If Greece's currency colaspes

But is the US unemployed or disabled? No, we are simply lazy and want to consume more than we have, just like many individual Americans. There is an opt out, and that is choosing another country. If you are an American, or Canadian, or any other citizen of a democracy, then I simply don't buy that you aren't responsible. These politicians are voted by US, they are not appointed. We can change them, change the Constitution, do anything we like collectively. You keep saying "someone else borrows money", but its not, 1/300,000,000 of that is Cloud, another 1/300,000,000 is mine. I am not happy about it, I do not agree with it, but it is OUR stupid politicians begging the world to lend to us, not greedy international corporate bankers forcing us to take money we do not want to borrow.

That is my point is all. Since we are the ones begging to borrow the money, I simply don't feel right saying its their fault. Remember, US Savings bonds your grandmother gave you for your birthday are US debt too.

 

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I have sir, but maybe instead of telling someone they are historically ignorant and you have superior historical knowledge you should actually share a few facts as to what you are referring to. That is what I was saying. Posting on a board how others are simply ignorant and that is why they disagree with you does nothing to further a conversation, especially when you have not made any type of historical references and shown your knowledge to the board.

 

You are not correct on this. First lets be clear what we are talking about. That is the Federal Reserve Note that is now the current definition of the dollar. Established as the only $ in 1971. The holder of this note is owed a debt by the Federal Reserve. No more no less. The Federal Reserve is only obligated to pay you back in more Federal Reserve notes. Beyond that, these notes are not obligations of the US Treasury. The Treasury will not redeem them for anything.

Federal Reserve issues these notes using in part by using US Debt. That is the Federal Reserve will hand over dollars to the US Treasury in return for US Bank Notes promising to repay the debt + interest because the government has the power to tax people. This is why Congress has to vote to increase the debt limit. The government uses these dollars to pay its bills. And furthermore, when the government spends these dollars, the party who receives them is getting a debt from the Federal Reserve, not the US Government. But this only represents a small part of the $s in the economy that are issued by the Federal Reserve.

The vast majority of Federal Reserve notes printed (or created electronically) are due to such things as QE2, Fractional Reserve Lending by the Federal Reserve Banks, and closed market and secret operations conducted by the Federal Reserve outside of any federal control. These have nothing to do with Treasury debt. As I said, the Federal Reserve is completely free to issue as many Federal Reserve notes as it likes to manage its "monetary policy". These are conducted in secret and the Federal Reserve, except in very rare cases, is not obligated to even disclose how much money it has created and where it went.

Why is it setup this way? Simply because it allows politicians to acquire money to spend without raising taxes as required otherwise if it issued the debt itself. The government can spend money without regards to the economic output of the USA. The Federal Reserve is happy to do this because in return they get the absolute monopoly on the currency and thus it makes their owners, officers and cohorts very rich people.

 

I guess it is popular to blame the accumulation of debt on the lazy stupid and irresponsible Americans. I don't. It's a brainwashers dream to have successfully convinced the population of a country that the plans by the international bankers to strip them of their wealth is somehow the fault of the citizens and not the thieves. The quaint idea that anybody in this country can control Washington or the Fed through the ballot box is losing popularity. But at least the trend is toward more people waking up and realizing that it isn't their personal irresponsibilty that created this situation, but a system imposed on them from above to steal the wealth of the nation through debt and violations of the Constitution. I guess that until enough people wake up to the problem, the problem will continue to grow and the nation will become poorer.

 

We agree its a problem Cloud. No doubt about that. However, the "greatest generation" has also received the "greatest giveaway" in history in the form of insanely rich returns from their SS contributions. We, (yes the politicians voted for it, but I don't see my father returning the SS checks), have spent ourselves into this hole. If we are arguing that the US should go into bankruptcy, since that is what you are advocating, I am just saying that there will be repercussions to that. I still see us simply doing the lazy, politically expedient thing and devalue our currency so that our debt is servicable. This is what nations around the world have done for eons. This is most palatable to the politicians since they can blame the "evil bankers" for it, all the while they will be stealing from savers in this country, mainly senior citizens and hard working, responsible Americans.

Sorry Cloud, but blaming "international bankers" for forcing us to borrow money smacks of the same type of classism diatribe coming out of the white house right now. Its always conventient to blame others for our own shortcomings and failures.
Like I said, I didn't see Americans that were benefiting from this spending returning the money. This debt really started from WWII, which we have never paid off. The "greatest generation" may have fought WWII, but they sure as heck did not pay for it, along with Korea, cold war, or Vietnam. Indebtedness and mortgaged futures is the real legacy that we have been given.

Chris

 

This isn't what happened. Assuming you are referring to the Federal Reserve, it is a legislative creation. It it not a constitutional entity and thus, the US Congress can eliminate it, change the rules in which it operates under, end it's monopoly on money, etc. i.e. The political class is in 100% control over it. They disingenuously argue the Fed should be independent, but this simply means they don't have to deal with the repercussions of the failures of this system as they can blame non-elected people that do things in secret for the good of all of us.

It should also be noted, that for the common person, the US government was not needed at all to countersign currency as general commerce was handled in gold and silver coinage and that does not require any government. That is, the political class had NO control over the money. The US issued coinage was simply an easy assay of the metal. The Federal Reserve and fiat money system was created because it 100% gave the government power over the currency and once that was established they had the power to tax and take wealth from people. It was this creation that gave the political class unimagined power and it has gone on so long that the current generation believes it was always this way.

 

Do you really think the politicians are blaming the "evil bankers"... they are handing them more and more power each day, and given that they are "your" elected politicians, you are responsible for it ; )

Still waiting on your feedback regarding googling 'banking and war'... let me know.

 

http:// *URL removed~ this type of presentation belongs in Politics Religion and World events forum.

 

Answering the last bit first: I'm not denying anybody the right to change the system. We the people (acting through Congress) created the system, and we the people (acting through Congress) can change it. What I'm saying is that (a) I don't see how your proposed changes would be improvements, and (b) if we *do* change the system, we're simply changing our minds, not triumphantly throwing off a system that was imposed on us by someone besides us.

As for the rest, you're drawing distinctions without differences:

Federal Reserve Notes are backed by Treasury debt; United States Notes *are* Treasury debt (and saying they're not doesn't make it so). Thus the amount of debt is the same either way.

The USNs are, as you say, interest-free. The bonds backing the FRNs pay interest--but that interest is paid to the Fed, and the Fed's profits go to the Treasury. So with USNs the government pays no interest, and with FRNs the government pays interest to itself. The result is the same either way.

I don't see what my arguments in favor of FRNs have in common with gold advocates' arguments against FRNs. For the first two decades of their existence, FRNs were redeemable in gold anyway--and during the same era, USNs were exchangeable for gold as well. Ever since gold was removed from circulation in 1933, it's certainly true that FRNs and USNs are very different from a gold-backed currency...but again, that's something that FRNs and USNs have in common. You're still not finding any practical *difference* between FRNs and USNs that would motivate a switch from one to the other.

 

This simply isn't true. Current total US Debt is ~$14T If your statement was true, then this would be the absolute limit on all dollars in the entire world. Yet we know this isn't true. All countries hold USD in order to buy oil, it's the world's reserve currency, and it's known that at least $20T are deposited offshore in the shadow banking system.

The GDP of the USA is ~$14T/year. If this was the total limit of dollars, then there would be none for the rest of the world.

 

The problems in Greece should only be a problem in Europe and I really understand why it is making headlines in North America.Unless the IMF is bailing them out with U.S. taxpayer dollars, the news in Greece should be irrelevant.

There are 18 other countries ahead of them in the debt per capita stats.

http://www.nationmaster.com/graph/eco_deb_ext_percap-economy-debt-external-per-capita

 

This is in fact what the IMF does. The US Taxpayer provides 20% of the funds the IMF uses to bailout countries. It has no money of its own.

But it's worse than this. The Federal Reserve has printed money and bailed out all the big banks in Europe.

 

I follow the U.S economy and can't understand why a few people [and you know who they are] are able to control the money supply, print as much money as they want, bailout their friends on Wall Street without and not have to answer to no one.
I am confident things will change when it takes a big basket of cash to buy a loaf of bread.

 

I take serious offense to the "simply lazy" statement you made. It is flat out ridiculous, and while there are plenty of lazy people in this country, there are even more that would like to be working and earning a fair wage for their labors. While the politicians may be voted in, they are voted in by less than 50% of the population for many reasons; apathy, disenchantment with the system, inablity to get real issues to the forefront, and the list goes on. The reality of that is the 2 party system is a joke in my opinion and will not take this post down that path.

If you knew as much about the banking system as you thought you did, you wouldn't have posted many of the things you did. You also blamed the wrong generation for the ails of this system, IMO. It's not the "greatest", it's the baby boomers. Take a good look at what the higher education system taught them in the 60's and 70's and you'd realize the shift from making things to selling things happened there. So did the idiocy of cheapest labor costs, instead of most/more effective labor costs, and the list goes on, and on and on. It's sad when you take a good look at it, we want to make things better for our children, but in the end make it much harder on them.

I appreciate the things you point out in this thread as it makes me look at the other side of the coin, but I have a very hard time swallowing misplaced blame.

 

Federal Reserve Notes and Dollars are not the same animal. FRNs are backed by US Treasury Debt while Dollars are backed by debt in general. Except for the couple of hundred bucks I carry in my wallet very few of my dollars exist in the form of FRNS. Most of my dollars are backed by a debt owed to me by my bank.

 

Yes they are. Since 1971, this is the only dollar available. Even if you show up with a silver certificate $, or a US Treasury $, it will be treated as a FRN. All other obligations on those dollars were nullified. Furthermore, if you go to your bank and withdrawn your account into dollars, you will be given FRNs. Since the late 1970s, all financial institutions in the USA were forced into the Federal Reserve System. There are no individual banks that issue currency now, i.e. direct debt.

As I said earlier, current USD are obligations of the Federal Reserve. They are not obligations on the US Treasury.

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Relative to this topic, this is why the economies are in trouble. All countries in the world now use this sort of arrangement and in the western world currencies are exactly this model. Bank of Japan, European Central Bank, Bank of England, etc are all other examples of the Federal Reserve in their respective countries. And this is exactly why the economies of this world are failing now. This alliance between governments who have given the banksters 100% control over the currency is supposed to be governed by a strict set of laws and oversight that prevent banksters from using this privilege in destructive manners for profits. However since the Reagan administration these laws where weakened. They were delt a serious blow by the Clinton Administration, and made almost irrelevant by both parties during the Bush years. Obama has further worsened it by absolutely refusing to perform any serious oversight of the banks since he was elected.

Without these laws, the banksters get into trouble, and they have to run to the governments to bail them out. Treasuries don't have to do this, since these are not their liabilities, but they don't want to deal with the repercussions when the true nature of the people's money (it's worthless) is exposed. This entire system works due to the endless obfuscation of the difference between banker currency and national currency (which doesn't exist now). Rather deal with revolutions they bail out the banksters.

So far, there has only been one country that has broken this trend. Iceland. Banksters destroyed that currency, went to Iceland's taxpayers to bail them out via loans from the IMF. The people there revolted, showed up at the Presidents house with torches threatening to burn it down, and thus the government relented, told the IMF to go to **** and let the currency collapse. Iceland is doing fine now. The banksters didn't get their bailout and as an added bonus, Iceland threw the ones in Iceland, in jail.

 

First of all, the currency system in place in the US and most parts of the world absolutely do FORCE nations to go into debt. The debt IS the money and the money IS the debt. Money is spent into existence through federal government borrowing and bank lending. There is no other way, so lets stop blaming people for it. Second, it is completely misplaced to talk about the greedy senior citizens while ignoring the trillions of dollars spent by the military in interventionist conflicts to enrich the military industrial complex; and spent by relatively new, completely worthless and probably unconstitutional government ageneices such as Homeland Security and FEMA. Get rid of all of that and then it will be a lot more clear to people what changes are needed to social security and medicare to put those programs back on a sound basis.

I never argued that the US should go into bankruptcy. I stated as clearly as I could that if/when the choice comes down to a choice between widespread poverty and misery for massive numbers of people, or forcing the banks to take a haircut on their loans, then I will always choose in favor of people and against the banks. I just have to shake my head in wonderment at folks who believe that an economic failure due to the unstable nature of the present international banking system should fall on the people and not the institutions.

The difference between us is that I believe that the international and national banking systems are a tool to make life better for the people. You seem to believe that people are here to make sure that the profits earned by the banking system and politcal class that have sold their loyalty to the banks remain secure. We are 180 degrees in the opposite direction on this one.

 

All FRNs are dollars but all dollars are not FRNs. If all dollars were FRNs then a run on a bank would never be a concern. There is not a FRN backing every dollar in existence. FRNs are backed by Treasury debt but Treasury debt does not back all dollars. Money you deposit into your bank account is not backed by the US Treasury's promise to pay - it is backed by your bank's promise to pay.

 

Regarding the first comment, I think you are overestimating the ability of folks to change the system. It's like a dog who only realizes that he is on a leash when he tries to go to a place that his master will not allow. The dog is "free" only when he does what his master wishes.

The practical difference between FRNs and US Notes are that US Notes do not involve the creation of debt and interest on the debt that has to be repaid -- a tremendous benefit. Imagine how different things would be today if there was no national debt. And while interest paid on the bonds owned by the Fed in excess of 6% goes back to the Treasury, (1) the present rate of interest is lower than 6% so nothing goes back to the Treasury from that source, and (2) most Treasury bonds, notes and bills are not owned by the Fed. They are owned largely by foreign central banks and domestic investment institutions, so the payments and the pain are real.

 

I was trying to be somewhat facetious in that post but evidently failed. Everything you say about voter apathy, baby boomers, etc is true. However, in a Democracy, final power is in the people. We can, with work, pass Constitutional amendments, change leadership, etc. People on this post talk like we are living under a King who has absolute power. If we were a Monarchy, then I would absolutely agree that monetary policy, government debt, etc should have no claim on the population at all.

I am simply saying its our "collective laziness" by not stopping this spending, not voting them out, not changing the Constitution, by accepting higher levels of spending that we are not paying for but passing the costs to our grandchildren, that puts us to blame.

Cloud talks about banks "taking a haircut". Really? The US is in debt, when promised benefits and unfunded liabilities are included, of somewhere around 60 trillion dollars. This number cannot be a "haircut" since it is more than the net worth of every bank in the world, plus about 40 trillion. There simply is not enough money in the entire world to fund that kind of number, yet evidently he thinks banks should take the entire loss when we have been begging them for money. That is what upsets me. The US taxpayer, the ultimate responsible party, should be the first to have to take a hit for this debt. The banks will already lose when we devalue our currency and pay them back in US dollars only worth $.50 of what they used to be.