If Greece's currency colaspes

Regarding (2), the vast majority of treasury bonds are held by people and institutions for investment purposes. If the bonds were paid off, the proceeds would flow into other investments - stocks, other bonds, real estate, gold, etc.

Regarding (3), Congress currently spends at will and borrows the shortfall. The dollar has "self-regulated" itself to a 98% loss of purchasing power. This would be no different with USNs except there would be no debt or interest on debt and there would be at least a small chance that people would vote against big spenders whereas now there is no incentive to do so. It is true that the banks would have to grow up and be big boys and girls since there would be no Fed to bail them out. The likely outcome of this would be the elimination of liar loans, no doc loans, loans to people with only a small chance of paying the loan, and various derivative investments. Savers would still have the FDIC to protect them, but the bank institutions would not.

Your questions have convinced me more than ever that USNs are the way to go. Thanks.

 

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You are correct that people would not be able to hold FRNs in the form of Treasury securities if we switched to USNs. They would have to spend the USNs on other investments or goods and services sold in the USA. The likely outcome would be a bull market, the end of the recession, a reduction in unemployment, and the elimination or reduction of the trade deficit. I'm sorry but you haven't posted a single thing in the last 100,000 words that speaks against USNs. Instead, I think you have strengthened the case for them.

But I think we are getting to the point of talking in circles. There is enough here to convince anyone with even a partly open mind that there are alternatives to the current Federal Reserve System. The choice is simple, change or perish. Debt slavery or freedom. National bankruptcy or prosperity.

It's time to choose. You can have sunny days and bunnies, or permanent stagnation and debt servitude. Open your mind to possibilities that your controllers don't want you to know about and realize that the way things are ISN'T the way they have to be.

Good luck.

 

That's a pretty big leap. In my view, the Fed is completely unconsitutional since the power to create money was placed squarely with Congress in the Consitution, and this hasn't been amended to permit them to delegate it. Can the President delegate the role of commander in chief to, say, the UN? Of course not. And it is a quaint idea that somehow an unelected banker will be more responsible than an elected official. Witness the recent Congressional hearings where Bernanke has refused to provide information requested by Congress. No problem there, right? This is supposed to be a republic. In a republic, everything is decided by law, not by mob rule. And it is the job of representatives to enforce existing law, pass new law where necessary and consitutional, and go back to the people for permission to amend the Constitution when circumstances seem to warrant it. Since the creation of the Fed, none of this has taken place, so don't be surprised that the outcome has been unacceptable.

 

You would want to be somewhere where the population is low, where the basic economy is not 100% dependent on global trade, where food production is local and won't collapse when oil all of a sudden becomes unobtainable due to currency failure. This elimates most of the USA and certainly the urban areas on both coasts. Can you imagine what a place like Los Angeles would be like if the currency collapes and all of a sudden food shipments stop?

I recommend finding a stable smaller country with a good ex-pat community. Of course, the advice is mostly worthless if one is still here when it happens.

 

I know this is ot from the thread of grecian currency crisis, but if a problem is debt, then what if in order to draw down the debt, imports had to pay a market access fee to import goods into the worlds largest consumer marketplace. I am not sure what the fee would have to be, perhaps the amount that social security would collect if the products were made right here?

I remember when Nixon started lowering the import duties back in 69, say what you like about the old crook, most of the policies he initiated have not been changed much in the 40 years since his time in office.

So tell me why I am wrong?

 

Tariffs are currently unpopular but a proven way for the government to raise revenue and to encourage domestic investment. Globalists don't like it because it increases the economic power of the US.

 

Actually, if you want to fix the US economy then you have to put the people back to work making things. Bringing back trade barriers is the best way to do this.

 

I think 'mob rule' is being interpreted in 2 different manners. One as rule by majority, and one as rule by mafia. I'm not inherently opposed to appointed positions, but what I am opposed to is outsourcing our government policy to bankers who have no accountability or vested interest in our nation's well being in some cases (such as being a citizen of the nation). As Numbers has pointed out, the US Treasury is a much bigger offender than the Fed, but that doesn't mean that the Fed is constitutional. Their policies of currency devaluation (wealth diminishment) are being applied in nearly all western governments at the behest of the Rothschild banking dynasty which surfaces to view as the Basel BIS which all these central bankers are a member of. Everyone involved is working toward the same end which is globalization, including the subsequent usurping of authority from the US Constitution. Ultimately had our elected officials done the right things we wouldn't even be talking about the Fed, but that is how they got their foot in the door in 1913. Setting the USD as the global reserve currency built the global infrastructures necessary to support a global currency, and taking it off the gold standard opened the door to the possibility of a global default where a new currency can take its place outside the jurisdiction of the US. None of which could occur without cooperation or at the very least complicity by elected officials of any nation involved in this ponzi scheme, including Greece. If one were to desire a return to feudalism this is an effective method since it bypasses government checks and balances, and occurs over such a long period of time that most people won't notice the gradual change. In regards to the analogy of incrementalism as compared to boiling a frog in a pot by turning up the heat slowly so he doesn't jump out, things seem to be getting pretty toasty.

 

That was exactly my point. Once the investors spend their USNs to buy other investments, where do all those USNs go? They go to the gold miners that the investors buy gold from, the corporations that the investors buy stocks from, and so on. The USNs continue to float around in the market, losing value all the time as the government keeps printing more of them. Under your system, there's no way for these excess USNs to be removed from circulation.

Once a couple trillion face value of USNs is in circulation, their value will get so low that the remaining holders of Treasury debt will start refusing to accept payment in that form. If the U.S. doesn't give them any other option, it'll effectively be defaulting on the remaining debt, by paying it off with worthless USNs instead of real dollars. See above on the consequences of default.

But that's a monetary issue rather than a currency issue. To fix that problem, we need less spending or more taxes, as I keep saying.

Under the current system, a $1 FRN is always worth a dollar, though the value of the dollar itself can decrease with inflation if the government issues too much debt. Under your system, a $1 USN wouldn't even be worth a dollar, though dollars in other forms might retain their value in spite of that. This is why your system breaks, and this is the problem you keep ignoring. Yes, the USNs would be a wonderfully brilliant idea if you could magically make this problem go away; but so far you don't even acknowledge that it exists.

There's no connection between this and the earlier part of your post. Clearly these junk loans are bad things; clearly it'd be great if the banks would quit making them. But the government would be under political pressure to bail out the careless bankers whether we were using FRNs or USNs, and just as much political courage would be required to end the bailouts under either system. Nothing about the USNs would cause, force, or prod the bankers to "grow up"; that's a separate problem.

 

If the USNs magically retained their full value despite an order-of-magnitude oversupply (or more), then yes, all of that could happen. Of course, there's no way the USNs would ever retain much of any value under such circumstances....

But you're right, we're pretty much repeating ourselves at this point. By now, anyone who's still bothering to read this thread can see that all the talk of USNs, and eliminating the Fed, is just a sideshow distracting us from the hard work of seriously tackling our debt problem. So as you say:

It is indeed time to choose. Let's choose to put our energies toward a solution that will actually solve something, rather than one that merely exchanges one road to bankruptcy for another.

 

You miss the primary and fundamental difference between the two. The US Treasury can only issue USNs depending upon the true economic output of the USA via the authority the US Constitution gives the Congress. There are no such limitations on FRNs. This was the primary reason for creating the Federal Reserve. Keep in mind that in order to even make the Federal Reserve viable, the goverment had to seize everyone's gold.

The Federal Reserve can print trillions of dollars if it likes to meet its definition of monetary policy. In order for the Treasury to do it, the US Congress would have to go on record to vote for every dollar increase of debt. It's a huge incentive to hold down spending of USNs as there is direct accountability to the voters. On the other hand, nobody knows anything about what the Fed does except to see the results of their "tinkering". This is the fundamental flaw. The people making these monumental decisions, are not elected and not responsible to the people.

If we went back to Treasury based money, the changes to the American economy would be great, and IMO, good for the people. It would eliminate the 40% of the economy that is concerned with nothing more than making money off currency. It would restore some confidence in the people that we might be headed in the right direction. As it is now the Federal Reserve, because its primary mission is to preserve the bankers at the cost of everything else, has put this country on a path that is going to lead to complete destruction. It's just a matter of time.

 

Of course, the assertion is merely opinion. Did the dollar lose more value in the 100 years prior to the Federal Reserve Act or after?

 

Well, there is no such limit in the Constitution, the unlimited printing of FRNs has a mixed history at best, and the government did not seize everyone's gold when the Federal Reserve was founded. In fact, they didn't even seize it under Roosevelt since each family was permitted to retain 5 $20 gold pieces per family member [a considerable sum], silver was not confiscated, and numismatic gold, which was loosely defined, was left alone. It basically only applied to gold reserves held in the banking system.

And with that, I think it's time for me to move to the sidelines. Every one of your objections have been refuted and the thread is beginning to become circular. There is enough here for anyone interested to continue their own investigation, or not, depending on their own curiosity.

Thanks for the opportunity to explain a segment of monetary economics that will never be discussed in the Wall St Journal, Forbes, or CNBC. It's the dirty little secret that people aren't supposed to know about since it doesn't fit the plans of the controllers.

Good luck.

 

I'm not in disagreement with you Cloud. The USD has lost 98% of its purchasing power in the 98 years up to this point, and it's been accelerating. What I meant to say was that going forward what the Treasury is doing will constitute a greater confiscation of wealth, but only when comparing the volume of bonds to dollars in circulation. I don't think they would have taken such a path if the Fed never exerted their influence in the first place. On the surface it's the politicians who gave all our tax dollars to the TBTF's and ran up the deficit that are directly responsible for this situation which leaves the Fed little choice on interest rates, but if you look at the common names between the TBTF's and our elected officials it's pretty apparent that they're symbiotic. I believe the Fed is enabling and proactively aiding this scenario by setting up a system in which the wealth is consolidated in the hands of a minority as I've mentioned in other posts relating to fractional reserve banking and interest, but I don't view it as the core source. The agenda of those at or near the source is not difficult information to find, and is a big reason why I am so bullish on metals.

"Give me control of a nation's money supply, and I care not who makes its laws."

 

I didn't say that the gold was seized when the Federal Reserve was created. I said that in order to make it viable they had to seize people's gold. Furthermore, the seizure was metaphorical. They didn't sieze anything but they made it impossible to continue transactions using gold currency. People had no choice but to trade their gold in for FRNs. This was the basis for the Federal Reserve taking control of the US currency. I recommend you go read FDRs executive order if you are still confused.

In addition, the US Constitution gives the US Congress the right to take on debt. But in order to do this, they have to authorize it. Since USNs are debts of the US government, increasing the USN money supply requires congress to authorize it, and hence this is the limitation.

In terms of refuting anything, the above example demonstrates that you should pay attention to what is posted, and not turn it around to something else because nothing that I have posted has been refuted. I do agree with you on this point, it's time for you to take another break.

 

No, people also had the choice of trading gold for silver to use as money instead of FRNs. As the saying goes, you can look it up.

 

Just pointing out that the Fed was created and operating for a couple of decades before FDR's gold order. Your posts make it sound like they were simultaneous. They weren't. Also, as Cloud points out there were tons of silver coins in circulation that anyone could and did use until the silver value rose and made it impractical to use in coinage. Did the Fed orchestrate that as well?

People have a fun time blaming the Fed for everything. Look at the alternative, you would have a US Bank directly controlled by the politicians. Do you really think Barney Frank and his friends would run this bank better? Look at what Mr. Frank did to Freddie and Fannie and his role in the housing bubble. Putting central bank operations out of direct political control is still the correct answer to me.

Chris

 

This is nitpicking, IMO, and has nothing to do with the point made. I've laid out, in detail the differences between the USN & FRN. You guys haven't disputed any of it. In regards to political control, I will point out that it worked this way for 130 years in US history during the period of greatest economic expansion of this country. History is not on the side of those who blindly argue for The Fed.

Yes absolutely. The reason they get away with their nonsense is because they are not held accountable for their actions. Fannie and Freddie would not be possible if the Fed was gone.

I simply can't imagine why anyone would argue for full control of the currency by a small group of men who are not elected, who don't answer to any elected officials and who are shielded completely from any public oversight of their actions and who have a motivation to protect those who profit greatly from the entire endeavor. Even a bad elected politician is better than a dictator. Nobody should have this sort of control over the economy and when it has been tried in the past, it's always led to disaster. Nobody is smart enough to do it, yet here we are, people who believe it must be this way.


"One can ignore reality, but one can't ignore the consequences of reality"

 

Well, the central banking system is in the process of crashing down around us all over the world with the potential for all sorts of reversals in the progress made by Western Civilization. I've offered one option. You guys better come up with something quickly because hoping for a return to the good old days is looking less realistic every day.

 

What about what I previously expanded upon regarding removal of interest altogether and instead just putting a fee on the service as chosen by the lender? If somebody defaults then it's the lender's fault for making a risky loan, and the responsible lenders will rise to the top. This would also promote competition among lending rates and let the free market take its course. The other important piece of that was requiring that loans come from preexisting money so that the money supply is not perpetually expanding. Giving some entities the ability to acquire money without providing a good or service for it while the rest of us work our lives away to make ends meet is just a less overt form of slavery. Seems like a simple and effective solution to me, but implementing it is not so easy.