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H.R. 2755 to Abolish the Federal Reserve
http://www.picassodreams.com/picasso_dreams/2007/06/hr_2755_to_abol.html ^ | June 17, 2007

Posted on 06/18/2007 12:02:56 AM PDT by keyd

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To: Toddsterpatriot
Not enough gold and silver. Sorry.

That's exactly the point. The notes in circulation have lost most of their value. Every dollar the Fed creates causes those already in circulation to be devalued.

61 posted on 06/20/2007 7:52:00 AM PDT by 4CJ (Annoy a liberal, honour Christians and our gallant Confederate dead)
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To: 4CJ
That's exactly the point. The notes in circulation have lost most of their value.

The point is the economy (and the need for money) has grown much faster than the supply of silver and gold has grown. Even when we were on a gold standard the shortage of gold was constantly causing panics, recessions and depressions.

Every dollar the Fed creates causes those already in circulation to be devalued.

Wrong. And in case you didn't know, the Fed only creates a small portion of the new money supply every year.

62 posted on 06/20/2007 8:03:13 AM PDT by Toddsterpatriot (Why are protectionists (and goldbugs) so dumb?)
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To: Toddsterpatriot
These two exerpts from your post contradict each other: "The money printed by the Fed does not incur an obligation by the taxpayers of the United States." "The Fed doesn't give the new money to the government to spend. Did you write this silliness? Or did Ron Paul?" So Fed notes do not impose an obligation on the taxpayers, BUT, the Fed does not GIVE them to the government. Doesn't that mean the government has to PAY for them? Isn't the government funded by taxpayers? Make no mistake sir, EVERY dollar that the Fed deposits in the government's checking account is a loan, repayable in full, @ interest, by the American taxpayer. The fact that a privately owned bank has the power to create our medium of exchange and sell it back to us is the basis for any learned man's opposition to the Fed. Bankers will defend the system using the argument that we must have a profit motive driving the process of money creation. Thirst for profits teaches bankers to constantly expand the supply of credit, supposedly fueling economic growth. In reality what is happening is that the entirety of human civilization is going deeper and deeper into debt. "...bankers own the earth..." As long as money is created as debt, this statement will be true.
63 posted on 06/20/2007 9:29:12 AM PDT by iconoclast63
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To: iconoclast63
So Fed notes do not impose an obligation on the taxpayers,

Correct. The taxpayers do not owe me anything for the $20 bill in my pocket.

BUT, the Fed does not GIVE them to the government.

Correct.

Doesn't that mean the government has to PAY for them?

Yes, when the government wants to buy some FRNs, they have to pay for them. Kinda like you pay for FRNs by debiting your bank account at the ATM.

Isn't the government funded by taxpayers? Make no mistake sir, EVERY dollar that the Fed deposits in the government's checking account is a loan, repayable in full,

Yes, every dollar the government borrows must be repaid.

The fact that a privately owned bank has the power to create our medium of exchange and sell it back to us is the basis for any learned man's opposition to the Fed.

If you want to buy something, you have to pay for it. So what?

64 posted on 06/20/2007 9:35:20 AM PDT by Toddsterpatriot (Why are protectionists (and goldbugs) so dumb?)
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To: 4CJ
Every dollar the Fed creates causes those already in circulation to be devalued.

If that were true then every time the money supply increased we'd have inflation.  It doesn't.  In fact, if the increase in wealth is faster than the increase in in money, we can have deflation.  Inflation only happens when the money supply grows faster than wealth.

65 posted on 06/20/2007 10:07:24 AM PDT by expat_panama
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To: Toddsterpatriot
In response to: The fact that a privately owned bank has the power to create our medium of exchange and sell it back to us is the basis for any learned man's opposition to the Fed. You said: If you want to buy something, you have to pay for it. So what? The constiution says that congress shall have the power to "coin money, and regulate the value thereof". That means CONGRESS, not a private bank. If our government needs to buy something it has several choices to raise the funds to pay for it. It may tax us, which is unpopular and can end political careers, it may borrow it, or it may print the money and spend it into ciruclation, which is what Lincoln did to pay for the Civil War. This last option is so far beyond the understanding of most men, and on it's face so controversial because of the almost RABID opposition by the rich and powerful banking interest that make up the ruling class of our country. If you are a billionaire banker, in a position to influence the operation of government, does it not make sense that you will spare no effort to prevent government from printing it's own money? Of course you will. You would want to maintain the status quo, no matter how unjust, for as long as you possibly could. In todays world our government is limited to two options, taxing and borrowing. Deficit spending fuels more borrowing. Wars fuel more borrowing. Remove the profit motive from loaning governments money and you would quickly see the size and scope of governments stabilize and eventually start to shrink. Is that not the goal of every patriot Todd?
66 posted on 06/20/2007 10:50:08 AM PDT by iconoclast63
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To: Toddsterpatriot

The S&L crisis is not much different from the bank failures that happened in the late 70’s and early 80’s. Banks, even though they can CREATE money, can also become over-extended. When, like the case of Continental Illinois in 1980 (I think), a bank gets over aggressive in it’s lending policies, especially when the borrowers are unstable foreign governments, the banks reserves can become depleted very quickly. It’s called a bank run. What happens is that news travels telling of a major default in some outstanding obligation and large depositors get nervous and remove their deposits. In the modern world these large depositors are often instutional investors like insurance companies or hedge funds. With the combination of a massive loan default and a major drawn down of reserves, banks CAN, but are rarely permitted to fail.

In a world where banks were required to live up to a 100% reserve requirement, these catastrophies would be impossible. It is PRECISELY the business models that banks operate on, using a small fraction of assets to underwrite exponentially larger loan portfolios that allow this to happen.


67 posted on 06/20/2007 11:34:52 AM PDT by iconoclast63
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To: iconoclast63
If our government needs to buy something it has several choices to raise the funds to pay for it. It may tax us, which is unpopular and can end political careers, it may borrow it, or it may print the money and spend it into ciruclation, which is what Lincoln did to pay for the Civil War.

So what? What does that have to do with your gross misunderstanding of money supply?

Remove the profit motive from loaning governments money and you would quickly see the size and scope of governments stabilize and eventually start to shrink.

Yes, if people didn't earn interest when they lent money to government, they'd stop lending to government. Has nothing to do with the Federal reserve or money supply. Try again?

68 posted on 06/20/2007 11:48:05 AM PDT by Toddsterpatriot (Why are protectionists (and goldbugs) so dumb?)
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To: iconoclast63
Banks, even though they can CREATE money, can also become over-extended.

Explain how they create money. If I deposit $1000 in the bank, how much money can they loan out based strictly on my deposit?

69 posted on 06/20/2007 11:49:42 AM PDT by Toddsterpatriot (Why are protectionists (and goldbugs) so dumb?)
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To: Toddsterpatriot
Yes, if people didn't earn interest when they lent money to government, they'd stop lending to government. Has nothing to do with the Federal reserve or money supply. Try again? How can you say this has nothing to do with the money supply??? It is PRECISELY the money created by the Fed to fund the federal deficits that serves as the foundation of the ENTIRE money supply. Tell me Todd, where do you think money comes from? How can you disconnect it from government debt? You are obviously fine with the arrangement that, while the government CLEARLY has the power to create it's own money, debt free, and use it to pay for the costs of government, instead we should continue BORROWING that money from the privately owned Fed and feeding the banking system with unlimited profits. Should I give you a reading list? What are you defending?
70 posted on 06/20/2007 11:57:01 AM PDT by iconoclast63
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To: R.W.Ratikal
Fed/Res is a “quasi” governmental institution

It is a state institution, like all institutions including government.

71 posted on 06/20/2007 11:59:56 AM PDT by RightWhale (Repeal the Treaty)
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To: Toddsterpatriot

Ok, now this is a good question. Knowing bank owners personally I will give you the explanation they have given to me. Let’s say you deposit $1000.00 in your bank. The bank will set aside a reserve, say for the purposes of this example, 20%. So the bank then sets aside $200.00. That leaves $800.00 available for them to loan to the next loan applicant, which they promptly do. Now, you deposited $1000.00 and they immediately loaned $800.00 of it. The fact that you can come back to the bank the very next day and withdraw your entire $1000.00 means that the bank, based on your deposit, CREATED a NEW deposit, into the checking account of the borrower for $800.00, even though you still maintained total access to your original deposit.

Then they create a NEW loan, using the newly created deposit they LOANED the borrower in the above example, for 80% of the new deposit or $640.00. This cycle can continue, I think, 28 times. Meanwhile, all of the deposits that made up the basis for these loans could have been withdrawn by the checking account holders. Ninety five percent of the total money supply is created this way.


72 posted on 06/20/2007 12:09:44 PM PDT by iconoclast63
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To: iconoclast63
It is PRECISELY the money created by the Fed to fund the federal deficits that serves as the foundation of the ENTIRE money supply.

The Fed doesn't "create" money to finance the deficit. The deficit is financed by sales of Treasury securities. How do you remove profit from those sales?

while the government CLEARLY has the power to create it's own money, debt free, and use it to pay for the costs of government

That's what you recommend? You like inflation?

instead we should continue BORROWING that money from the privately owned Fed

The government borrows from anyone who buys a Treasury bond. And pays interest. You think that's bad? Oh, right, you'd prefer they just print money to pay the bills. LOL!

and feeding the banking system with unlimited profits.

Unlimited profits? How much? Who earns (steals?) it?

Should I give you a reading list?

Goldbug reading? No thanks.

What are you defending?

I'm defending against goldbug ignorance.

73 posted on 06/20/2007 12:11:00 PM PDT by Toddsterpatriot (Why are protectionists (and goldbugs) so dumb?)
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To: RightWhale

Quasi? Hmmm.... interesting word. Of course if you ask the Fed, specifically the Federal Reserve Bank of New York, which IS the central bank for the United States, their public relations department will admit that they are a privately owned institution and will even forward you a list of their stock holders. All of which are national banks chartered in NY state. It is the owners of these NY banks that are the true owners of the Fed.

The 12 regional Fed banks are actually private Delaware corporations.

The Federal Reserve BOARD is a quasi government agency, but it is NOT an actual government agency. It’s employees are not paid with government checks and it does NOT enjoy the immunity from law suits that agencies of the federal government enjoy.

If the Fed were, in fact, just another branch of government, then why would our government borrow trillions from itself and pay hundreds of billions per year in interest payments?


74 posted on 06/20/2007 12:15:28 PM PDT by iconoclast63
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To: iconoclast63

It’s not a branch of the government. It’s an institution of the state. The government is an instutution of the state, constitutional in this case, as is the Press. The Fed sort of manages something, which makes it sort of like government in that respect. That is why it is quasi. Quasi means sort of like.


75 posted on 06/20/2007 12:19:47 PM PDT by RightWhale (Repeal the Treaty)
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To: iconoclast63
Let’s say you deposit $1000.00 in your bank. The bank will set aside a reserve, say for the purposes of this example, 20%. So the bank then sets aside $200.00. That leaves $800.00 available for them to loan to the next loan applicant, which they promptly do.

Loaning less than their deposits is not "CREATING" money. Loaning more than their deposits would be. Glad you figured that out.

76 posted on 06/20/2007 12:20:04 PM PDT by Toddsterpatriot (Why are protectionists (and goldbugs) so dumb?)
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To: Toddsterpatriot

You assume, incorrectly, that I support the gold standard.

The Fed does CREATE the money to finance the federal debt. The Treasury securities you speak of are sold FIRST to the Fed, then the Fed has the power to auction them off to selected buyers. The bulk of these securities are now, and have always been held by the Fed itself. Foreign holders of US debt make up less than 25% of the total $9 trillion.

When the Fed liquidates these securities, through Open Market Operations at the NY Fed, what it is doing is regulating the money supply. When investors buy federal debt the money from the sale disappears and the total money supply is reduced by a corresponding amount. When the Fed buys them from Congress the money supply is increased by a corresponding amount.


77 posted on 06/20/2007 12:21:44 PM PDT by iconoclast63
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To: Toddsterpatriot

Todd.... please ... using my example....explain where the bank got the $800.00 it loaned out of the $1000.00 deposit that you withdrew the very next day?

Hmmm?


78 posted on 06/20/2007 12:25:08 PM PDT by iconoclast63
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To: iconoclast63
The fact that you can come back to the bank the very next day and withdraw your entire $1000.00 means that the bank, based on your deposit, CREATED a NEW deposit, into the checking account of the borrower for $800.00, even though you still maintained total access to your original deposit.

So when the $1000 is withdrawn, where does the bank get the cash? Do they print it?

When $1000 is deposited and the bank goes through this "process" 28 times, how much "money" exists? Is it more than $1000? If so, where did it come from?

79 posted on 06/20/2007 12:25:43 PM PDT by Fan of Fiat
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To: iconoclast63
The Fed does CREATE the money to finance the federal debt.

Wrong.

The Treasury securities you speak of are sold FIRST to the Fed, then the Fed has the power to auction them off to selected buyers.

Wrong again.

The bulk of these securities are now, and have always been held by the Fed itself.

Wrong, by a wide margin.

Foreign holders of US debt make up less than 25% of the total $9 trillion.

And you think the Federal Reserve holds more than foreigners? I'd like to see your source.

When the Fed liquidates these securities, through Open Market Operations at the NY Fed, what it is doing is regulating the money supply.

Yes, the FOMC regulates the money supply.

When investors buy federal debt the money from the sale disappears and the total money supply is reduced by a corresponding amount.

Yes, when the Fed sells some of their bonds, it reduces the money supply.

When the Fed buys them from Congress the money supply is increased by a corresponding amount.

Wrong. The Fed Open Market Committee buys in the "OPEN MARKET", not from Congress. You know a little which only magnifies your misunderstanding of the big picture.

80 posted on 06/20/2007 12:28:23 PM PDT by Toddsterpatriot (Why are protectionists (and goldbugs) so dumb?)
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