Taking the Glitter Out of Gold-Based Currency

Please, by all means, show us where money is issued by a private bank in this country! You have numerous misconceptions about the role of the Federal Reserve and the manner in which it functions as it performs the tasks laid out to it by this government. Show me one instance where the Federal Reserve issues money. I realize that the FED both sells and purchases Treasuries and other assets on the open market, it manipulates interest rates and economic movements, but as far as issuing our money I know of absolutely no instance where it does so. Thus, the level of misconception on the issue is exposed for exactly what it is!

The fact is that the Federal Reserve is nothing more than a continuation of the Progressive Socialistic legislation that began, in earnest, during that latter part of the 1800s. It was little more than a method to expand the role of government into every area of life in this country and, of course, the first place that needed to be transformed to accomplish that feat was the money. In order for the government to reach far beyond the limitations of the Constitution it needed to gain complete control over all monetary and thus economic power, once that was accomplished the rest would fall into place.

During the latter part of the 1800s, the banks found it difficult to actually form successful cartels within the free market, thus they needed the partnership of government to allow that to happen. Yet, it turned out that it was much more than simply a matter of Quid Pro Quo, for the government would be holding the power and the ability to reap far more benefit from the arrangement than the banks, yet make no mistake, the banks did benefit from the virtual grant of monopoly power over the ancillary functions of the monetary markets. It became very clear to those within the banking houses that, without government, it would be impossible to gain control over the economic and financial sectors of the country. Likewise, the governement also was quick to recognize that without the banking industry the over-reach for power would be impossible. It would be necessary for the government to completely transform the economy from a free market to a highly centralized economy that would be coordinated with a distinct form of Statism, the only means of accomplishing this feat was through the eventual destruction of the gold monetary system. It was the only method to gain the necessary controls over the economy and thus the people, for once money property is removed from the hands of the people, all other rights become flexible in the hands of government. The government desperately desired a political economy, one that allowed it the ability to function without the necessity of seeking the consent of the people, the only form of money that would allow such a function is a fiat monetary system, or essentially a money substitute where all control lay in the hands of government.

The first real attempt at such Statist control came during the Lincoln Administration, under the cover of war, the Radical Republicans could set forth their agenda of a highly centralized and powerful government, breaking the Independence of the States and the will of the people in the process. The seed was planted during the Lincoln Administration, the seed of alliance between the powers of big government and the big business. Perhaps the most interventionary acts of the Lincoln Administration was that of money and banking, it paved the way for the concept of both the Federal Reserve and the fiat monetary system. The fact is that during that time there was a huge push by those within the Administration and its beneficiaries in the banking and industrial sectors, to establish complete control over the banking and financial sectors; this was not to benefit the county, on the contrary, it was to benefit the government and those policitally connected to it through patronage.

If you look deeply into all the back-door deals that were struck, not only during the Lincoln Administration, but subsequently, you would be amazed at the corruption. Indeed, if you look carefully, you will find that much of what we now endure found its seed-stock during those periods. Many of the very functions of the Federal Reserve were crafted during the period of the late 1800s, primarily by the political powers in Washington with the assistance of those seeking a banking cartel. There were many proponents of the creation of a Trust Cartelization by the government, primarily it was those within the political spheres who supported such a cartelization, which would, in essence, provide the government with the ability to completely control the economic life of this country behind the curtain of a central bank, it worked. The Federal Reserve is nothing more than that, a curtain concealing the un-Constitutional attributes of the State. Indeed, all one need to is read the debates and findings of the House Banking and Currency Committee during that period to find the real purposes behind the formation of a central bank, it had little to do with the actual banking industry and everything to do with the power of government, although granted the banking industry would benefit from the arrangement.

It is essential to understand that almost every act legislated to create a gold standard was nothing more than a way to destory the use of gold money in this country. As such, the Gold Standard Act of 1900 did just that, it placed changes in banking legislation that would allow for a drastic expansion, both of government intervention and of the manner in which banks could operate under the auspices of government oversight. Essentially, the Gold Standard Act of 1900, like several gold standards created by government before it, sought to remodel the State and National bank systems into one much more pliable to the whims of government. The Gold Standard Act opened the door for much more radical reforms in the relationship between government and banking, indeed it lead the way for the creation of the Federal Reserve. There were several legislative innovations which took place, many of which were illegal until, in 1902 the Fowler Bill allowed for expansion of National Bank Notes based on broader assets than simply government bonds. The next innovation, again once illegal, was to allow National Banks to establish branches over a much wider territory than previously allowed and even expand abroad. Perhaps the most dangerous innovation however, was the creation of a three-member board within the Treasury with the power to control and supervise the creation of all new bank notes and estabilish a group of clearing house associations for the express purpose of managing the issuance of the newly created bank notes. Now, remember all of this was under the newly legislated Gold Standard of 1900 and essentially it was a license to print fiat money under the veil of what was assumed to be a legitimate Gold monetary system. The whole purpose of the legislation was to build a foundation for the creation of a central banking system and the fiat monetary system it would be empowered to administer on behalf of the government. Fortunately, at least at that point, the bill was killed in committee, but, as well all know, that was not the end of the story.

There were, at that time, various experiments being executed which would allow the Treasury to function as a central bank, allowing the Treasury to actually make open market purchases, using Treasury deposits to expand the money supply beyond the reserve of gold. It was a violation of law, at that point, for until then there was a statutory limitation which confined government revenues and expenditures to actual Treasury accounts, but that ended and Secretary leslie Shaw actually deposited Treasury funds into the governments favored big National Banks, this, of course, artificially lowered interest rates and subsequently expanded easy credit, both of which were politically beneficial to those in government power. The problem is that of deficits, when the government, dependent upon a flow of new revenue, spent beyond those revenues the entire system would rapidly degenerate into economic choas. During this period, yet another scheme was being formulated, one that would give total control to the Secretary of the Treasury over all banks, fortunately again, it did not happen.

Of course, as we know, the Federal Reserve Act of 1913, enacted by Congress lead to the creation of the Federal Reserve Banking System, but as it was, it was limited as to the extent of its power by one main factor and that was gold money. That did not however, stop the push toward a fiat monetary system under government control, the fact that the Gold Standard was created and established in the name of gold, was merely a formality. In reality, the Gold Standard was nothing more than a system which allowed for the installation and subsequent management of a what was to become a highly coordinated system of international inflationary fiat paper money. The entire concept behind the Gold Standard, indeed behind the subsequent Bretton Woods agreement, was the eventual replacement of gold money with government controlled paper fiat money. Essentially, the Gold Standard was nothing more than a pseudo-gold standard, all used to benefit government and allow for the expansion of its power. What it created, again all under the guise of a Gold Standard, was a highly unstable system, inflationary in character and more than potentially dangerous. In fact, it was this type of activity which lead to the eventual collapse of the system during what we now know as The Great Depression. The Great Depression had absolutely nothing to do with gold, but was the result of several factors revolving around the issuance of a fiat paper expansion, while retaining the facade of a Gold Standard as a convenient cover for the disaster. That cover allowed for the government to take control, both direct and indirect, over more and more of the monetary, economic and financial sectors while it blamed gold as the culprit behind the debacle. It was a very effective ruse and as then, many people are still buying into the lie. You are a prime example.

It is quiet evident that the push for consolidation and centralization that began during the Lincoln Administration continued throughout the latter part of the 1800s, it continues to this day. The idea, now, as in Lincoln's day, was that the concentration of power would permit the ability of efficent government actions, like now, it was viewed as essential for the promotion of an American World Empire. It was absolutism at its finest, and allowed for the expansion of executive and government power far beyond Constitutional restrictions. The only method that would allow such an expanse of government power was through Monetary Imperialism and that could only be achieved through a fiat monetary system controlled by government issue and managed by a central bank. The whole purpose of the fiat monetary system is to expand the power and reach of this government, it has nothing to do with prosperity, altough it creates a sense of prosperity. It was also necessary, in order to create a Monetary Empire, for the government to tie its Client States, dependent upon the U.S. Fiat Monetary System, into a system that would allow those Client States to pyramid the monetary and credit inflation on the inflation of the United States. Part of the purpose of the fiat monetary system was to bind the countries of the world to the U.S. Fiat "dollar". That is one reason why there was such a pressure placed on Third World countries to adopt the Bretton Woods agreement which essentially created a veil of viability under a "Gold Exchange Standard" which was actually nothing more than "Dollar Standard". Most of the Imperialist intervention of the late 1800s by the U.S. was nothing more than a preparation for the eventual imposition of a Monetary Empire envisioned by certain political figures in our government. It is easy to see the consequences of this governments actions, the purposes behind those actions and why we now live in the type of world we do.

If you read about the actual reasons and the ideology behind the War of 1861, then behind the Spanish American War you will see where the seeds were planted and why those seeds were planted. Delve into the reasons behind the capture and occupation of the Phillipines, and particularly of Puerto Rico, Panama and Cuba, the vast majority of reasons had to do with the creation of the U.S. Monetary Empire. Read why in 1911 and 1912, the U.S. government imposed a Gold-Exchange Standard on Nicraqua, it certainly didn't have anything to do with gold money or the use of gold as money, but on the power to manipulate the economies of the world; this policy extended to other countries as well, such as Mexico, Liberia, Bolivia, Guatemala, Honduras and even to China. Of course, as I said, none of this had anything to do with gold money, but under the guise of a gold monetary standard, the expansion of bank credit and government control could be achieved on a global stage. [an interesting read is entitled "The Principles of Money and Banking" (1905- Charles Conant), who was the engineer behind the expansion of the Monetary Empire of the U.S. government, it is, of course, a magnum opus in government propaganda.

Some other very interesting and pertinent information can be found in the reports issued by the National Monetary Comission from the year 1908, the Commission was made up of equal numbers of Senators and Representatives, but primarily the power behind the Commission was none other than Senator Aldrich, I am sure you have heard his name mentioned before. His desire was that everything be done without bring much, if any, public attention to the meetings. Aldrich had the idea that it would be possible to divert control over the monetary system to the government by using a ruse, using regionalism and decentralization as a guise, they stated that the government would establish regional reserve centers, while they would appear to be independent, the fact of the matter was that they were to be completely dependent upon government charter and monopoly control, all centralized under what would become known as The Federal Reserve. The proposed purpose of The Federal Reserve was not only to determine and manipulate the money supply [fiat bank notes], protect bank reserves through the manipulation of the discount rate, but also to allow for government spending [debt] to function as a mechanism to siphon off "surplus capital" from the economy. To fully understand the import of the events of the period and how it now affects our lives it is absolutely necessary to read the various reports issued by the various committees and associations, as well as the numerous speeches given during the period. It is truly amazing to read those reports and to see the mechanics behind the facade that was created to impose the system on this country. In particular is the issue of the APS's "Reform the Currency" of 1911. The primary impetus was that the entire idea of a free market was obsolete, the market no longer considered to be self-regulating [especially since government involvement made it impossible for the markets to continue to self-regulate], instead, the government would be the provider of the expertise necessary to government the markets, in particular the money market.

In one conference, the plan was disclosed as follows: "The real purpose of the conference was to discuss winning the banking community over to government control..." That is exactly what happened, and if anyone doubts that this government is not in control over the Federal Reserve and the banks it oversees, then it would be wise to actually read the myriad of documents that were written during that period. It is also necessary to understand that within this plan was the express purpose of the destruction of all State banks, or at least the ability to bring all State banks under the control of the federal government.

The progression was clear, from a free market gold system to a government controlled "Gold Standard" to a government controlled "Gold Exchange Standard" to a government controlled Fiat Paper Money Substitue Standard. The only way the government could expand its power beyond the limitations set forth by the Constitution was through the eventual creation, control and manipulation of a Fiat Monetary System. It is the only way this government can spend, creating a vast network of military intervention around the world as well as a vast network of entitlements domestically. None of that would be possible under our Constitutional form of government if a direct gold monetary system was voluntarily allowed, without government control or ITS central bank. The Federal Reserve Banking System is a government created and sanctioned device that allows the monopoly power over money to be placed in the hands of government through the intermediary of the Federal Reserve, it has allowed for the creation of the fiat monetary system, the expansion of that system and the control of every aspect of life in this country through that system.

Unlike the limitations placed upon government under a free market gold monetary system, there are no such limitations under a fiat monetary system. It is an inherent characteristic for goverrnment, as the sole issuer of fiat money to issue as much money, and in the process issue deficit spending, that it can get away with without causing the destruction of the fiat currency through inflation. Under a gold monetary system, government was limited in the issue of paper money by the reserve of gold, thus such severe limits by gold on the potential for monopoly money issue [fiat or partial fiat] held government in check, restricting its ability to expand its power or to use that power without the consent of the people. Gold was a barameter as much as it was a sound system of money, it restricted government to very limited functions. If the government spend beyond revenues, it would have to tax the people, that was a politically imprudent action since there was always the next election around the corner or worse, an actual tax revolt if taxes were raised too high to support the governments spending adiction.

Indeed, if you look at the works of John Maynard Keynes, you will quickly see that the purpose behind his "theories" was the centralization of government, not only that, but it was suggested that his theories would lead to an ever-increasing degree of government intervention into the markets and eventually this would lead to a socialization of the American Economy and Society. In fact, this is exactly what has happened. The solutions proposed by government always become problems which require more intervention, more solutions which become more problems requiring more government intervention. Keynes hated gold money, and he set out to destroy it...his theories were obviously successful and the results are equally obvious.

Now DrKrbyLuv, you "say" you are against the FED, yet what you propose is nothing more than another version of the FED. The FED is an adjunct of this government, the banking system is controlled by government for the benefit of government. If the government did not benefit from the FED there would be no FED.

They need the coercive force of legal tender law, taxation, etc. in order to run their racket.

Their ability to create mischief without government is practically nil.

I think that's a pretty safe bet.

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

"The United States Bullion Depository holds about 4,603 tons (4,176 metric tonnes) of gold bullion (147.4 million troy ounces[1]). It is second in the United States only to the Federal Reserve Bank of New York's underground vault in Manhattan, which holds about 5,000 metric tonnes of gold in trust for many foreign nations, central banks and official international organizations."

Different sources give different estimates. I wouldn't be surprised if Fort Knox was empty, but I'd be shocked if the Fed had no gold.