• Steve H. Hanke
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On Why America's 234th Birthday May Not Have Many More To Follow

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Sun, 07/04/2010 - 22:34 | 452424 TheJudge2012
TheJudge2012's picture

Competing currencies.  People are free to trade in what they want.  Naturally they will gravitate toward hard money.

Sun, 07/04/2010 - 22:35 | 452426 Apostate
Apostate's picture

Laissez-nous faire. 

Mon, 07/05/2010 - 19:37 | 453576 Testicular Cancer
Testicular Cancer's picture

Laissons-nous faire.

Tue, 07/06/2010 - 10:57 | 454220 Marla And Me
Marla And Me's picture

Aaaaaaah, la beauté de l'impératif...  sortons tous notre Bécherelle!

Mon, 07/05/2010 - 02:56 | 452715 joe90
joe90's picture

Except for "Gresham's law"; in doing so they get rid of the bad money first and keep the good.  So bad money drives out the good.

Mon, 07/05/2010 - 05:14 | 452751 Noah Vail
Noah Vail's picture

The author of this article exhibits a stunning ignorance of US economic history. Complete and total ignorance, for fiat money was instituted as soon as the nation was founded. The USG did NOT issue money, the fucking banks each issued their own. We did not even have a standard currency for over 100 years. The USG did issue metal coinage, but it did not issue bills. You will not find anywhere a single bill issued by the USG prior to 1913. THAT is why we went through a constant series of bank panics.


Almost nobody ever used the gold and silver coinage because it was inconvenient and due to Gresham's law: bad money drives out good, so bad paper was always the coin of the realm in the US. Always.

On a few occasions they established a National Bank that issued currency, but that never worked out and both times the NB's were abolished. The sad fact is that this nation limped along with a hodge-podge of bank notes that were far worse than any fiat problems we have today. The money we have today is perfection in contrast to money in 1837 or 1887 where anyone could suddenly find themselves holding worthless bank notes, and often did.

Holy shit, Tyler, I can't believe you posted this pathetic piece of monetary ignorance. TRy reading some US history before making such a fool of  yourself. From Wikipedia:

The first institution with responsibilities of a central bank in the U.S. was the First Bank of the United States, chartered in 1791 by Alexander Hamilton. Its charter was not renewed in 1811. In 1816, the Second Bank of the United States was chartered; its charter was not renewed in 1836, after it became the object of a major attack by president Andrew Jackson. From 1837 to 1862, in the Free Banking Era there was no formal central bank. From 1862 to 1913, a system of national banks was instituted by the 1863 National Banking Act. A series of bank panics, in 1873, 1893, and 1907 provided strong demand for the creation of a centralized banking system. The first printed notes were Series 1914 and in 1928 in order to save millions of dollars the size of the note was reduced to the size it is today

Mon, 07/05/2010 - 06:48 | 452792 johnny9iron
johnny9iron's picture

Noah is correct and the essay is grossly distorting history. Historian Ron Chernow ("House of Morgan" author) wrote a fantastic book on Alexander Hamilton in 2004 and he points out time and again the tremendous difficulty Hamilton had in trying to establish a strong central bank. The history played out just as Noah correctly outlined it.


Mon, 07/05/2010 - 12:09 | 453075 WaterWings
WaterWings's picture

Junk! for Noah, and a Junk! for you. In no way is there distortion. The story can be fleshed out, but it is correct. Jeez!

"But, but, but teacher, there are more presidents than just George Washington and Abraham Lincoln!"

I wish I could Junk! Noah again for citing wikipedia as gospel. Yes, private banks issued their own paper and they failed because of risky bets. But the focus of the article is post-1913 and the Federal Reserve system. All downhill from there as the financial scientists and political scientists took control.

And tell us a bedtime story about Aaron Burr instead, Johnny9.

Mon, 07/05/2010 - 14:02 | 453232 Ripped Chunk
Ripped Chunk's picture

Thanks Wings.

It's jokers like these 2 that are beginning to rot out the fabric.

Junkin' em' too


Mon, 07/05/2010 - 16:53 | 453425 Votewithabullet
Votewithabullet's picture

Yes beware, they could "rot out the the fabric" please get out quick before they get any on you. cunt. Back the fuck up.

Tue, 07/06/2010 - 10:03 | 454063 Ripped Chunk
Ripped Chunk's picture

Not sure if we are friends anymore or not?

Tue, 07/06/2010 - 10:57 | 454177 WaterWings
WaterWings's picture


Lots of confoozled peeps out there. Hamilton was a bastard; didn't want state and individual rights.

Who cares anymore. Sunset approaches. If you're not prepared with your own food supply and ability to defend yourself none of this information will matter anyway. The only good it serves now is to help the last few who might find it and save it for the next generation. We can only hope.


Hey, Noah.

The sad fact is that this nation limped along with a hodge-podge of bank notes that were far worse than any fiat problems we have today. The money we have today is perfection in contrast to money in 1837 or 1887 where anyone could suddenly find themselves holding worthless bank notes, and often did.

Perfect slavery now. We used to let banks fail, back in the day; unwise investments led to ruin. And why trade in gold and silver when you can barter for other items - Au and Ag just happen to be the most widely accepted. A forced fiat currency is not the answer! Did you count the death toll, worldwide, because of the Federal Reserve system? Misery. Waste. Destruction. The Empire couldn't have been achieved without the forced-by-law Federal Reserve Note. All we have here is 40,000,000 on food stamps, UI running out, and crumbling infrastructure. Parasites in control and gangrenous limbs. We must have it so good. Worthless bank notes every once in a while allows new players to come in and hard lessons to be learned - clean out the rot. The lesson to be learned by America for allowing the Federal Reserve system to be snuck in on Christmas Eve of 1913 will be the last: the gift of total collapse.


Tue, 07/06/2010 - 23:41 | 456038 GoinFawr
GoinFawr's picture

Indeed. At least slave owners used to have some sort of obligation to care for their slaves once they lived beyond their usefulness. Unlike the debt/wage slaves of today; if they go lame they'll get part-timed or simply 'let-go'. Which is kind of a misnomer...


Mon, 07/05/2010 - 08:06 | 452803 RabidLemming
RabidLemming's picture

Bill Still made a wonderful film on the subject called Money Masters.


the first step in taking this country back is abolishing the Federal Reserve Bank.


Mon, 07/05/2010 - 10:57 | 452991 Rogerwilco
Rogerwilco's picture

"the first step in taking this country back is abolishing the Federal Reserve Bank."

Yes, we'll all sleep better with Barney Frank in charge of the banking system and money supply.

Mon, 07/05/2010 - 11:02 | 452996 RabidLemming
RabidLemming's picture

I never said anything about having Bawknee Fwanks in charge of anything... although he and Dodd seem quite able to do the bidding of their masters at the FRB

Mon, 07/05/2010 - 19:10 | 453558 unununium
unununium's picture

We have our answer ... yes, trolls do go to work on national holidays!

Mon, 07/05/2010 - 08:01 | 452825 Sean7k
Sean7k's picture

Actually, the first paper money was issued by Lincoln during the civil war. Greenbacks were printed and remained in circulation until 1994 paying zero interest. Otherwise, a much better accounting of the history Noah.

The author plays fast and loose with history and requirements for a sound system. The elimination of legal tender laws needs to be addressed. The problem is not banks issuing notes, it has more to do with clearing house systems and accountability. Bank runs must be allowed. People must be aware of the fiscal condition of their banks. 

There is nothing wrong with a gold standard. People continue to make scarcity of gold arguments- without reason or logic. Whether a gold coin is worth the equivalent of 50 dollars or 5000 dollars is immaterial. The markets can continue to function.

The elimination of the FED by Jefferson, Jackson and hopefully a brave American in the near future is essential for sound money. The elimination of manufactured wars from manufactured security threats is essential for the security of wealth and private property. The elimination of political parties is essential for the vigor of the nation.

Mon, 07/05/2010 - 09:32 | 452918 dark pools of soros
dark pools of soros's picture

Noah is correct, but I find that many stalwarts of history are so entrenched to never leave it.  Most of the courageous thankfully have a fleeting knowledge of the past and thus no chains binding them to it. 


Yet Noah also simply states the end effects in his points and brings nothing to the debate on the motives and means of those bank runs so scorned. 





Mon, 07/05/2010 - 11:41 | 453048 BrosMacManus
BrosMacManus's picture

The intellectual dishonesty of revisionist history, like moral equivalency, needs no further rebuttal. Would courageous be not only pointing out the factual errors and misrepresentations, but also constructing a counterargument to the premise of the author's article, or merely saying "while I agree with the premise...."?

Stalwarts of history and dogma are diametrically opposed. While claiming Noah brings nothing to the debate by not addressing the motives and means of bank runs, neither did you. Nor will I.

Sometimes I wonder if Tyler posts these guest contributions to take the temperature of the petri dish that is ZH....

Wed, 07/07/2010 - 22:10 | 457736 dark pools of soros
dark pools of soros's picture

I left the notion neutral to open the discussion.. it is facinating how so much of history shows money as one of the main reasons for motive but scholars rather study the failed steps as if they were not scripted

Mon, 07/05/2010 - 12:38 | 453127 Muir
Muir's picture

Thank you Noah.

Mon, 07/05/2010 - 12:51 | 453142 lucasjackson
lucasjackson's picture

To be fair there have been several failed fiat currencies issued by the government in US history, not only banks.  The Continental, issued during the Revolutionary war went to its intrinsic value of zero, as did the Greenback issued during the Civil War.  Common thread.....Government issued, backed only by fiat, overissued during time of war.  I know this does not sound like our current situation at all, but you never know.

Mon, 07/05/2010 - 19:45 | 453581 BGO
BGO's picture

Actually, your "The USG did NOT issue money, the fucking banks each issued their own" statement isnt accurate. The US govt. issued gold certificates starting in 1863 (I think), around the middle of the civil war. At the time, gold certificates functioned basically just like FRNs. The govt stopped printing gold certificates in the 30s.

Tue, 07/06/2010 - 00:10 | 453821 bingocat
bingocat's picture

Thank you for speaking out (tough to understand why you were junked except when I look at who junked you).

Fiat money was indeed the currency of the realm, and fractional reserve-based lending was standard practice (one of the reason why there were so many bank failures). There were even deposit insurance societies in the 1800s, to allow bank depositors to feel good about fractional reserve as a concept.

Just because people don't like the situation doesn't mean the structure of things before was necessarily better.

Tue, 07/06/2010 - 12:57 | 454590 slimfinger
slimfinger's picture

On the comment/criticism by "Noah Vail":  is it not true that the early American banks originally issued notes that were simply promises to pay in the official gold/silver coins of the government (and described by the Constitution)?  Contracts, in essence; IOU's for real money and not for more contracts.

If so, then Noah is wrong (it was not fiat money), and the essay is accurate.

Mon, 07/05/2010 - 07:26 | 452802 quintago
quintago's picture

Given the loss of credibility this post engenders, you might as well take this post down

...on another note, the issue at large we are facing has a lot more to do with the tax policy in this country. Each change of the administration brings one set of tax policies, cuts, increases, etc.

This wishy washy policy of constant change does not play nicely with the policy of the majority of the american populace, which is to spend everything they have, and sometimes more. This exacerbates fiscal crises, puts pressure on the consumer, and raises all sorts of other problems.

Perhaps some of the issues we face are borne out of the FED, and monetary policy, but lets not discount the impact that our fiscal slot machine levers have.

Sun, 07/04/2010 - 22:38 | 452427 ZeroPower
ZeroPower's picture

Happy 4th to the American posters here:)

Sun, 07/04/2010 - 23:01 | 452459 ISEEIT
ISEEIT's picture

Same to you and everyone else. Tyler is a remarkable and great person. He is telling us the worst case, and admitably, most likely scenerio. I believe that we still have the pulse to end this well in the long run.

Short term pain, long term gain.

I know that I am a bit of a simplton on this, but I have faith that will survive.

Sun, 07/04/2010 - 23:22 | 452492 Bent Nail
Bent Nail's picture

As an American, it is a sad day for me. All Americans should read (or re-read) the declaration and contemplate if the 4th should be celebrated or the declaration should be restated.

Mon, 07/05/2010 - 00:04 | 452542 Uncle Remus
Uncle Remus's picture

Interesting - I did a post on my own blog in a similar vein.



Mon, 07/05/2010 - 12:12 | 453096 WaterWings
WaterWings's picture

Especially this part:

That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

"Right" is capitalized for a reason.

Mon, 07/05/2010 - 13:03 | 453158 Uncle Remus
Uncle Remus's picture

Just as "Governments are instituted among Men, deriving their just powers from the consent of the governed" preceeds your bolded section, it too, in my view, be the focus of attention and understanding - right here, right now. Once that is truly understood, it is more likely action will be taken to correct the situation.

Mon, 07/05/2010 - 14:04 | 453228 WaterWings
WaterWings's picture

Agreed. Voting is consent and therefore one of the tools to perpetuate the status quo at this point. The chained, shadow-interpreting slaves are too busy congratulating each other to realize they won't be fed anymore in a short while - and as we all know they lash out if you try hard enough to wake them up. Tired of cuts and scrapes...heading for farmland outside...


Dig your posts - your concise blogroll is dandelion wine. It's truly a CF Nation.

Mon, 07/05/2010 - 14:58 | 453280 Uncle Remus
Uncle Remus's picture

Thank you.

Mon, 07/05/2010 - 20:42 | 453643 chistletoe
chistletoe's picture

Its pretty amusing to quote the high-sounding words of the Declaration of Independence,

as if they had any more validity or truth than CNBC does today ...

but do remember, please, that the only reason

that Tom had the time to write such stuff was

that he had 140 or so african slaves doing the grunt work for him

(and one keeping his sheets warm ...)

Mon, 07/05/2010 - 00:19 | 452587 russki standart
russki standart's picture

Happy Canada Day. BTW, after watching the G20 Toronto Youtube Videos, I feel better knowing that the police in Toronto are even more psycho than the good ol´boys down south. And we used to think that Canadians were polite and well mannered...

Mon, 07/05/2010 - 01:16 | 452660 WeeWilly
WeeWilly's picture

Pretty lame, russki. To single out the south as symptomatic of police abuses is at best uninformed, at the least, ignorant. Rodney King, the '68 Democratic Convention, Diallo, many of the recent abuses we've seen exposed didn't occur down south. Get rid of erroneous prejudices.

Mon, 07/05/2010 - 01:22 | 452664 Bolweevil
Bolweevil's picture

Perhaps he meant south as in south of Canada (U.S.) not dirty south like the ATL or Nawlins or 'Bama.

Mon, 07/05/2010 - 02:25 | 452697 FrankIvy
FrankIvy's picture

Get your head out of your ass WeeWilly - he was referring to the U.S., as in "south" of Canada.

You're not exactly representin' the South well with that, man.

Tue, 07/06/2010 - 01:09 | 453880 WeeWilly
WeeWilly's picture

Lol Frank, thanks for the correction. I guess I'm not used to seeing "good ole boys" used in reference to the Michiganders and New Yorkers. I'll get my head out of my ass now. I suggest maybe you do the same...

Mon, 07/05/2010 - 09:12 | 452889 Treeplanter
Treeplanter's picture

I remember the Native man who was on trial in Williams Lake, BC.  The arresting Mountie was on the jury.  So much for Canadian superiority.  

Mon, 07/05/2010 - 11:22 | 453013 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

When the Mountie voted not guilty I was stunned. I think the arrest and subsequent jury duty was just a ploy to make money. Jury duty is easy money. Mountie shift work sucks. Right and wrong are only concepts in socialist states.

Mon, 07/05/2010 - 20:20 | 453600 DavidPierre
DavidPierre's picture

Re-inserting and revising a post which was junked out here ealier by all the "free speech patriots"  on ZH...DP


This is what is called, in the history biz, a revisionist history. American history, at least as far as the general public knows it, is in desperate need of revision, bringing what is taught and what is said about America's past more in line with the truth.
It is the history that good upstanding Americans are not supposed to know.

Everything here is based on publicly available information and most historians know all about it.

And yet they remain strangely silent, allowing the fantasyland, propagandized version of American history and the fatuous pseudo-patriotic nonsense spewed by politicians and the mass media to stand unchallenged.

1783-1865: UNITED STATES. The U.S. Constitution is approved.

Amongst other things, this fabulous instrument of freedom carries a provision preventing Congress from banning the importation of slaves.

But, most significantly, the authors of the Constitution were very careful to ensure that it validated slavery by means of a so-called "positive" law embedded in Article 4, Section 2:

"No person held to Service or Labour in one State, under the Laws thereof, escaping into another, shall, in Consequence of any Law or Regulation therein, be discharged from such Service or Labour, but shall be delivered up; on Claim of the Party to whom such Service or Labour may be due."

In plain English, there was no escape for slaves in the land of the free and the U.S. Constitution made damned sure of it.

In a magical inversion of reality, U.S. histories repeatedly refer to assemblies, governors and presidents as being elected by “popular” vote.

In truth, however, in the United States, popular votes are strictly verboten. Blacks in the new “democracy” are items of property who cannot vote or hold office.

Indentured whites, are simply slaves of another name and another color and who can not vote or hold office.

Indians, upon whose stolen land the new nation stands, and who were described in the racist Declaration of Independence as “merciless Indian savages”, cannot vote or hold office.

In most states in this brave new homeland of “religious freedom”, Catholics and Jews cannot vote or hold office. Women, regardless of race, creed, color or religion, are chattels who cannot vote or hold office.

White men, even those most sacred of all God's creatures; white, Protestant, non-indentured men, cannot vote or hold office unless they meet a further qualification for membership in the ruling class; they must be very, very rich.

Although it varied from state to state, the property qualification which opened the doors to participation in the new demockracy was as much as $4000, an astronomical sum in the eighteenth century, equal to millions of dollars today.

The right to vote and hold office and all political and economic power in the new demockracy was, of course, held by a tiny handful of what would later come to be known as fascists, a small fraction of one percent of the population, the ultra-wealthy, white, male, Protestant, slave-owning, land speculating, terrorist, thoroughly unscrupulous elite; a self-appointed aristocracy of hypocrisy which looked down in open contempt upon most of their fellow human beings including ordinary Americans of all races.

Depend upon it, sir, it is dangerous to open so fruitful a source of controversy and altercation, as would be opened by attempting to alter the qualifications of voters. There will be no end of it. New claims will arise. Women will demand a vote. Lads from twelve to twenty one will think their rights not enough attended to, and every man, who has not a farthing, will demand an equal voice with any other in all acts of state. It tends to confound and destroy all distinctions, and prostrate all ranks, to one common level. John Adams.

Imagine that, equality in the land of the free!

Can't be havin' none of that.

Those who refused to swear allegiance to the newly installed dictatorship of the ultra-wealthy were denied virtually all civil liberties, were jailed, murdered or forced into exile and their property stolen.

The “three-fifths” clause of the Constitution counted each slave owned as three-fifths of a person for the sake of apportionment of electoral districts although the slaves themselves were not, of course, allowed to vote.

The effect was to give slave-owners a hugely disproportionate share of political power amongst the tiny minority of Americans who had any at all.

The slave-owners had about a third more seats in Congress and a third more electoral votes than they would otherwise have had.

The desire to keep control of the country in the hands of the slave-owners also stood behind the creation of the Electoral College.

Votes in the Electoral College, which “elects” the president, neatly sidestepping direct election, were apportioned using the same three-fifths rule.

Thanks to the three-fifths clause, slave-owners dominated the government of the United States until 1865.

For most of the period, slave-owners occupied the presidency, the chairmanship of the House Ways and Means Committee and the Speaker’s chair. During the same period, eighteen of thirty one justices of the Supreme Court, that great protector of human rights and dignity, were slave-owners.

The much propagandized first president, George Washington, was an elitist snob who considered ordinary Americans no better than cattle.

He called the white citizens of the new country over which he lorded “the grazing multitude”. Washington was a slave owner and a land speculator.

The great freedom lover owned about two hundred and fifty slaves, dressed them in rags, auctioned off their children for yet more cash, of which he could never, apparently, acquire enough, and had them viciously whipped for “disobedience”. Among Washington’s many business "enterprises" was the construction of a canal through the Great Dismal Swamp in the Carolinas. The canal was hand-dug by slaves through steaming, mosquito-infested swamp. The slaves were worked to death in appalling conditions so that Washington, already the wealthiest man in the United States, could grow even richer.

Aside from his desire to maintain slavery, Washington, as a leading land speculator, was particularly anxious to gain control of the government because the British had signed a treaty with the Cherokee Nation and other Indian nations which prevented him stealing their ancestral land for profit.

As President, Washington, in his fervor to steal the maximum possible amount of Indian land, was also a mass murderer of considerable accomplishment; the country's leading early practitioner of the ethnic cleansing of native Americans. According to Washington, native Americans were "wolves and beasts" who deserved nothing from the whites but "total ruin."

The second president, John Adams, had no higher opinion of ordinary white Americans than Washington. They were, he said, the “common herd” and had “no idea of learning, eloquence and genius” and were “locked within vulgar, rustic imaginations”.

Junk away all you Rednecks... deny truth!

Tue, 07/06/2010 - 11:07 | 454256 WaterWings
WaterWings's picture

Great! Thanks, pal! You're really doing us a huge favor! I had no idea that not everyone got a fair shake. What we need is a New World Order! Let the smart Fabian Socialists tell us what is best!

We don't no stinkin' Bill of Rights! We just need everyone to play fair! Come on folks! The one in bold is my most favoritist of all. It's gonna be a bitch to get anywhere close to half a billion people.

  1. Maintain humanity under 500,000,000 in perpetual balance with nature.
  2. Guide reproduction wisely - improving fitness and diversity.
  3. Unite humanity with a living new language.
  4. Rule passion - faith - tradition - and all things with tempered reason.
  5. Protect people and nations with fair laws and just courts.
  6. Let all nations rule internally resolving external disputes in a world court.
  7. Avoid petty laws and useless officials.
  8. Balance personal rights with social duties.
  9. Prize truth - beauty - love - seeking harmony with the infinite.
  10. Be not a cancer on the earth - Leave room for nature - Leave room for nature.


Tue, 07/06/2010 - 11:12 | 454277 WaterWings
WaterWings's picture

They should put 5 and 6 together; kind of redundant; so we can make #6 be: "Let free booze flow to all those that like it."

Shit, man, Jesus made it easy: "Love one another."

These freaks, eh, they can't stand to just leave people alone.

Tue, 07/06/2010 - 20:12 | 455769 nmewn
nmewn's picture

I love it when someone speaks of equality and ends it with;

Junk away all you Rednecks


Tue, 07/06/2010 - 20:38 | 455818 Rebel
Rebel's picture

Is "Redneck" an insult? I did not know that. Perhaps a day is coming when your greatest asset might be friendship with some of the good ol' boys. When the collapse hits, they might not even notice.

Tue, 07/06/2010 - 21:39 | 455901 nmewn
nmewn's picture

"Is "Redneck" an insult?"

I believe, if I have all this PC crap down correctly, that it is in the way it's used and by whom that makes it an insult.

Foxworthy using it talking to rednecks would not be considered an insult, it is a badge of honor. In much the same way as Tupac using the word nigga would not be an insult, it is also a badge of honor.

"Perhaps a day is coming when your greatest asset might be friendship with some of the good ol' boys. When the collapse hits, they might not even notice."

I know a few good ole boys...some of em have gold teeth and some chew tabacky...while a few have both attributes.

When/if the SHTF they'll be the ones making ALL the money selling food to ignorant elitist snobs who invest their time in running them down...LOL.

I would wager they will be very grateful to have "rednecks" around them and act like they're a long lost cousin ;-)

Mon, 07/05/2010 - 02:28 | 452700 FrankIvy
FrankIvy's picture

Jesus dude - your point seems to be that the U.S. fought the revolution to perpetuate slavery rather than some other cause.

Take that long, drawn out blackspiracy somewhere else.

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