Posted on 04/20/2009 6:13:38 AM PDT by RWB Patriot
When Congress spends more money than it collects in taxes, it authorizes the Treasury Department to borrow from the public by selling Treasury bills, bonds, and notes. The Treasury offers these securities for sale at public auction, and they are bid for and purchased by banks, pension funds, trusts, corporations, individuals, and even foreign interests. These are widely considered to be the safest IOUs around. After all, they are guaranteed by the U.S. government. Inasmuch as Treasury securities are offered at auction, there is no chance they will not be purchased. The Treasury can offer as high a rate of interest as is necessary to attract buyers. Thus, investors, including individuals, pension funds, banks, and life insurance companies needing safety of principal are induced to sell other debt securities such as bonds, savings accounts, and certificates of deposit, and buy the government IOUs.
(Excerpt) Read more at blog.robertringer.com ...
Investing trillions of our children’s and grandchildren’s money in uncollectible debt, in order to maintain the illusion that the Democrats in Washington are fixing the problem.
This is an excellent article and should be read in it’s entirety by everyone on this forum. It explains why there is inflation in our future that is a direct result of the unprecedentedly high spending and borrowing by the Obama Administration. Get ready, inflation is coming.
Anyone who thinks the Fed isn't an agency of the Federal Government isn't playing with a full deck.
ML/NJ
Submitted for your consideration while standing by for FURIOUS FLAMES from the FRIENDS OF PAPER MONEY!
(I wrote this a number of years ago when things were NOT going well with the economy. Trust me: They WILL get ugly once again as man — or certain men — cannot resist playing God. We continue to violate the universal, immutable laws of economics at our great peril.)
History proves that EVERY house of cards eventually comes down. And the higher the card house, the harder the fall when it finally comes. And when it does, the more freedoms we will voluntarily surrender to “restore order.” It was the Founders’ concern about this historically valid problem which prompted their attempt — now ignored — to keep American “money” sound and honest.)
And I certainly recognize that NO system of commodity backed paper “money” is foolproof (and we now seem to be led by some of history’s biggest fools) how’s the current UNBACKED system working out for you?
Dick Bachert 1998
***************
2009 UPDATE:
I have noted with interest that I have lately been getting far, far fewer flames from the paper money lovers out there. And when, over 2 years ago, I began ranting about the incredibly stupid financial devices (derivatives, mortgage backed securities, etc.) being created to hoodwink the greater fools out there who were snapping up these things, I could count on about half the responders to tell me I was too simple-minded to understand these highly complicated financial “products.” I guess all those really bright financial guys are too busy now washing car windows at traffic lights to post here.
And I’d ask you to consider that when gold and silver come up in the news, the talking heads fall into the old, establishment fostered trap of measuring the precious metals in the rapidly failing paper when they SHOULD remark that it is the metals that are – within the narrow confines of fluctuations caused by their uses as industrial commodities – holding THEIR value and it is the paper that is INFLATING. (The classic example is that around 1900, one could buy a fine man’s suit for one ounce of gold. YOU STILL CAN!!!)
A fiat money system of the sort we are now painfully watching collapse creates a FALSE world of FALSE feelings of well-being and elevated lifestyles. During the expansion phase of such a system, those living under it spend or borrow more than they should, have more children than they can afford and, at the national level, come to believe they can afford to allow a score of millions of illegals to come here for educations, welfare payments, medical care, etc. They reject the immutable and universal economic realities and embrace what my old friend, the late Tupper Saussy, called “the IDEASPHERE.”
Now that the inevitable economic catastrophe is upon us, how much fun is it to watch the idiots in congress who triggered this thing scramble for cover by blaming everyone else? Not much!
The only folks who feel good now are the Hank Paulsons and Obamaites of the world who are in the process of conducting what may prove to be one of the largest raids on the REAL wealth of this nation – our labor and real property – ever witnessed.
And I’ll readily concede that while a precious metals backed money system ain’t perfect, ASK YOURSELF HOW THE FIAT MONEY SYSTEM NOW COLLAPSING ALL AROUND US HAS BEEN WORKING FOR YA’?
“Liberty lies in the hearts of men and women; if it dies there, no constitution, no law, no court can save it.” — Judge Learned Hand, 1944
DB 3/2009
* * * * * * * *
The Forgotten History of Money
This is the fascinating story of the efforts by certain of the Founding Fathers to prevent the economic distress we find all about us today. It is also a sad story on the basis that modern, “sophisticated” Americans have abandoned the corrective institutional mechanism that remains in place to this day. As you read it, think about a world with many fewer S&L, banking and political scandals and economic problems now considered the norm.
“Blood running in the streets. Mobs of rioters and demonstrators threatening banks and legislatures. Looting of shop and home. Strikes and unemployment. Trade and distribution paralyzed. Shortages of food. Bankruptcies everywhere. Court dockets overloaded. Kidnappings for heavy ransom. Sexual perversion, drunkenness, lawlessness rampant. The wheels of government are clogged, and we are descending into the vale of confusion and darkness. No day was ever more clouded than the present. We are fast verging on anarchy and confusion. (George Washington in a 1786 letter to James Madison, describing the effects of fiat paper money inflation then ravaging America in the pre Constitutional period.)
“The annihilation (of the paper money) was so complete that barber shops were papered in jest with the bills; and sailors, on returning from cruises, being paid off in bundles of this worthless money, had suits made of it, and with characteristic lightheartedness, turned their loss into frolic by parading through the streets in decayed finery which in its better days had passed for thousands of dollars.” (Contemporary writer, Breck, 1786)
“Paper money polluted the equity of our laws, turned them into engines of oppression, corrupted the justice of our public administration, destroyed the fortunes of thousands who had confidence in it, enervated the trade and husbandry, and the manufactures of our country, and went far to destroy the morality of out people.” (Peletiah Webster, 1786)
At the drafting of the U.S.Constitution, there were many “Friends of Paper Money” present. On August 16, 1787, when the discussion arose on Article 1, Section 8, the proposed wording was this: “The Legislature of the United States shall have the power to...coin money...and emit bills of credit of the United States.”
A hot argument ensued on the power to emit bills of credit, which is another way of saying “printing paper money”.
Here are the actual words James Madison wrote describing the debate in his diary: “Mr.G.Morris moved to strike out *and emit bills of credit.* If the United States had credit, such bills would be unnecessary; if they had not, unjust and useless.
MADISON: Will it not be sufficient to prohibit the making them a tender? This will remove the temptation to emit them with unjust views. And promissory notes in that shape may in some emergencies be best.
MORRIS: Striking out the words will leave room still for notes of a responsible minister which will do the good without the mischief. The monied interest will oppose the plan of the Government, if paper emissions be not prohibited.
COL.MASON: Though he had a mortal hatred to paper money, yet as he could not foresee all emergencies, we was unwilling to tie the hands of the Legislature [Legislature = Congress].
MR.MERCER:(A friend to paper money) It was impolitic...to excite the opposition of all those who were friends to paper money.
MR. ELSEWORTH thought this was a favorable moment to shut and bar the door against paper money. The mischiefs of the various experiments which had been made, were now fresh in the public mind and had excited the disgust of all the respectable part of America. By withholding the power from the new Government, more friends of influence would be gained to it than by almost anything else...Give the Government credit, and other will offer. The power may do harm, never good.
MR.WILSON: It will have a most salutary influence on the credit of the United States to remove the possibility of paper money. This expedient can never succeed whilst its mischiefs are remembered, and as long as it can be resorted to, it will be a bar to other resources.
MR.READ thought the words, if not struck out, would be as alarming as the mark of the Beast in Revelation.
MR.LANGDON had rather reject the whole plan than retain the three words *and emit bills*”.
The motion for striking out carried.
Historian George Bancroft later wrote: “James Madison left his testimony that *the pretext for a paper currency, and particularly for making the bills a tender, either for public or private debts, was cut off.* This is the interpretation of the clause, made at the time of its adoption by all the statesmen of that age, not open to dispute because too clear for argument, and never disputed so long as any one man who took part in framing the constitution remained alive.”
(Bancroft – founder of the U.S.Naval Academy at Annapolis among other accomplishments – wrote a book on this very subject entitled “A Plea for the Constitution of the United States: Wounded in the House of Its Guardians.” During WWII, FDR – a serious friend of paper money – ostensibly to supply the war effort, ordered the printing plates for many historical books smelted. Bancroft’s book was among them. A photocopy of one of the remaining originals can be found here
ROGER SHERMAN(1721 1793)should be a name familiar to every American. As familiar as Washington, Madison, Jefferson and Adams. He is the only man to have signed all 4 documents surrounding the formation of the United States of America: The Continental Association of 1774, The Declaration of Independence, The Articles of Confederation and The United States Constitution. He was a Judge of the Superior Court in New Haven, Connecticut, serving that office with distinction from 1766 until 1788. He served as Treasurer of Yale University from 1765 to 1776. He was renouned for his high intelligence and unswerving honesty and was described by John Adams “as honest as an angel and as
firm in the cause of American independence as Mount Atlas.” He served in the U.S.Senate from 1791 until his death in 1793.
Why is Roger Sherman*s name unfamiliar? HE WAS AN ENEMY OF PAPER MONEY!! In 1751, Roger Sherman and his brother William sued James Battle for paying a debt to their shop in New Milford, Connecticut, in depreciating paper currency. Over a period of 15 months, Battle had charged “divers wares and merchandizes” amounting to 129 pounds of what
Sherman assumed were pounds of Connecticut “Old Tenor”, a stable currency whose value were well preserved by taxation taking it out of circulation. But Battle assumed the debt was denominated in pounds of ever depreciating Rhode Island currency, tendered in same, and the Shermans took a beating in the payment and sued for recovery of loss by depreciation. The Shermans lost when Battle argued that he was merely following the accepted custom of the day. In 1752, Sherman wrote his book “A Caveat Against Injustice or An Inquiry into the Evils of a Fluctuating Medium of Exchange” indicting UNBACKED PAPER MONEY.
It was this experience that Sherman brought to the Constitutional Convention and prompted him to rise on August 28,1787 and propose new, more restrictive wording to Article 1,Section 10. The standing version under consideration was worded this way: “No state shall coin money; nor grant letters of marque and reprisal; nor enter into any Treaty, alliance, or confederation; nor grant any title of Nobility.” (From Madison’s Notes of the Convention) “Judge Sherman and Mr. Wilson moved to insert the words *coin money* the words *nor emit bills of credit, nor make any thing but gold and silver coin a tender in payment of debts* making these prohibitions absolute, instead of making the measures allowable with the consent of the Legislature of the U.S. Mr. Sherman thought this a FAVORABLE CRISIS FOR CRUSHING PAPER MONEY. If the consent of the Legislature could authorize emissions of it, the friends of paper money would make every exertion to get into the Legislature in order to license it.” Mr. Sherman*s and Mr. Wilson*s motion was quickly agreed to and became the supreme law of the land.
Some additional quotations to ponder:
“All the perplexities, confusion and distress in America arise not from defects in the constitution or confederation, nor from a want of honor or virtue so much as from downright ignorance of the nature of coin, credit and circulation” (John Adams in a letter to Thomas Jefferson, 1787)
“I deny the power of the general government to making paper money, or anything else, a legal tender.” (Thomas Jefferson)
“You have been doubtless been informed, from time to time, of the happy progress of our affairs. The principal difficulties seem in great measure to have been surmounted. Our revenues have been considerably
more productive than it was imagined they would be. I mention this to show the spirit of enterprise that prevails.” (George Washington in a letter to the Marquis de LaFayette, June 3, 1790 AFTER the United States Constitution prohibited unbacked paper money at Article 1, Section 10)
“Since the federal constitution has removed all danger of our having a paper tender, our trade is advanced fifty percent. Our monied people can trust their cash abroad, and have brought their coin into circulation.” (December 16, 1789 edition of The Pennsylvania
Gazette)
“Our country, my dear sir, is fast progressing in its political importance and social happiness.” (George Washington in a letter to the Marquis de LaFayette, March 19, 1791)
“The United States enjoys a sense of prosperity and tranquility under the new government that could hardly have been hoped for.” (George Washington in a letter to Catherine Macaulay Graham, July 19,1791)
“Tranquility reigns among the people with that disposition towards the general government which is likely to preserve it. Our public credit stands on that high ground which three years ago would have been
considered as a species of madness to have foretold.” (George Washington in a letter to David Humphreys, July 20, 1791)
“It is apparent from the whole context of the Constitution as well as the times which gave birth to it, that it was the purpose of the Convention to establish a currency consisting of the precious metals.
These were adopted by a permanent rule excluding the use of a perishable medium of exchange, such as certain agricultural commodities recognized by the statutes of some States as tender for debts, or the still more pernicious expedient of PAPER CURRENCY.” (Andrew Jackson, 8th Annual Message to Congress, December 5, 1836)
DESPITE WHAT YOU WERE TAUGHT IN SCHOOL, THE HISTORICAL RECORD IS CRYSTAL CLEAR: AMERICA WAS TO HAVE BEEN SPARED THE DESTRUCTIVE EFFECTS OF AN UNBACKED PAPER MONEY SYSTEM. MOST OF THE PROBLEMS WE FACE TODAY CAN BE TRACED TO WHAT ANDREW JACKSON CALLED “THE PERNICIOUS EXPEDIENT OF PAPER MONEY”.
HISTORY TEACHES THAT AN “ARTIFICIAL” MONEY CREATES AN “ARTIFICIAL” WORLD WHERE THE PRICE FOR SOME ITEM...EVEN OUR MOST POPULAR WELFARE “PROGRAM”...CAN BE DEFERRED TO FUTURE GENERATIONS (OUR $11 TRILLION
NATIONAL DEBT) OR PAID WITH A “MONEY” CREATED OUT OF THIN AIR WHICH ROBS THE VALUE FROM THE MONEY WE MIGHT BE UNFORTUNATE ENOUGH TO HAVE IN OUR POCKETS AT THAT MOMENT (INFLATION). AND ONE THING YOU MUST REMEMBER ABOUT INFLATION IS THAT IT IS NOT AN “EQUAL OPPORTUNITY” DESTROYER: THOSE FIRST IN LINE TO GET THEIR HANDS ON THE NEW MONEY ROLLING OFF THE PRESSES (THE MODERN FRIENDS OF PAPER MONEY) HAVE A CHANCE TO SPEND IT BEFORE IT LOSES ITS VALUE. THE LITTLE PEOPLE (THAT’S US, FOLKS!) FARTHEST DOWN THE LINE ARE THE ONES WHO FEEL THE FULLEST EFFECTS OF THIS DESTRUCTIVE PROCESS.
The Fed is a level above the Federal Government. Everything they do is in their best interest, not in the Federal government’s and not in the American people’s best interest. They could keep every penny that the government creates through the treasury from ever seeing the light of day if they wanted. Their ability to control the money in the economy trumps the Federal government every time. It is more like the Fed allows the government to spend money, they are the wizard behind the make believe money that we operate on.
When the organization committee shall have established Federal reserve districts as provided in section two of this Act, a certificate shall be filed with the Comptroller of the Currency showing the geographical limits of such districts and the Federal reserve city designated in each of such districts. The Comptroller of the Currency shall thereupon cause to be forwarded to each national bank located in each district, and to such other banks declared to be eligible by the organization committee which may apply therefor, an application blank in form to be approved by the organization committee, which blank shall contain a resolution to be adopted by the board of directors of each bank executing such application, authorizing a subscription to the capital stock of the Federal reserve bank organizing in that district in accordance with the provisions of this Act.
http://www.federalreserve.gov/aboutthefed/section4.htm
Do you know what a stock subscription agreement is?
ML/NJ
BTTT
I just received the book “The Creature from Jekyll Island” (mentioned by a FReeper whose name I do not recall) and read the first chapter yesterday. Scared the heck out of me.
The FOMC is part of the Federal government.
The Federal Reserve Board is part of the Federal government.
The Banks of the Federal Reserve, the ones with all the money, the one in New York with that big vault full of gold. They are owned by shareholders and the government ain’t got no shares.
Ignorance abounds.
I assume you mean "the member banks" when you write "the banks". I wonder when and where you think they acquired this gold. As recently as 35 years ago private ownership of gold was illegal in this country.
I, Franklin D. Roosevelt, President of the United States of America, do declare that said national emergency still continues to exist and pursuant to said section to do hereby prohibit the hoarding gold coin, gold bullion, and gold certificates within the continental United States by individuals, partnerships, associations and corporations and hereby prescribe the following regulations for carrying out the purposes of the order:ML/NJSection 5. Member banks shall deliver all gold coin, gold bullion, and gold certificates owned or received by them (other than as exempted under the provisions of Section 2) to the Federal reserve banks of there respective districts and receive credit or payment thereof.http://www.the-privateer.com/1933-gold-confiscation.html
The Federal Reserve Corporation of Puerto Rico is a PRIVATELY HELD Corporation, It is not in any way a Government Entity. The President can appoint the Fed Chairman and thats all, All properties owned by the Federal Reserve Corporation of Puerto Rico pays Property Taxes.
I read the creature from jekyl island when it came out
A case against the Fed by Murray Rothbard is an easy read for those wishing to start.
I'm not a fan of the Fed. I think it is illegal, unconstitutional, wrong; but that doesn't mean I think it is part of any international banking cabal. It is an arm of the government of the United States of America.
ML/NJ
It is not, you must have the courage to believe the truth, The Federal Government cannot print money they can only “COIN MONEY”
ML/NJ
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