a similar purpose, but not on a national scale.

45 Posted on 07/07/2001 22:16:13 PDT by Moonman62
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I am, however, intrigued by considerations of the gold standard

Well, I suppose I'm only opening myself up to massive flamage by posting this, but there are some basic problems with returning to a gold standard:

A) There isn't enough gold in the world to cover the dollars in circulation, let alone the yen, pounds sterling, deutsche marks, etc. By shifting to a gold standard, you would insure that a lot of people who have wealth in the form of currency would be simply unable to obtain an equivalent sum of gold. Hence, instant impoverishment for many;

B) Virtually all the gold that has ever been mined is still in existence, yet more is produced. In the long run, gold loses value, especially when adjusted for inflation. Just look at the performance of gold over the last fifteen years (okay, don't bother, I'll spoil the surprise - compared to other investments, it's been absolutely in the toilet, Monex commercials notwithstanding. You'll almost never go wrong shorting gold ;)).

The claim is often advanced that paper currency only has value as long as people believe it has value. Of course, it is usually ignored that the exact same thing is true of gold as well. There is nothing inherently valuable about gold, except that people want it. Just like paper currency. If people stop valuing gold, gold becomes worthless. And when you get right down to it, there's absolutely no difference between buying things with pieces of yellow metal versus buying things with pieces of green paper.

Hey, is it getting hot in here? ;)

46 Posted on 07/07/2001 22:18:29 PDT by general_re
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Interesting thread bump.

47 Posted on 07/07/2001 22:20:53 PDT by Ms. AntiFeminazi
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Alan Greenspan said on National Durring a Session of B.S. and told everyone..we are broke!

48 Posted on 07/07/2001 22:26:57 PDT by Back at Ya'
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Thank you. I'm too exhausted to bother.

49 Posted on 07/07/2001 22:28:07 PDT by Jack Black
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Thank you for confirming, prior to 1913+ period inflation was extremely low. Also, I believe that unemployment prior to 1967 was normally between 3.0 and 3.5% on average. Other than the 30's where it got to 35%, unemployment would sometimes spike down to 1.0% and sometimes up to 12%, but it was 80% of the time 2.5%-4.0% except for the 1930's. Interest rates, didn't they?, used to be lower than what we've had the last 30 years?

They tell us, 'lowest unemployment in 30 years', they don't tell you the last 30 years have been the worst in US history for unemployment. They say they're lowering interest rates, they don't tell you that interest rates and have been for a long time at historically high levels.

I'm not an economist, but tell me if I'm right or not.

50 Posted on 07/07/2001 22:28:10 PDT by Red Jones
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Try this experiment. Then tell me which you would rather have. Paper or gold as money.
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Take 2 $ 20.00 gold coins 1800 vintage. Discover what they would buy you at 1800 prices in goods.
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Take the face value of those coins (which is what they were used at in 1800). What will $40.00 buy you in todays market place in goods? Try to select comparable items.
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Ignore inflation. It didn't exist before paper.
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Now. How rich are you REALLY?

51 Posted on 07/07/2001 22:30:35 PDT by Goldi-Lox
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“they’ll figure it out, they always do; they are in the business to make a profit, and so they do what they have to do.”....that's right, Balding Old Man, they'll take out all US auto manufacturing and move it to China or South America and there will be MORE UNEMPLOYED AMERICANS who can't produce to keep your bloat going!

52 Posted on 07/07/2001 22:33:59 PDT by brat
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All money is fiat currency, be it dollars or gold.

Money is nothing more than a placeholder, a counter we use so that I don't have to provide an equal amount of service to you when I get a service from you. I can give you money, so that you can exchange it for service later on, even with someone other than me. This is true no matter what you use for money. So what is your point?

53 Posted on 07/07/2001 22:35:08 PDT by Charles H. (The_r0nin)
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Thanks. I always greatly appreciate any and all help in this department. But I have a few of comments. With regard to "(A) There isn't enough gold . . . ," doesn't that depend on how it is valued? Simply make a tiny chunk worth a whole lot. Presto! (O.K. so I am not an enonomist). Also, as for "(B)" yes, gold is in the toilet, but isn't that precisely because it is not used as a standard and because governments have been dumping it? And third, with regard to metal vs. paper, is there no value at all in using a physical commodity instead of paper? And, would it not be, as it has been, a worldwide standard with the same value everywhere, unlike combative paper currencies?

54 Posted on 07/07/2001 22:35:10 PDT by MrChips
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When my parents came to Alaska in 1976, carpenters made $15 an hour. Last month I talked to a friend of mine who was a carpenter and he told me that he makes a little over...well...$15 an hour. Don't tell me nothing is wrong with the US economy

That's called a surplus of carpenters. That's due to a shortage of other jobs, and that's a result of free trade. It also has to do with the fact that good quality power tools cost less and less, and more folks are more willing to DYI becaue they no longer have the bucks to hire a carpenter. With a negative balance of trade, (more foriegn goods coming in than our goods going out,) if we were on the gold standard we would have long ago been squeezed dry like juicing orange. That's essentially the process that destroyed the Roman Empire, we will run longer on paper. On Gold, we would have already died.

I suggest a serious look for another line of work somewhere. It probably won't ever get any better for carpenters who are now only getting 15 dollars an hour. Try getting a government job. It's only a fraction of the difficulty of carpentry, and no real skills are required.

55 Posted on 07/07/2001 22:39:12 PDT by Luella
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The house I live in was purchased in 1948 by my parents. They financed it at 6% because it was real property. That was the rate then for property. It was considered very bad to borrow any money from the bank. Bankers were considered evil. (Remember Little Nell and the Railroad tracks, and the unpaid Mortgage in all the children's cartoons?) So interest rates were low, because people didn't borrow unless they were destitute. Saving was considered a virtue. So, to get money to loan, banks had to pay 6% interest.

Interest rates began to go up with the use of credit cards. First were the store cards, then the gas cards. And finally the VISA and Master Cards.

The final blow came when laws were passed to allow FRACTIONAL banking. Once the funds required to be on hand in the bank were reduced dramatically, the banks could lend money they didn't have. In order to cover their depositors, they needed a fresh infusion of cash. Thus, credit cards interest began to climb rapidly. Until today, we have virtually nothing IN the bank, and the banks interest and bills are being paid with credit card interest income. As folks stop their spending sprees, the banks are becoming ... WOBBLY.

56 Posted on 07/07/2001 22:39:48 PDT by Goldi-Lox
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Very helpful. Thanks. But I would suggest that the fall of the Roman Empire was a little more complicated.

57 Posted on 07/07/2001 22:42:17 PDT by MrChips
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Okay, there are some problems here, but let's see if we can pin them down.

You want me to take $40.00 in gold coins, see what $40.00 would buy me in 1800, and then see what $40.00 will buy today. If I had gold coins, silver coins, wooden nickels, coins carved from rocks, whatever, and then we pay attention to ONLY the face value - what you wanted to do - then it matters not what the coins are made of, they've all lost value.

What I think you are getting at, though, is an attempt to demonstrate that an ounce of gold will buy roughly the same amount of stuff today as it would 200 years ago. With all due respect, that's simply wrong. Gold is no more immune to inflationary pressures than any other commodity.

As I said, all the gold that has ever been mined is still in circulation. And more is still being produced. We have more gold today than we did yesterday. And tomorrow, we'll have more still. Now, what happens to the value of a commodity as it becomes less and less rare? It declines, of course. As scarcity decreases, value declines in relative lockstep. It's why diamonds are worth comparatively more than corn - diamonds are relatively rare, whereas 99¢ will buy you a whole can of corn.

Why is gold somehow immune to the laws of supply and demand?

And if you have a response to my first objection - A - I'd be most interested in hearing it.

58 Posted on 07/07/2001 22:48:08 PDT by general_re
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But I would suggest that the fall of the Roman Empire was a little more complicated.

Fascinating. You obviously know more than Gibbons. Do go on.

59 Posted on 07/07/2001 22:52:34 PDT by Luella
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60 Posted on 07/07/2001 22:54:34 PDT by Nick Danger
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In our Constitution, you'll read that only Congress has the power to coin money, and only of gold, silver and precious metals.

No, you will not read that in the Constitution because it isn't there. The states are prohibited from issuing any currency but gold and silver. There is no corresponding restriction on the United States. It would have been easy for the framers to put it there, but they did not.

61 Posted on 07/07/2001 23:03:27 PDT by Nick Danger
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Hitlary! Now there's a real threat to freedom.

62 Posted on 07/07/2001 23:04:39 PDT by