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Guest Post: Counterfeit Money, Counterfeit Policy
Submitted by Charles Hugh Smith from Of Two Minds
Counterfeit Money, Counterfeit Policy
What is the difference between printing money and counterfeiting? There is none.
Counterfeiting is illegal because it is the false creation of value. The counterfeiter takes low-value paper and turns it into high-value money, which is fundamentally a claim on the real productive value of the economy that issues the currency and recognizes it as a proxy means of exchanging that productive value.
Counterfeiting is illegal because the counterfeiter creates no additional value--he creates only the proxy for value. Creating real value--adding meaningful goods or services to the economy--is tedious, hard work. How much easier to simply transform near-worthless paper into a claim on actual goods and services.
If this is illegal, then would somebody please arrest the Board of the Federal Reserve for counterfeiting? The Fed has blatantly printed money without creating any real value to back up their added claims on productive value. Hence they are counterfeiting, pure and simple. A government based on rule of law would arrest these fraudsters and cons at the earliest possible convenience.
And while you're drawing up the indictment, can you also charge them with counterfeiting competence and policy, as they have demonstrated the Peter Principle par excellence: the Board has risen to its highest level of incompetence. Their counterfeit policies have wreaked incomparable damage on the real productive economy.
The essence of counterfeit policy--a fake policy that claims to be something it is not--is "extend and pretend." And the sole goal of "extend and pretend" is self-preservation and the preservation of the Financial Elite which has tightened its grip on the nation's throat as a direct consequence of Federal Reserve policies--notably "extend and pretend."
"Extend and pretend" extends the "too big to fail" Financial Sector's licence to mask its insolvency and its licence to continue issuing debt, leverage and derivatives under false pretences, i.e. that the risk and market value of these instruments are transparent. They are not.
In effect, the banks are also counterfeiters, as they are issuing debt--a claim on future productive value--without adding any actual value to the economy.
Thus the Fed and the Financial Sector are both diluting the base of actual real value with ever-expanding claims on real productive value by printing money and issuing debt. If an economy creates 100 units of productive value, and issues 100 units of currency as a proxy claim on that value to be used as a means of exchange, then there is a 1-to-1 correspondence with the money claim on productive value and the actual value.
If someone prints another 100 units of money and starts buying assets with that money, then they are claiming 1 unit of money still equals 1 unit of production though they have debased the currency so that it actually takes 2 units of money to represent 1 unit of productive value.
This is a con of the first order, which is why counterfeiting is illegal. If counterfeiting is illegal because it is a con, a fraudulent claim on real goods, services and assets, then how can money printing by the Fed (a private bank, mind you) be legal?
It can only be legal in a kleptocracy ruled by a Financial Elite bent on political and financial dominance, a Plutocracy whose wealth is all skimmed from the productive economy via ever-expanding issuance of money and debt.
When corporations and the State are one, we call it fascism. In the U.S., it has taken the form of financial fascism, and the Federal Reserve and Federal agencies (Treasury, Freddie Mac, FHA, etc.) are the handlers and enablers of this kleptocratic financial fascism. They add no value, they only steal value from those who create it.
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yeah, it was a kangaroo court and used an obscure law from the civil war to prosecute, then the lead prosecutor lied after the trial, travesty at hand
Counterfeit this Banker Kuntts:
http://3.bp.blogspot.com/-NBtAUMzwHng/Tmo5jnnEMBI/AAAAAAAAM4c/Lxy418k7rvU/s1600/Best-top-desktop-golden-wallpapers-hd-gold-wallpapers-gold-wallpaper-picture-image-photo-24.jpg
There are a few limbs of this massive wealth transfer from the public to "banks" and their owners:
* counterfeiting via private control of currency creation (central banks), fractional reserve lending
* fees/charges (the bank can charge you fees but you can't charge the bank fees, even though this is supposedly a free market)
* direct transfer (bailouts, ZIRP/bond purchases etc) facilitated by management by crisis (induction and exploitation of fear).
These are the financial mechanisms of wealth transfer, the political mechanisms include capture and corruption of the political process, propaganda, culturing financial illiteracy in the general population. People can lose their jobs, homes, hard-earned retirement funds, and are yet unable to penetrate the narrative that this wealth "vaporized". Apparently there is a "shadow banking system", with 700 trillion in liabilities requiring massive transfer of public wealth to the "banks", as if either of these factoids was remotely acceptable. Remarkable that the public can accept this degree of damage on an ongoing basis.
Bravo.
The FED is like the U.S. Sickcare industry and especially the Pharmaceutical giants who push one drug after another at grossly inflated prices, half of which end up being pulled from the market for "unintended consequences" (i.e. - making people sicker or killing them).
Any other drug dealer would have their posessions confiscated and be put in the slammer for 5-10.
The way it works is this...you devalue the currency by 50% over ten years, but see to it that the wealthy have their incomes increase by 250% over that same period, then pay Congress to let you keep more of it through tax cuts. And since unemployment is kept nice anf high, you don't have any of that pesky wage inflation.
I think everyone who reads Z.H. is fully aware of the Dog and Pony show known as the FED, even the Shills and Trolls, but until the Grandmas in Pacoima and the life long Democrat voting (or Repub voting) elderly crowd get the message, until the minority and career poor crowd get it, it is just preaching to the choir.
ZH needs a way to find a method of increasing it's readership exponentialy, Z.H. T.V.?
It is not required of voters that they even own a computer and poor people vote, the elderly vote (inspired by CNN and NBC and Fux news?)
Until they 'Get It' ('Get it' being a sandwich now for an ass fucking later),the generational bubble that does most of the voting in the USA is going to repeat it's habit of relying on the MSM and local chit-chat to inspire them to vote for people like Bush 1 and 2 and Obama and that Romulin guy.
A LARGE portion of US citizens do not use the net and therefore have no exposure to real Data,Fact,Info,Truth.
A lot of people Vote with sincere passion based on the information they have, twisted,warped, agenda driven drivel from owned outlets and bought politicians, sincere Marxist moles and bank owned radio shows. But I do not under estimate the American people, the greater part of them, to use their street smarts if a way to get the truth to them could be found.
Dear Mr. Boompi - it works for me. i mean really - i STILL have these pesky brats from harvard b-school trying to get my job. when will the learn?
but it terms of the illegals i have as domestics - they work for a few tacos and are happy. since you've got it figured out - please send me your resume and if i can't find you anything here - i would be glad to send it over to ben and tim. sincerely - lloyd blankfein.
Counterfeiting is illegal
Counterfeiting can be made legal if you have enough money.
Legal counterfeiting is the highest achievement ever attained on Earth.
Legal counterfeiting is God's work.
I actually got out my old Money and Banking textbook and course reader from Undergrad days. Re-examining what Frederic Mishkin and other vaunted members of the status quo and various Fed advisory committees wrote. They continually mention risks to such activities of swaps, repurchase agreements, off balance sheet bank trading activities, and derivatives but largely downplay the risksand describe how proper "internal controls" can prevent crisis etc.
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Mishkin even writes on a part on a sidebar explaining Low Japanese Interest Rates : "Usually we think that low interest rates are a good thing because they make it cheap to borrow. But the Japanese example shows that .....[i]n Japan the low and even negative interest rates were a sign that the Japanese economy was in real trouble, with falling [asset] prices and a contracting economy."
Does anyone actually believe that anyone other than the central banks is buying 10 - 30 year U.S. treasuries paying ridiculously low yields? Mishkin types explain interest rates as though they happen due to free market forces when in fact its anything but a free market with our central planners manipulating the U.S. Bond markets.
Not to sound like I’m defending the corrupt institute know as the Federal Reserve but I'd like to make a couple of points.
The FED buy's Treasuries and MBS's in return for freshly printed dollars. UST's represent value through future tax revenue. I'm hoping that tax payers represent some level of productivity. MBS's are also a form of productivity in labor and resources.
The FED sends hot money to Treasury who deposit it into banks that "supposedly" open up credit channels. I say supposedly because that's the crux whole argument. If the hot money is NOT released or credit demand is weak, does it make a difference?
In other words, if I print up a trillion dollars in my basement and bury it in my backyard, have I created inflation?
that's it ! we have the jails !
"In other words, if I print up a trillion dollars in my basement and bury it in my backyard, have I created inflation?"
The answer is obvious- NO.
One of the many faults of the system is that what you refer to as money (really credit) must be borrowed into circulation at interest. If the banks aren't loaning and/or there is no demand this credit is not in circulation and cannot cause inflation.
An example of this is the St Louis Fed's M1 Multiplier graph:
http://research.stlouisfed.org/fred2/series/MULT
For the past 40 years or so our whole economy has been structured on growth (Boomers, population, wants) financed by the 10X fraudulent fractional reserve system. Now the bills are due and there is no money just credit.
Bankruptcies are the new growth industry. As these take hold the fractional reserve system works in REVERSE and we go back to the future!
Over time the powers of the Federal Reserve have drastically expanded. Today they are explicitly defined as: "Its duties have expanded over the years and today, according to official Federal Reserve documentation, include conducting the nation's monetary policy, supervising and regulating banking institutions, maintaining the stability of the financial system and providing financial services to depository institutions, the U.S. government, and foreign official institutions."
Overall, it is really irrelevant. Everytime they continue to add "money" to the economy, they really decrease the purchasing power of money. Since the Fed is not accountable to the Citizens of the United States, I always use Gold and Silver, along with other commodities that actually are worth something, to counter balance extensive intervention by the Fed.
At the end of the day, Buy Gold.
when slavery became intolerable to the
contemporary consciousness the exploitable
benefit was retained by removing the slavery
from the individual/s and onto the aspects of
the economy itself. i think it is called
financialization in a debt based fiat money
system where money is debt / credit and lent into
existence out of very thin air or no air even,
no doc, no down, no job, no problem .....
to be paid back at principal and interest
where the lender is the receiver of interest and
holds assets as collateral and has the opportunity
to securitize fee generating fraud and call it investment
grade paper of kinds to then be sold back to the
retirement accounts of the base debtors who have
deceived themselves into believing that slavery was
abolished, not transcribed, and their liberation
is in sinc with the
markets for 'money' and 'securities'.
securities, that is a good one, orwellian .
.
and,
the country is a big financial crime scene.
the elite have succumbed to bunker mentality
due to their psychopathic repressed guilt, terminal fear has set in.
Economic collapse in the Western nations-On the Edge with Max Keiser-01-27-2012
http://www.youtube.com/watch?v=TDF5kC6rs8s&feature=player_embedded
.
end the fed !
They sell currency and charge whatever they want for it through inflation. This is why Bernanke says gold is not money, because it's competition. If banks and governments are broke then how they are staying business? They're charging everyone in the world for currency. And they're getting upset that Iran doesn't want to buy it anymore. Imagine, no tinkering in a garage, no science degree, no hard work, to sell a product that is used in every transaction in the world (or was).
Nobody saved that money for banks to lend for people to borrow. They create it and sell it on the spot once the dotted line is signed.
Go Baby! Rock On! I Believe!
Nuthouse got into trouble, not because he minted silver coins -
Because he minted coins with a face value in USD. Big Difference. That, and they looked vaguely official. They were also (at the time) denominated about twice their melt value. Don't try this at home, folks.
Notice none of the rounds or bullion bar manufacturers run into trouble.
Interesting point, unlike posts to the contrary, legal tender laws do not require one to accept notes, EXCEPT for debts - e.g. Taxes, or to pay back what was borrowed in same, bills, etc. A business is perfectly within their rights to refuse dollars, although that might not be wise from a business sense, as they can also refuse checks, credit, etc. There is no "debt" prior to a sale or purchase.
Bernanke, when asked about gold, one could see the wheels turning. My view, he didn't want to get out in the weeds on this. He said "gold isn't money" IN THE SENSE that it isn't legal tender any more. It is money, it just isn't convenient in the standpoint of buying goods and services at Wally World.