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How Our Crazy Money System Works
Submitted by Bill Bonner vai Acting-Man blog,
Squirrelly and Subtle
Yes, we were in London, taking care of business. Now, we’re back in Buenos Aires. We’ve tried medication. We’ve tried prayer. We’ve tried heavy drinking – all in an effort to understand how our crazy money system works. And where it leads.
You’d think it would be easy. It’s just Central Banking 101, no? Well, no. It is squirrelly… and diabolically subtle. We doubt anyone understands it – especially those who are supposed to control it.
The basic unit for the system is a kind of money the world has never had before: the post-1971 fiat dollar. It’s paper money – worth as much as people think it is worth … and managed by people who think it should be worth less as time goes by.
Photo via Pixabay
What a Business!
Who are these people? Who do they work for? You might say they are “public servants.” But that implies they are working on the public’s behalf. Nooooo sireee…
They are employees of a banking cartel that is owned by private banks. These banks have a license to lend money into existence, earning interest on their loans.
It is no surprise that their share of US corporate profits has risen fourfold since President Nixon ended the quasi-gold standard Bretton Woods system. What a business! Their cost of goods sold is next to nothing. A few strokes on a keyboard and millions… billions… heck, trillions… of dollars are created.
As our friend and economist Richard Duncan points out in his book The New Depression, the amount of liquid reserves banks have to hold against their loans is now so small they provide “next to no constraint” on the amount of credit the system can create.
Banks just have to maintain a certain “capital adequacy ratio.” This restricts their lending to a multiple of their equity capital (money provided by their shareholders). Of course, money is valuable only as long as there is not too much of it. The market can absorb a little counterfeited money. But there’s a limit. And that limit has been greatly increased, thanks to:
- 1) A worldwide overcapacity of output, financed by previous lending
- 2) A huge glut of cheap labor, also largely brought forth by the credit expansion of the last 30 years
Without these unique circumstances, central banks’ irresponsible policies – ZIRP and QE – would probably have caused inflation to rise to the double-digit range already … maybe higher.
Proof of Richard Duncan’s contention: prior to the crisis, a negligible amount of bank reserves “supported” trillions of dollars in outstanding bank credit. QED, reserves actually don’t matter anymore in the “fractionally reserved” system. However, it is still necessary to understand the money multiplier theory in order to fully grasp how the system works – click to enlarge.
Free Money for Governments
The authorities must feel like a college student who has found his professor’s exam questions. He knows he’s going to get away with something…
And since there are about 1 billion people who live on $1 or less per day, central bankers expect to get away with a lot more. Not only that, but also they’re lauded as heroes for it.
And now there’s no further need to worry about how much governments borrow. Central banks buy governments’ bonds… hold them on their balance sheets… return the interest payments… and the whole thing will be forgotten. And when those bonds expire, central banks can use the repaid principal to buy more government debt!
In effect, today’s raft of central bankers is doing something previous central bankers could only dream of doing: printing money without causing inflation. Politicians, too, are enjoying this once-in-a-lifetime opportunity for recklessness. They will be able to do what none could do before: borrow money without paying it back. We have not seen it in the press yet, but it should be coming soon. Commentators and kibitzers are bound to urge Germany to lighten up:
“Why should Greece have to repay those loans, anyway? Where did the money come from? It didn’t come from German taxpayers. It came from nowhere, like all the rest of the world’s money. And so what if it isn’t repaid? What difference will it make? None.”
Unfortunately, it will make a difference: Even though most of the money was created ex nihilo, Greece’s liabilities are offset by assets someone owns. That “someone”, quite involuntarily, are the taxpayers in other euro nations. The above cartoon illustrates quite nicely how “helpful” money printing is to the economy.
Nirvana for Public Finance
Duncan, whose analysis of liquidity levels at Macro Watch helps us understand the effects of QE, believes central banks should – and will – buy 100% of government bond issuance… and then simply set fire to them. Too much government debt? Problem solved…
Hallelujah! Hallelujah! Nirvana for public finance has arrived. Heaven has come for politicians. Who says there is no such thing as a free lunch? We doubt that either the public or Congress has fully come to terms with this. We’ve just realized it ourselves. But eventually they’ll start lining up.
Budget restraint will be yesterday’s worry. Government debt will be written off and forgotten. The feds will be eating breakfast, lunch and dinner on money that never existed… and never will be paid back. But wait? Is that too good to be true?
Yes, it is too good to be true. If central banks really were to set fire to all government debt, this would happen. The illusion that money is “backed” by something with value, however ephemeral, would be irrevocably shattered.
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How our crazy money system DOESN'T work.
Crazy?
Our money system is well planned.
"Duncan, whose analysis of liquidity levels at Macro Watch helps us understand the effects of QE, believes central banks should – and will – buy 100% of government bond issuance… and then simply set fire to
them. Too much government debt? Problem solved…"
Bonfire of the vanities?
There is no universal value system, money is an utopian idea.
Perhaps, but there most certainly are things that all humans universally value. Call it collateral if you will.
Sorry, did you have a fucking point?
Well, I did the heavy drinking then medication (during hospitalization detox) followed by prayer and I got it figured out. They prints a whole bunches and bunches, gobs and gobs, oodles and oodles, they gives it to themselves of which I isn't one.
QED
How Our Crazy Money System Works
They call this system "working". How generous the title be.
Hitler was killed for exposing the counterfeiters. He canned the parasites and instead let the good citizens print the money and fund whatever they wanted without ever needing to pay it back. The tribe didn't like that, it made them look bad. Made them and their business model appear to be a lot of lies and dishonesty. Made the evil selfishites VERY uncomfortable.
Combination of harsh austerity and massive speculation in the price of the Mark (relating to post war reparations) caused the collapse of the Weimar Republic. Speculators shorted the mark because they were convinced that Germany could not pay the reparations. Meanwhile, the newly privatized Reichsbank (the central bank of Germany) created the immense amount of currency, driving its value to near nothing. Hitler nationalized the Reichsbank and issued government currency. This brought Germany out of depression and allowed it to outproduce the rest of Europe. However, this made Hitlet the enemy of the banking cartel and therefore the enemy of the Western allies.
Hitler didn't do that.
The one man who not only could have replaced him but indeed wanted to sure did though.
Found not guilty at Nuremberg...not for lack of being argumentative with the Court either!
- Adolf Hitler
http://www.webofdebt.com/articles/bankrupt-germany.php
It was Luther not Hitler who stabilized the currency. Hiter, as most of the world knows but few zh'ers are aware, was a complete fuckhead who nearly annihilated Germany.
http://en.wikipedia.org/wiki/German_Papiermark
http://en.wikipedia.org/wiki/German_Rentenmark
almost like he was someone's patsy...
Total bull. Money is debt. Th edebts are your house, your business, your government's obligation.
Period.
The demand for money is driven by the demand for people to pay back the principle with interest.
If you don't pay it back, you lose it. Go ahead, lose confidence in money and you'll lose everything indebted to the criminal banking cartel that rigged this debt based system to systematically asset strip people who don't comprehend the system.
Hitler also trucked the fat cat Zionist, after Judea declared war on Germany, in 1938, to Palestine. Gave `em guns, machine tools and bags of marks. Of course Germany's realigious Jews of that era, who hand at least glanced at the Torah, knew that "play" was one of them so called abominations and would jump on the Nazi provided transport, the SS Tel Aviv, to research a hoped possibility that Noah's Arc did, iindeed, make a port call to Ashkenazi Land, and instead had to suffer in the refugee camps with the rest of Germany as allied firebombing took it's toll.
During the depression, the only country that was moving up was Germany, thanks to it's uninfected banking system.
"Let us infect your banking system or we'll call you an anti-Semite." - WZO Shadow Bankers secret slogan.
Vanity of the bonfires.
The silly notion that printing money and burning it, amounts to an "economy".
" believes central banks should – and will – buy 100% of government bond issuance… and then simply set fire to them. Too much government debt? Problem solved…"
Bonfire of the vanities?
---
I think of the switch to pure MMT bond purchases as the next big wave in RE, that of sub-prime cardboard box tenements with a marvelous view of the park.
Exactly. It works very well for those who engineered it...
... and apparently the author still doesn't quite understand how it all works.
The short version (no time today for another 5000 word dissertation)-
Required Reserves and Capitalization Ratios are different requirements.
Required Reserves and Capitalization Ratios are different requirements.
Required Reserves and Capitalization Ratios are different requirements.
When most people think of fractional reserve money creation through debt issuance, their thought process is constrained by the notion of people depositing paper or digital dollars in a bank account as the primary input, that is then multiplied. This is FUNDAMENTALLY WRONG.
A bank deposit is a bank asset, but there are countless other types of bank assets - equity, senior debt, overnight debt.. and on and on until you get to thing like subprime CDO2 and LIE-BOR derivatives. The devil is in the detail of the legal definition the specific bank asset type, and how the specific bank asset type is weighted in the various Capitalization Ratios. It is the SUM TOTAL of BANK ASSETS not customer deposits (which can be a statistically insignificant and irrelevant fraction) that fundamentally a bank's ability to "print money"... which is why a lot of banks treat their customers (YOU) as if you were a statistically insignificant and irrelevant.
If Bank X has a fuck ton of subprime CDO2 assets - those bank assets are NOT generally subject to customer withdrawal, so they NOT are included in Required Reserve calculations - since those regulations serve to ensure (in theory) that is adequate paper or digital fiat to cover customer withdrawal requests (which is why demand deposits, money markets, and time deposits have different reserve requirements).
Required Reserves and Capitalization Ratios are different requirements.
Required Reserves and Capitalization Ratios are different requirements.
Required Reserves and Capitalization Ratios are different requirements.
The official shylock instruction manual for Required Reserves is about 100 pages, whereas
The official shylock instruction manual for Capitalization Ratios is about 1000 pages, whereas
Guess where the Devil is hiding his dirty details... and why they needed a log scale in that chart...
In Germany the invading Jews stole the printing press and were living high off the hog while the good German people starved to death. Basically what is happening mow.
You do have "point of sale."
That does in fact bring actual cash monies into existence.
It also represents a form of employment..."putting them on the payroll" so to speak. Combined with a minimum wage this creates not a lot but at least SOME cash flow.
Stupendous amounts of energy production in the form of oil or natural gas doesn't hurt either.
Of course refusing to allow interest to be paid on said monies (in this instance actual cash) has a DEVASTATING effect on recovery.
Detroit has already been ruined.
The Wall Street Banks by refusing to lend into QE but instead merely lend to the Fed have really missed out on huge profits too.
If other Banks start printing their own money...well, obviously no need for Wall Street anymore.
Still need the pulp of course...
The paper/gold mark chart is exactly how the BTC/USD chart is going to look in a few years. Keep on printing you stupid bankers, LOL.
The banks could in fact do coinage as well.
This is why the refining and utility business is so valuable.
In theory Montana/Dakota Utilities can in fact create real coinage...real copper pennies etc...
The entire war in Syria is dirty, she had proof and they killed her.
New Anonymous op as White House still ignores murder of American reporter Serena Shim in Turkey
Endogenous circuit theory blown credit bubble backfilling buffoons.
"They are employees of a banking cartel that is owned by private banks. These banks have a license to lend money into existence, earning interest on their loans."
OMFG!!!
I'm SHOCKED to hear of this!!! [Those INDIANA QUARRIED LIMESTONE EDIFICE blocks of stone need a SPANKING]!!!
However, there was one American that knew it:
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning" - Henry Ford – “New York World” newspaper, 1920
I hope poor Henry didn't bruise his hand as he took those Indiana Quarried Limestone blocks out the woodshed to get spanked.
Henry was on to the tribe and their evil parasitic ways.
Yes he was...
In fact ~ I use HF's views as a 'benchmark' sometimes to compare this century [to the last]...
It's CLEAR... Notwithstanding HF's contributions... That he would be viewed in quite a different way today...
So why?
- Have PEOPLE really changed that much [on their own accord]?
- Or, has THE TRIBE propaganda machine sunk it's talons down deeper into the fabric of society & clenched its grip?
Mako
''Modern Money Mechanics by the Federal Reserve spells out the process step by step, states it plainly how the Demand Deposit Account moves the promissory note.
Everyone is playing pretend. What is the Truth?
THERE IS NO MORTGAGE.
You created currency by simply signing the mortgage note.''
2010
You might be interested to know that the Henry Ford Quote about banks is displayed in the first room as you enter the National Museum of the Pacific War in Fredericksburg TX, as well as the audible quote in a short film clip.
http://www.pacificwarmuseum.org/I inquired as to who made the decision to put that in the display and why it was important in the context of the pacific war but none could provide the answer
Thanks for the tip.
I'm gonna drop by and see if they have an answer yet.
Trillion Dollar Platinum Coin,..............bitchez !!!!!!!11111
"O" don't need no platinum
http://upload.wikimedia.org/wikipedia/commons/e/ec/Yapese_stone_money_20...
Hitler was killed for exposing them. He let the people print the money and fund whatever they wanted without ever needing to pay it back. The tribe didn't like that, it made them look bad. Made them and their business model appear to be a lot of lies and dishonest parasites. Made them very uncomfortable.
so at the bottom of your Tax Form... where it says amount Owed..
Just write in... " Please have treasury Print this Amount "
Well lets do some logic.
1) The United States Government is supposed to be owned by the sovereign people . . . of The United States.
2) The United States Treasury is also owned . . . by the people of the USA
3) Thus all the assets of the U.S. Treasury are also owned . . . by the people of the USA
So why can the U.S. Tax-Payer not simply write a check from the treasury? allowing the U.S. govt to "Print" the money it needs to operate?
INFLATION IS A TAX.
Why do you need more than one TAX?
Simply use the exact system we have now, send a tax bill ... if you make 100,000$ a year, send a TAX BILL from the IRS to the Tax Payer with a permission slip.
"Please Remit 30% of your 100,000$ Income from the Treasury"
Tax Payer signs a blank Remittance (instructing the government it has permission to "print" 30,000$USD in the name of the Tax Payer ID#) then currency is issued into circulation by the treasury , and spent by government for the public good.
No more Federal Reserve Needed
No more government Deficits
No more bailouts
100% system stability, and efficiency and clear accounting records.
Prices rise relative to GDP and stay stable, the more GDP Grows (the more productive a nation is) the more income people make, the more the government can print
the more the govt spends, the more money people have to spend, the more they spend the more the economy grows... the more the population grows...
A snake eating its own tail forever . . . works forever until all the energy of the planet and our sun is exhausted or we reach the carrying capacity of our solar system.
Tell me something.
What would you feel better about?
A) The government stealing 30~45% of your paycheck?
or
B) The government sending you a letter asking you for permission to print XXXXX$?
I would gladly pick option B.
You have a slightly outdated constitution. It has been the United States INC. for quite some time. Only those born before 1913 are citizens. Everyone born after that is a tenant. Do a little homework on where your social security number originates...
Answer:
International Monetary Fund.
Pretty sure that date needs to be pushed back to 1868, the year that the 14th Amendment was allegedly ratified; every U.S. Citizen was conscripted into the "national citizenry" and fundamentally transformed from a sovereign State Citizen into a federal subject, forced into bondage according to the new rules of Hamiltonian "American System" economics of statists like Carey, Clay and Lincoln. Yes, that was later formally institutionalized just as you described.
Lincoln didn't free the slaves OR save the Union; he and his cronies just nationalized the plantations and expanded slavery to cover the entire populace, which has been living in an empire comprised of conquered vassal states, ruled by the bankster plutarchy in D.C. using the lingering threat of military force as the 'stick' and an impenetrable illusion of representative democracy as the 'carrot'.
Pledge of Allegiance? Your loyalty oath to the federal government.
The 14th Amendmnent creates a 'corporate person' aka 'citizen'. That amendment is the root of the fraud that is currently occuring in this country. This amendment defined what a 'citizen' was, is, and could be. It eliminated all rights to property and transfered them to the state. That is why you must 'register' everything with the state. The term 'registration' means to give up all rights and ownership, that is why no one owns anything in this country, because fictions(corporate persons) are dead and 'tell no tales' and 'own nothing'. Senate Report 93-549 confirms that Americans live under a dictatorship, own no property, and never can. This amendment allowed for the creation of the Act of 1871, which then in turn allowed for the creation of The Federal Reserve Act, which in turn lead to the Emergency Banking Act which dissolved the Republician form of government and replaced with a democracy. This amendment needs to gone the way of the Prohibition Amendment. Do your research the Secretary of State(Not the President who is supposed to) signed the Executive Orders in 1868 ratifing the 14th Amendment ahead of the last state and to publish it. The Secretary of State was the one who finalized it and only the President can finalize them. It is a fraud and needs to go.
I may also add, Look this up CRS Report for Congress Order Code 98-611 page 5, and I quote:
"The sixth executive order, dated July 20, 1868, and concerning the ratification of the Fourteenth Amendment to the Constitution, was also signed by Secretary Seward and has the form of a proclamation. The same was true of the seventh executive order, dated July 28, 1868, certifying the ratification of the Fourteenth Amendment and ordering its publication."
Only the President can sign executive orders, and Johnson did not want to sign it. So there is fraud right there, not to mention the fact that 2 states recinded before it was ratified.
Thank you for a very informative post.There is also a serious problem with the original 13 Amendment signed in 1819 not the slavery issue now shown. Milestones
interest free credit.........fuck paying usury to a parasite bankster for doing absolutely nothing
Hitler was killed for exposing them. He let the people print the money and fund whatever they wanted without ever needing to pay it back. The tribe didn't like that, it made them look bad. Made them and their business model appear to be a lot of lies and dishonest parasites. Made them very uncomfortable.
Well - Hister tried to eliminate the Vile Vermin. Exposing them was secondary to wiping them from the Earth.
That's how they close the loop. Money is slavery. State sponsered violence is conditioned from day one as normal.
The sovereign coins money/slavery, and pays the army/police with the coin, and the slaves pay taxes in coin of the realm under threat of violence, and the sovereign coins money/slavery, and pays the army/police with the coin, and the slaves pay taxes in coin of the realm under threat of violence, and the sovereign coins money/slavery, and pays the army/police with the coin, and the slaves pay taxes in coin of the realm under threat of violence, and the sovereign coins money/slavery, and pays the army/police with the coin, and the slaves pay taxes in coin of the realm under threat of violence, and the sovereign coins money/slavery, and pays the army/police with the coin, and the slaves pay taxes in coin of the realm under threat of violence, and the sovereign coins money/slavery, and pays the army/police with the coin, and the slaves pay taxes in coin of the realm under threat of violence, and the sovereign coins money/slavery, and pays the army/police with the coin, and the slaves pay taxes in coin of the realm under threat of violence, and the sovereign coins money/slavery, and pays the army/police with the coin, and the slaves pay taxes in coin of the realm under threat of violence, and the sovereign coins money/slavery, and pays the army/police with the coin, and the slaves pay taxes in coin of the realm under threat of violence, and the sovereign coins money/slavery, and pays the army/police with the coin, and the slaves pay taxes in coin of the realm under threat of violence.
The solution for Greece (if Europe wants them to stay in the Euro):
Loan Greece about 500B with a mandate that 80% of it be spent on developing industry (Roads, Bridges, Oil Refineries and Shipping Ports, Oil Exploration, and extraction of other natural resources, Farming expansion as well as military contracts in partnership with European nations (ports to park war ships and planes).
Greece can profit as a nation by exporting resources, and renting ports and landing strips to other nations industry and military.
Greece can build pipe lines for countries like Russia/China/Turkey to help transport and sell natural gas/oil into Europ/Africa.
Greece can bolster its farming industries and export some of the highest quality lamb/pork/chicken/eggs in the world, not to mention Greece litterally has THE BEST olive trees on the planet.
Greece can exploit its rich culture via tourism, more shipping lanes/ports/airstrips and lower taxes on tourism would see tourism jump 100~300% from the previous highs.... give people more flights into your country and the cost of those flights drop like a rock.
More people flooding into Greece will inevitebly lead to more people buying and building vacation homes. . . in Greece. . . as such the housing industry and banking sectors will begin to flourish there again.
And Greece could even be like Switzerland, de-regulate all banks and do not comply with foreign governments demands for account theft/freezing . . . people would dump money into Greece as a safe heavan to avoid excessive taxation from less. . . civil governments.
Greece is positioned VERY WELL.
The reason this will never come to fruition is not because it isn't possible . . . it is because the people who run Europe DONT WANT GREECE TO THRIVE, they WANT IT TO FAIL so that they can continue to launder money through Greece to themselves . . . the people running the show/making the deals with Greece and its loan arrangements are only interested in getting European tax-payers in debt . . . so that they can steal the money from the loans and buy McMansions on Greek Islands... it has nothing to do with making Greece sustainable . . . the people directly responsible for all the economic woes of europ and Greece are the ones responsible for these loan agreements / terms / demands (namely Troika and other mostly German Interests).
Bull Shit.
Greece would have to bring in German people to design and build it - then pay them to stay and manage / run it or it would soon be bloated with lazy Greek government employees that only want more vacation and early retirement at full pay.
Nice job but you just exposed yourself as a troll.
What part of my comment is false?
Truth - even from a troll is still truth.
I have read that if you trace the money that went from Germany to Greece, you find that a lot of it was used to purchase military hardware made in Germany, as a condition of that money being advanced to Greece. Allegedly, Greece was forced to pay for submarines, among other things. Can anyone give definitive answers as to whether this is a true story or not?
true
same with portugal. and in germany they found the guys who bribed the PT government to buy those subs and arrested them, while in PT they can't find the ppl who received the bribe!
Crazy?
Can't be, why it is backed by the "Full Faith & Credit" of the United States Gubmint!
Now that is awesome!
FUBAR!
Backed by the full faith of it's nukes and military.
14th Amendment is where your certificate of live birth enters with your mothers signature of abandonment on the bottom. Research Trading with the Enemy, that's you. Your still contracting and doing commerce with a foreign nation daily, why? Because THE UNITED STATES OF AMERICA,INC. is located on foreign land, what we call the USA, or home to US citizens and your Represenatives on the Hill need you in the usury system because that's who their bosses are, big banks and Corporations.
Their signing your death warrants with China and Russia and everyone in this du jure governance is praying you don't find out the truth that your a commodity and colladeral for their federal debt they incure. The more debt they make, the more US citizens must die so they can collect on your Fidelity mutual bond as a way to recoup their losses.
On average, everyones bond is worth approximately 1.5 million dollars until it terms. So figure out how much public debt we have, then divide it by that number and that's how many their going to kill when they get here.
Your mother released her newborn unwittingly into a foreign nation as to participate in their Commerce and by concent/seal her own bill of laiding into a foreign port, at the dock - tors office at the State Hospital. All Maritime Law.
Get it? Her birth canal broke water and delivered a goods or product to a dock in a foreign port. The Dock - tor legally witnessed her delivery, your port of exit, as you entered into a foreign jurisdiction with UCC Laws.
You all are contracting with a foreign .gov. so your considered a squater on their land.
Your Birth Certificate is now a bond, a financial instrument to be traded publicly until your Corp. expires meaning death.
All crimes are UCC Commercial, they operate du jure under public policy, policy is NOT LAW so wipe your ass with your Constitution [Bill of Rights] and your Declaration of Independence because its just that, they don't recognise the 1776 Constitution, they replaced it with The Act of 1871, so their both toilet paper at this point. Ones in the dust bin and ones re written to become a Corporate charter which has nothing to do with your freedom. It's the exact opposite.
A non codified "Declairation" or announcement voca visa statement made by a, or the public, doesn't have to be recognised as a decree of soverignty on foreign soil, it's quite the opposite, that person making that decree can be arrested because your talking like a foreign invader becoming an enemy of a foreign nation because he is too stupid to research he is a registered slave by his own mother and volentary, your sprawl on their Plantation.
If you think your so free and own all the crap you have registered, try to fight them when they come to seize their property and see what happens.
I can declair in the public square all day that I am a free man and I have God given rights, but that goes counter to what my mother signed over to the state when I was born.
US Citizens must get educated quickly, if not, it may cost you your life and or property. Your squaters on Foreign land. Get over your Star Spangle banner bullshit and recognise your born into a usury system owned by multinational Corporations. its not your fault
becase your parents were equally ignorant of the History of the united states of America.
If we were truely that free on soverign land, we wouldn't need an SS. Secretary of State. You need them domestically to enter the jurisdiction of our US Court system to use Notary signed documents so their recognised by a foreign jurisdiction (the court) on your behalf.
Wake up and become aware. The American dream was just that.
Your contracted with a foreign Multinational Corporation. Maybe this might help?
as usual Chupa, excellent work.........
Why are our names are in all capital letters on legal doc. and forms.
When you sign your personal check you do not sign in all caps, so “they” have a micro print put under the signature, (it looks like a small line, get a magnifying glass and look at it) to bind you with your legal fiction.
TABLE OF CONTENTS:
Executive Orders Rule the Land
http://famguardian.org/subjects/lawandgovt/articles/memlawonthename.htm#12.__The_present_situation_in_America_
Right now... that would be 78 million.
Perhaps it is a function of the scale of the modern economy. Were it just the U.S. using the dollar, then the confidence of people in the U.S. would affect the presumed value of the currency. But it's not just the citizens of one country anymore. Whether you like it or not, the dollar is the currency of world trade, and in order for it to be affected by people's confidence it has to be affected at a lot of levels across a lot of borders. It can happen, but it hasn't happened yet. And the trillion dollar question is when will it happen. This article hasn't done anything except restate the obvious, it certainly hasn't answered the question.
Money is a convenience of modern society, it makes labor and goods transfer fungible. When it stops doing so, when I have any choice from my clients but to be paid in dollars, then the dollar will lose its value to me. But if that ever happens, if the public demands some other option but fiat currency, then Armageddon occurs unless change in public ethics/morals/values also changes. Because I believe it is possible for Armageddon to happen, I own gold and silver. But I'm not really looking forward to it.
Hitler was killed for exposing them. He let the people print the money and fund whatever they wanted without ever needing to pay it back. The tribe didn't like that, it made them look bad. Made them and their business model appear to be a lot of lies and dishonest parasites. Made them very uncomfortable.
The Federal Reserve's plan to monetize debt.
It's getting harder and harder for the inflationist camp to argue their position in the face of declining global GDP numbers and a rising dollar. The deflationists clearly have the advantage...
http://www.globaldeflationnews.com/inflation-vs-deflation-part-1which-on...
And the accompanying credit bubble just keeps on expanding...
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
I don't buy this part of their story. Like it or not the dollar is the Petro-dollar, which refers to a particular major resource commodity. National currencies are backed by their respective abilities to settle trade and debts with a combination of potential resources extraction and supply, potential primary production levels, export earnings potential and skills that will be profitable and in demand, plus a sound national culture and will to act.
That's what ultimately has been paying and 'backing' the bills since 1971 in the US. So the currency exchange value is not going to go to zero because it is not 'paper-backed' fiat, it is paper that's backed by national potentials to settle trades.
People never honestly face that within these types of discussions, not wish to deal with it honestly or forthrightly and that's where the wheels fall off their conclusions, and subsequent statements, advice and outlooks
Take the next damned step people, just what are you afraid of? That it's right?
Saying that the national money is "backed by national potentials to settle trades" is another superficial view of what money "should be."
Money is measurement backed by murder, because every possible trading relationship is INSIDE the context of robbery. Anything that could be traded could simply be robbed instead. All possible voluntary contracts developed within circumstances which could be described as "involuntary contracts."
The petrodollar was backed by the American Military, including all of the various CIA type activities, such as the range of behaviors of the economic hit men, and the literal assassinations, as well the back up of military invasions. The book Confessions of an Economic Hit Man reviewed the range of techniques such as bribery, intimidation and assassination, as well as military invasions, all of which were ways that made, and maintained, and advanced the established monetary systems of fiat money, as enforced frauds, which controlled natural resources. The history of the petrodollar, can not be separated from that history.
To review that history, I recommend an amusing presentation: Robert Newman - History of Oil - YouTube
The petrodollar was a form of the basic sorts of enforced frauds that made and maintained the monetary systems that controlled access to natural resources, wherein all private property is based on backing up claims with coercions, in which the money was merely the most abstract form of that, namely, measurement backed by murder.
By and large, most people want to indulge in superficial view that money is backed by production, while they deliberately ignore that the production of destruction controls production. The notions that money should be a means of exchange, (or should meet the rest of the standard list of what money "should be") are the views of people who continue to as the productive prey, who operate INSIDE systems which were made and maintained by the predatory parasites.
The biggest bullies' bullshit world view has been promoted in the most tangled upon ways possible, to result that in being almost perfectly backwards to what is the real situation. The morality of the productive prey is the one that they were taught to believe in by the predatory parasites. Furthermore, those who are the predatory parasites also pretend to promote the same morality.
If one looks at human beings and human civilizations as general energy systems, one discovers that they are operating as entropic pumps of energy flows, which are best described as following the principles and methods of organized crime. The existing civilization actually behaves as fractal patterns of organized crime, and it must necessarily do so. The relative triumphs and social successes of the best organized gangs of criminals has resulted in them being surrounded by controlled oppositions groups with promote the same bullshit social stories originally sponsored by the biggest bullies.
Our "crazy" money system actually makes perfectly logical sense as the manifestation of organized crime, surrounded by various groups of controlled opposition, which all present what they are doing in the most backward ways possible, due to the history of successful warfare being based on deceits and treacheries, which then was the foundation for finance based on enforced frauds.
The deeper problem with respect to those people who promote idealized views of what money should be is that they tend to deliberately ignore that money IS measurement backed by murder, and that it must necessarily be, because the central controls are necessarily the death controls, which back up all other levels of controls, such as the debt controls.
In general, it is routine on Zero Hedge for most articles and comments to continue to present what is wrong with the established monetary systems, which is then followed by bogus "solutions," based on impossible ideals, regarding what money should be. E.g.: Money as a Means Of Exchange (MOE) has often been promoted in Zero Hedge comments by withglee.
The things is, money IS what it IS for good reasons, which make sense when one regards human beings and human civilizations as general energy systems.
Of course, to do that more rigorously, one also has to go through a radical critique of the currently conceptions of entropy, because that has been deliberately inverted during the history of the development of thermodynamics and information theory. The way that we currently think about entropy is backwards, because an arbitrary minus sign was inserted into the entropy equations, so that the measurements of power and information could be expressed in as relative positive values, rather than relative negative values. That is, the mathematical physics was arbitrarily inverted, and thus perverted, because that was what was consistent with the biggest bullies' bullshit world view.
The monetary system is based on enforced frauds, because human realities are always organized lies operating robberies. As soon as one defines human beings as separate from their environment, then they act as robbers in that environment. As entropic pumps of energy flows they kill and consume other living things in order to live. As history developed, the ability of some human beings to kill other human beings was the central feature, because civilizations were forged in the crucible of conflicts, through the history of warfare.
The sublime paradoxes that we face are due to the almost totally degree to which the dominant natural languages and philosophy of science present a Bizarro Mirror World, or Wonderland Matrix, where everything appears to be as backward and absurd as possible. Everything that human beings do is originally based on SUBTRACTION, from which follows ROBBERY.
As entropic pumps of energy flows, overall human beings kill to live. All forms of "productive" behavior takes place in an overall context of destruction. Although it should be obvious that the production of destruction controls production, the vast majority of people are able to deliberately ignore that, and want to continue to deliberately ignore that. Hence, although it makes good sense that money is measurement backed by murder, people who refuse to face that fact then regard the established systems of enforced frauds and being crazy, and getting crazier ...
From some perspectives that is correct, since society is dominated by the best available professional liars and immaculate hypocrites. However, that too itself makes good sense after one understands how and why human energy systems necessarily operate according to the principles and methods of organized crime. The irony of the established systems is that they are the most socially successful the more that they are able to lie about themselves, including surround the core of organized crime by layers of controlled opposition groups who also repeat basically the same lies, because they operate within the same fraudulent frame of reference.
Element was partially correct when asserting:
"National currencies are backed by their respective abilities to settle trade and debts with a combination of potential resources extraction and supply, potential primary production levels, export earnings potential and skills that will be profitable and in demand, plus a sound national culture and will to act."
National currencies are actually backed by the ability of their police and armed forces to kill people and destroy things. It is only WITHIN that context that any other kind of trading occurs, where trades in goods or services are settled with exchanges of money.
It is quite possible to understand "How Our Crazy Money System Works," after one regards the ways that human beings operate as energy system matches the principles and methods of organized crime. From that perspective, OF COURSE, governments are the biggest forms of organized crime, controlled by the best organized gangs of criminals, which currently happen to the biggest gangsters that may be called the banksters, that have the power to make the public "money" supply out of nothing, which frauds are enforced by governments, which have their police and military forces which can kill people, or destroy their things, if they do not agree to operate within that monetary system.
After one goes through enough of the intellectual scientific revolutions which are necessary to better understand human beings and human civilizations as general energy systems, which are deliberately misrepresented by themselves to themselves to the maximum possible degree (which is consistent with them basically being systems of organized lies operating robberies), then everything else becomes consistent with that overall understanding, including the paradoxes that successful warfare was based on deceits, and successful finance was based on frauds.
After one adopts a better definition of "money" that is consistent with all the social facts, rather than deliberately ignores some of them, in order to continue to promote the impossible ideals about what money should be, then it becomes clear that the only things which actually exist are the dynamic equilibria between different systems or organized lies operating robberies. The only way to have better government is through better organized crime. The only way to have better money is to have better measurements backed up with better murder systems.
Obviously, that radical truths are in a head-on collision with the long history of successful warfare based on deceits, and successful finance based on frauds, wherein almost everyone has a relative degree of social success depending upon the degree to which they can operate as professional liars and immaculate hypocrites. However, the underlying PROBLEM is that progress in physical science has enabled people to understand other general energy systems better and better, which has enabled technologies to become trillions of times more powerful, while NONE of that has been allowed to manifest through political science, by understanding human beings and human civilizations as general energy systems, because doing that requires going through profound paradigm shifts.
As my original comment on this article below also outlined, "How Our Crazy Money System Works" is due to civilization operating through organized crime, surrounded by controlled opposition. There are NO genuine "solutions" which can be based upon stopping that. There are NO ways to make idealized money ever become real money, because real money is necessarily based on measurements backed by murder.
Those realities go back to the basic biological facts that human beings live by killing and consuming other organisms, and that the history of humanity was some human beings killing other human beings, in order to gain access to the natural resources that would enable the survivor to continue to live and reproduce, by acting as entropic pumps of energy that killed and consumed other living organisms.
Not by accident, our civilization has developed it natural language and philosophy of science to promote the biggest bullies' bullshit world view to the maximum degree possible. That has SUBTRACTED THE SUBTRACTION, therefore, the radical truth is to subtract the subtraction of the subtraction in order to return to what was always the real situation.
We understand money in the most backward way possible, because we understand almost everything else in the most backward ways possible. The success of killing based on deceits, which enabled the success of consuming based on frauds, have become hyper-complicated entanglements which are based on bullshit about those.
It is almost impossible to exaggerate the degree to which people misunderstand that basic processes of SUBTRACTION, because they so totally take for granted that they have subtracted that subtraction, without being aware that they have done that. Hence, the history of science slipped an arbitrary minus sign into the entropy equations, so that the measurements of power and information would end up having relative positive values, rather than relative negative values.
The progress in physical sciences require profound paradigm shifts which challenged common sense, but which nevertheless were proven to be effective, and experimentally confirmed over and over, by such technologies as electronics and atomic bombs. To cope with that, we need profound changes in our political science, which must overthrow most of what most people now take for granted as their perception of politics.
We need to develop a monetary system based upon energy, so that monetary system can be reconciled with the natural energy systems, and the industrial energy systems. However, the existing monetary systems are based on the maximum possible frauds, while those who tend to recognize that tend to then promote bogus bullshit solutions which refuse to accept that is necessarily the case, that human beings must operate through systems of organized lies operating robberies.
At present the established systems are becoming extremely unbalanced, because there is almost nothing but organized crime surrounded by controlled opposition, both of which promote bullshit "solutions" based on impossible ideals about how things should be, which can never be realized, but rather, attempts to realize such impossible ideals always actually cause the opposite to happen in the real world.
The comment above from Element was another example of the supreme ironies of how people who promote paradigm shifts almost never do (which I presume probably applies to me to, in ways which I too am still blind towards.) I would throw right back at Element what he wrote that: "People never honestly face that within these types of discussions, nor wish to deal with it honestly or forthrightly and that's where the wheels fall off their conclusions, and subsequent statements, advice and outlooks."
I would assert that regarding the definition of money being measurement backed by murder, which is the only definition consistent with all the facts, as well as consistent with understanding human behaviors as expressions of how general energy systems operate: "People never honestly face that ... the wheels fall off their conclusions ..."
Element has pointed out one of the real levels that backed up fiat money, i.e., the petrodollar backing, as the main form of "backed by their respective abilities to settle trade and debts with a combination of potential resources extraction ... and will to act." That is certainly correct on some levels, and more correct than the view that national fiat money is backed by nothing whatsoever. I am NOT saying that Element is wrong, but rather that his expression was incomplete.
The most important form of any national "will to act" is the will to go to war. Of course, that included the history of various operations of the CIA,such to overthrow governments, and replace them with new regimes.
Anyway, my point is that while Element make a correct comment, on the level that it was presented, I think that one can look deeper than that, to understand that national fiat money is not merely backed up by the ability to settle trades, but also by the ability to murder to back up the measurements made by that money.
Generally speaking, the established systems have become psychotically dishonest, so that better balancing of the rates of social robbery, and environmental robberies, has become practically impossible. Indeed, there is no practical political point to me attempting to communicate more radical truths about political economy and human ecology, since the established systems are a core of organized crime, surrounded by controlled opposition, run by people who are professional hypocrites who do not want to face any more radical truths.
In general, the most probable future paths are NOT for enough people to understand the monetary system enough to improve that, but rather for the existing debt slavery systems to continue to generate numbers which are debt insanities, which then provoke death insanities. Since the overwhelming vast majority of people do not know, and do not want to know, that money is measurement backed by murder, those realities will continue to actually be done through the maximum possible frauds, while those who benefit the most from doing that in the short-term will continue to have every political advantage to invest the profits from those frauds in more frauds, particularly through the funding of the political processes.
Overall, human civilization has become too psychotic to fix its problems. Our society is already terminally sick and insane, as demonstrated by the degree to which there is almost nothing but organized and controlled opposition, both of which want to continue to believe in the same old bullshit, rather than consider any more radical truths. Since the percentage of the population that wants to understand the ways that money is measurement backed by murder, in order to do that better, is such a tiny fraction of 1% as to be vanishingly small, there continues to be no practical political point behind my posts on Zero Hedge.
For all practical purposes, the situation we are in is globalized electronic frauds, backed by atomic bombs, headed towards psychotic breakdowns, taking the forms of collapses into chaos, provoking mass murders. Unfortunately, as far as I can tell, trying to understand that better seems quixotic, since almost everyone else does not want to understand any better. Both the article above about "How Our Crazy Money System Works," and the comment by Element upon that, were superficially correct, but did not go deeper, in the directions which would theoretically be necessary in order to understand those problems in ways which could theoretically provide better solutions.
Of course, in general, our civilization has become so completely crazy, due to its long history of social successes based upon deceits and frauds, that it has overall become way too criminally insane to recover from how criminally insane that has become. Hence, the best qualification to the general point that money is measurement backed by murder is that the established form has become a Crazy Money System to the point where it is criminally insane!
Too bad, so sad. I WISH that learning about these issues did not always result in that the more one learned, the worse it got. I WISH that there were some theoretical ways that understanding these problems better would lead to being able to implement better solutions. However, so far, the only conclusions that I am able to come to that have intellectual integrity is that the established systems are runaway criminal insanities, which can not be prevented from madly destroying themselves, in ways which can not be prepared for.
There is an alternative:
The Crossing Point
https://www.youtube.com/watch?v=-_-kMVwJaDA
Thanks for that link, AE911Truth.
I will watch it through later ...
I have already watched lots of similar stuff, e.g.:
THRIVE Movement - YouTubeHOWEVER, so far, what I actually observe is that the systems based on backing up lies with violence continue to be almost totally dominant, while anything else is nice to theoretically consider, but has NOT had signfiicant practical effects. I tend to intuitively feel the Greer is still controlled opposition. He does NOT discuss how those insights, possible science, and resulting technologies, would work through the issues with respect to death controls. After all, every possible technological miracle has potential military applications, which is probably why so much "truth" has been deliberately suppressed.
P.S.
I have collect lots of similar stuff under this thread: Solar Flare Co-incidences?
Sorry RM, I read maybe half of your first paragraph and simply lost interest in going any further. You're suffering from pathological obsessive verbosity mate. I know you love it, and it is your right, and you are naturally inclined to painfully repetitive ranting, but it's not effective communication. You may as well have laid down a random alpha numeric flood with some occasional gaps, for all the difference it made (at least for me). I could count the number of comments of yours that I've read during the past two years on one hand. What you wrote above in reply may be pro, or con, or neutral and indifferent, but I'll never know.
Think about it.
You are free to not bother to consider my criticism of your comment, Element.
I have thought, A LOT, about the ways that most people want to continue to believe in bullshit. I am resigned to accept that fact, despite that meaning we could NOT recover from the degree to which our society has become terminally sick and insane.
Your comment repeated one of the standard views regarding the theory of what money should be, which is correct upon its own level. I am not surprised that you do not want to think more deeply about that, and therefore, automatically skip over my reply. Your mind is automatically skipping over considering more radical truths about what money IS, in order to continue to continue to believe in what money should be.
That was totally "normal," although, these days, the runaway debt insanities situations are making your attitude appear to become what Zero Hedge has recently taken to calling "paranormal."
Didn't want to be rude RM, you don't deserve that, I suppose I was tired when I tried to read it, but I did mean it. It's not too late to alter your (habit) mode or bludgeoning people with wordy noise. The general repetition of the same phrases and themes renders 95% of it not worth reading so it's a simple function of the law of diminishing returns to read it. The more words and repeated concepts, the exponentially less likely I am to read what you write. I'm sure I am not the only one, so for god's sake take that criticism on board.
I will be away a few days and will read through to see what you were saying. But If you want to know what 'money' is it's a mechanism for rationing access to resources.
See? It doesn't take 50,000 words.
If you think 'money' is a mechanism for rationing access to resources then what do you think war is?
@Rad I find it amazing that people feel they must complain about your comments. They display a degree of self-centeredness and fail to 1) appreciate the vast quantity of your material that you don't include in each comment which can only be appreciated by reading all your comments, 2)appreciate that article after article after article lends to strengthening your arguments 3) appreciate that others may be reading your comments for the first time and that it's generous of you to take the time to lay out some of the basics for them (I expect this is a result of being in politics, I'm sure there are days you feel like a stuck record lol) 4) be able to operate a 'page down' button.
-1 Element, rude, arrogant, and abrasive is the norm for you.
Oh really? OK, I'll take a Styer a few grenades and some body armor next time I go to the shops to get some some milk.
Making all sorts of sense there dumb-dumbs.
Wait, so you're saying *snicker* that you still think *snicker teehee giggle* that your milk comes from cows? BWAHAHAHAHAHAHAHA
Fuck it, I've grown weary of preaching to the choir. Just be ordinary and keep working forever for worthless fiat, bitchez. Oh, and watch lots of TeeVee and pierce sensative parts of your body. Go to Disney World and buy an iPhone and use yo credit card to "pay" for it. And VOTE in every election because your vote matters!!!
Element-
That's why I think Japan still has a way to go before total collapse. They make a lot of stuff people around the world want to use.
I think you're right. They have a lot of machinery to constantly pay for via on-going production and they tend not to close factories due to under utilization. Not like Detroit, they instead invented and perfected hybrid drive-trains and are making a stack of money, despite other Asian competition, where the US just stopped making stuff. Plus people know the quality and demand it now, they know Japanese products are well designed and reliable with excellent after sales service and parts as they age. And they now have free-trade agreement tariff removal with Australia, their main industrial inputs and energy suppliers. They will kick on for a while yet.
Furthermore, there is little doubt that those controlled opposition groups will continue to promote bogus "solutions" to the problems which remain too superficial, and so, silly, since their continuing belief in false fundamental dichotomies will continue to manifest in them promoting "solutions" based on impossible ideals, which will continue to cause the opposite to happen in the real world.
The latest sort of shallow public debates regarding how "How Our Crazy Money System Works" have been about the prospects for auditing the Federal Reserve Board, that I commented upon here:
http://www.zerohedge.com/news/2015-02-25/janet-yellen-freaking-out-about-audit-fed-–-here-are-100-reasons-why-she-should-be
Janet Yellen Is Freaking Out About "Audit The Fed" – Here Are 100 Reasons Why She Should Be
http://www.zerohedge.com/news/2015-02-28/fed-independence-joke-so-why-not-audit
Fed Independence Is A Joke, So Why Not Audit?
The concept of money is one of mankind's crowning achievements; unfortunately, it has been bastardized and perverted by small groups working in collusion to enrich themselves at the expense of greater humanity...This cannot end well...
Just about everything we produce these days is a byproduct of these control systems.
Give us this day our daily bread, and forgive us our debts, as we have forgiving our debtors.
"In the end, the only way out of all this global debt may prove to be a Biblical debt Jubilee"
http://www.zerohedge.com/contributed/2013-10-14/9-mind-blowing-facts-abo...
fiat free
interesting article. Question, doesn't capital adequacy ration only apply to loans that are not hedged? i.e. in the 90's and 00's with the expansion of cds to support your loans, which were unregulated, meant you did not need so much capital in reserve; because those loans were "insured". If that is so, isn't the massive injection/creation of money by the fed, only there to fill in the gap and prevent a financial meltdown? What i mean is, wasn't the massive money supply actually initially created by private banks with the support of CDS? Central Banks aren't the only ones that can create money...