Money, banking and related issues

The money issue, specifically how it’s created and who controls its supply, is arguably the most important of all issues discussed at or relevant to MR. Tired of malicious individuals spreading disinformation on money and banking, I finally posted a Money FAQ. This should’ve been here from Day 1, but better late than never.

Preservation, survival; quality of life

Some of the discussion here’s been about preservation and survival. But survival can occur in a coma, and an endangered species can be preserved in a cage-like setting. Quality of living goes beyond mere survival or propagation, and money’s central to it for most practical purposes.

Higher order aspects of living such as the pursuit of special knowledge, philosophy, non-work-related attempts to improve ourselves on our own initiative, the indulgence of passions, etc., require financial stability, discretionary income and spare time. But people in Western nations are increasingly drowning in debt and face a not-too-distant future where the majority of us live in poverty, like most people in the Third World. The overwhelming, singular cause for this is that our money’s created, as debt [out of nothing], by bankers, and it’s these bankers who’re in control of the money supply, which they manipulate to their advantage.

Primary and secondary issues; cause vs. symptom

To facilitate their schemes, the bankers have taken numerous steps to realize their goals and consolidate their power. One of them’s acquisition of the mainstream media (MSM). It’s for this reason why the MSM won’t publicize some of the things that ail us, promote propaganda that harms us and occupy us with trivial news to deflect attention from what really matters. Obviously, ranting against the MSM is misplaced as the rant should be against the factors that have facilitated the acquisition of the MSM by a hostile minority, which’s wealth acquired through creating money as debt and manipulating its supply.

In another example, the bankers have used their money power to bring large numbers of alien races and cultures into Western nations. They’ve done this to undermine ethnic cohesion among the natives and to pre-occupy citizens with race- and culture-related troubles, thereby diminishing the odds of a community-based organized response or action against the bankers. Again, railing against unwanted immigration, forced integration of incompatible aliens, dispossession and deracination as the chief problems is misplaced as these troubles are secondary and employed by a hostile minority to facilitate their grip over our money supply and consolidate their power by leaching further wealth, which’s the primary problem.

These are some of the reasons why, apparently, the money issue’s more important than other issues relevant to MR because the other issues are either secondary or symptoms rather than the cause.

Principles of money vs. Jews

Now, it doesn’t take much research to observe that the international bankers are overwhelmingly Jews and that the Jewish community has a long history of money lending and manipulation of the money supply. But I’ve avoided mentioning Jews in the money FAQ. This is deliberate, for two reasons. The first is that the basic principles of money creation and its control are what really matter, and Jews shouldn’t be given an opportunity to deflect debate from these basic principles, which are the heart of the matter, to “anti-Semitism.” This is why I’ve written it so that readers can post it elsewhere, put the argument in their own words, adapt the FAQ to their own country, and discuss the basic principles of money rather than digress into Jewish-related issues, particularly “anti-Semitism.” By omitting Jews, I make the argument less precise, but it remains fundamentally accurate.

The litmus test

The second reason for omitting Jews in the money FAQ’s that the basic principles allow us to almost decisively address the issue of the litmus test, which has come up on some occasions. What’s the litmus test for deciding who’s “us” and who’s on “our side”? I’ve put ‘us’ and ‘our side’ in quotes because I don’t intend this to mean something very narrow. Let it refer to nationalists, or patriots, or anti-globalists, or anti-new-world-order people, or... other groups that recognize that the world’s taking a turn for the worse, particularly regarding issues related to wealth and money, and wish to do something about it.

If the problems being confronted involve wealth or power [wealth confers power], then the litmus test of who’s “us” or on “our side” is how one responds to the money issue, particularly the process of money creation and who should control its supply, not a vague agreement that yes, there’s a money problem and that bankers are responsible. Note that the litmus test isn’t what’s one’s stance on the money issue, but what’s one stance after being informed of the money issue or the nature of money, which is what the money FAQ’s about, and what’s one’s attitude toward the money issue thereafter. This is because many people simply don’t have a clue, and after being confronted, malicious individuals may superficially acknowledge the problem and agree to the solution, but quickly ignore it or go back to their ways and pretend that the issue never came up. This litmus test should be regarded as necessary but not sufficient.

In the case of the Holocaust hoax or 9/11, in many contexts people can get in major trouble for taking the correct stance, which’s why these can’t be the litmus test, at least as of present, and can only serve as litmus tests in narrow circumstances, such as commenting anonymously on the internet.

But ensure that Jews aren’t mentioned in a money FAQ, and there’s no excuse in most circumstances to adopt positions on the money issue that favor bankers unless one happens to be a banker, an agent of the banker, a malicious Jew or an economist whose livelihood depends on promoting bankers’ propaganda.

The Jewish question

Whereas I wanted to keep Jews out of the money FAQ, this post’s about comments on the money FAQ, and I don’t intend to avoid discussing Jews here.

If the money power’s not taken away from Jews, they can survive an expose of some of their most serious crimes and lies, such as 9/11, the world wars and the Holy hoax. Those not convinced of this assertion need only spend a few weeks browsing the website wakeupfromyourslumber.com. This website’s run by malicious Jews who don’t shy away from blaming Jews for the world wars, economic recessions, 9/11 and numerous other false flag operations. Why do they do it? Notice two things about them. At the very least, they’re not keen on linking to or bringing independent critics of Jewry into the fold, and in a number of cases they display marked hostility toward independent critics of Jews. In addition, they also post lots of disinformation that minimizes Jewish involvement, makes it appear that the problem stems from a small minority among Jews, or even that the Jewish majority’s a victim of a malicious Jewish minority. It’s all about controlling dissent and damage control, which’s increasingly becoming more important for Jews.

As long as the Jews hold on to their money power, the worst [for them] is that they’ll sacrifice some of their criminals for the greater good of their community, intending to maintain the bare minimum level of malfeasance required to hold on to their money power and hopefully resume their schemes for greater wealth and power at a future date. But take away their money power and all the dominoes fall, and there’s no way they could prosper as a community once their crimes are widely exposed, which’ll happen rapidly once the money power’s gone. We might thus see a decisive answer to the Jewish question after Jewish money power’s taken away. I don’t intend, at this point, to discuss what shape this answer might take or should take because I’ve intended this discussion to be about basic money principles and want to address Jews only to the extent that it’s necessary to point out that without taking away their money power, their malfeasance can’t be stopped.

Nationalism

Now for something closer to home. In general, the money issue [basic principles and solutions] isn’t properly addressed by nationalists or those close to them, which’s consistent with most of the prominent ones either being useless/ineffective or controlled opposition.

Watch out for the following types of treatment of the money issue among apparent nationalists and closely related individuals.

First there’s this David Duke video on the debt problem and the Jewish role in it, which, in a nutshell, acknowledges both. There’s no argument about the creation of money as debt; the causation of recessions by the contraction of the money supply, a result of fewer loans; and the simple solution, which’s creation of debt-free money by the government and the prohibition of money creation by bankers, which the Constitution calls for. There’s more than sufficient time to discuss these issues in brief, but they aren’t discussed, and they’re not properly addressed in the mass of his writings, although he’s had decades to work on them. It’d take less time and fewer resources to write the basic argument than what it took to produce this video.

Duke’s presentation’s of the type that uses emotional manipulation to establish rapport, offers no true understanding of the problem and no solution. Some readers may know that I’ve argued that Duke’s [blackmailed] controlled opposition, but this video alone isn’t decisive [feel free to watch other videos or podcasts of his on the topic]. The point’s to beware of this approach and carefully examine other arguments of the author to decide whether the author’s largely useless or controlled opposition.

The second argument’s of the type of posting by Kievsky here, where he argues that the coming economic dire straits/higher unemployment will perhaps effect a cultural renaissance. He starts with claiming that the bankers have apparently outsmarted themselves because non-productive paper-shuffling jobs can’t be sustained and there’s going to be a high level of unemployment [presumably bad for the bankers]. In reality, the move to leaving increasingly paper-shuffling jobs in the U.S. has been a calculated approach by the bankers as it:

Allows them to reap more profits from cheaper offshore labor.
Counterbalances American power by building up another nation, China in recent years. Such balance–of–power arrangements assure that the bankers can’t be overthrown worldwide by a political revolt in any single country, and if an ouster attempt occurs, the bankers simply shift support to the counter–balanced country. Additionally, the inevitable military rivalry between roughly balanced powers results in massive expenditures and hence more national borrowing and debt.

High levels of unemployment aren’t bad news for bankers as during recessions, people default on loans, and bankers acquire assets for pennies on the dollar, which is why bankers periodically contract the money supply to cause recessions.

Back to Kievsky. Kievsky shifts gears and starts blaming the government for manipulation of employment, and engineering laziness, idleness and mental dullness, whereas the government’s controlled by the bankers, and it’s the bankers who also control the media.

Kievsky says, “We are finding that most white Americans are lazy and apathetic, and this is why we are being run over. Only a contracting economy and the bite of hunger can awaken them from their anaesthesiac slumber.” Aside from shifting the blame further, this is an argument of the type, “You’ll be raped; you might as well enjoy it as you’ll be emerging a stronger person, better able to handle adversity.” It’s a form of psychological manipulation to resign people to their fate instead of making them fight it while they still have some vitality left. Of course, no useful cultural change came out of the Great Depression. It’s clear that one’s dealing with a malicious individual, and Kievsky’s left a trail that reinforces this conclusion.

Another argument’s like a four-part series [1, 2, 3, 4] by Kerry Bolton, titled “Breaking the Bondage of Interest: A Right Answer to Usury.” Anyone who puts something like this together knows about the nature of money. Notice what’s identified as the main problem: usury [excessive interest on loans; obsolete usage refers to interest on loans].

Charging interest on valid loans goes toward covering the risks associated with loans, and getting back a little more than what one lent is a reasonable incentive to lend to strangers, which should be acceptable to those who really need a loan.

Let’s assume there’s no fractional reserve banking, i.e., banks lend no more than a dollar for each dollar they possess [100% reserves banking]. Since interest is charged but not issued, interest’s a problem in the hypothetical scenario where the amount of money remains constant, all borrowers return the principal sum and there’s no money to pay interest, but this hypothetical scenario won’t be seen as some borrowers are bound to default, the sum thus not returned as principal sum being available for interest payments by others, and the government [responsible for money creation] will match the money supply to the need for money. Those who default won’t necessarily lose their assets to the banks as there’s bankruptcy protection. In summary, charging interest on loans isn’t a problem if the loans don’t represent the creation of money.

However, charging excessive interest [usury, in modern usage] is a problem under 100% reserves banking, and creating the amount of the loan out of nothing and then charging interest is a much more serious problem. The overwhelmingly major basis for the bankers’ power is creating loans out of nothing and charging interest [fractional reserve banking]. Yet Bolton identifies usury as the problem.

Bolton mixes a few gems with largely irrelevant details to detract focus from the gems. The presentation of fractional reserve banking’s in a vague, obscure manner that many naive individuals won’t get, and no clear solution’s presented except for a historical survey of approaches to combat the problem of “usury,” that includes examples of governments getting into the money-lending business, whereas there’s no need for the government to expand itself by getting into banking; all the government needs to do is prohibit banks from creating money and create the nation’s money as a debt-free utility.

Kerry Bolton’s approach is to give the impression that he possesses in-depth historical knowledge, include interesting tidbits here and there, and empathize with the reader over debt problems, thus establishing rapport, and then he wastes their time with distractions, offers no solutions, and elsewhere you can see him defend the bankers against some of the crimes they’re responsible for—e.g., his treatment of the U.S. civil war; contrast with the clear presentation of history by Patrick Carmack. Kerry Bolton’s another malicious individual.

There are those who promote banker-friendly policies, such as a gold-based money standard or Austrian School economics, easily giving their game away if they obviously know enough about the nature of money and claim to express an interest in solving the debt problem. The three approaches above—by Duke, Kievsky and Bolton—however, avoid promoting banker-friendly economic policies, but resort to other tricks to mislead. Be careful; think more critically; the controlled opposition problem’s worse than you think.

Posted by J Richards on Monday, November 21, 2011 at 11:21 PM in Activism, Economics & Finance, That Question Again, World Affairs
Comments (71) | Tell a friend

Comments:

Posted by Captainchaos on November 22, 2011, 04:41 AM | #

An apparently chastened Richards doing the “philosophy” thing. Hell hath frozen over. LOL

Litmus test: support for territorial and politically-sovereign separation for Whites from non-Whites including Jews. Under that circumstance, money could still be issued as debt by White bankers without this effecting a dire blow the quality of life and very existence of White people. Not saying I support money issued as debt by governmentally non-accountable bankers - just saying. Richards?

Posted by J Richards on November 22, 2011, 08:02 AM | #

@Captainchaos,

The litmus test can’t be “support for territorial and politically-sovereign separation for Whites from non-Whites including Jews.” I’ll give you two good reasons.

The first’s that malicious commenters at MR routinely express this support or even strongly emphasize it, whereas some of the things they promote, the things they deflect attention from, and the disinformation they include tell a completely different story.

The second reason’s America, practically created as a white homeland: the pre-existing natives were to be conquered and displaced; it was taken for granted that citizenship was limited to whites. America’s a nation born of battle, in a war of independence from the money changers. The money changers didn’t give up. After five bank wars, the money changers or international bankers emerged victorious. Today, America’s drowning in debt and projected to be majority non-white within three decades, the darkening a direct consequence of the money changers’ power, as explained above. Whereas I’ve provided it in the money FAQ, here, again, is the history of how the money changers won America: http://www.majorityrights.com/uploads/money-masters.zip

The first lesson’s therefore that the primary issue’s money [creation and supply], not a white homeland.

The second thing’s your complete failure to understand the gist of the issue if you can write that “money could still be issued as debt by White bankers without this effecting a dire blow the quality of life,” because there’s no way to pay off a debt created out of nothing when the debtors [the masses in this case] don’t get to create money. You’d end up with a white nation where the majority’s destitute and lives in squalor.

Now, if you start with predominantly white nations, say, with non-white percentages ranging from one to three percent and the money controlled by a representative government, there won’t be any push for importing alien races and cultures to any significant extent because this is the natural order of people’s preferences, and there won’t be much of a push to expel the non-whites and limit citizenship to whites only as many whites wouldn’t encounter non-whites in their everyday lives and those who do won’t be affected by it for the most part. So you end up with nations that are practically white homelands where the majority of people live well.

Which of these two scenarios would you rather have? You must understand that the primary issue’s the creation and control of the money supply; a white homeland/separation from non-whites is secondary. Without taking care of the primary issue, the secondary issue of a white homeland’s impossible.

Posted by Leon Haller on November 22, 2011, 08:59 AM | #

For those who would like to learn about the basis of sound money at the level of first principles, I suggest this very recent article:

http://mises.org/daily/5802/A-Priori-Theory-and-Sound-Money#ref7

Warning: it is very dry. But also correct: sound money arises from consumer want for an optimum medium of exchange (not government fiat), which long ago the market determined to be gold.

For those who really want to master “money, banking and related issues”, the definitive text is:

http://mises.org/store/Money-Bank-Credit-and-Economic-Cycles-P290.aspx

Lastly, even if Richards were correct in his monetary understanding, he hasn’t demonstrated that disempowering the banking establishment is the most important or first task for WNs, let alone the Key to White Survival. If it is agreed that only a white ethnostate is ultimately sufficient to guarantee the prevention of white extinction, then the first and most vital task is either ending nonwhite immigration (if that ethnostate is to be European), or launching the White Zion project (if the ethnostate is thought to be most likely to achieve outside of Europe - not, however, that European fatherlands and an extra-European WZ are necessarily mutually exclusive), and then ending n/w immigration to the future WZ colony.

Sovereign territory (living space) is the key, not monetary arrangements. We could save the white race under socialist, Keynesian, monetarist, Austrian or any other type of political economy, provided our people are determined to maintain their blood-purity, and possess the physical/military means to do so.

I prefer the free economy for reasons of justice and efficiency. But economic issues really are tangential to the main racial struggle(s) - immigration, integration, cultural deracination (denial of heritage), and miscegenation.

Posted by J Richards on November 22, 2011, 09:37 AM | #

@Haller

Nice to have further confirmation of your malicious nature.

Regarding your contention that I haven’t demonstrated that disempowering the banking establishment’s the most important task, I have. Here’s it again, not my work, but try arguing against it: http://www.majorityrights.com/uploads/money-masters.zip ... this is a history of America… when America was formed, it was basically a white ethnostate and there weren’t any siginificant problems regarding non-white immigration [you had to be white to be a citizen], deracination [non-english northern Europeans had to Anglicize themselves], incompatible immigration [people outside of northern Europe weren’t welcome] or miscegenation.

Now you know what state America’s in, courtesy of international bankers, and here are additional details concerning the role they played in the immigration mess: http://www.majorityrights.com/uploads/Jews-and-immigration-MacDonald.pdf

These show beyond a shadow of a doubt that economic issues aren’t tangential but central to the problems facing Western man.

I’ve stated before that I prefer a free economy myself, and there’s nothing I’ve written that goes against a free economy. A government creating debt-free money isn’t an example of the government creating or preventing from being created goods, services or means of production; it’s a tool that facilitates economic activity taking place. Here’s the basic idea behind debt-free money: http://www.majorityrights.com/money#debt-free-money

I’ll be back on “the basics of sound money” from the Mises institute.

Posted by dc on November 22, 2011, 10:18 AM | #

ad J. Richards,
Fine work. Well done.

Posted by J Richards on November 22, 2011, 01:33 PM | #

The Mises Institute/Austrian School on “the basics of sound money” Part 1 of 3

This is a comment on the link posted by Haller [an essay by Professor Thorsten Polleit]

How can it be that today’s moneys — the US dollar, the euro, the Chinese renminbi, the British pound or the Swiss franc — are no longer commodity moneys?

Polleit’s answer’s the State, specifically the Austrian theory of State developed by Murray Rothbard:

The State is that organization in society which attempts to maintain a monopoly of the use of force and violence in a given territorial area; in particular, it is the only organization in society that obtains its revenue not by voluntary contribution or payment for services rendered but by coercion.

This is a bunch of nonsense. The American Constitution allows for armed militias as a measure against government tyranny, which isn’t an example of a government trying to monopolize the use of force and violence. Jews in particular would rather have armed militias legally interpreted as the police, but this isn’t what the founders had in mind or what would be the point?

Regarding the government obtaining revenue by coercion, what choice does it have when the bankers have prevented the government from issuing money apart from coins? The government must tax in order to pay billions in interest on money borrowed from bankers or else it can’t borrow money and then the government shuts down.

These fiat moneys are produced by government-sponsored central banks, which hold the money production monopoly.

False. The central banks are privately owned. See the law regarding America: http://www.majorityrights.com/money#legal-basis

It’s also false that central banks hold the money production monopoly. In America, the central bank creates, as debt, only about 2% of the money, whereas other private banks create, as debt, about 98% of the money: http://www.majorityrights.com/money#government-impotence

The importance of the central banks lies in the fact that they make it possible for other private banks to create the bulk of the money, as debt.

That said, replacing commodity money by fiat money (that is, replacing the sound-money principle by the unsound-money principle) is, from a praxeological viewpoint, a logical consequence of public ownership of government.

Very misleading.

The correct statement’s that debt-free fiat money is a logical consequence of public ownership of a modern government. Bankers prefer commodity-based money to this system as centuries of fractional reserve banking have provided them with majority ownership of the commodities that could be used as money. Bankers prefer, even more, fiat money created as debt by themselves as they’re not limited in terms of maintaining any reserves of a commodity used as money.

This is seen in the history of the United States from the mid 1860s to 1971. It was the government that attempted to issue debt-free fiat money (greenbacks), the bankers that started removing greenbacks from circulation following Lincoln’s assassination, the bankers that began an attempt to force the gold standard, the bankers that demonetized silver (contra the Austrian school as it wasn’t the government demonetizing commodity money, but bankers because silver was plentiful and gold rarer, more easily allowing the manipulation of the money supply), the bankers that established a gold standard in 1900, the bankers that established a system for the issuance of money by themselves in 1913, the bankers that dissociated the dollar from gold by 1971, and the bankers that ended up issuing fiat money as debt [the government only issues coins as money].

Posted by J Richards on November 22, 2011, 01:36 PM | #

The Mises Institute/Austrian School on “the basics of sound money” Part 2 of 3

A continuation of comments on the link posted by Haller [an essay by Professor Thorsten Polleit]

Austrian trade-cycle theory

Ongoing injections of fiat money produced through bank-circulation credit to “fight” the crisis caused by fiat-money expansion in the first place prevent unprofitable investments from being liquidated, as they can be refinanced at lower interest rates and appear to be profitable.

Artificially suppressed interest rates — brought about by an expansion of bank-circulation credit — encourage investment projects that would not have been undertaken if the market interest hadn’t been pushed down by central-bank policy.

Obfuscation and nonsense.

At least a millennium ago, goldsmiths/money changers noticed that at any given time, those who had deposited their gold with them only came back for a fraction of the deposits, allowing them to loan some of the deposits [which they were supposed to safeguard] and make extra profits. Thus money changers were creating loans out of nothing when a commodity was money and, later, when money was tied to a commodity. The system became more efficient for them when they could create loans out of nothing using money untied to a commodity. So the problem’s with bankers creating loans out of nothing, not fiat money.

The talk about artificially suppressed interest rates and injections of fiat money is simply a tortuous way of describing how bankers relax loan standards to encourage borrowing and create booms. Later, they’ll give out fewer loans, causing a recession, forcing people to default and hence acquiring the defaulters’ assets for pennies on the dollar. This is what’s behind the trade cycle.

Unsound money principles [According to the Austrian School]

According to the Austrian School, this is what’s true the world over:

1. money production is monopolized by government, and
2. government’s power over money production is leading to ever-greater violations of individuals’ private-property rights.

Completely false, and undoubtedly a lie, too… already well documented that coins, hence a negligible fraction of money, are the only form of money issued by the government.

Posted by J Richards on November 22, 2011, 01:43 PM | #

The Mises Institute/Austrian School on “the basics of sound money” Part 3 of 3

A continuation of comments on the link posted by Haller [an essay by Professor Thorsten Polleit]

Sound money principles [According to the Austrian School]

It is affirmative in approving the market’s choice of a commonly used medium of exchange.

Here’s a passage describing the Great Depression:

Fairburn felt that New Zealand illustrated Douglas’ theories perfectly. Was there not here as elsewhere in the capitalist world, that maddening paradox: a surplus of goods combined with massive unemployment and hunger in the midst of plenty? Farmers hung on to their wool, hoping for a price that would justify their labour, while families without blankets shivered in the cities; thousands of urban poor went without meat because the Government was too hidebound by book-keeping to distribute it. Stock had to be slaughtered because farmers could not afford to carry it on their land. Livestock owners surrounding Auckland offered beasts free to the townspeople if the Government would meet the cost of transport. Scrimgeour[26] attempted to negotiate transport with the Minister of Railways. He was given a blanket refusal and told that the Government had to “think of our bondholders.”

D Trussell, Fairburn (Auckland: Auckland University Press, 1984), p. 133.

What happened to the market here? There was demand and there was supply, but the medium of exchange was seriously deficient, and this wasn’t the government’s fault as the government was issuing bonds (promises to pay) instead of money and had to pay interest on the bonds to private parties, thus letting the people starve. Obviously, if the government could’ve issued money instead of bonds, it would’ve, but it couldn’t.

It’s pretty obvious what happened. Banks and other financial corporations that controlled the money supply decided to loan less and recall loans, severely shrinking the money supply. The part that was deficient had nothing to do with demand or supply, but with the medium of exchange and thus “market” here is simply a proxy for banks and other financial corporations.

It is negative in obstructing the government’s propensity to meddle with the currency system.

Chutzpah! Refer to the Great Depression example above. Why would an elected government comprising of non-hereditary appointees interfere with the money supply to starve and freeze the people when the supply’s sufficient to meet demand? The individuals meddling in the true market, for the worse, were and are bankers.

an instrument for the protection of civil liberties against despotic inroads on the part of governments

The Patriot Act followed 9/11, which was orchestrated by Jews, the same people behind many other false flag operations used as a pretext to restrict civil liberties, and the same community to which most of the prominent international bankers belong. It’s pretty obvious who’s behind the despotic inroads.

money must emerge in the form of commodity money, and that free-market money means sound money.

Looking at the past, it’s inevitable that some commodity would’ve been regarded as money as humans progressed from barter to the modern system, but, as noted earlier, centuries of fractional reserve banking have provided bankers with most of the commodities that money could be based on and the power to acquire more of these commodities. So, even though creating money as debt’s more efficient for bankers when fiat money’s used, commodity money will still keep the bankers in power.

As noted earlier, free market here doesn’t include supply and demand but banks and financial corporations being free to create money and control its supply, which’s sound money policy only from the bankers’ perspective.

To Hell with the Austrian School, and to Hell with you Haller!

Posted by Ivan on November 23, 2011, 01:01 AM | #

Makes perfect sense to me; most importantly, it worked in the past and it can work again.

http://www.veteranstoday.com/2011/09/13/hitler-and-the-banksters-the-abolition-of-interest-servitude/

For the first time in my life I heard a discussion which dealt with the principles of stock exchange capital and capital which was used for loan activities. After hearing the first lecture delivered by Feder, the idea immediately came into my head that I had found a way to one of the most essential prerequisites for the founding of a new party.

To my mind, Feder’s merit consisted in the ruthless and trenchant way in which he described the double character of the capital engaged in stock exchange and loan transactions, laying bare the fact that this capital is ever and always dependent on the payment of interest. In fundamental questions his statements were so full of common sense that those who criticized him did not deny that au fond his ideas were sound, but they doubted whether it be possible to put these ideas into practice. To me this seemed the strongest point in Feder’s teaching, though others considered it a weak point.
...
I understood immediately that here was a truth of transcendental importance for the future of the German people. The absolute separation of stock exchange capital from the economic life of the nation would make it possible to oppose the process of internationalization in German business without at the same time attacking capital at such, for to do this would be to jeopardize the foundations of our national independence. I clearly saw what was developing in Germany, and I realized then that the stiffest fight we would have to wage would not be against the enemy nations but against international capital. In Feder’s speech I found an effective rallying-cry for our coming struggle.
...
The struggle against international finance capital and loan capital has become one of the most important points in the program on which the German nation has based its fight for economic freedom and independence. - Adolph Hitler, Mein Kampf

J Richards,

Forget about idiots like Haller, don’t waste your time on obvious wankers. What is your take on Paul Craig Roberts? He is perhaps the most subtle red herring of them all.

Posted by anon on November 23, 2011, 03:25 AM | #

1. Good stuff.

2. I wouldn’t be too sure that everyone who only partially gets it is malicious. This scam has been running for thousands of years precisely because it’s hard to get and it’s partly so hard to get because it’s so blatant only sociopaths (or a tribe who are equivalent to sociopaths in their attitude to outsiders) are shameless enough to get away with it.

Under that circumstance, money could still be issued as debt by White bankers without this effecting a dire blow the quality of life and very existence of White people.

Personally i think the fractional reserve and issuance as debt elements miss the critical part of the fraud.

I think the most fundamental element is a lot easier to see if you imagine how it would have first started.

Imagine a town with a goldsmith with a vault. He has 100 gold coins and the other people in the town have 900 between them which they keep in his vault.

The goldsmith thinks up a scam. He melts all the coins down and for every 100 coins he melts down he mints 101 new ones which are slightly smaller but too small to notice i.e. it’s the same amount of gold but spread among 101 coins instead of 100. He keeps the extra one.

So from having 100 coins out of 1000 the goldsmith now has 110 coins out of 1010.

(This will cause inflation because the total goods and services haven’t changed, just the quantity of money.)

Repeat 20 times over 40-50 years and now there’s 1200 coins and the goldsmith has 300. He’s gone from having 10% of the wealth (100 coins out of 1000) to 25% of the wealth (300 coins out of 1200). It’s theft but done slowly enough for people not to notice.

Eventually this causes the complete debasement of the currency and economic collapse but the process can take generations with care. Just before the collapse the wealth of the bankers and their associates will be increasing exponentially and the population will be very rapidly impoverished.

There’s no difference between what i just described and the central banking fraud. You have a cartel of private banks who bribe politicians to allow a central bank with a monopoly on creating money. The central bank conjures money out of thin air. That process extracts a tiny sliver of value from every unit of currency that already exists. That extracted value is transferred to the new money which is created on the books of the banks that make up the cartel.

It’s a wealth transfer mechanism. This applies even without the fractional reserve and other elements.

It’s a simple scam which has been running from one victim-country to the next since Sumer.

So the answer to your question is it’s a scam whoever runs it. The creation of new money extracts wealth from the citizens and transfers it to the creator so from the citizen’s point of view money creation has to be done by the treasury or some other institution where that extracted value is used for the benefit of the citizens. A central banking cartel is automatically a hostile elite even if it’s not intentional.

http://video.google.com/videoplay?docid=-515319560256183936#

00:37 to 01:15 gives a potted history of the various failed attempts to export the central banking scam to America before they finally succeeded with the federal reserve.

Posted by Ex-Pro White Activist on November 23, 2011, 08:28 AM | #

@Leon

But economic issues really are tangential to the main racial struggle(s) - immigration, integration, cultural deracination (denial of heritage), and miscegenation.

You make many wrong and idiotic statements in every thread. But this one is surely a candidate for this year’s Haller Prize For Exemplary Ignorance. The Judeo-Masonic importation of negro slaves to North America was entirely about economics. So is the Judeo-Republican Open Border policy for Mexicans.

The contemporary collapse of birthrates among young whites is also highly correlated with concurrent economic deprivation. White girls - being “white” - have a more developed “instinct” not to just drop kids in the dirt irrespective of surrounding economic conditions.

I will give you one back-handed compliment. You are well advised to move away from economics (deride it as ‘tangential’) since you demonstrably know absolutely nothing about the subject that wasn’t cut ‘n pasted from a Libertarian-Austrian website.

fyi, your periodic attempts to parse Rothbard and other Austrian School writers into “libertarian” and “economic” compartments are laughable. Rothbard didn’t parse himself that way. His “libertarian” claim to a right to starve children was also an act of “Austrian” economics.

The only place we find a rigid compartmentalization between “libertarianism” and the “Austrian School” is with you. iow you just make things up and try to apply nouns to your concepts that are already in widespread use. This reminds me of a tactic frequently used by a particular group of often condemned people.

Posted by Ex-Pro White Activist on November 23, 2011, 09:08 AM | #

I started reading the Money FAQ.

I think it will benefit greatly if you first conduct an extended study of the various US Coinage Acts and Banking Acts. I suggest starting here:

http://en.wikipedia.org/wiki/Coinage_Act_of_1792

Then you can progress here: http://memory.loc.gov/ammem/amlaw/lawhome.html

Recommended keyword searches include “legal tender”, “gold”, “silver”, “coins”, “foreign gold coins”, “bank notes”, et al

After completing your study of public monetary policy I commend to you a similar study of paper money issued by states, counties, townships, private banks and other entities throughout the 19th Century.

You might begin that portion of your research here: http://www.banknotes.com/us.htm

After this completely rewrite the Money FAQ. Your knowledge of US monetary history - in common with all internet Federal Reserve dissidents - is very incomplete. One minor detail you will discover is that foreign gold coins were legal tender in the USA for most of the 19th Century.

You are presently positing standardizations that simply never existed in the past.

The principle feature of the 19th Century US monetary system was its immense diversity. US coins, foreign government coins, Us, state and local paper money, privately issued coins and privately issued bank notes (both interest bearing and non-interest bearing) were all circulating and commingling in marvelous anarchy.

Posted by ex-uh on November 23, 2011, 09:14 AM | #

—OT—

The Judeo-Masonic importation of negro slaves to North America was entirely about economics.

“Judeo-Masonic” subtly dodges Anglo guilt for that industry. Let’s just admit rich white men make racially disastrous mistakes, stop trying to cover for them. You listening, Captain?

White girls - being “white” - have a more developed “instinct” not to just drop kids in the dirt irrespective of surrounding economic conditions.

I’ve already been banned for this CRIMETHINK, but we could just as well call this “being spoiled”. Certainly isn’t instinct. You’ve surely read of the Dust Bowl — when they actually just dropped kids in the dirt with little enough to feed them beyond weening. It’s pure material conditioning. Until white girls are forced to eat from dumpsters, or more realistically until white men are forced to go dumpster-diving for white girls, white materialism will continue to stymy the birthrate. It’s pretty to paint this as “instinct”, but instinct it isn’t. It is “economic deprivation” only at their obscene level of material expectation. How many of these “deprived” white girls will be in lines this Black Friday to buy junk?

“White” equals “too spoiled to breed”. Else how to explain European girls’ refusal to breed?

Posted by Leon Haller on November 23, 2011, 09:28 AM | #

It distresses me to see how far this site has been lowered in intellectual quality of late. Most of you are just pitifully stupid, and the further you range from core racial topics, the greater is your revealed ignorance.

For the dwindling number of serious persons here who would like to understand monetary issues, here are some suggestions:

Rothbard:

What Has Government Done to Our Money?
The Case for a 100% Gold Dollar
The Case Against the Fed
The Mystery of Banking
America’s Great Depression
A History of Money and Banking in the United States
Man, Economy and State (a total economic treatise - something desperately needed around here)

Anderson, Economics and the Public Welfare

Rockwell, The Gold Standard: Perspectives in the Austrian School

Mises, The Theory of Money and Credit

Griffin, The Creature From Jekyll Island

Huerta de Soto, Money, Bank Credit and Economic Cycles (I was told by a leading Austrian that this is the best treatise on money matters ever written)

And if these are too difficult for the likes of XPWA et al, there is always:

Ron Paul, End the Fed (I have not read this one, but I’m sure it’s sound and clearly written)

Posted by Leon Haller on November 23, 2011, 10:03 AM | #

Richards,

I do not have the time to rebut your errant nonsense, nor would it be worth my while.

I looked at some of the Money Masters stuff. They combine a lot of good history, and a correct sense that money matters are of course central to Western civilizational decline (but only indirectly to white racial collapse, probably via the mechanism of lowered middle class living standards reducing white fertility - though feminism is a far greater cause of low white fertility than working class immiseration), with often juvenile economic understanding, and complete idiocy wrt modern politics. As there is so much crap, here are just a couple of random examples:

1) central bankers do not privately own 70% of the world’s gold, but even if they did, how much gold is in circulation is irrelevant to the usefulness of gold as an exchange medium (any quantity of a commodity money can be optimum)

2) bankers greatly fear a commodity money system without fractional reserve because that would wipe out much of their profit base - there would have to be actual tangible backing for loans made

3) your “solution” is beyond asinine: take fiat money creation away from the bankers and give it to ... democratically elected POLITICIANS?! This is supposed to be better than the real solution: restore a 100% reserves (no FRB) commodity money (gold standard)? Your prescription is basically ascribing modern monetary instability (and all the other monetary abuses, like Fed-created inflation) to the fact of who (allegedly) controls the money supply - bankers - instead of to the fact of fiat money. The issue is not who controls the money supply, but whether money is sound (arising from consumer wants, per Mises/Rothbard) vs fiat (arbitrarily created by government).

Your tireless purveying of ignorance, carefully concealed by a blizzard of (occasionally false, often irrelevant) ‘facts’, is going to force me to take some time out of my Christmas holidays to post a formal piece on the correct theory (with some correct relevant history) of money… even though all this is finally very tangential to core white survivalist concerns.

Posted by Leon Haller on November 23, 2011, 10:32 AM | #

@Leon

But economic issues really are tangential to the main racial struggle(s) - immigration, integration, cultural deracination (denial of heritage), and miscegenation.

You make many wrong and idiotic statements in every thread. But this one is surely a candidate for this year’s Haller Prize For Exemplary Ignorance. The Judeo-Masonic importation of negro slaves to North America was entirely about economics. So is the Judeo-Republican Open Border policy for Mexicans.

The contemporary collapse of birthrates among young whites is also highly correlated with concurrent economic deprivation. White girls - being “white” - have a more developed “instinct” not to just drop kids in the dirt irrespective of surrounding economic conditions.

I will give you one back-handed compliment. You are well advised to move away from economics (deride it as ‘tangential’) since you demonstrably know absolutely nothing about the subject that wasn’t cut ‘n pasted from a Libertarian-Austrian website.

fyi, your periodic attempts to parse Rothbard and other Austrian School writers into “libertarian” and “economic” compartments are laughable. Rothbard didn’t parse himself that way. His “libertarian” claim to a right to starve children was also an act of “Austrian” economics.

The only place we find a rigid compartmentalization between “libertarianism” and the “Austrian School” is with you. iow you just make things up and try to apply nouns to your concepts that are already in widespread use. This reminds me of a tactic frequently used by a particular group of often condemned people. (XPWA)

——————————————————————

Christ, you are stupid! What am I dealing with here?!

Whether some GOPers support Mexican immigration for personal financial gain does not make monetary economics per Richards central to the racial struggle. The proximate issue is ending immigration. There may be all kinds of reasons for radically altering monetary arrangements, but they have nothing to do with white survival, except indirectly (and many, many policies have indirect EGI effects). We don’t need to change anything about money in order to end immigration, either. We need to do the hard work that FAIR and Numbers USA etc are doing. We need to educate about immigration, build up a grassroots opposition to it, and then get anti-immigrationists elected. Not easy, but quite straightforward.

The collapse in white fertility is extremely UNRELATED to economic deprivation. IT IS A SOCIOLOGICAL FACT THAT THE HIGHEST INCOME FEMALES HAVE THE LOWEST FERTILITY!!

I would like to see white wages increased. But you are again putting the cart before the horse. Attack the problems that directly relate to white EGI. And within that subset, deal with those that are (relatively) easy - eg, deporting illegals - before trying to upend a long established set of arrangements, like modern finance, which have many vested interests defending them.

I know so much more about economics (and most other subjects, as far as I can tell) than you do that it’s not worth arguing about.

This statement

fyi, your periodic attempts to parse Rothbard and other Austrian School writers into “libertarian” and “economic” compartments are laughable. Rothbard didn’t parse himself that way. His “libertarian” claim to a right to starve children was also an act of “Austrian” economics.

is a lie, and illustrates your complete ignorance or total misunderstanding of Rothbard (and, again, I’m not a libertarian, and not interested in defending that ideology). Rothbard most certainly made the distinction between ethical advocacy and wertfrie economics, and did so repeatedly. Recognition of that distinction was central to his whole corpus!!!

You have either never read him, or read only a tiny bit of his work.

The Rothbardian Walter Block once emphasized that one could be both an ‘Austrian’ and a Nazi.

Economics is an intellectual structure for understanding exchange phenomena, or cost/benefit trade-offs. It does not advocate particular policy prescriptions.

(Honestly, you and many others here need to do some really basic learning. I recommend you purchase the Economics course from the wonderful Teaching Company. Very basic principles, well presented.)

Why don’t you give an example of this:

iow you just make things up and try to apply nouns to your concepts that are already in widespread use.

Posted by anon on November 23, 2011, 11:17 AM | #

@Leon

I looked at some of the Money Masters stuff

I agree it slips off the page in a lot of places hence why i pointed at a particular segment. The simple fact remains there was a long-running battle to instate a central banking system in the united states against the wishes of patriots and the constitution.

I mostly agree with your points 1) and 2).

Patriots who talk about this need to keep it simple.

take fiat money creation away from the bankers and give it to ... democratically elected POLITICIANS

It can’t be worse.

The central banking fraud is a criminal operation that deliberately and consciously transfers wealth from the public to the banks through inflating the currency away but slowly enough for the public not to notice they’re being robbed. It’s conscious theft. It was designed as theft. If a public institution created the money the benefit accrues to that institution not to the private individuals who run it. The individuals running the institution could give themselves massive salaries maybe or embezzle the money but in the central banking fraud the theft is hidden in plain sight as the base function of the institution.

Also if it was a public institution there would be no personal financial incentive to create booms followed by busts as a way of making people bankrupt to speed up the wealth transfer.

It couldn’t be worse.

It *could* be the same in a different way i.e. governments expand the money supply too much for electoral reasons which causes inflation which then needs to be checked by money restriction but that process is no worse than the *deliberate* booms and busts caused by the central banking fraud aimed at the enrichment of the money power. If the money creating institution is a public institution the wealth transfer causes a concentration of wealth in the institution not in the private hands of the 0.1% of private individuals connected to the banking cartel.

Posted by anon on November 23, 2011, 11:32 AM | #

“White” equals “too spoiled to breed”. Else how to explain European girls’ refusal to breed?

This issue can’t be reasonably disccussed without relation to the similarly lower birth rates in places like Japan and Korea.

IQ.

There will be a correlation between IQ and reduced birth rate in areas of expensive living conditions hence why the white birth rate is higher in regions where there is cheap land. The reduced birth rate in western cities over-crowded by immigration will be an average with lower IQ women effected the least.

Different ethnic groups will be effected by this pressure in proportion to their average IQ.

Posted by Gudmund on November 23, 2011, 03:03 PM | #

There will be a correlation between IQ and reduced birth rate in areas of expensive living conditions

Depressed fertility rates also are related to modern phenomena like urbanization and economic development. Where these factors are present, they generally correlate with reduced birth rates. Many Western countries and some Far East states are the farthest along in this process and the effect is felt the most.

Note also that birth rates are even dropping in third world countries, so this trend will potentially become more widespread in the future.

Posted by ex-uh on November 23, 2011, 05:21 PM | #

Note also that birth rates are even dropping in third world countries, so this trend will potentially become more widespread in the future.

True, but non-whites are still breeding more:

http://www.indexmundi.com/map/?v=31
http://upload.wikimedia.org/wikipedia/commons/7/78/Fertility_rate_world_map_2.png

So although “global fertility rates are in general decline”, and migrant populations drop in fertility as they inhabit industrialized nations, the disparity is still dramatic and tends to non-white surplus, given that large swathes of Africa (and Haiti, a major source of emigrants here in South Florida who eventually will wander north) will likely never be generally industrialized. Even a two or one child disparity, say between Mexico and the USA, or Bangladesh and France, Pakistan at 3+ and Britain at ~2, or Mexicans in the USA at 2.3 and Americans at ~2 or less, amounts to non-white surplus.

All I mean is that “fertility rates in general decline” is a truism which ignores the same differential.

In terms of realia the only way to reverse all this is to destroy industrialization / agriculture and return everyone to subsistence living, then for whites to take up the timeless practice of cousin marriage. Which can’t be done.

Guessedworker has said that white fertility rates aren’t problematic in themselves — but cohabiting competitors for our own niche with a fertility advantage, and a massive ethno-strategic advantage (tribal ethos / lower IQ).

Also note the rate for Israel: 2.7. And this:

As against the overall average of 1.86 children per Jewish woman, an informed estimate gives figures ranging upward from 3.3 children in “modern Orthodox” families to 6.6 in Haredi or “ultra-Orthodox” families to a whopping 7.9 in families of Hasidim.

http://www.aish.com/jw/s/48899452.html

Figures to keep in mind for the next time some sackless conservative tells you “Jews are declining too”. Ashkenazim may be, but the Orthodox are booming — and they move unimpeded between Israel, Paris, Buenos Aires, Miami and New York.

Posted by J Richards on November 23, 2011, 06:06 PM | #

@Ivan

I agree with your assessment of Paul Craig Roberts. I wouldn’t look up to him for useful insights or solutions.

@anon

There’s a difference between partially getting the issue and thus making an honest mistake vs. obfuscation, deflection and distortions that’re clearly deliberate. In the other entry on Alexander Baron’s e-petition, I pointed out a mistake he made, indicative of someone who partially got it, and have no reasons to believe that he’s malicious: http://www.majorityrights.com/weblog/comments/alexander_barone_downing_street_e_petition

The same can’t be said of Kerry Bolton. The determinant’s knowing enough about the nature of money and reading the author to figure out if he knows enough about it and guess what time or resources he has spent looking into the nature of money.

You’re mistaken that “fractional reserve and issuance as debt elements miss the critical part of the fraud.”

Whereas it’s true that the process of subtle alteration of a 100 gold coins to turn them into 101 gold coins expands the money supply, thus devaluing existing money, and that modern banking also expands the money supply, causing inflation, your mechanism only works with a low level of coin standardization because gold smiths can’t have all gold coins with them at any given time. But, if the standardization level’s low, then people won’t look at superficial dimensions but go by weight, and goldsmiths will have to come up with adulterants, which other goldsmiths could spot when they get around to melting coins.

The main mechanism for the success of the money changers has been creating debts out of nothing, which in modern economics parlance’s known as fractional reserve banking. Applied to goldsmiths, their chief success came from lending the gold deposits people had left under their safeguard after observing that people only demanded some of their deposits at any given time [in effect, creating debts out of nothing].

You’re also mistaken that “The creation of new money extracts wealth from the citizens and transfers it to the creator so from the citizen’s point of view money creation has to be done by the treasury or some other institution where that extracted value is used for the benefit of the citizens.” This doesn’t apply to the creation of debt-free money of no intrinsic worth, as this money’s not loaned and can cause inflation only if distributed for free to the citizens beyond the amount needed for economic activity, which the government has no reason to be doing.

Posted by J Richards on November 23, 2011, 06:11 PM | #

@ Ex-Pro White Activist

Thank you for suggesting that in the Money FAQ I include information on various coinage and banking acts and also the diverse forms of money that have been used in the past.

In writing the Money FAQ, I had a couple of things in mind. It had to be brief, so that more people read it. It wasn’t to be about everything I know on the topic, but the essentials. I didn’t want details to detract from the main points. It should focus on one sufficiently important country so that people understand the basic mechanisms and aren’t lost in the names of various acts and treaties. And, it should focus on the present because this is the part that needs to be changed.

I found the history of the money changers as it pertains to America to be highly relevant, but it’s lengthy, and so I included it in a zipped file, and the Money FAQ links to it. I’ll be happy to link to additional details in this manner, and intend to modify the money FAQ in the future.

Interested readers can contribute by modifying the FAQ to adapt it to other countries and include any other details they wish. If you want this contribution posted at MR, use the contact form to send it to us.

I wouldn’t describe myself as an internet Federal Reserve dissident. The Federal Reserve could be replaced by a system with a different name that essentially achieves the same thing. This is why I focus on the root causes that need to be eliminated, such as the creation of money as debt, i.e., creating loans out of nothing.

Posted by Desmond Jones on November 23, 2011, 06:35 PM | #

Let’s just admit rich white men make racially disastrous mistakes

Until the Civil War, the South presented a fairly valid example of mutualism. These two organism clearly received a fitness benefit (i.e. increased survivorship). The white population of the South grew from 1.2 million in 1790 to over 8 million by 1860 with very little immigration. The black population grew from ~650,000 to 3.9 million over the same period without the slave trade.It appears the racially disastrous mistake was in the ending of slavery [w/o repatriation/segregation] not in its origins.

Posted by ex-uh on November 23, 2011, 07:57 PM | #

It appears the racially disastrous mistake was in the ending of slavery [w/o repatriation/segregation] not in its origins.

... ended by other, richer white men, of course.

I like chattel slavery as a social system, as far as it goes. George Fitzhugh laid out the final arguments for that over northern wage slavery, to which you’ve just given a concise darwinian twist. But southern slavery, like DAS REICH DAS REICH!!!, like the Soviet Union, and Afghanistan under the Taliban, were all reactionary bubbles against the steadily encroaching Anglo-Judean world capitalist system, so isolating a bubble and judging it affirmatively is fine, but basically ignores the central fact of the previous centuries and the present ... the Money Power and the “killer apps of modernity” as that douchebag Ferguson calls it.

Some writers understood the long-term risk of cohabitation even under slavery. They witnessed slaves learning letters seemingly by osmosis and suffered the spectacle of white Christians passionate to speed them along to civilization. So there was a term limit to the affair even if it worked for a century or however longer given these variables. The failure was of course in not being brutal enough — with slaves and with Christians. Too much “humanity” to give it durability.

If we were gods, could halt history and decide how human affairs would be ordered, I’d propose a return to chattel slavery and mass crucifixions, with mandatory purdah thrown in for good measure. You would propose something else, and everyone here still other configurations; these ideas follow our peculiar temperaments, experience, and the wreckage of ideas we call memory. We are not gods, but we act like it in isolating this or that system and saying, well, this worked for a time, perhaps it wasn’t a bad idea, — which falsifies the conditions in which these systems occurred entirely, for otherwise they would still be going.

This is why nationalist projects, if they even were capable of winning, would very quickly fail: they don’t take proper account of the world system beyond their borders that ultimately comes back to squash them, because it cannot tolerate exceptions. It must enfranchise everything in a grand game of peer pressure. And this is the real meaning of “rogue states”. Everyone must come along, or else.

So yes, southern slavery was sweet as Georgia tea while it lasted, but it couldn’t last — because it could not beat the northern power which represented the larger Money Power. If anyone had seen the conflict at that level, and no doubt a few did (Brooks Adams?), it would quickly have dawned on them the South was doomed ... and that America would be stuck with tons of enfranchised blacks.

Repatriation to Freetown and Liberia were great ideas but were limited by the disinterested nature of such activity (and by the Americo-Liberian caste very quickly making hell of the place). There was simply not the money to be made in sending them back, I mean, so the project was bound to be left unfinished.

In 2011 some of us ought to be taking the long view instead of whitewashing the projects of those who lost.

Posted by Desmond Jones on November 24, 2011, 01:58 AM | #

which falsifies the conditions in which these systems occurred entirely, for otherwise they would still be going.

Not at all, as Darwin suggested, the long view, judging from all past history, is that the “Money Power” will be in its turn, overcome by some other system still more highly endowed. However, if a praetoria potestas is allowed to continuously sow salt into the soil, nothing will grow, even in the short term.

Posted by titan on November 24, 2011, 03:36 AM | #

Slavery was and is a bad idea:

http://evoandproud.blogspot.com/2011/05/demon-within-part-ii.html

http://evoandproud.blogspot.com/2011/05/demon-within-part-iii.html

If a pathogen is responsible for cuckold envy, and if the first recorded mention of this fetish comes from 17th-century England, the point of origin is probably extra-European. Specifically, it would have been a society that came into contact with England through that country’s expansion of foreign trade, exploration, and colonization from the 16th century onward. We’re probably looking at the West Indies, West Africa, the eastern American seaboard, or the territories of the Hudson’s Bay Company….the pathogen could have entered England via the West African slave trade. Indeed, an argument can be made that sexually transmitted diseases are most likely to develop in high-polygny societies, such as exist among the ‘female-farming’ peoples of sub-Saharan Africa.

Posted by ex-uh on November 24, 2011, 07:46 AM | #

Not at all, as Darwin suggested, the long view, judging from all past history, is that the “Money Power” will be in its turn, overcome by some other system still more highly endowed.

What are you, a MARXIST?

I should like you to point to where he did suggest that. He’ll still be wrong, for the same reason Marx was wrong —

“You make capitalism something other than us. Capitalism is not an institution, like government or a force of nature, like lightning. Capitalism is us.”

Of course “it” is even deeper than that, and is more like fire as biomass “capitalizing” upon other biomass for its own perpetuation.

Capitalism can be called a system as far as its form ... but not in essence. All socialist thinking errs when it posits that “first man” who pointed to something and said “mine,” and actually betrays its affinity with religious thinking in positing first and last discrete states.

So “it” can’t really be transcended for “it” is not a discrete phenomenon, or territorially bounded system, but the life-impulse itself. Certain details might be changed, but money will be with us yet for a long while. Wealth disparity and hoarding are necessary. Money is only a reflection of that.

Posted by Bliss on November 24, 2011, 09:16 AM | #

I like chattel slavery as a social system, as far as it goes….[but]..The failure was of course in not being brutal enough — with slaves and with Christians. Too much “humanity” to give it durability.

If we were gods, could halt history and decide how human affairs would be ordered, I’d propose a return to chattel slavery and mass crucifixions

In other words you are a big fan of the pagan Roman Empire which is the only historical example of a society that had both mass crucifixions and slavery, right? You did say you were half Italian….

You do know that the majority of the slaves in ancient Rome were captured from the white barbarian tribes of the North, don’t you? That’s where the word Slav comes from. How do you reconcile that with your worldview?

Posted by anon on November 24, 2011, 01:25 PM | #

Whereas it’s true that the process of subtle alteration of a 100 gold coins to turn them into 101 gold coins expands the money supply, thus devaluing existing money, and that modern banking also expands the money supply, causing inflation, your mechanism only works with a low level of coin standardization because gold smiths can’t have all gold coins with them at any given time. But, if the standardization level’s low, then people won’t look at superficial dimensions but go by weight, and goldsmiths will have to come up with adulterants, which other goldsmiths could spot when they get around to melting coins.

Yes, the example was used to show how the idea could have come about. It requires a monopoly on the creation of money and in my simple example the monopoly would only exist very locally.

That’s why the obvious logical next step once the scam had been dreamed up would have been the creation of a royal (or ducal or temple) mint. It would be the same fraud but extended to include the local ruler in the profits and in exchange they’d enforce the monopoly.

The effect is the same. The gradual transfer of wealth to the money creators and their associates combined with the eventual debasement of the currency.

The third stage was replicating the idea with a paper currency.

The main mechanism for the success of the money changers has been creating debts out of nothing, which in modern economics parlance’s known as fractional reserve banking. Applied to goldsmiths, their chief success came from lending the gold deposits people had left under their safeguard after observing that people only demanded some of their deposits at any given time [in effect, creating debts out of nothing].

That’s just a multiplier. If a central bank creates $100 billion out of thin air on the books of a bank in the cartel then $100 billion in new money has been created. If the central banking cartel has a reserve ratio of 10 then the same central bank can create $10 billion out of thin air on the books of the same bank who then create the other $90 billion as loans. It comes to the same $100 billion of new money.

The base scam doesn’t require anything other than a monopoly on the creation of new money and the ability to both inject it into the money supply to cause inflation and then get it back.

You’re also mistaken that “The creation of new money extracts wealth from the citizens and transfers it to the creator so from the citizen’s point of view money creation has to be done by the treasury or some other institution where that extracted value is used for the benefit of the citizens.” This doesn’t apply to the creation of debt-free money of no intrinsic worth

If it’s legal tender it has an intrinsic worth. A suitably large pile of it is *legally* worth a horse or a car or a house. An increased supply of it will automatically lower its value i.e. inflation, as people bid up prices.

as this money’s not loaned and can cause inflation only if distributed for free to the citizens beyond the amount needed for economic activity, which the government has no reason to be doing.

Governments maybe but a central banking cartel’s raison d’etre is to create inflation because inflation is the wealth transfer mechanism. The only question for them is how best to control the speed.

###

To bring it back to its simplest terms.

An island with a bank, a bunch of citizens and a central bank with a monopoly on creating money.

Initially the citizens between them hold $900 million and the bank holds $100 million. Every few years the central bank creates another $100 million and puts it on the books of the bank. After x years there’s now a total of $2000 million on the island and of the total the bank holds $1100 million and the citizens $900 million. This is without the bank doing anything.

It needs to be pushed out into the economy to cause inflation but it doesn’t require interest to do that. It could be loaned out interest-free and if the total supply of goods and services was constant then the extra money in people’s pockets would bid up prices i.e. cause inflation. As long as the banks got their loans back their proportion of the total money would still increase. Charging interest on the loans simply maintains the value of the loan (because the loan causes inflation) and provides the bankers with an income while the inflation-theft is taking place.

At its simplest the central banking fraud is simply slow inflation-theft through having the monopoly on creating legal tender.

Posted by danielj on November 24, 2011, 02:54 PM | #

Slavery was and is a bad idea:

High culture and technology is impossible without slavery.

I’m prepared to give that up but good luck convincing the masses to do the same.

Posted by anon on November 25, 2011, 05:36 AM | #

Understanding the money power is critical but it needs to be boiled down to its simplest level for ease of swallowing.

http://en.wikipedia.org/wiki/Counterfeit_money

At its root that is all the central banking scam is, a legalized private monopoly on counterfeiting created through suborning elements of the ruling class. There’s more to it but *initially* that’s all you need.

Give me control of a nation’s money and I care not who makes her laws.
Mayer Amschel Rothschild

Posted by Leon Haller on November 25, 2011, 07:11 AM | #

Are “anon” and “ex-uh” the same?

Posted by anon on November 25, 2011, 08:36 AM | #

Are “anon” and “ex-uh” the same?

Nope.

Posted by Ex-Pro White Activist on November 25, 2011, 09:12 AM | #

@ J Richards,

This is why I focus on the root causes that need to be eliminated, such as the creation of money as debt, i.e., creating loans out of nothing.

My understanding is you are advocating a uniform legal tender fiat paper currency to be issued directly by the Treasury Department. iow “U.S. Notes” like these:

http://en.wikipedia.org/wiki/United_States_Note

They were in circulation as late as 1971. It’s an interesting intersection that US Note issuance ceased the same year Nixon cut the last ties between the USD and gold.

The first objection to this is allowing someone like Barrack Obama to decide how much money to print ala Robert Mugabe.

Second, this is a currency standardization that has only prevailed in the USA since 1971. Why do we want to continue supporting this kind of monetary monopoly? Do you know that as a customer of any modern Russian bank you can:

1. Open an insured account denominated in your choice of rubles, US dollars or euros.
2. Freely buy and sell gold and silver bullion at the cashier’s window.
3. Exchange FOREX at market competitive bid/ask rates.
4. Buy and cash a vast array of cashiers checks, money orders, pre-paid credit cards, travelers’ checks and Western Union and other wire transfer services.

The same is true in most countries.

By contrast the two local Federal Reserve banks I use are true Communist entities.

1. Only USD denominated accounts are available.
2. Gold and silver is not available.
3. FOREX transactions have rip-off bid/ask spreads of the kind Soviet ‘banks’ once practiced.
4. One kind of cashier’s check and one kind of travelers’ check are sold. Huge fees apply to any wire transfer.

In your view which country has the ‘capitalist’ and which has the ‘communist’ banking system now?

My third objection is that the money issue is a red herring for dissidents and pro-white activists. The exact

medium of exchange

is less important than having something to exchange.

There is no law requiring you to accept Federal Reserve notes as payment for anything when conducting business on a cash basis. http://www.federalreserve.gov/faqs/currency_12772.htm

This statute means that all United States money as identified above is a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are free to develop their own policies on whether to accept cash unless there is a state law which says otherwise.

You are however required to pay taxes in “legal tender”. At the present time “legal tender” is Federal Reserve notes, electrons denominated by the Federal Reserve as being as federal reserve money and US coins.

Posted by Leon Haller on November 25, 2011, 10:33 AM | #

XPWA,

Of course you did not address #16.

However, your own comment 34 shows you are really quite close to the dreaded Austrian monetary position. Congrats!

Now if you would just read the books I recommended @#14 you might yet develop a sound grasp of basic economic principles - which could then be your launchpad for the development of a specifically nationalist form of political economy.

Posted by John on November 25, 2011, 11:27 AM | #

“There is no law requiring you to accept Federal Reserve notes as payment for anything when conducting business on a cash basis.”

Actually, there kind of is a law. This law makes it next to impossible that any alternative currency can break through and challenge and displace the money monopoly. It is the income tax. The income tax creates a demand for monopoly money by making it an unavoidable requirement for any productive person to have it.

Posted by Ex-Pro White Activist on November 25, 2011, 12:11 PM | #

However, your own comment 34 shows you are really quite close to the dreaded Austrian monetary position. Congrats!

No. It shows the so-called “Austrian position” is merely a Rube Goldberg contraption consisting of superficial empirical observations made by grumpy old and mostly Jewish men. The system I described existed for centuries and probably millenia before von Mises and other recent Jews tried to copyright it and present it as their original work.

My third point:

“My third objection is that the money issue is a red herring for dissidents and pro-white activists. The exact medium of exchange is less important than having something to exchange.”

was a reminder of my fundamental rejection of all forms of monetarism. None of them are fundamental to physical economics. This includes the “Austrian School”, the “Haller School” that you present as being part of the “Austrian School”, J Richard’s New Greenback Party, the Federal Reserve System and assorted gold and silver bugs.

I apologize to you for being overly subtle here: “having something to exchange.” I meant “having” in the sense of physically growing or making things that are useful to other biologically related human beings in the struggle for survival, reproduction and propagation of future generations. I didn’t intend ‘having’ to encompass intangible paper assets traded across organized financial exchanges or over the counter. In retrospect I realize that “intangible assets” was likely the only interpretation you put on ‘having’.

Posted by J Richards on November 25, 2011, 02:52 PM | #

@Ex-pro white activist

The United States notes you’ve mentioned are the debt-free greenbacks originally issued by Lincoln. After killing Lincoln, the bankers made a concerted effort to remove them from circulation, obviously because this legal tender doesn’t represent debt owed to the bankers.

Your objection that you wouldn’t want someone like Obama to issue debt-free money like the greenbacks fails for many reasons. Had it been debt-free money throughout, the bankers wouldn’t have the wealth/power to raise from obscurity and appoint as President an incompetent puppet in spite of an obviously phony birth certificate.

Secondly, the Mugabe analogy isn’t apt. Mugabe’s a dictator whereas laws in the U.S. limit the President’s power and allow him two terms max. Mugabe wouldn’t have enjoyed his rule if it hadn’t been for Jewish/banker machinations overthrowing the whites under the guise of anti-racist/anti-apartheid measures but really undertaken to obtain the wealth created by the white people.

Thirdly, according to the U.S. Constitution, money needs to be issued by Congress, not the President [Head of the executive branch of the government]. In other words, money has to be issued by a specific body that’s elected by the people, accountable to the people, removable by the people, and comprises of non-hereditary appointees. So what reasons would this body have to issue money in a malicious or irresponsible manner?

An objection of yours was that my position favors a monopoly on what can be used as money. Your objection to a monopoly’s based on what’s in the present United States, where the bankers have an obvious interest in having people use only debt-based money issued by them. Why would the situation be equally bad when the legal tender’s entirely debt free? Secondly, considering that the U.S. dollar’s effectively the world’s reserve currency, it isn’t surprising that some other nations more readily allow greater diversity of money, including the U.S. dollar. Thirdly, considering how the U.S. dollar became the world’s reserve currency and the introduction of the Euro, you can predict that unchecked, the bankers will do their best to minimize the diversity of what can be used as money, moving toward as few debt-based forms of money as possible in the long run. Fourthly, debt-free money issued by world governments isn’t incompatible with traveler’s checks or currency conversion/foreign exchange or any system where printed debt-free notes are transferable to a card that can be carried in lieu of the notes, provided that the card issuer maintains 100% reserves.

The money issue definitely isn’t a red herring for dissidents and pro-white activists. It’s the most important one for good society-level functioning. In a complex society, there’s lots of commercial activity going on at any given time, involving lots of individuals and large distances. Such commerce becomes increasingly less efficient and more problematic the lower the level of standardization of a medium of exchange. In the simplest case, barter, it works well among a few entities. If two nations use barter successfully between them, it’s because a central authority of one nation’s trading with the central authority of another, thus there only being two effective trading entities. Going beyond barter or commerce involving multiple entities requires some level of standardization of a medium of exchange. If a city comes up with coupons that can be used as money within its limits, what about intercity, interstate and international commerce? One needs a high level of standardization for complex societies.

I mentioned the example from the Great Depression when people froze and starved in the midst of plenty. People had things to exchange but the medium to facilitate the exchange was lacking… the governments were effectively prohibited from creating a debt-free medium for exchange and the bankers wouldn’t help as they had deliberately contracted the availability of the medium for exchange in the first place. The Great Depression and other modern recessions are excellent examples that underscore the importance of a sound medium for exchange for complex societies [requiring a high level of standardization and a debt-free nature].

So yes, I advocate that the standardized currencies used in the world be issued as debt-free utilities for the exchange of goods and services, and since it’s important to ensure that the amount of these world currencies is adequate for commerce, they must only be issued by bodies comprising of non-hereditary appointees that are accountable to and removable by the public, all actions being bound by a Constitution.

Posted by Ex-Pro White Activist on November 25, 2011, 03:22 PM | #

@J Richards,

Could you give me the short form of what has to be accomplished to implement your monetary program? I think 5-10 steps plus a reasonable time line for achieving this.

My constant anxiety is the white race will go extinct for lack of white babies while we’re waiting on the Millennium to follow the completion of wide-ranging political programs.

Posted by Liberal Heresy on November 25, 2011, 04:18 PM | #

Money has been privatised by stealth
The greatest privatisation in history has gone unnoticed. It’s time to take from the banks the power to produce money
Ben Dyson
guardian.co.uk, Tuesday 15 November 2011

Through this process of creating money, banks have been able to inflate the money supply at a rate of 11.5% a year, pushing up the prices of houses and pricing out an entire generation. So while criminal gangs manage to create about £2.5bn of fake cash each year, the banks collectively create more than £100bn a year without breaking a single law. Their reward for doing so is the interest that is currently being collected on nearly every pound in existence. The cost to the rest of us is a lifetime in debt.

Posted by Silver on November 25, 2011, 05:30 PM | #

It distresses me to see how far this site has been lowered in intellectual quality of late. Most of you are just pitifully stupid, and the further you range from core racial topics, the greater is your revealed ignorance.

No kidding.

I see nothing inherently evil or fraudulent about fractional-reserve banking. Fractional-reserve banking is simply ‘financial evolution’ at work. The evolutionary process (I realize I’m using the term ‘evolutionary’ loosely) began with ‘exchange’ itself. That was followed by ‘money,’ and later came ‘credit.’ Fractional-reserve banking allows for wide-ranging expansion and improvement of the credit system and is itself an ‘evolutionary advance.’

Money, as all economists will tell you:

- Is a unit of account and a standard for deferred payment.
- A means of exchange.
- A store of value.

Taken together, these features of money enhance immeasurably man’s ability to direct and manage his economic affairs. (Managing our economic affairs is what humans have been consumed with since time immemorial. Think about it.) With respect to the topic at hand, money’s most important function is as a ‘store of value.’

Bill does work for John. John pays Bill money. Bill could have demanded an exchange of goods or a service rendered instead, but if he had, he would have to receive (and, in most cases, consume) those goods or that service immediately. Bill could insist that John owes him such goods or service, but with the passage of time it is all too easy for John to cheat Bill. With money, Bill can be paid now but defer consumption indefinitely.

As a practical matter, since inflation has been a constant throughout human history, Bill is limited in how long he can defer consumption if he expects to consume an amount roughly equal to what he could have consumed had he spent the money immediately. Nevertheless, the payment for the work he did for John will retain some value (in all but conditions of hyper-inflation, which are very rare) for many years—even decades (in the case of gold or silver, even centuries)—since that work was originally done.

Bill could also use the money John paid him to acquire capital (land, plant, machinery etc) that would allow him to do perform a greater volume of work and earn him more money. However, Bill would have to have some idea of the sort of work he could do before he set about acquiring capital. Short of such ideas, if he was still intent on deferring consumption he would have no choice to but to sit on his money and hope that it retained its value. (Bill is also exposed to the risk of being robbed and his money stolen.)

Enter the credit market.

Instead of investing his money in acquiring capital of his own, Bill can now lend his money to others who wish to acquire capital (ie those with an idea of what sort of work they intend to do with it), and demand interest on the loan as a payment for the service rendered by it.

Bill accepts that there is a risk he will not be repaid. The risk is offset by not only the prospect that his money will retain its value but also that it may increase in value. Still, Bill is unsure, and thus demands a very high interest rate—so high it puts off many would-be borrowers. Other potential borrowers require Bill’s money for longer periods of time than Bill is prepared to lend it. Further complicating matters, Bill realizes he doesn’t know very many potential borrowers. Bill’s preparedness to lend his money will do him little good if he cannot find an appropriate borrower to lend it to.

Enter financial intermediation.

Rather than seek out borrowers on his own, Bill can now lend his money to a financial intermediary—a bank. The bank specializes in finding borrowers and assessing their ability to repay their loans. Moreover, if a borrower fails to repay the bank, Bill doesn’t necessarily lose the money he lent. With such greater security, Bill is now prepared to lend his money at a lower interest rate. Bill is satisfied, however, because the prospects that his money will retain its value or perhaps grow in value—his original objective—are still good. Bill is also pleased that the job of physically protecting his money from being stolen is in the hands of specialists whose ability to protect it far exceeds his own.

Let’s forget Bill now.

The foregoing outlined the basics of how money, deferred consumption, and credit work.

Let’s turn our attention to fractional-reserve banking.

When Bill sat on his money it was ‘doing nothing.’ It could have been invested in acquiring (potentially) productive capital (either by Bill himself or by whoever borrowed from Bill, or borrowed from him indirectly, through a bank). It could have been, but it wasn’t. Productive work (increased production) that could have taken place didn’t. The more “Bills” in society that sit on their money less productive work that could have taken place takes place.

If Bill took his money to the bank and left it there for safe-keeping, Bill would be obliged to pay the bank for the service of protecting his money. The bank could make money this way and Bill, with no present use for the money, would be content to keep paying the bank for the service. But, again, merely by sitting in bank’s vault, the increased production that would be possible if the money were invested in acquiring capital does not take place.

When the bank took Bill’s deposit (ie Bill’s loan to the bank) and lent it to a suitable borrower it found (or who came to the bank looking for a loan) it paid Bill one rate of interest less than it charged the borrower it lent Bill’s deposit to; the difference being the bank’s payment for the service it rendered.

If the bank only lends to other borrowers the amount that Bill (or society’s “Bills”) lend it, a similar situation ensues: less productive work that could have taken place had banks been permitted to lend more than was lent to them.

By expanding credit, fractional-reserve banking increases the amount of productive work that can take place.

Fractional-reserve banking provides a tremendous service to society, justifying the profits that banks are able to earn providing it.

Fractional-reserve banking (under conditions of competition) lowers the interest rate charged to borrowers. In order to profit from the difference between interest charged and interest paid, the rate of interest charged must be greater than the interest paid by an amount greater, in percent, than: (1/(1-reserve ratio))*interest rate charged. Thus if the reserve ratio is 50% (the bank being required to keep 50% of deposits as reserves) and the interested paid on deposits is 10%, the bank must charge more than (1/(1-0.5))*10 = 20% If the reserve ratio were 10%, and the bank paid 10% on deposits, the interest rate charged to borrowers would only need to be greater than (1/1-0.1))*10 = 11.1%.

The vast majority of bank deposits are interest-bearing deposits, and banks make most of their profit on the difference between interest charged and interest paid, so banks’ ability to profit from interest is very important to the functioning of the financial system. (This can be verified by banking data at the Federal Reserve site or the Federal Deposit Insurance Corporation site.)

Many people are upset that banks profit from financial intermediation, alleging that they create “money out of nothing.” But just how profitable is banking? According to FDIC data, US commercial banks’ net income grew from around $400 million in the late 1930s to around $100 billion in the late 2000s, an average annual growth rate of some 8%. That rate has increased to closer to 10% per annum over the last thirty years. Those are healthy grow rates for an industry but they probably not what people imagine when they think of money being created “out of nothing.” When profitability is weighed against the value of the service provided, banking profits seem eminently justifiable.

Relatedly, the total equity of US commerical banks grew from about $6 billion in 1934 to around $1.4 trillion today. Thus even if the banks were nationalized and banking equity were handed over to the people, Americans’ wealth would increase by about $4500 per person. That would be a welcome sum but it’s hardly life-altering. Moreover, if the point behind such an unprecedented redistribution of assets were to prevent accumulation of banking power in the hands of a few, people would have to be prevented from disposing of their newly acquired asset.

As for the “Money Masters” program, it combines interesting tidbits with gross misinformation. The grossly misinformed views on which the material which follows is based are summarized by narrator in the first few minutes. That it’s misinformation can be easily demonstrated, and I’ll do that in my next post. There’s a updated version of the documentary called “The Secret of OZ” which you can be viewed here http://www.youtube.com/watch?v=swkq2E8mswI

Posted by J Richards on November 25, 2011, 05:30 PM | #

Reply to Haller [@14, 15] Part 1 of 4

Haller, since you claim to be a grad student, let me tell you how to respond to others in a manner that befits one as it’ll help you in grad school. Consider my 3-part reply to the essay explaining the Austrian School’s perspective/position on money [@6-8].

Your response to it @14, 15 has the following elements.

Descriptors [element 1]: lowered in intellectual quality, pitifully stupid, revealed ignorance, dwindling number of serious persons here, too difficult for the likes of [implied lower intelligence], something desperately needed around here [basic economics knowledge], errant nonsense, nor would it be worth my while [to respond], juvenile economic understanding, complete idiocy wrt modern politics, so much crap, beyond asinine, tireless purveying of ignorance, (occasionally false, often irrelevant) ‘facts.’

Anyone in grad school will tell you that such descriptors by themselves lack substance.

This brings us to the substance part of your reply [element 2].

You had two things to say about Patrick Carmack’s history of the money masters in America.

1. The first thing you said was that central bankers don’t privately own 70% of the world’s gold, which Carmack never said.

2. The second thing you said was that bankers greatly fear a commodity money system without fractional reserve because that would wipe out their profit base. Carmack mentions numerous examples of bankers forcing a gold standard [for profits] both before the the revolutionary war and after the U.S. civil war, which you’ve completely ignored.

So let’s recapitulate your reply to Carmack’s synthesis. You dismiss an argument that Carmack never made. And you ignore Carmack’s cited examples of bankers forcing a gold standard, far from your claim that they should fear it, and expect us to take your word for it.

If you were pressed for time and could only leave a few sentences on the shortcomings of Carmack’s work, you’d mention the most egregious claims, but you’ve pointed out nothing!

And you have such derision for Carmack’s work… amazing! You’d get a F in grad school for this kind of work.

Posted by Derek on November 25, 2011, 05:33 PM | #

High culture and technology is impossible without slavery.

How so? Slave societies such as Egypt, Rome, antebellum South, modern cheap labor wage slavery, etc. tend to retard technological development. And I don’t see why high culture is impossible without slavery unless the point is a tautological one and “high culture” is being defined as the culture produced by a group of people lording over slaves.

Posted by J Richards on November 25, 2011, 05:37 PM | #

Reply to Haller [@14, 15] Part 2 of 4

Haller, let’s look at some of the details of your response to Carmack.

You said “how much gold is in circulation is irrelevant to the usefulness of gold as an exchange medium.” This is easily refuted by history, which shows that there has never been enough gold to match increases in population size and commerce, which is one of the reasons why the value of gold has generally risen. One of the best examples comes from 1500-1650, when the Spaniards stole massive quantities of gold from South America, most of which was intercepted by English and Dutch navies. During this period, because of a glut of gold in northern Europe, the price of gold actually dropped by 80%, but still it wasn’t possible to fully base commerce on gold, forget about other periods.

Now let’s look at whether a 100% reserves gold-based system will wipe out bankers’ profits. First you ignore the documented history of the criminal nature of the money changers, as a result of which most of the gold/world’s wealth’s in their possession. And they can obtain a greater proportion of it… as in the past, they can have governments confiscate people’s gold, which the governments will have to hand over to the bankers because of the high levels of national debts. Second, you ignore that the money FAQ mentions numerous techniques apart from fractional reserve banking that bankers use to rake in the moolah.

With most of the gold in their possession, it’d be easy for bankers to cause recessions by keeping a substantial proportion of gold and hence gold-based money out of circulation, thus forcing more people to seek loans and forcing some people to default on their loans, thereby acquiring the defaulters’ assets for pennies on the dollar.

If money’s tied to gold, then gold’s legal tender, too. So, when it comes to basing money on gold reserves, bankers will surely exclude gold in private possession, including their own stash, and undoubtedly the reserves at various banks because your provision would have the bankers ultimately in charge of money creation and management, and no independent audit of gold reserves against gold-backed money could be possible. What purpose would this serve?

When people ask banks for loans, they lend their gold which was never translated to gold-backed paper money. This has the effect of devaluing gold because the gold-backed paper money remains constant whereas there’s a greater amount of gold in circulation as legal tender. After a while, the money changers will release more of their gold that wasn’t translated into paper money [all they have to do is to start buying things here and there with this gold, and these things they could later sell], bringing down the value of gold further. So when it comes to the debtors paying back their loans, they have to increasingly pay back in gold, which has less buying power at the time of return, which means that to return the same buying-power-worth of the principal sum, they need to come up with more gold than what was lent just to cover the principal sum.

Of course, as in today, international bankers will get together and raise and lower gold’s price in concert to profit in this manner. So your contention that 100% reserves gold-based money will wipe bankers’ profits is false, and this is ignoring the practicality of the system as never in history has a 100% reserves gold-based money system been possible as there was [and is] no way to match the gold to increasing population and commercial activity.

Another issue’s how just gold-based money is. A 66-IQ black African who accidentally comes across a pound of gold has plenty of loot to lavishly spend on malt liquor, women, KFC, and bling bling, whereas a 136-IQ white computer programmer without family inheritance and no accidental discovery of gold has no choice but to borrow money for a software enterprise he has in mind, which forces him to sign an agreement perpetually turning over most of the profits to the venture capitalists who provide the loan, where the venture capitalists inherited the wealth, courtesy of their ancestors practicing fractional reserve banking. This brings us in general to the wisdom of letting the considerably wealthy and criminal international bankers continue to exercise influence by virtue of the vast gold reserves they own and have control over.

Overall, any grad student will give you an F for your response to Carmack.

Posted by J Richards on November 26, 2011, 12:53 AM | #

Reply to Haller [@14, 15] Part 3 of 4

Haller, now for your response to me [point #3 @15].

You express shock at my suggestion that Congress, not bankers should create money. This shock would be justified if you cited examples of disasters resulting from the government creating money and benefits resulting from bankers creating money. You’ve cited no such examples and neither has the Austrian School. What you guys do is falsely blame the government for financial problems when it’s easily verified that the government hasn’t been creating money and controlling its supply.

In the Money FAQ, I cited the necessary legal evidence that the Federal Reserve Banks are private banks, not part of the government, and that from 1913, private banks have been issuing, as debt, nearly all American money [the exception being coins]. Yet, you responded by citing the Austrian School lie that these central banks are government commissioned and that the government control of money is therefore responsible for global financial problems. When I responded to the professor summarizing the position of the Austrian School, you didn’t directly respond to the criticism but merely cited more references to the Austrian School!

You’ve continued to ignore the legal evidence. I went beyond citing the legal evidence alone. The few instances where governments have unambiguously issued the region’s money and controlled its supply, for a while, have resulted in prosperity (e.g., colonial script before the bankers waged war, national socialist Germany). But you have no comment here and continue to talk, without basis, of the ills associated with the government creating money and managing its supply.

What’s wrong with a democratically elected legislative body issuing money? Since the U.S. isn’t a democracy, there’re no potential issues concerning a tyranny of the majority, and even in democracies, if the bulk of the population’s reasonably educated, a democracy can function well.

In spite of my very clearly presented arguments, you describe my position as ascribing modern monetary instability to who controls the money supply rather than the culprit according to you, which is fiat money. Let me be very clear about this. My position’s that our debt/money problems stem from who controls the money and how money’s issued, not just who controls the money, and I’ve illustrated this with examples, whereas you say, without justification, that the issue isn’t who controls the money. I’ve also stated that fiat money isn’t a problem at all, and have justified this claim by explaining what debt-free money means. I dare you to show how such debt-free fiat money could cause monetary instability or recessions.

You explain sound money as money stemming from consumer wants, fully ignoring my response to the Austrian School position paper by the professor. What do you have to say about people starving and freezing in the midst of plenty during the Great Depression? There was supply and there was demand, but no money arising from consumer demands, and this is a common story.

During the Irish potato famine, a large number of Irish starved to death, not because they subsisted on potatoes alone [humans don’t] and the potatoes failed; the production of wheat, barley and oats exceeded people’s dietary needs. So why were there starvation deaths aplenty? A lot of the food had to be exported to meet the debt obligations of the government because the government couldn’t issue its own debt-free money and had to borrow from bankers. Again, there was hunger and there was food but no money stemming from consumer wants [hunger].

The market as conceptualized by you and the Austrian School doesn’t include supply and demand, notwithstanding what you say. Only a group of non-hereditary appointees, with term limits, accountable to and removable by the public can be entrusted to issue money that covers supply and demand.

You’ve described fiat money as money arbitrarily created by the government. Wrong. Fiat money’s money not backed by a commodity or something of value. Fiat money can be issued by a government or a private bank. Fiat moneys used by world governments are almost entirely issued by private banks. Regarding arbitrariness, fiat money may be named arbitrarily or printed with an arbitrary look, but this type of arbitrariness is irrelevant. When it comes to the amount issued, there’s no reason to believe that a group of non-hereditary appointees, with term limits, accountable to and removable by the public, will issue the amount in an arbitrary and capricious manner.

Posted by J Richards on November 26, 2011, 01:01 AM | #

Reply to Haller [@14, 15] Part 4 of 4

Haller, repeatedly reading your comments about the lowered intellectual quality of MR and the stupidity of most here (e.g., @14) is getting tiresome. Your behavior isn’t consistent with this statement as any reasonable person who felt so wouldn’t keep coming back.

I strongly suggest you do either of the following. Quit whining, stop insulting others and address the points, exercising proper commenting etiquette in the process. Or, repeat your frustration with the stupidity of most of us here one more time, say you’ve had enough and don’t come back. The choice is yours. If you fail to chose voluntarily, you’ll be forced to.

Here’s another choice for you. First the context.

It’s getting tiresome to read your comments where you expect us to take your statements for granted, feeling no need whatsover to provide evidence on your part and ignoring evidence provided by us. Part 3 of this reply details an example, and then there’s your behavior on the 9/11 discussion that’s on record, where you couldn’t be bothered citing any evidence for the involvement of 19 Arabs, ignored all evidence of Jewish involvement, and proceed to argue that we should intensify attacks against Muslims! Your comments lack substance and are full of insults and arrogance. You’d get an F in grad school for this behavior.

Now the second choice. Since a fundamental premise of the Austrian School’s that government issuance and control of money’s a bad idea, this must be documented by examples of financial mismanagement, particularly failing to provide sufficient money to match supply and demand, by a government that issues and controls nearly all the money of a nation. So if you wish to promote the Austrian School here further, you need to cite such examples for starters. If you can’t cite such examples, then don’t promote the Austrian school or your ideas on money here. The choice is yours. Chose voluntarily or be forced to make a choice. Let me remind you that falsehoods don’t qualify as valid examples. For instance, “Federal Reserve’ doesn’t necessarily mean that the Federal Reserve banks have anything to do with the government, and the law says that they’re private banks, which can be verified. Come up with verifiable claims.

If you don’t like these choices, let me help you. There’s no shortage of websites that are either in MR’s genre or deal with many of the topics here. Most of them will welcome your comments, and many will allow you to blog. Here are a few examples.

age-of-treason.blogspot.com
alternativeright.com
amren.com
counter-currents.com
isteve.blogspot.com
jihadwatch.org
occidentaldissent.com
stuffblackpeopledontlike.blogspot.com
theeconomiccollapseblog.com
theoccidentalobserver.net
toqonline.com/category/blog/
vnnforum.com
whitereference.blogspot.com

You can look up their blogroll to find many other websites like them. And you can always come up with your own website if none of them are to your taste.

If you believe we’re mostly stupid, why not leave us stupid people alone? You can’t say it’s because of the danger us stupid people pose because the smarter and educated won’t listen to the obviously stupid, and MR isn’t a high-traffic website [MR presently has a 3-month Alexa ranking of 149,180, which’s the number of websites out there that have traffic greater than MR].

You say you’re a Christian. I’m sure you’ve heard of the advice that one shouldn’t cast pearls before swine [Matthew 7:6]. Disseminate your wisdom where it’s likely to be appreciated… comment at the suggested websites above. And let me remind you that I’m serious about the two choices I gave you.

Posted by anon on November 26, 2011, 06:09 AM | #

from http://en.wikipedia.org/wiki/Counterfeit_money

Some of the ill-effects that counterfeit money has on society are:[1][2]

1.Reduction in the value of real money
2.Increase in prices (inflation) due to more money getting circulated in the economy - an unauthorized artificial increase in the money supply
3.Decrease in the acceptability (satisfactoriness) of money - payees may demand electronic transfers of real money or payment in another currency (or even payment in a precious metal such as gold)
4.Companies are not reimbursed for counterfeits. This forces them to increase prices of commodities

===

decline in dollar value over time

http://cointrader.files.wordpress.com/2011/03/usd_graph.jpg

note the dramatic dips for wars e.g. 1812, civil war etc when a lot of money is created and note the well managed inflating away of the value since the end of WWII as the central bankers get more and more skilled at their fraud.

note also that the scam inevitably leads to the debasement of the victim’s currency and eventual economic collapse. i have no doubt now that this how Rome ended. the people responsible were the people who controlled the mints.

===

the big difference between counterfeiters and the central banking scam is the counterfeiters don’t get their money back. they pass it into the economy causing inflation but it’s gone for them. it only pays for their personal consumption. the central bank equivalent would be if they created money out of thin air and used it simply to pay the wages of everyone who worked at the central bank.

because the banking cartel is legal they can pass their newly created money into the economy as loans and get that money back again as the loan is paid off.

===

example:
option 1: island with $900 million circulating. counterfeiters creates $100 million and spends it into the economy to pay for their own consumption. after it’s all gone the dollars are now worth 900/1000 or 90% of what they used to be worth and the counterfeiters have none left.

option 2: same but a legal counterfeiter aka a central bank creates the $100 million and instead of spending it lends it out and gets it back. repeat a couple of times over the years and the island now has $1200 million circulating with the people connected to the scam having $300 million of it. Each dollar is worth 900/1200 or 75% of its original value so in terms of purchasing power
- the citizens have 75% of $900 million left i.e. $675 million. they’ve lost $225 million in value
- the banking cartel has 75% of 300 million i.e. the extracted $225 million.

The central banking fraud extracts value from the original currency and transfers it to themselves through
- creating new money out of thin air
- passing the new money into circulation as loans
- retrieving it again as loans are paid back

the only difference with counterfeiting is the banking cartels can pass the money and get it back again.

the perfect crime

===

the end result of the process as the victim is slowly bled dry

http://www.spreadingscience.com/wp-content/uploads/2011/04/4-8-2011income.png

Posted by J Richards on November 26, 2011, 07:48 AM | #

On the value of fractional reserve banking

@Silver

I’m not surprised in the very least that you see nothing inherently evil or fraudulent about fractional reserve banking.

The U.S. Treasury prints a $100 Federal Reserve note at the cost of a few cents, but it doesn’t issue this note. The note’s issued by a private bank, as a loan worth $100, and it costs the Federal Reserve only a few cents to obtain the note, as much as it took the Treasury to print it. Joe Average uses this note to buy bond paper worth $100 from the Treasury, which’s the Treasury’s promise to pay Joe $100 at a later date, plus interest. Thus the Treasury has borrowed $100 for the expenses of the government. This is an instance of fractional reserve banking at play, where the fraction of reserves maintained by the Federal Reserve equals zero percent and that reserved by other private banks is overall less than 3%. And you see nothing evil or fraudulent about this scheme as opposed to the Treasury printing a $100 United States note and using it for its expenses without going through the detour above… great!

Now for the facts concerning your claims. I agree that fractional reserve banking’s financial evolution at work, the evolution of the art of counterfeiting money with impunity.

On your definition of money, money’s unambiguously a means of exchange but it’s a store of value if it’s commodity money [not something I’m advocating].

Your narrative about Bill, a person, makes some interesting assumptions. The first’s that given inflation as a constant, Bill’s well advised to put his money in a bank and let the bank lend it. The problem’s that the reason inflation’s a constant is because of fractional reserve banking! In the absence of fractional reserve banking, and the government issuing debt-free money, Bill could sit on his money for a very long time and it’ll have the same buying power, and since bankers don’t get to create debts out of nothing, people will be wealthier and have less of a need for loans, and in the case of a need for lots of capital for establishing industry or a major business, there’s always stocks.

Your second assumption’s that Bill can safeguard his money against theft by keeping it in a bank, and since it’s advisable for him to lend it, if he lets the bank lend it, he’s better off with respect to potentially losing it to a debtor unable to pay him back. I’m sure you’ve heard of a run on the bank, which is a bank collapse when too many customers start withdrawing substantial portions of their deposits, a direct consequence of fractional reserve banking. So Bill better hope that when he wants to withdraw most of his money from the bank, most other bank customers don’t have similar plans. Yet when Bill would need his money the most, which is when the economy starts to collapse, others will also attempt to get as much money out of the bank as possible and the bank will collapse, quite possibly leaving Bill with nothing from his deposits. And, as long as the economy chugs along, even if poorly, fractional reserve banking keeps devaluing the buying power of Bill’s money. Great, isn’t it?

Some nice math on fractional reserve banking lowering the interest rate charged to borrowers on your part! Allegedly, if a bank pays 10% interest on deposits, then by lowering the fractional reserves from 50% to 10%, for operational profit, the bank lowers the interest rate it needs to charge on a loan from at least 20% to at least 11.1%. Boy, aren’t we glad for fractional reserve banking?

Not so fast!

When the bank maintains 50% reserves, the loaned amount’s twice the reserves and thus the actual interest rate’s not 20% but twice this, or 40%. And, when the bank maintains 10% reserves, the loaned amount’s ten times the reserves, and the actual interest’s 10 times 11.1%, which equals 111%! So which would you rather pay, 40% interest or 111% interest?

You dismiss [American] bank profits on the order of $100 billion per year as hardly what people would expect if bankers are creating money out of nothing. Taken at face value, the figure’s isn’t bad for creating loans out of nothing, but the figure’s incorrect. The government alone pays hundreds of billions of dollars in interest annually on the national debt. Banks conceal much of their vast profits from the public as undistributed or retained earnings. There’s a reason why when you go to the downtown area you see that the tallest skyscrapers are banks and other professional financial institutions.

On the topic of present bank equity in America on the order of $1.4 trillion such that nationalizing banks would increase Americans’ wealth by about $4,500 per person, this is an attempt to avoid the real issues, which fails. First of all, no serious reformer’s advocating nationalizing banks. The advocacy I’m promoting is nationalization of the money supply. When the government issues debt-free money, it isn’t lending money, not taking money back, not charging interest and not storing money, and hence not doing banking. Second, and here’s where fractional reserve banking comes in, if the banks maintain 10% reserves, then the 1.4 trillion dollar bank equity [taking your reported figure at face value] corresponds to 10 times the amount in debt, or 14 trillion dollars of debt, but due to various rules regarding reserves (e.g., only 3% reserves for deposits under 50 million), the actual reserves are less than 3%, and the corresponding debt’s in the neighborhood of 47 trillion dollars, let’s round it to 50 trillion dollars. Using a round figure of 310 million Americans, this corresponds to an average debt of around $160,000 per American, courtesy of fractional reserve banking or banks creating loans out of nothing.

Fractional reserve banking’s so enriched Americans, hasn’t it? We should all be immensely grateful to the bankers for rendering such a tremendous service to society! Apparently, I have to be very ungrateful and crazy to want all the bankers and their agents summarily prosecuted and hanged forthwith.

...I look forward to the “gross misinformation” in the Money Masters video.

Posted by Ex-Pro White Activist on November 26, 2011, 08:55 AM | #

@J Richards,

I think you and similarly minded activists would do better just by focusing on restricting the legal requirements for “legal tender” to transactions involving the government. As I showed, there is no requirement to use Federal Reserve notes for “cash” transactions. Legal tender should be further restricted by allowing any mutually agreeable exchange to be used in the settlement of private debt.

Here’s an interesting factoid. Until 1933 the words “Legal Tender” didn’t appear on any Federal Reserve Note. I once forced down a coin & currency dealer on this point. I challenged him to pull out one example from his inventory of a pre-1933 Federal Reserve Note that said ‘legal tender’. He couldn’t do it.

What these notes did say pre-1933 was “The United States of America Will Pay To The Bearer On Demand One Hundred Dollars”. “Dollars” in those days were silver dollars, gold dollars or silver & gold certificates.

After killing Lincoln, the bankers made a concerted effort to remove them (US “greenback” notes) from circulation, obviously because this legal tender doesn’t represent debt owed to the bankers.

This program appears to have required 106 years to complete (1865 to 1971).

Thirdly, according to the U.S. Constitution, money needs to be issued by Congress, not the President [Head of the executive branch of the government]. In other words, money has to be issued by a specific body that’s elected by the people, accountable to the people, removable by the people, and comprises of non-hereditary appointees.

Again, that’s an interesting theoretical statement. What is required and how long will it take to reimplement this in practice? 2/3s control of the US Congress and the White House appears to be two prerequisites. Congress can also issue letters of marque and reprisal. But it hasn’t done so for almost two centuries.

Here are the US Congress’ real enumerated powers over money and taxes:

Article I, Section. 8.
The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow Money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

For the last century Congress has progressively abdicated its powers under the fifth clause. You say it should resume this function. The Judeo-Austrian School will undoubtedly claim that Congress should not even attempt to “regulate the Value thereof, and of foreign Coin”. You contend the Federal Reserve is actually “coining” most money. The Fed will claim the US Bureau of Printing and Engraving does it. The fifth and sixth clauses are the reasons for this claim.

Your objection to a monopoly’s based on what’s in the present United States,

I admit this. I have very practical objections based on what’s been developing for over 100 years, what’s happening right now, the present demographic profile of the USA and any reasonable projection of political-demographic outcomes in the coming decades. You outlined to me a theoretical ideal of “woulda-shoulda-coulda”. Reality now and for the next few decades is the Amerokwa of Barrack Obama and Herman Cain. And that’s a best case outcome.

My oldest kids are in their early 20s. A future generation of posterity is already coming into view for our clan. And we’re not willing to suspend this while waiting on grandiose political-economic programs designed by anyone. My wife has the bizarre ideas that 1) nature has designed women to start having children in their early 20s at the latest and 2) thinks children greatly benefit from having younger parents.

Posted by Ex-Pro White Activist on November 26, 2011, 10:07 AM | #

@J Richards,

My position’s that our debt/money problems stem from who controls the money and how money’s issued

This is a partly reasonable statement. The constant point made by GT & me - and we are separate persons - is that it is vastly easier to start attacking the “debt” issue from the bottom up than from the top down.

The broad brush macroeconomic state that so many love to pontificate on is merely a summation of many micro-economic states.

What I consider unreasonable is:

1. Proposing that at this late demographic date any possible “Constitutional-political” program can succeed in altering the above factors to the point of establishing country-wide pro-white monetary policy control inside the nominal political borders of the USA.

The burden of proof resides on those who claim such solutions are necessary to show how they can be implemented in reality. And if they cannot reasonably demonstrate this then their particular nostrum is just more science fiction. It’s just as impractical as proposing we emigrate on faster-than-light starships and establish white colonies on other habitable planets far far away.

2. Assuming that the current form of the “economy” that the Federal Reserve has engendered has any resemblance to an economy optimized for the 14 Words.

The USA is not Germany circa 1932. The USA overall does not have the racial, linguistic or cultural homogeneity that Germany in 1932 possessed. On the other hand the USA still offers abundant cheap resources of land and materials. It’s low hanging fruit to those willing to learn and then use what they learned in productive work activities.

Posted by anon on November 26, 2011, 03:20 PM | #

What I consider unreasonable is:

1. Proposing that at this late demographic date any possible “Constitutional-political” program can succeed in altering the above factors to the point of establishing country-wide pro-white monetary policy control inside the nominal political borders of the USA.

This is true, however this issue can be used to destroy people’s trust in the ruling class if it can be couched in a simple enough form. Destroying people’s faith in the ruling class, media, academia etc is the first step in opening them up for alternatives.

Posted by danielj on November 26, 2011, 08:25 PM | #

Egypt was not culturally retarded. Rome wasn’t until they started fucking the slaves.

Athens is the perfect example. Not necessarily chatel slavery, but some form of servitude must exist to enable the kind of extended, protracted thinking that is necessary to produce great art, philosophy and science.

Honestly I prefer Sparta. I prefer the Rome of Cinncinatus. I prefer an agrarian society. But, I, unlike most, prefer honest toil.

My constant anxiety is the white race will go extinct for lack of white babies while we’re waiting on the Millennium to follow the completion of wide-ranging political programs.

An excellent point.

Repeat after me: we are capable of meaningful annihilation…. we are capable of meaningful annihilation… we are capable of meaningful annihilation…

Posted by ex-uh on November 26, 2011, 08:35 PM | #

No leisure class minus the mudsill. No leisure — no science.

I would like to prefer an agrarian society, but my instinct runs to the pastoral and earlier. I’ve tried hoeing beans; dozed off mid-row. Crops are a snooze. Like the economics they spawned!

Posted by ex-uh on November 26, 2011, 08:43 PM | #

To tell the full truth, I not only dozed while walking that row, but quit five minutes later, had a cigarette, then tromped into a nearby wood for a nap.

Not for me the farmer’s life. I guess I’m a ... Thoreavian?

Posted by danielj on November 26, 2011, 09:11 PM | #

Not for me the farmer’s life. I guess I’m a ... Thoreavian?

You’re the Italian anti-Puritan… (They invented the alarm clock according to David Hackett-Fisher.) You’re a Gentile Lafargue. A straight Oscar Wilde. An extremely unambitious reincarnation of Carlyle.

Posted by danielj on November 26, 2011, 09:13 PM | #

No leisure class minus the mudsill. No leisure — no science.

I could have probably accomplished something if I hadn’t spent the last ten years working 70 hour weeks…

Posted by Captainchaos on November 26, 2011, 11:26 PM | #

There’s only one way to settle this. If Richards can beat GT arm wrestling then he gets to keep his computer programming gig. If however Richards loses then he has to quit his effete occupation and train to become a self-employed machinist. LOL

Posted by Derek on November 27, 2011, 02:39 AM | #

I meant that slavery tends to retard technological development. Cheap labor seems to disincentivize technology over time.

Posted by danielj on November 27, 2011, 02:49 AM | #

I meant that slavery tends to retard technological development. Cheap labor seems to disincentivize technology over time.

Sorry I didn’t make it clear that I knew what you meant. I’m just not sure I agree. I’ve got very little time for extended debate though these days. Wage slavery…

Also, after thinking about it. The greatest and most noble slavery is the slavery of the present to the future generation.

Posted by ex-uh on November 27, 2011, 08:46 AM | #

How so? Slave societies such as Egypt, Rome, antebellum South, modern cheap labor wage slavery, etc. tend to retard technological development.

And, as I mention on the other thread, technology tends at last to retard racial integrity. Faustian bargain, man.

Cheap labor seems to disincentivize technology over time.

Corollary: technology seems to cheapen labor (and race) over time.

This is where someone usually makes the mistake of positing a choice between the two social models. In reality there is none, which is why anti-capitalist “bubbles” have failed and liberal democracy spread over the globe like ... some appropriate species metaphor.

But this realization negates everything WNs talk about.

EXPWA,

My oldest kids are in their early 20s. My wife has the bizarre ideas that 1) nature has designed women to start having children in their early 20s at the latest and 2) thinks children greatly benefit from having younger parents.

I totally agree. Pics?

Posted by Leon Haller on November 27, 2011, 09:42 AM | #

I agree, too, although I believe the evidence is for women starting to have kids then. Women who start young often can and do have lots of kids, way into their 30s and even 40s. It’s my asshole generation of no longer yuppies who wanted to start having kids in their late 30s and 40s who are needing all the fertility treatments.

Posted by Derek on November 27, 2011, 04:01 PM | #

Corollary: technology seems to cheapen labor (and race) over time.

Technology doesn’t cheapen labor. Scarcity of land cheapens labor.

The margin of production sets the general wage level.

Agriculture is a good example. Land has different degrees of productivity according to soil, sunlight, temperature, rain, etc. You grow crops up to the border where you either run out of labor or it’s no longer worth growing. That border is the margin of cultivation (production). Land beyond the margin is submarginal, not having any cultivation value. Land just at the margin, the least productive land in use, is free, and its rent is zero. So all the product goes to wages, to the labor of the man who cultivates it. This sets the the general wage level since if landlords paid lower wages then labor would move to the margin. Technology increases production and raises the wages of the man at the margin of cultivation (production).

However, as land gets owned and the margin of cultivation (production) gets extended further out to less productive land, wages decrease. If all the land gets owned then the margin of production goes to 0 and there is significant downward pressure on wages. In this case the gains in production from technology go the landlord as rent rather than to wages to labor.

This example of agriculture can be applied generally to all kinds of production.

Just think about how much better of a bargaining position you would have against your employer if there were land available that could offer decent independent living. The employer would have to offer a standard of living at least as high as the available land. Technology that would raise production on that available land would put upward pressure on wages.

Posted by ex-uh on November 27, 2011, 06:30 PM | #

Technology doesn’t cheapen labor. Scarcity of land cheapens labor.

That was an excellent description of how scarcity of land can cheapen labor. And I probably ought not to have spoken generally of what is a particular facet of a multivariate phenomenon. It seems to me, and I have also read in countless places, that improving technology tends to lessen error and thereby human input, thus driving production to maximum efficiency and triggering inflation, behind which wages limp along, triggering strikes, compromise or layoffs, etc. But it’s clear from modern wealth disparity that blue collar wages have just barely kept up with rising costs.

This example of agriculture can be applied generally to all kinds of production.

But today wages don’t depend solely, nor even largely, on production — which I suppose is the meaning of “service economy”. There are more people competing for service jobs than even for low-level jobs at factories. There are more people applying to be dishwashers than forklift operators, for example. This is not a question of production but of the value of labor that results in no product beyond customer / supervisor satisfaction. How do the experts analyze these matters? I haven’t a clue and am loath to investigate.

So, no economist I, but on the face of it I don’t see how the model of land cheapening labor applies to a faltering service economy, i.e. an employment market in which over 50% of jobs are in human services, and I think you would have to reach quite far to tease a relation of the primary sector out of one in the tertiary, to take that example as it seems to dominate the jobs market today. Improved technology making human input obsolete or fungible in the secondary sector is the real battleground of tech vs wages, I suppose.

I don’t remember much of my Marx (I read Kapital years and years ago), but wasn’t his whole problem with factories making humans fungible / obsolete, to be solved by wresting the means of production from entrepreneurs and placing them in the hands of “the people”?

What about overpopulation in cities, massively imbalanced applicant to job ratios? With this level of human fungibility in labor, brought about in no small part by human resources computer technology, couldn’t we say that this aspect of technology has acted to depress wages?

Posted by danielj on November 27, 2011, 06:43 PM | #

That would be my sentiment.

There are too many variables you aren’t taking into account Derek. In my opinion.

Posted by Ivan on November 27, 2011, 06:57 PM | #

This Australian fella seems to have something to say about the subject of this thread worth listening:

http://www.blacklistednews.com/Steve_Keen_On_Parasitic_Bankers,_Deluded_Economists,_and_Why_“We_Are_Already_In_The_Second_Great_Depression”/16757/0/38/38/Y/M.html

Posted by Derek on November 28, 2011, 02:56 AM | #

By “production”, I mean production generally, of both goods and services.

The margin of production sets the basic wage. The other variables are encapsulated in supply and demand which operate on top of the basic wage set by the margin of production.

Suppose that the best land, which can grow 10 bushels, is all taken up. Farmers have to go to the next best land, which can grow 9 bushels. In this land, the wage is 9, the return a farmer gets for his labor. So what is the wage in the best land, which can grow 10 bushels? If someone there offers a wage of 9.5, then farmers from the next best land will come to work. If he offers less than 9, then no farmers will apply since they can get 9 working for themselves. So the wage in the best land settles at 9. If a farm owner in the best land hires a worker instead of working the farm himself, he pays the worker 9 in wages and produces 10 bushels. The difference goes to the owner as rent.

The margin of production in this case was the next best land that could be had for free. As the next best lands get taken up, the margin of production gets extended to lands of ever lesser quality. The wage level gets set at this margin, where the best free land is available. As the margin gets pushed further out and people are located on worse land, the base wage rate falls. So if the margin of production moves beyond the 9 bushel land to 8 bushel land, then the base wage goes down to 8, and rent becomes 2. Benjamin Franklin talks about this in his Observations Concerning the Increase of Mankind, Peopling of Countries, etc.. In Europe, labor competed for limited opportunities and there was no free good land available, so employers could afford to offer low wages. In America, there was land available at a higher yield than the margin in Europe, and wages for other occupations had to be high to keep employees.

As more land gets taken up, the margin of production might extend to the “land” of the sea where one can catch fish without paying rent, or maybe of the sky vertically by building another story on a building without paying more for land.

If all the lands get taken up and claimed, then there is an internal margin of production where the next worker can get the highest wage without paying extra rent.

Posted by J Richards on December 02, 2011, 11:03 AM | #

Steve Keen on the solution to the global economic crisis

@Ivan

You linked to an interview of Australian economist Steve Keen, thinking that he has some useful strategy for us. Hardly. Just the fact that the interview was shown on BBC’s enough to predict that it can’t be about a proper solution.

Steve Keen was introduced as one of the few economists to have predicted the global financial crisis, which’s meritless. Any economist worth his degree can tell you, in the midst of an economic boom, that a crash, and a horrible one at that, is coming. Most won’t say it though. One doesn’t even have to be an economist to make the “prediction” as the crises are guaranteed.
Steven Keen describes debt as something that can be good and bad. According to him, debt’s good to the extent that rising debt fundamentally finances investment, but it’s bad when used for gambling on financial instruments. However, whereas it’s true that loans help those without the capital to come up with something useful, the worst thing about debt’s that it’s created out of nothing, creating, as a result, a situation where most of the wealth ends up in the hands of a few, and the masses end up needing to indebt themselves if they are to meaningfully contribute to economic activity.

During the first decade of the twentieth century, 70% of corporate funding in America came from profits, and most expansion could be financed by profits instead of loans. Now, this is unthinkable. So Steve Keen doesn’t address the most serious issue behind the global debt problem, which isn’t speculation/gambling [parasitic behavior according to him], but creating money as debt or creating loans out of nothing [the parasitic behavior].

Steve Keen says that money’s created in two ways: banks create money by extending loans, and government creates money by running a deficit. But both mechanisms describe the same process of money creation, which’s branks creating money as debt. Governments finance deficits by loans, which they obtain by selling Treasury bonds and other IOUs (promises to pay). The people who buy Treasury paper do so using money issued as debt by private banks. So government budget deficit’s financed by banks creating loans out of nothing.

Actually, there’s a second process by which money’s created, and this is the government minting and issuing coins, but these are a miniscule proportion of the money supply.

The interviewer refers to the government as central banks and Steve Keen nods in agreement, whereas the central banks are privately controlled.

Steve keen refers to a danger in the system, which’s banks making money by creating debt, but this is ambiguous. Had he added “out of nothing” after “creating debt,” he’d properly convey the nature of the danger.

Steve keen says that the only reason we take on more debt than we need is because we’re persuaded that we can make a gain out of it via leveraging speculation (gambling), but this applies to a subset of debts. The truth’s that with money as debt, no debt means no money, i.e., people are forced to take on debt. And if this force’s relatively lacking, bankers have their way to persuade people to take on debt: 0% APR for 6 months followed by 2.99% APR and other similar offers inundating us when the bankers decide to create an economic boom appeal to the desire for items associated with higher quality living.

Steve keen says America has rising levels of government sovereign debt because the private sector’s reducing its debt. Had he explained why, it’d be interesting, but he doesn’t. Here’s the reason why. The private sector taking on less debt means reduced hiring by it and fewer employee benefits offered by it. So now the government has to pick up the tab for feeding more people and providing them with healthcare, unemployment and other benefits.

And what’s Steve Keen’s solution? Write off private debts, nationalize the financial system, bankrupt banks, and start all over again. When money represents debt, writing off debt’s the same as removing money from circulation. So one can’t just write off debt, but here’s what Steve Keen means.

He wants central banks to create money that’s provided to people to pay off their debts. In other words, he wants central banks to create debt-free money to pay off the loans. Presently, when loans are paid off, the principal sum disappears and the interest’s pocketed by the bankers. Obviously, if this is done with the money handed out for free by the central banks, most money simply disappears and the economy can’t run. This means that Steve Keen doesn’t want banks to make the principal sum disappear this one time. In other words, the world starts over with debt replaced with debt-free money and bank reserves at 100%.

Notice that genuine people proposing monetary reform want money as debt replaced with debt-free money, but on a permanent basis, i.e., the power to create money and control its supply is permanently taken away from bankers, or if they want banks to create money as debt, then they want the ability to monetize all commodities and to eliminate interest, replacing it with a service fee. But Steve Keen doesn’t endorse these solutions. The interview doesn’t focus on what Steve Keen means by nationalizing the financial system, but speaking of nationalization, there’s only one thing pertaining to the financial system that genuine and knowledgeable reformers want nationalized, and this is the money supply, not banking.

Now why would banks follow Keen’s proposal? If there are widespread riots and massive unrest, with people primarily agitating against the bankers, and it’s clear that mass arrests or even martial law won’t help because there are too many civilian protesters, banks may resort to this drastic [for them] measure, once, to mollify the public and then resume creating money as debt, leading to another major recession 20 years down the road. The problem for bankers is that once the problem’s solved by central banks creating debt-free money and giving it to people to pay off their loans, people will again agitate for the same solution, and bankers will be forced to retard their rate of wealth acquisition by limiting the process of acquiring defaulting debtors’ assets for pennies on the dollar to individuals here and there instead of coordinating recessions on a global basis.

In summary, if Steve Keen had a proper solution, he wouldn’t be interviewed on BBC.

Posted by Silver on December 09, 2011, 03:23 AM | #

Richards,

The U.S. Treasury prints a $100 Federal Reserve note at the cost of a few cents, but it doesn’t issue this note. The note’s issued by a private bank, as a loan worth $100, and it costs the Federal Reserve only a few cents to obtain the note, as much as it took the Treasury to print it. Joe Average uses this note to buy bond paper worth $100 from the Treasury, which’s the Treasury’s promise to pay Joe $100 at a later date, plus interest. Thus the Treasury has borrowed $100 for the expenses of the government. This is an instance of fractional reserve banking at play, where the fraction of reserves maintained by the Federal Reserve equals zero percent and that reserved by other private banks is overall less than 3%. And you see nothing evil or fraudulent about this scheme as opposed to the Treasury printing a $100 United States note and using it for its expenses without going through the detour above… great!

The problem with your example is that it purports to start at the beginning of the story but really begins midway, with Joe already having his hands on $100, which he likely received as remuneration (he’s unlikely to have borrowed it with the express purpose of buying bonds, because he’d pay more interest to the bank than he’d receive from the bond).

The fact is it’s the central bank that creates new money (ie expands the money supply; though it also ‘destroys’ money if it wishes to contract the money supply), not private banks. If the central bank wishes to increase the money supply (say, to keep interest rates down) it purchases financial instruments (bonds or, nowadays, repurchase agreements) on the open market. This entails depositing newly created funds for those purchases in member banks’ accounts, which they can then use to increase the loans they make. In effect, this is private banks borrowing from the central bank, but since it’s the central bank that sets the target interest rate it’s the central bank, not private banks, that determine the money supply.

On your definition of money, money’s unambiguously a means of exchange but it’s a store of value if it’s commodity money [not something I’m advocating].

No. Fiat money is also a store of value. (It’s not ‘my’ definition, it’s the standard accepted definition.)

Your narrative about Bill, a person, makes some interesting assumptions. The first’s that given inflation as a constant, Bill’s well advised to put his money in a bank and let the bank lend it. The problem’s that the reason inflation’s a constant is because of fractional reserve banking! In the absence of fractional reserve banking, and the government issuing debt-free money, Bill could sit on his money for a very long time and it’ll have the same buying power, and since bankers don’t get to create debts out of nothing, people will be wealthier and have less of a need for loans, and in the case of a need for lots of capital for establishing industry or a major business, there’s always stocks.

I shouldn’t have said “is a constant.” There have occasionally been deflationary periods. But inflation has been present throughout history, in two forms. The first is the general definition of inflation, as a rise in the general price level. It’s true that in the past prices rose much more slowly. Don’t quote me on this, but I think I recall reading that the inflation rate between 1500 and 1800 (or 1900) was around 0.5% per annum, which is quite low. In this case, the cost of holding money is not very high. Nevertheless, it’s still a cost, and people are aware of it and many would prefer to avoid it. Secondly, inflation is a “constant” in the sense that prices of specific goods have often risen rapidly. This attracts attention and urges action to receive a return on one’s money.

Your second assumption’s that Bill can safeguard his money against theft by keeping it in a bank, and since it’s advisable for him to lend it, if he lets the bank lend it, he’s better off with respect to potentially losing it to a debtor unable to pay him back. I’m sure you’ve heard of a run on the bank, which is a bank collapse when too many customers start withdrawing substantial portions of their deposits, a direct consequence of fractional reserve banking. So Bill better hope that when he wants to withdraw most of his money from the bank, most other bank customers don’t have similar plans. Yet when Bill would need his money the most, which is when the economy starts to collapse, others will also attempt to get as much money out of the bank as possible and the bank will collapse, quite possibly leaving Bill with nothing from his deposits. And, as long as the economy chugs along, even if poorly, fractional reserve banking keeps devaluing the buying power of Bill’s money. Great, isn’t it?

Right. So now you understand why the Federal Reserve was created, in order to act as a lender of last resort, insuring that those deposits will be there when depositors request them. It’s also why the FDIC was created.

Look, I’m not suggesting it’s been a smooth run. That’s why I described it as ‘evolution.’ Evolution’s messy business. Some things that are tried will fail, it’s a given. (Eg, there have been significant ‘moral hazard’ issues.) Others will work, at least for a while, and thus endure. If it leaves us better off in the long run it’s a good thing.

The fact is depositors don’t want to hold money. If they did, they wouldn’t lend it (ie deposit it). You can rail against ‘money lenders,’ but it’s what most of us are, even if we don’t know it.

Some nice math on fractional reserve banking lowering the interest rate charged to borrowers on your part! Allegedly, if a bank pays 10% interest on deposits, then by lowering the fractional reserves from 50% to 10%, for operational profit, the bank lowers the interest rate it needs to charge on a loan from at least 20% to at least 11.1%. Boy, aren’t we glad for fractional reserve banking?

Not so fast!

When the bank maintains 50% reserves, the loaned amount’s twice the reserves and thus the actual interest rate’s not 20% but twice this, or 40%. And, when the bank maintains 10% reserves, the loaned amount’s ten times the reserves, and the actual interest’s 10 times 11.1%, which equals 111%! So which would you rather pay, 40% interest or 111% interest?

What are you talking about? No one “actually” pays 40% when the interest rate is 20%. If you borrow at 20%, then you pay 20%.

There’s nothing wrong with my math. If banks pay interest on the deposits they take then they simply have to make more interest on the loans they issue simply to stay in business. If they couldn’t charge more in interest they’d go out of business and society would be deprived of the valuable service of financial intermediation. Lowering the reserve requirement reduces the interest rate differential, which has benefits for banks, for borrowers and the economy and society in general.

You dismiss [American] bank profits on the order of $100 billion per year as hardly what people would expect if bankers are creating money out of nothing. Taken at face value, the figure’s isn’t bad for creating loans out of nothing, but the figure’s incorrect. The government alone pays hundreds of billions of dollars in interest annually on the national debt. Banks conceal much of their vast profits from the public as undistributed or retained earnings. There’s a reason why when you go to the downtown area you see that the tallest skyscrapers are banks and other professional financial institutions.

I’m right to be dismissive of $100 billion in banking profits because the WN assault on banking has much to do with the idea that banks are impoverishing people and depriving them of monies that would have been theirs if banking were nationalized. $100 billion distributed among 300 million people (or 200, if you would prefer to exclude non-whites) is hardly a life-changing amount of money.

The government pays hundreds of billions in interest to bondholders, the vast majority of which are not banks. Interest paid to banks who hold bonds is included in the $100 billion profit figure.

Retained earnings are not “concealed.” Please. I don’t think you’re in any position to be writing Money FAQs if you’re this confused about the basics.

Are bank buildings really the tallest skyscrapers? It’d be interesting to find out, because I’m betting Bill Still never bothered to. Bank buildings were historically large because of their outsized lobbies, necessary to keep long lines of customers indoors and out of the public eye, lest the public suspect a bank run.

When the government issues debt-free money, it isn’t lending money, not taking money back, not charging interest and not storing money, and hence not doing banking.

Government “issuing” money is simply government printing money to fund its spending. Good God man, you state you’re worried about inflation and yet you want to hand over the power to simply print money to the government? This is exactly why I suspect Bill Still is just some conniving leftwing prick who’s found a way to exploit libertarian conspiratorial gullibility. Ron Paul may have his reasons for wanting to end the fed, but it’s assuredly not because he wants to give the government free reign to spend to its heart’s content.

Second, and here’s where fractional reserve banking comes in, if the banks maintain 10% reserves, then the 1.4 trillion dollar bank equity [taking your reported figure at face value] corresponds to 10 times the amount in debt, or 14 trillion dollars of debt, but due to various rules regarding reserves (e.g., only 3% reserves for deposits under 50 million), the actual reserves are less than 3%, and the corresponding debt’s in the neighborhood of 47 trillion dollars, let’s round it to 50 trillion dollars. Using a round figure of 310 million Americans, this corresponds to an average debt of around $160,000 per American, courtesy of fractional reserve banking or banks creating loans out of nothing.

Wrong.

‘Equity’ represents a going concern’s claim on its assets. Banks are businesses. Businesses own assets and incur liabilities. If banks were publicly owned, and ownership divided equally among all members of the public, equity would represent each individual’s claim on banking assets after liabilities have been paid. This is the reason I cited the figure, to demonstrate that few people’s lives would markedly improved as a result. Moreover, the only way to maintain equitable public ownership would be to prevent people disposing of that ownership (including its use as collateral), rendering the dollar figure somewhat meaningless; only distributions of banking profits would accrue to the owners, and those, as stated above, are rather meager.

Whatever the mean debt of American households, it owes its existence to the availability of credit per se, rather than credit created via means of fractional reserve banking. Fractional reserve banking forces no one to incur debt who does not want to. It’s true that by pushing the interest rate lower it FRB encourages borrowing, but most borrowing is put to productive use. Again, we come back to society as a whole being more productive because of the existence of a credit market.

Fractional reserve banking’s so enriched Americans, hasn’t it? We should all be immensely grateful to the bankers for rendering such a tremendous service to society! Apparently, I have to be very ungrateful and crazy to want all the bankers and their agents summarily prosecuted and hanged forthwith.

Yes you do have to be crazy. And honestly? I really believe you are. That’s a pity, because you obviously have a brain and can formulate impressive arguments when you stick to subjects you know. Unfortunately, you have a tendency to swallow extreme, conspiratorial positions wholesale and only later attempt to substantiate your claims. None of this has the effect of empowering the cause (a good, righteous cause, in its basic essence) you so fervently believe in; only of alienating or delaying support for it. But you are what you are and those swayed by this fanatical agitation against ‘money lenders’ are what they are, so I don’t expect this is going to change any time soon.

...I look forward to the “gross misinformation” in the Money Masters video.

Oh, there’s plenty there. It’s a lengthy documentary and I’m going to have to watch it again to pick out the most egregious bits of misinformation. I’m too tired to do that right now and I’m going out later, so it might be a day or two till I get around to it.

Posted by J Richards on December 09, 2011, 02:51 PM | #

Silver’s second attempt to defend fractional reserve banking, Part 1

The problem with your example [Joe Average] is that it purports to start at the beginning of the story but really begins midway…

No, I’m not starting at the beginning. Money and fractional reserve banking have been in use for a while. So one has to start much after the beginning.

he’s unlikely to have borrowed it ($100) with the express purpose of buying bonds

This is a complete digression from the point. With time, under fractional reserve banking, the money in circulation increasingly represents debt. So Joe Average doesn’t have to literally borrow money to purchase Treasury bonds; the money he uses represents debt. Think about it. How many people use coins issued by the Treasury, the only debt-free legal tender in America [the remaining Greenbacks from the Lincoln era practically don’t count], to purchase Treasury bonds?

Here’s a practical example. I borrow $1,000 to buy a TV. $100 out of this goes to pay the salary of the store manager who sold me the TV. Now the store manager uses this $100 to buy Treasury bonds, and this money clearly represents debt owed by someone (me in this case, not the store manager).

The fact is it’s the central bank that creates new money… not private banks… since it’s the central bank that sets the target interest rate it’s the central bank, not private banks, that determine the money supply.

The central bank’s a private bank. In the U.S., the central bank’s 12 private banks combined. I’ve cited the necessary legal information. The American central bank creates only around 2% of American money, refuting your contention that the central bank alone creates new money, and hence just because the central bank sets the interest rate doesn’t mean that it controls the money supply since other banks have discretion to charge varying interest rates to customers.

Fiat money is also a store of value. (It’s not ‘my’ definition, it’s the standard accepted definition.)

If fiat money [only the type created as debt by bankers] were a store of value, it wouldn’t become worthless when the economy collapses.

I shouldn’t have said “is a constant.”... I recall reading that the inflation rate between 1500 and 1800 (or 1900) was around 0.5% per annum… In this case, the cost of holding money is not very high. Nevertheless, it’s still a cost

Your “constant’ reference isn’t the important part. Whereas the rate of inflation isn’t constant and can be occasionally negative (deflation), the time trend is overall inflation. Again, you miss the point. Why’s there this time trend? Fractional reserve banking had started centuries before 1500 and it became money changer heaven from around the late 1600s. Fractional reserve banking’s the single most important cause of inflation. This is why you can’t defend fractional reserve banking by bringing in inflation.

Right [the part about a run on the bank]. So now you understand why the Federal Reserve was created, in order to act as a lender of last resort, insuring that those deposits will be there when depositors request them.

A complete digression! Even in the recent recession blamed on the housing crisis, some banks failed. Do you seriously believe that when the economy’s on the verge of collapse and the people are trying to withdraw their money from the banks en masse, the central bank will lend as a last resort to cover the withdrawals? Complete B.S.!

Anyone can notice that you’ve completely failed to defend fractional reserve banking as in Bill being better off letting a bank lend his money because the FDIC deposit insurance/central bank as a lender of last resort is a provision to stem a problem created by fractional reserve banking in the first place, a provision that only works if excessive customer withdrawals occur in a low key manner.

With 100% reserves, there wouldn’t be a need for FDIC insurance or a need for a central bank to lend as a last resort as a run on the bank couldn’t occur.

Posted by J Richards on December 09, 2011, 02:55 PM | #

Silver’s second attempt to defend fractional reserve banking, Part 2

Look, I’m not suggesting it’s been a smooth run…. If it leaves us better off in the long run it’s a good thing.

No kidding it hasn’t been a smooth run: a Great Depression, dozens of recessions, the American dollar losing 95% of its value since the passage of the Federal Reserve Act, the American national debt that’s gone from zero dollars from the time of Andrew Jackson (when he paid it all off) to around $15 trillion currently, people drowning in debt,... we’re all better off in the long run, isn’t it?

The fact is depositors don’t want to hold money. If they did, they wouldn’t lend it (ie deposit it). You can rail against ‘money lenders,’ but it’s what most of us are, even if we don’t know it.

Completely false! A deposit is supposed to be for safekeeping. Most people don’t know that when they deposit their money in a bank, the bank lends most of it [going by what banks claim], which means that if too may people withdraw a lot of their deposits simultaneously, the bank will fail. In reality, banks don’t lend depositors’ money; they create the money for loans out of thin air; excessive withdrawals collapse a bank because most money exists as computer entries, not as printed notes.

What are you talking about? No one “actually” pays 40% when the interest rate is 20%. If you borrow at 20%, then you pay 20%... There’s nothing wrong with my math.

You know what I’m talking about. Let’s say a bank loans $100 at 9% APR. The borrower returns $109 a year later. Now the principal sum disappears and the bank pockets $9. At a 10% reserve ratio, the bank never lent $100 of its money to the borrower but merely had $10 for the loan. So the bank earns $9 for a $10 deposit, which works out to a 90% interest rate. The bank’s made a killing, the borrower’s clueless and liars like you continue to insist that only 9% interest has been paid.

I’m right to be dismissive of $100 billion in banking profits because the WN assault on banking has much to do with the idea that banks are impoverishing people and depriving them of monies that would have been theirs if banking were nationalized.

A bogus claim. The money FAQ or monetary reform has nothing whatsoever to do with white nationalism, but with human welfare in general. You’ve yourself noted that Bill Still’s a libertarian and his arguments on the money issue, which happen to also be my arguments, were also Catholic Priest Father Charles Coughlin’s arguments, and so on. The benefits white nationalists seek just happen to be included.

Secondly, there’s no WN assault on banking as most ostensible WNs either don’t have a clue, improperly address the money issue (rant against illegals, non-whites seeking public benefits) or are controlled opposition spreading disinformation.

Thirdly, it’s a strawman that any serious money reformer’s complaining that “banks are impoverishing people and depriving them of monies that would have been theirs if banking were nationalized.” No serious reformer wants banks nationalized; they only want the money supply nationalized.

Posted by J Richards on December 09, 2011, 03:00 PM | #

Silver’s second attempt to defend fractional reserve banking, Part 3

The government pays hundreds of billions in interest to bondholders, the vast majority of which are not banks. Interest paid to banks who hold bonds is included in the $100 billion profit figure.

Twisting facts…. What do the bondholders do with their earnings? They’re deposited in banks. Consider the store owner that sold me the TV in the above example; his interest earnings may be deposited in his bank or in someone else’s bank if he buys goods with it. And considering that he obtained the $100 from me, who borrowed this money, the money he used to buy the bonds represents debt, which has to be paid to the bankers who created it. So, all the interest paid by the government on the bonds is ending up in banks and utimately going toward loans and the service of some sort of debt or the other to banks.

Retained earnings are not “concealed.” Please.

Retained earnings don’t translate to dividends paid to public stockholders, these profits thus being unavailable to the public.

Are bank buildings really the tallest skyscrapers?

Go to the downtown areas of a couple of cities and observe for yourself what the tallest buildings disproportionately represent, and you may also be interested in the professions/sources of earnings of the owners of the tallest buildings.

Bank buildings were historically large because of their outsized lobbies, necessary to keep long lines of customers indoors and out of the public eye, lest the public suspect a bank run.

This fails to consider how the banks got the money to buy these large buildings. They’ve been making a killing by creating loans out of nothing, indebting people, and acquiring defaulters’ assets for pennies on the dollar.

Wrong [around $160k per capita American debt based on a total bank equity of $1.4 trillion].

I don’t need a lecture on equity, assets and liabilities. You’ve again deflected the issue to public ownership of banks to show how distributing bank equity among Americans won’t improve the lot of Americans. Again, no one’s advocating the nationalization of banks. The fact remains that banks create loans out of nothing, i.e., their equity’s translated to many times the amount in loans created out of nothing. So, if the reserve ratio’s 3% for deposits less than $50 million, and there are other exceptions to the reserve ratio requirement of 8-14%, then what kind of public debt does the bank equity of $1.4 trillion represent?

Whatever the mean debt of American households, it owes its existence to the availability of credit per se, rather than credit created via means of fractional reserve banking.

What a lie! As if most credit’s created by means other than fractional reserve banking. Where does money come from Silver? Debt-free coins from the government and bank loans via fractional reserve banking. Banks decide the availability of credit.

Fractional reserve banking forces no one to incur debt who does not want to.

What a lie! The only debt-free money created in America is coins minted by the Treasury. These coins can’t cover more than a miniscule proportion of commerce. So nearly all money has to be borrowed for exchanging goods and services.

Unfortunately, you have a tendency to swallow extreme, conspiratorial positions wholesale and only later attempt to substantiate your claims.

I’ve been citing empirical, verifiable things. People like you have been dismissing them as conspiracies, not bothering with the facts. It’s clear who has the evidence.

When you find “egregious bits of misinformation” in the Money Master’s video, let me know about it.

Next entry: Alexander Baron’s Downing Street e-petition

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The Mises Institute/Austrian School on “the basics of sound money” Part 1 of 3

The Mises Institute/Austrian School on “the basics of sound money” Part 2 of 3

Austrian trade-cycle theory

Unsound money principles [According to the Austrian School]

The Mises Institute/Austrian School on “the basics of sound money” Part 3 of 3

Sound money principles [According to the Austrian School]

Reply to Haller [@14, 15] Part 1 of 4

Reply to Haller [@14, 15] Part 2 of 4

Reply to Haller [@14, 15] Part 3 of 4

Reply to Haller [@14, 15] Part 4 of 4

On the value of fractional reserve banking

Steve Keen on the solution to the global economic crisis

Silver’s second attempt to defend fractional reserve banking, Part 1

Silver’s second attempt to defend fractional reserve banking, Part 2

Silver’s second attempt to defend fractional reserve banking, Part 3

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