Posted on 09/22/2005 5:35:28 AM PDT by Robert Drobot
As some may know America lost any and all control over the banking system in 1913 at a meeting on Jeckyl Island. See “Secrets of the Federal Reserve” by Eustace Mullins.
Accordingly to the Constitution,
Section. 10.
Clause 1: No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
But we create money by fiat,
Fractional Currency as Fiat Currency
In order to have a single unit of account and standard of legal tender, for payments large and small, it is necessary to fix the legal tender value of each denomination of coin. However, coins made of different metals, such as gold, silver and bronze (copper alloy), have an economic value that depends on the market prices of the various metals in terms of each other. In order to fix the legal tender values of coins of different metals, under a gold standard the silver and bronze coins are deliberately over-valued as legal tender, but also limited in the quantity that is legal tender for any one payment. For example the English silver and bronze currency were overvalued by about 10% and 300% respectively as legal tender compared to the gold currency, but were only legal tender for 40 shillings and one shilling respectively. For this reason the over-valued fractional currency was referred to as token currency, because its economic value was less than its legal tender value. Debtors, however, had to accept it at legal tender value by government fiat (albeit in limited quantities).
Central Bank Notes as Fiat Currency
With the establishment of government owned or sponsored central banks, many governments made central bank notes unlimited legal tender, in addition to gold (or silver) coin, by government fiat. This is the most common use of the term fiat currency. Typically, fiat currencies have driven out the principal metallic legal tender currency via central bank default, leading to hoarding, melting or export of gold (and/or silver) coins. This breaks down a gold standard (or silver standard or bimetallic standard) and leaves a pure fiat currency, however under the gold bullion exchange standard, the currency may still be technically redeemable. Following the breakdown of the Bretton Woods Gold Bullion Exchange Standard with the default of the US Federal Government in 1971, fiat currencies became entirely irredeemable.
As of 2004, most currencies in the world are fiat monies. However, the situation with major currencies, such as the euro, the United States dollar and the Swiss franc is more complex.
Debate over the term
What exactly is a "fiat" currency is a matter of some debate, with a spectrum of opinion that runs from hard money advocates which declare that anything other than a one to one currency basis is "fiat money", to a range of economic theories which hold that market dynamics enforce fiscal discipline. In general, ultra-conservatives define fiat money stringently, and an opposition to fiat money is coupled with an opposition to fractional reserve banking and governments having a central bank. Advocates of "debt-free money" argue, in contrast, that money which requires the issuing of central bank debt is a burden on the public. In essence, just as there is a school of thought which opposes any money which is not linked to specific, countable, and measurable reserves, there is a school of thought which denies the value of any encumbrance on the government's ability to issue notes at all.
How else can America continue to function with the debt and deficit that we have. As long as the banking cartel smiles on America we will continue. And by the way, all this talk about a “Fair Tax” (what an oxy-maroon) will not change a thing.
The “FED” as it is commonly refered to, is privately owned by an exclusive cadre of some of the most wealthy and influential individuals in the world. The FED is part of an international banking cartel and is in no way part of our Federal Government. It’s purpose is to fleece the American people by stealing our wealth under the pretext of “government-regulated central banking system” that calls itself “Federal”.
A Federal Reserve note is merely an IOU. When you go to the neighborhood bank the “money” that is loaned is created out of thin air. With nothing more than a book entry. The money supply is made up of book entries, some 97% of it. Only 3% is actual coin and paper money. Without a continuous and exponentially increasing cycle of borrowing, debt and refinancing the entire system would collapse.
And by the way, all this talk about a “Fair Tax” (what an oxy-maroon) will not change a thing. It is mathematically impossible to pay of the national debt.et el.
Really. So If I, as head of the Fed, organize a meeting of other banks and investors when a entity is about to go belly up and help concoct a scheme whereby they assume all the liabilities of said entity THAT in your opinion is not a "bail out"? Would that be because of the thin factoid that the Fed didn't use it's money (but the money of the friends of Alan) to pull off the bail out? Or is there some other fact I got wrong?
LTCM's failure had nothing to do with gold. LTCM was basically a few simple arbitrage plays that were immensely profitable so long as they and their imitators did not become the proverbial whale in the bathtub, which of course they did.
Well we don't know about all of LTCM's business, only the few plays that went south. The claim of GATA is not that the gold short caused the firm to fail, rather that having failed it exposed other highly leveraged positions they held, one of which was major gold swap / gold short. I think they have a bit of evidence to back this supposition up. When I have a little more time I shall find and and post it here for you.
no taxpayer dollars = no government "bailout", as far as I am concerned.
BBC
Greenspan defends hedge-fund bail-out
The Chairman of the US Federal Reserve Bank, Alan Greenspan, has defended the publicly organised bail-out of Long-Term Capital Management (LTCM), a hedge fund specialising in large-scale speculation.
Speaking to the banking committee of the US House of Representatives, Mr Greenspan said a failure of LTCM's failure could have caused substantial damage to banks and investors and might have impaired the economies of many nations, including the United States.
LTCM lost hundreds of millions of dollars when its financial experts misjudged the extent of the crisis in Russia. Co-ordinated by the Federal Reserve, 14 large banks got together to bail out the fund to prevent its collapse.
Mr Greenspan insisted that for LTCM's bailout "no Federal Reserve funds were put at risk, no promises were made by the Federal Reserve, and no individual firms were pressured to participate."
The "fragile" condition of the markets had prompted the Federal Resevere to act quicker than usual, he said, promising that the bail-out would be a "rare occasion."
US lawmakers raised critical questions about the fund's rescue. Jim Leach, chairman of the House Banking Committee, called on the Justice Department to make an antitrust review of the group of big banks and brokerage firms involved.
The rescue raised "troubling questions of financial concentration and antitrust," Mr Leach said at the hearing. "As a group working together, the new owners can have a greater impact on markets than in competition with one another."
Representative Bernard Sanders of Vermont, the House's lone independent, called it a "bailout for billionaires" that rewarded "the gambling practices of the Wall Street elites."
High returns
Mr Greenspan described LTCM's clients as "a small number of highly sophisticated, very wealthy individuals" who had tried to get high rates of return.
However, after several years of success changed market conditions made it more and more difficult for LTCM tor repeat its good performance. According to the Fed's chairman, the fund then tried to get high returns by taking higher risks "just as financial market uncertainty ... began to rise rapidly around the world."
He said that this risk had produced "stunning losses" of about half the firm's capital base.
Mr Greenspan suggested that it would have been wrong to let LTCM go under. The unwinding of the fund's "complicated portfolio" would have been very risky, and could have seriously distorted financial markets around the world.
At the same time he ruled out direct regulation of hedge funds, saying it was possible to monitor the fund's activity and act when necessary.
I never said it was a GOVERNMENT bailout. I think we are in agreement.
Well, I didn't sell them mine!
Thir chief element is surprise and a fanatical devotion to the United Nations...
Well, in most places. I admit to a modicum of surprise at the wimpiness of the Cajuns and other good Southern folks in New Orleans. One might have expected the second American Revolution to start there. Just another example of the seeds planted in the public schools forty years ago, now bearing fruit.
As to gold, the Chinese have conspired with other nations for DECADES to artificially keep the price of gold low. Every couple of years they'd sell 40 or 50 metric tons onto the open market. This would cause a glut and the prices would sink. Since they began to run low a few years ago, as smaller investors began to hoard gold in circulation, they were unable to maintain such strict control of the prices.
My Hot Shot Brother In Law, the Senior VP BANKER, used to ridicule me for buying gold since the 1980's. Now his smirk ain't quite so big. He did manage to talk me out of buying gold in the 1970's when I was in high school, but something told me that I was right....and when I got my inheritance from a parent, I acted. One of the best moves I ever made. My holdings have grown in value by a factor of four. I invested in both specie and in uncirculated pre-1933 numismatic gold coins. I continue to invest in these as I can afford it.
Sure you can. Got a dollar in your pocket? It's an IOU. Every dime of currency in circulation, every dollar is borrowed. Maybe you didn't borrow it but somebody did. If all the IOU's were repaid, all the money supply would disappear back into the banks. Read this AWESOME book: The Creature From Jekyll Island by G. Edward Griffin if you want a complete economic explanation that reads like the most SEARING thriller you've ever seen...except it's all true and documented. You can get it from amazon.com.
I believe the HUNT BROTHERS are dead.
Absolutely, 100% CORRECT!!! Did you read the Griffin book? It says the same thing but in much more depth...well obviously more than you can put in a post. But I highly recommend the book.
Where do you get that?
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