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Need help with a Gold Standard issue (UPDATED)

anyone with a little more experience care to comment on the condemnations of a gold standard in favor of greenbacks presented in the documentary "The Money Masters?"


This three and a half hour doc is too thorough for me to condense effectively here, if you haven't seen it, it is an excellent watch, but also presents compelling evidence for why a gold standard is a dangerous solution, thoughts?

UPDATE: Guys, this thread is almost 2 months old, it has died twice and been revived now a third time, if you're going to comment, please directly answer these questions, how is having the FED better than having greenbacks IN THE CASE where we have competing currencies. Also, how do you get out from under the debt when the US has no gold assets that havent been placed as collateral on the DEBT? How is the debt-based money preferable to greenbacks? Who is going to trade gold for FRNs when they are no longer the only legal tender(and as a result no long the world's reserve currency?) When the Petrodollar is dissolved(very soon) what will the severly devalued dollar do to the elderly and the poor who are unable to turn their subsistence living into gold? When you give answers to these questions we can consider this issue closed. I get tired of people railing aginst the greenback yet never once listing why they approve of continued FED action in its place.

For the record, at this point my belief is to print greenbacks to replace FRN's while simultaneously instituting competeing currencies, which will force greenbacks to be more stable long term or die, but we can close the FED very soon if we go this route, i see no end to the FED otherwise until we can pay the debt we owe them..

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Republicae's picture

I have to wonder just how

I have to wonder just how gold and silver in the U.S. could depend on the Rothschilds since their ownership is, compared to global reserves, rather minor.

The headlines are from April 2004:

“LONDON, April 14 (Reuters) - NM Rothschild & Sons Ltd., the London-based unit of investment bank Rothschild [ROT.UL], will withdraw from trading commodities, including gold, in London as it reviews its operations, it said on Wednesday.”

In fact, oddly enough, the Rothschilds actually walked away from about 260 years in the gold market back, that is when they gave up their Chair on the London Bullion Market. You will also find other strange things that were associated with the Rothschild decision, one being that the World Gold Council announced that it was closing over half of its global offices approximately the same time as NM Rothschild & Sons, ltd.

For what that’s worth, its hard to tell exactly what such movements were about, what significance, if any, it had on their actual holdings, but there were some who suspected that the Rothschilds had lost a great deal of money and resources due to some trades.

The use of gold and silver, as I stated, once it is released as money, it is very difficult to control, or for that matter influence, though there have definitely been attempts to do so through the years. Gold and silver are much more susceptible to manipulation outside the monetary realm than in, that is because the market mechanics are completely different and the basis of pricing is also completely different. Once gold and silver become money, the market forces that were once subject to external influences due to the fact that such currencies are now priced in fiat currency, are no longer factors as gold and silver act as money in the market. In other words, at present, gold and silver are subject to the market forces exerted through a system of fiat money, once gold and silver are allowed to be money, the dynamics completely change within the market.

Dr. Paul seems to trust GATA (Gold Anti-Trust Action Committee) I too find that they provide pretty accurate information on gold and any attempts to manipulate or control it, but their present view is how gold is being possibly manipulated as a commodity, not as money, which would change everything about the way gold operates within the market.

In other words, what I am saying is that gold functioning as money is not nearly as subject to manipulation and control as all fiat monetary currencies are, nor is it as easy to hid things when gold money is involved, gold demands accountability in governments and in businesses. Besides, if the Rothschilds, or even the Central Banks around the world had such power, they certainly have not used it very well, for the fiat price of gold is not serving the purpose behind such manipulation, which would be to depress the fiat price, not inflate it. Additionally, there is simply too much gold in the hands of individuals for such manipulation to take place, especially once gold and silver are allowed to be money.

Well, nothing is wrong with the idea of Congress creating a currency attached to nothing outside the US except the fact that it is not allowed by the Law of the Land, and that is, after all what we are attempting to restore, the Law of the Land and in doing so restore justice to this country, freedom and liberty to its people.


"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

...there is simply too much

...there is simply too much gold in the hands of individuals for such manipulation to take place, especially once gold and silver are allowed to be money.

Where does the assigning of value of gold and silver come from? If external to the individuals in a transaction with each other, then that means they're subject to the assignee, the person assigning the value. If value is assinged by themselves, why even use gold and silver? Why not use something else? *shoulder shrug* Regardless.

Gold and silver are as anything else, something. Their use should depend on the people using it, not someone or something besides them. If two or more people in a transaction want to use gold or silver, or both, so be it.

...except...[that currency other than gold and silver in issuance by Congress, right?] is not allowed by the Law of the Land, and that is, after all what we are attempting to restore, the Law of the Land....

I didn't say the Constitution, a guide and not a necessity for freedom, is perfect. Individually, what's necessary for freedom is that s/he thinks and acts according to that thinking. Regarding the government, it should adhere to the Constitution.

Back to the individual, the Constitution, a document listing conditions natural, is something the individual can point to to prompt his ability to justify the result of defending himself or react with his transgressor to obtain resolution or to seek justice on his trangressor. The Constitution is a document of defense, a document of reaction, an object (a thing acted on), not a subject (an actor). I see the Constitution as a reference to maintain action-reaction relationships, 1 for 1 relationships, fair relationships.

School's fine. Just don't let it get in the way of thinking. -Me

Study nature, not books. -Walton Forest Dutton, MD, in his 1916 book whose subject is origin (therefore what all healing methods involve and count on), simple and powerful.

Republicae's picture

There is evidence that in

There is evidence that in Neolithic periods, that some items were valued, for whatever reason, the basis of that value became what could easily be called “money”. For instance, the Cortaillod and Rfyn cultures in Neolithic Switzerland created copper beads that while ornamental, also appear to have been used as a medium of exchange. Markets and money, for that matter, both preceded governments, in fact, it can be said that governments sprang from the necessity of markets, cities sprang from the organization of markets and money sprang from markets. The assignment of value, particular in the case of gold and silver money, comes from the fact that both metals were valued in the market before being utilized as money. In fact, in order to be money proper, the commodity must first have been recognized for a particular value. Now, it shouldn’t be necessary to go into all the natural characteristics of gold that make it an almost perfect monetary medium, you can find that anywhere on the web, but the fact is that gold and silver were recognized by people as having value, based primarily on the characteristics and uses of those metals.

It can also be said that the Framers of the Constitution were not only well aware of the natural characteristics of gold and silver, but they were also extremely familiar with the monetary superiority of gold and to a lesser degree silver. I say monetary superiority because they were also keenly aware of the history of fiat paper money and the tendency of such paper substitutes to reek havoc on the economy and social structure of a country which, they wished to avoid in this newly created Republic. The took steps to prevent this country from falling into the same monetary, economic and political turmoil that other countries had faced due to such fiat paper currencies. Indeed, they were also well aware of just what paper currencies did to many of the Colonies prior to Independence and what the Continental Scrip did during the Revolution itself.

There was therefore, a seemingly natural standardization that took place after the Ratification of the Constitution. The definition of a Dollar, based on the Coinage Act of 1792, provides that a Dollar be a specific weight of Silver, 371.25 grains of fine silver to be exact and that there be a ratio of so many Dollars to an ounce of gold. There was very good reason for doing this, one was the fact that during the period, other countries used similar weights and measures of coins making foreign exchange, thus trade relatively easy, much easier in fact that the current system of fiat currencies. In fact, in this country, foreign coins were readily accepted as currency all the way up to 1858, when the government decided to step in an mud the waters with a legal tender law. Prior to 1858 we had what could basically be considered a system of competing currencies.

The fact is that gold and silver, while being commodities, are not as anything else, they are not just something, not just a commodities. Gold, for instance, has had at least a 5000 year history of being money, aside from being anything else. Silver too, has had a long history of being money, aside from being anything else. The same cannot be said for anything else, can it?

Additionally, there are very specific economic reasons for gold and silver money, it is a restrictive system of money which demands accountability in both business and government. Gold and silver are, unlike media such as fiat paper substitutes, limited in supply making it possible for a highly stable economic means of exchange and therefore a sustainable degree of economic growth. The fact that the supply of both gold and silver are essentially self-limiting, meaning that the supply simply cannot be increased on a political whim, this fact alone makes them perhaps the closest thing to perfect money. The non-elasticity of the mediums make them constraints on governments unwilling to abide by common sense or economic proprieties.

The Framers of the Constitution were also aware that economic freedom could not be placed in the hands of government through an elastic monetary medium, remember the Framers were well versed in the history of nations and knew that the nature of men cannot be trusted with much power, especially if that power is combined with the power to simply print money to serve that power.

While we have grown accustom to the current system of fiat paper money substitutes, the fact is that such substitutes are exactly that, they substitute real money but can never perform all the functions of real money within an economy. People think, for some reason, perhaps ignorance, that fiat paper money substitutes are just as good as money, but the fact is that a substitute cannot be just as good as the real thing, it is simply not possible. Fiat paper money substitutes do few things well, in fact, I suggest that they simply don’t fulfill all the functions of money well enough to be considered as money. Sure you can exchange fiat notes for other goods and services, but from almost the moment the fiat currency system was introduced into this country there became a downhill slide, gradually of course, to our present state of economic doldrums. The fact is that countries who subject their people to such systems always seem to follow similar patterns throughout history, the United States has followed just such a pattern.

Additionally, due to the characteristics of fiat paper money substitutes, they can never be titled property of the bearer, but are always, without exception property of the issuer, in our case that would be the government. They are official notifications, documents if you will, of an obligation by this government, they are not property and cannot be titled by holding them as gold and silver can. This is one very important point, for if you are not allowed, through the legal process of holding actual property title to money then the rest of your property rights are also questionable. Economic freedom depends on many factors, one being that when you hold money that money is, in fact and deed, legally your property under color of title, not the governments. Money is, in fact, more than simply an economic instrument, it is real property, thus when you labor, which is your life property, you are compensated for that property with an equally, or at least it should be, value of property.

Thus, a person could be assured that his money was a store of real value, he could spend it as he pleased, he could store in a bank, stuff it in his mattress or bury it in a mason jar in his back yard and it was no ones business but his own. He could be confident in the value of his money, that he could dig that Mason jar from the ground years later and still have money that kept an equivalent value as when he buried it, it was real money, sound money and it was his private property. He could be assured that his government could not confiscate it easily, track it or regulate it once it was in his hands; it was real property, his property. He need not worry about whether he carried a suitcase full of it from city to city, state to state or country to country because it was, without any equivocation, his property to do with what he wanted, unlike today.

In our Constitutional Republic, the Founders were well aware of the potential dangers involving the nation’s currency and with that knowledge they gave us with some extremely strong admonitions concerning the value of money as property. They had experienced the results of unsound money and knew that monetary instability would not only threaten the nation’s economic freedom, but all freedoms and liberties enjoyed by the people. I wonder why we take such things, so important to each of us and our future, for granted so easily?

In the preliminary draft of our Constitution the following words were considered: "To borrow money and emit bills [fiat currency] on the credit of the United States." The wording however, was struck from the final document and for good reason. Due to the Founders knowledge of history and even their experience with the “Continentals”, they knew the danger that emitting such bills posed to the nation and the value of the monetary property of the People. Indeed, it was more than just the monetary property Rights, but all Rights of the People that concerned the Founders; for they were aware that if the monetary system was ever corrupted that the entire system could be corrupted.

In fact, there were some in the Constitutional Convention that believed that it would be better to discard the entire Constitution instead of allowing “and emit bills” to remain. The passion concerning the ability of Congress to “emit bills” was so powerful because the Founders knew that such ability had the potential to undermine the Republic.

The cardinal rule of money as real property is essential for a Free People; absent that cardinal rule the government assumes powers that will always infringe upon the Rights of the People. As we have seen, when money is little more than an impotent instrument of exchange, monopolized and regulated by the government then the government is; apparently, free to treat it as such. The government can debase it, confiscate it, control it, track it and basically manipulate it to benefit any agenda it pleases.

Is it any wonder why the Founders were so concerned about taxation without representation? Such taxation allowed the King's government to tax the fruit of the people’s labor indiscriminately. It totally ignored their property rights and amounted to open robbery of the people’s private property. Today, we have the semblance of representation, but in reality those we elect rarely consider our consent when crafting legislation. Perhaps if we actually considered what has taken place over the last century we would once again raise our arms in revolution and cast out those who should be considered nothing more than common criminals acting for their own benefit instead of that of the people.

Through the years our financial privacy has been invaded through a system that has completely eliminated not only the property rights of our money, but also the value of our money and indeed the essence of our money itself has been detrimentally altered. Today, our money has been transformed, by certain factions in both the banking cartel and government, as an instrument of a government. A government that no longer places value upon the Rights of the People to keep their property and to use that property in ways that should be considered private and inviolate is a government operating outside the Consent of the People and the Law of the Land. Along with the Central Bankers, such a government seeks to use unsound money for purposes other than the real benefit of the People.

This government began to follow the path toward unsound money the moment it passed the Federal Reserve Act in 1913. Since that time we have witnessed some of the most heinous acts against the People and their property in the history of this nation. Under the watch of the Federal Reserve, this country and its people suffered numerous depressions and recessions, including the Great Depression. These financial crises served the bankers and the government well, it provided opportunities to both bankers and the government unparallel in our nations history. The scope and power of the government was immensely expanded in the wake of the Great Depression and although the Federal Reserve was, at least as the system was sold to the American people, intended to avert such economic panics, it was the major contributor to that economic catastrophe and, indeed, as it turns out, a prime beneficiary of the economic disaster. During the Great Depression there was a tremendous amount of wealth that was transferred into the hands of not only the Central Bankers, but into the coffers of the government itself.

The Great Depression provided the government with an opportunity never before seen in this country’s history; the Crash of 29 and the ensuing depression followed the natural progression of monetary debasement and control. It also proved to be the impetus for the destruction of the property rights associated with money. It gave the government the rights over the people’s money, making it nearly impossible for a man to control or maintain his money as private property. FDR’s attempted confiscation of the peoples gold and the government’s decision to renege on its promise to redeem its Liberty Bonds marked the beginning of the end of private money property in this country; it also marked the end of the full faith of the United States government.

By 1971, the goal of destroying private money, and the rights associated with it, was completed when the government quietly achieved a total fiat currency coup d’état and their banking partners, the Federal Reserve now had free-reign to control the monetary interests of this nation through a complete Mercantilist monopoly. This effectively ended all property rights the people retained in their money. Since that time, we have witnessed a drastic confiscation of the wealth of this nation by the government and its banking cartel. This confiscation is hidden from the masses of people and takes the form of inflation, draining away the purchasing power of the nation’s money and the ability of the majority of the people to maintain a stable livelihood.

Alan Greenspan once said: “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation.” He should know, for under his tenure at the Federal Reserve, the people of this country have been victimized and seen their wealth robbed through that insidious form of theft called inflation. We have seen our standard of living stolen from us and with the complicity of our own government we have witnessed the demise of our property rights, and indeed all our rights. The fruit of our labors are being siphoned off by those who are no longer worthy of being called our Representative Government, they have long ago abandoned good government for abusive powers and what amounts to little more than blatant highway robbery. They have replaced our Liberty and Rights with something that is totally contingent upon our compliance under the illusion of freedom. They have transformed this nation from one of producers, manufacturers and good labor into a debt-dependent serfdom created to increase their own real wealth and powers while reducing the actual standard of living for millions of hard-working Americans.

How many times did our Founders clearly warn us of the potential for deceit and corruption associated with the unsound money, but through trickery and overt deception this nation was lead down a path that will, ultimately, prove its undoing? The Father of the Constitution, James Madison stated that unsound fiat money would destroy the necessary confidence between man and man, in public councils, industry, the moral standing of the people and the complete character of the republican government. Madison was absolutely correct in his assessment!

The last century saw a progressive disregard for the Constitution and authority, in many cases it is simply ignored by government. Such disregard should not be considered anything less than criminal, a breach of contract between the government and those who have consented to be governed under that agreement.

The people must come to understand that one of their fundamental rights is that of money property and the only way to have money property is for money to be a sound store of value, untouchable by government, separated from the influences of a monopolistic Central Bank, free of the threat of confiscation or undue taxation without appropriate Constitutional Representation. It is a Right that must be restored to the People, without such restoration there is little hope of us maintaining the few vestiges of freedom left to this People.

We stand at a time when this nation will face a great turmoil, the next few years will determine the future of our nation as the fiat monetary system follows all fiat systems before it and collapses. The fiat monetary system is on the verge of reaching the terminal point within its lifespan, it struggles under minor disruptions and small interest rate hikes; chaos that ensues during its collapse will either end in a return to sound money or overt tyranny as the government seeks to control the collapse of society.

The Right of Money Property is a revolutionary right; it stands as a bulwark against those who would assume authority over us and our future. The Right to produce, to labor in exchange of just and sound compensation without the interference of government or the overt monopolistic control of the Central Bankers is essential for a good and prosperous future. We must repudiate all extra and un-Constitutional usurpations and hold those within government accountable for such crimes.

The People must once again take an offensive stance against all those within and without the government who continue to seek to overthrow the remaining remnants of our Constitutional Republic. Our call to sacrifice is no less vital as that of our Founders, our call to defend this Constitutional Republic is no less essential for the survival of this nation.


"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Evidence vs. Evidence and Abstraction and Conceptualization

Good grief, Republicae. First, what you wrote, I read fast because it was just too long. While I read it, I recognized what you said because a) I've thought about it before now and b) have read it in various forms before now.

I'm familiar and understand your argument for gold and silver. Despite what I've said in our dialogue -- that the individual should use what medium of exchange he wants assuming he wants to use one and that a new federal currency should be something outside the influence of TPTB -- I feel you missed those points.

You seem hellbent on what happened necessitates what will be. But because I don't know if you believe that, I'll ask you: Do you, Republicae, believe the past necessitates the future?

As important to that question is this question: Do you believe something besides the individual should conduct his life?

Yes or no to those questions will suffice. If you want to explain your answers, that's fine. Go ahead. I invite explanation.

Republicae, I'd like to continue our debate, but you should know I'm unwilling to debate a person who discusses his position at the exclusion of what isn't recorded, recorded being what's historical, statistical or otherwise journaled. Knowing what is recorded is important, yes. But the ground covered in debate using record at the expense of understanding the relationship between the mental plane and physical plane is little and the travel is a trudge. In that application, tedium, rote behavior, conformance, exhaustion and unwarranted reaction are the rule, not the exception. Ground covered in debate involving record and abstraction and conceptualization is large and paced. In that application, (good) sense, meaning, adaptability, pacing and fairness are the rule, not the exception.

Your answers are fundamental to our positions in our argument and our ability to communicate with each other in this debate and maybe in other debates. Your answers will tell me whether you can think abstractly and conceptually. It's important for me to know your value on history, because, to me, considering it above understanding the relationship between the aforementioned planes is not just dangerous, it's fatal. I prefer life, thank you. *chuckle* Depending on your answers, I'll reply. So, whether we meet here again or elsewhere on the DP, until then, take care.

School's fine. Just don't let it get in the way of thinking. -Me

Study nature, not books. -Walton Forest Dutton, MD, in his 1916 book whose subject is origin (therefore what all healing methods involve and count on), simple and powerful.

Correction: Moderate for Large

Ground covered in debate involving record and abstraction and conceptualization is large and paced.

I should have said the word moderate instead of "large" and written that sentence this way:

Ground covered in debate involving record, abstraction and concepts is paced and not less than moderate.

School's fine. Just don't let it get in the way of thinking. -Me

Study nature, not books. -Walton Forest Dutton, MD, in his 1916 book whose subject is origin (therefore what all healing methods involve and count on), simple and powerful.

Republicae's picture

No Sir, what I believe in is

No Sir, what I believe in is good Law, the Law Sir, written through compact of individuals for the purpose of protecting individuals from what must be viewed through the eyes of history as a constant abuse of powers by governments. I hold that certain truths are indeed self-evident, that there are indeed inalienable Rights and that due to the very real possibility that those Rights have and will be infringed upon, usually by those within government, that the Law is by far the best option for guaranteeing the possibility that there is a defense for the protection of those Rights.

Additionally, since the Framers of the Constitution, most students of history, both political and economic, were well aware of the propensities of government to abuse the power of government, those Framers sought to provide us with ample defense if we would only heed. An individual today is no more able to conduct his life than an individual back in 1776 without government interference and intervention, perhaps far less today.

Thus, a simple yes or no does not suffice, for those are not questions that can be thus answered with any fortitude of satisfaction. The actions of men are always suspect when the power afforded by government is available. Conceptualization is meaningless unless applicable to a given situation in our lives, abstract thought is nothing more than babbling if it brings us no closer to a concise understanding of the structure that our lives are subjected to in this world. History is resplendent with examples of the arrière-pensée of men, particularly men in power, it was therefore necessary and has proved prudent on the part of those who crafted our Constitution, to focus that document not at people but at government. The did so in hopes that their posterity would have the options available to them of individual liberty and freedom, the enumerated powers found within that Compact are principles that provide for the separate spheres of action by government, it’s intent it to limit all government power within those spheres of actions and not beyond. The purpose therefore, of that historical Compact was to provide each individual with the opportunity to life their lives in a manner respective of those Rights that are not granted by governments, nor within the purview of government authority. The Constitution is nothing more than a Declaration of Self-Ownership and one that provides for the shackling of the powers of government in every possible respect.

As far as abstract thought, I suggest you refer to my blog, in particular read the sections on Superiority and Supreme powers.


"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun


I should have written

In that application, tedium, rote behavior, conformance, exhaustion and unwarranted reaction are the rule, not the exception.

this way

In that application, tedium, rote behavior, conformance, inability to correct, exhaustion and unwarranted reaction are the rule, not the exception.

(change, addition: inability to correct)

and this sentence

In that application, (good) sense, meaning, adaptability, pacing and fairness are the rule, not the exception.

this way

In that application, (good) sense, meaning, adaptability, ability to correct, pacing and fairness are the rule, not the exception.

(change, addition: ability to correct)

School's fine. Just don't let it get in the way of thinking. -Me

Study nature, not books. -Walton Forest Dutton, MD, in his 1916 book whose subject is origin (therefore what all healing methods involve and count on), simple and powerful.

Ron Wants Currency Competition

Get informed. Not exactly the same thing as a gold standard.

buddy, read before you open

buddy, read before you open your mouth, im sure you're a nice person, so ill refrain from any slights, you should do the same.

Republicae's picture

VELVEETA...how goes it? Been

VELVEETA...how goes it? Been a while!


"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

It goes well

I've been here... I guess we haven't been commenting in the same threads for a while.

Republicae's picture

Actually, I've not been

Actually, I've not been around for a while, been out of the country, got back a few months ago and saw a post by DrKrbyLuv and I simply could not resist...LOL


"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Republicae's picture

PARTIAL UPDATE RESPONSE:The whole purpose of having

The whole purpose of having competing currencies, based on Dr. Paul’s proposal, is to allow for the use of gold and silver as money, once that happens since we do not have Greenbacks in the classical sense of the 1860s [thankfully], FRNs will no longer be competitive since they are not money proper, but only money substitutes which have lost 97% to 98% of the purchase value of the original 100 Cent Dollar prior to 1913. Greenbacks are not even a concern except in the mind of Greenbackers who point to them as the ideal form of currency, they suppose, since they mistakenly point out that there was no debt directly attached to the creation of the Greenback dollar, that however, was not true. Now is it true that debt was, most definitely, accumulated during the period of the Greenback fiat currency fiasco, the debt reached astronomical proportions under the use of the Greenback. A fact that every single modern Greenbacker completely avoids, they assume that there was no interest attached to the creation of the Greenbacks themselves, the same can be said of FRNs too, for interest is attached to the Bonds that are marketed, in the very same way that the Bonds of the Greenback era was attached. Indeed, the last few sessions of Quantitative Easing is what the Greenbackers really cherish, just read Ellen Brown, she, also a Greenbacker, lauded praise on the FED for QE without fully understanding the meaning of it, of course.

The name Greenbacker Labor Party says it all, it was, in fact, a leftist/progressive political movement, today the ideology is essentially the same, the reason for that is because the entire Greenback system and the focus is allowing government to basically be able to print and spend. It requires the impetus of the State as the administrator of all economic planning, it is Statist to the core and has little, if anything, to do with actually restoring this country to the Constitutional Republic.

Concerning debt, the organization of debt into a currency system, such as the FRNs, is subject to eventual default. In fact, defaults have already occurred in this country, the 1860s Greenback system was a form of default, 1930s FDR period was a default on domestic debt and obligations of the government to the people, and in 1971, there was a foreign default when the gold window was closed by Nixon and instead of creditors being paid in an actual asset, i.e. Gold, it was paid in paper fiat money substitutes.

To the best of my knowledge no gold assets have been placed as collateral on the debt, and under the system gold really can't be considered as collateral, in fact the debt obligations of the U.S. government are in the form of U.S. Treasuries, which are nothing more than yet another form of fiat paper securities substitutes with no actual collateral behind them except for the so-called Full Faith and Credit of the United States. U.S. Treasuries are what are called Repurchase Agreements, meaning that the United States government will repurchase them and depending on the current yield spread, the difference is what the creditor receives as "interest" on the Treasuries. While the FED does hold gold assets, those are not collateralized assets against the debt. Those U.S. Treasuries are payable in Federal Reserve Note “dollars”, nothing is mentioned about gold or any other collateral on those debt obligations.

Additionally, there is no where in the Federal Reserve Act that allows for the FED to actually own gold, and in fact, the FED itself states it owns NO Gold and only acts as a trustee for gold holdings within the FED system itself. The thing about the current situation on the global debt crisis is that every single country that has subjected itself to the market of debt will not nor can they ever pay their debts under such a system. In fact, if the truth be known, debt can never be repaid with a debt instrument when the system of debt reaches a certain maximum point where even debt swaps no longer function. In other words, the U.S. will default on its debt, it can either default directly or as it has been doing, default through inflating the debt away. That happens to be a very old trick, just think of a king that could not really afford to pay his debts, so instead he debased the coinage of his realm with, what else, base metals, making it possible for him to pay his debt to his creditors, but with coin that was not worth what he borrowed from his creditor in the first place. What will his creditor do, he will accept the coins, debased as they are, as payment. The same is true with the FRNs, they have been debased and will continue to be debased. Inflation, does many things, one is that it is, of course, a hidden form of taxation and redistribution, the other is its effect on debt. Debt, such as the massive debt from WWII, was effectively vaporized through massive fiat monetary inflation, making it possible for the debt of WWII which, was about 108% of GDP at the end of the war to 25% by the 1970s. That repayment was not all through productive growth or revenues from taxes, it was accomplished, in a large part through inflating that debt obligation away. There are several problems however, with such a tactic, especially in today's debt laden world. The amount of debt involved, particularly in the U.S. is enormous and the amount of inflation necessary would mean a hyperinflationary disaster if this government were to continue on the path of Quantitative Easing and undercover tactics of inflationary bailouts, stimulus programs, currency swaps, etc. Additionally, since the maturities on our debt is of much shorter duration today than say back in the 40s and 50s, the ability to inflate debt away is limited due to the shorter maturity of our debt instruments.

Despite the modern Greenbacker propaganda, Greenbacks were essentially debt-based. There was a Bond issue associated, indirectly with the issue of Greenbacks, that was the only way the Lincoln government could make the system half-way viable. It was also the only way that he could raise the money to fight his Un-Constitutional war against the Free, Sovereign and Independent States of the South. There is essentially no difference between the reality of what Greenbacks were and what FRNs are. The only difference is in the minds of highly confused, misinformed and in many cases, the highly deceptive minds of the modern Greenbackers. Debt accumulation under the Greenback system, if compared to FRN system in the modern era, are comparable in scope. In 1859 the debt of the U.S. government stood at $58,496,837.88, by the end of Lincoln’s illegal war and the Greenback fiasco the debt was at an incredible $2,773,236,173.69. That is a tremendous increase in debt over a very, very short period of time. Yet, the modern Greenbacker skates over such inconvenient facts and still insist that the Greenback is the way to go, the way to get us out of debt when that is anything but the truth.

If FRNs are no longer legal tender, that was forced on the people, who would want to trade gold for them, that’s the point, once gold and silver are allowed circulation in the markets the value of the FRNs, as opposed to gold and silver, is exposed. So, currently if gold and silver were allowed to be used as money, which that is exactly what they are: money, not money substitutes like fiat FRNs, you could take two silver dimes to pay for a gallon of gas, instead of $3.59 in FRNs for the same gallon of gas.

The problem is with the elderly, the poor and to be quite honest, everyone else that are subject to FRNs, is that as the purchasing value of the currency is continually eroded away through monetary fiat inflation we will all be in the same boat. Extremely high price inflation will hurt everyone but the very wealthy, but hyperinflation will devastate the entire market structure sending us back to what would be a barter economy. The whole purpose of allowing gold and silver to be used as money is to try to avoid such a disaster. Once gold and silver are allowed to be money then there will be a relatively natural transition in the markets. The problem with the current system is that so many of the elderly and poor depend on the Welfare State for their subsistence, that is another issue that must be addressed or otherwise, it too will be a disaster, unfortunately we do not have the political will to address those and a host of other issues that will ultimately bite this country in the proverbial ass.

I don’t think you will find a single person who have railed against the Greenback system that approve of the continuation of FED action, the two systems are equally as evil, equally as fraudulent. The people who rail against the Greenback system rail against the FED, because the two systems are essentially SISTERS IN CORRUPTION AND DECEPTION. Everyone on this forum, that I know of, is for the total DESTRUCTION OF THE FEDERAL RESERVE SYSTEM, but the majority of them, except for those few deluded Greenbackers, are also DEAD-SET AGAINST ANOTHER GOVERNMENT SYSTEM CALLED GREENBACKS! Why exchange one evil for yet another. If you read any of the writings of the Greenbackers you will find hundreds of examples of misconceptions, misinformation, skewed history and fake quotes. I have yet to meet a modern Greenbacker that could be called honest about his or her positions and none of them, in my experience with them, are above using lies to promote their highly questionable agenda. One Greenbacker, in particular, even suggested that no citizen be allowed to have a bank account, that they work each week and their paycheck is deposited in a government run account, from which the government would issue a stipend to each individual, his reasoning is that people are too stupid to handle their own affairs. Certainly, there are some very stupid people in this country, but nevertheless, they are not owned by this government, nor does the government own all of their labors. Such things give cause for alarm from the Greenbacker camp, I for one don't trust them one iota.

What on earth do you think that printing Greenbacks to replace FRNS would do to solve anything at all? It would be a complete waste in effort, paper and ink, not to mention the fact that this country had U.S. Notes circulating along side Federal Reserve Notes from 1913 all the way up to the 1960s. It does nothing, your point is so moot I’m not sure if you are aware of just how moot it is. If you can provide me with some advantage of just printing up "Greenbacks" and how that would solve anything then I would listen however, in the last four years there have been no Greenbacker that could even explain their proposals or make economic or monetary sense with such proposals. I have yet to have a single Greenbacker be able to explain to me the monetary mechanics behind their proposals. In fact, I have never met a Greenbacker who was even aware of exactly what the original Greenback system was, how it functioned or what it actually did to devastate the Northern States economy. Nor can they explain why California and Oregon, the two Union States that forbade the use of Greenbacks did not suffer from the same fate at the rest of the Union.

One of the things that becomes very obvious when reading the comments and writings, of even watching the vids of Bill Still, is that they don't even seem to understand just how FRNs are issued, the way debt is organized into currency, the mechanisms behind that currency or the nature of the debt itself. I find it odd that they basically operate from a point of assumptions, primarily assuming something is true because they have read it on the Web on some site that puts for this or that myth as truth, then they propagate the same mythologies, almost word for word, like some cult member. I am constantly amazed, and when confronted with very difficult questions regarding the very issues they raise, they always seem to try to divert attention away, throw up Straw-Men arguments. Greenbackers are, for the most part, either Leftist Progressives, or Statists, rarely will you find an actual Constitutional Liberty Movement person who is a Greenbacker, because how can you be if you espouse the Constitution, how can you be if you espouse economic Liberty and Freedom, property rights or a whole host of things that must be associated with Liberty.

Greenbackers, as with all other fiat paper money promoters, must, by reason of the character of fiat paper money itself, deny the right of money property to the people. Gold and silver are titled property of the holder no matter what the image stamped upon them, paper money is a money substitute organized for very specific political and economic purposes, none of which include actual property rights to those money substitutes because such substitutes are always official notifications of the issuers obligations to maintain the money substitutes within the society they are used. Gold and silver require no such official maintenance to be sustained and used as money. Gold and silver are titled to the holder by the property right of possession and can that title can only be removed through theft and deception. All fiat money substitutes are subject to the issuing authority, its value is subject to the issuing authority...all faith in such substitutes are also subject to the confidence maintained by the issuing authority.

What you will learn, if you are here long enough, is that the Greenbacker camp is not above switching screennames, they will show up, usually focus on this one subject, then disappear. I have my suspicions that DrKrbyLuv, Dr. NO, Soleprobe and LibertyBaby are all one in the same Greenbacker infiltrator, all with the very same agenda. I may be mistaken however, if I am then the Greenbacker cult is extremely strong due to the evidence of the same construction, sometimes the very same wording is used by each of those Greenbacker adherents. I happen to find that strange and somewhat disturbing, to be honest.

The whole purpose behind Dr. Paul’s brilliant proposal for competing currencies, allowing gold and silver to be used as money, is that it will destroy the use of FRNs as money substitutes and in doing so, destroying the power of the FED.

WE DON’T OWE THE FEDERAL RESERVE ANYTHING! We owe creditors who hold U.S. Treasuries as collateral, those are foreign governments, investors, pensioners, individuals, mutual funds, etc. The truth about U.S. Treasuries is that they are marketable securities which are usually bought and sold on what is known as a secondary market, in fact, so many are traded on a daily basis that each day more are bought and sold that are held by any single foreign government at any given time. If you look at the history of Treasuries sales, you will see something interesting, this government both owes because of these Treasuries, but it also makes money because of the Treasuries. The problem is that our government spends far more than it would ever be able to take in off the sale of Treasuries, there is a deficit between that source of revenue, and all tax revenues and the actual expenditures of this government. Of course, the Greenbacker solution is to simply print to cover all the costs of government and then some, but that would be an almost instant disaster if we were to take their unwise advice. Additionally, since a new issue of Greenback like currency would require an impartation of value, it would be almost impossible for such a valuation to take place because there is no frame of monetary reference on which to base it. Fiat currencies are created by "piggy-backing" off the value of a commodity currency, then, as we have seen, actual specie is suspended and the fiat currency can ride on its own for decades in some cases, but in most cases they end relatively quickly. There have been over 700 fiat monetary failures throughout history, that should be enough to convince anyone to think twice about suggesting yet another version of fiat currency as a solution to anything, much less the whole host of problems facing this country today. Of course, it is much more complex than this forum allows in both space and time to delve into, but there is plenty of very good and valid information concerning just how debt has been organized into a currency system.

You have that idea because of a particular ideology you have picked up from the Greenbacker camp, and it is obvious that’s where you picked it up from. When you begin to see the reality behind the Federal Reserve System, understand that it is a government mercantilist system, created by this government, for this government, that this government is, by far, the greatest beneficiary of the FED then you will begin to see that WE DON’T OWE THE FEDERAL RESERVE ANYTHING! At anytime, Congress could repeal the Federal Reserve Act, ALL ASSETS of the Federal Reserve Bank would be liquidated, the organization dissolved and employees laid off...OH HAPPY DAY. Why do you think Dr. Paul is holding the current hearings on the FED, it is not to see how much we might owe the FED, it is to audit, reform or abolish. Dr. Paul understands that even the simple act of auditing the FED will cause such an uproar and cry that it would not take long to rid ourselves of this Mercantilism creation.


"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Republicae's picture


Perhaps two of the best-known authors who purported that foreign banking families own the FED are Eustace Mullins and Gary Kah; there are others of course. Of course, the problem is that there are numerous errors to be found in the writings of both these authors. Of course, such positions are held by numerous people, primarily because of popular writings like those of Mullins, Kah and more recently Ellen Brown, and even more popular videos by people like Bill Still. Yet, for all the popularity of those writings and videos, few seem to question their content and, it appears, accept them at face value.

Interestingly, none of these authors can present valid information to substantiate their claims, in fact, in many cases their claims conflict each other. If they cannot all be right, then can they all be wrong, but people rarely consider that fact. Facts are hard things; they require either acceptance or rejection depending on the position of the person viewing those facts. Some prefer to base their positions on faith; faith in a certain position takes far more effort than simply relying upon facts for the truth. Nothing in my book however, is worse than a belief based on half-truths, fake quotes, distorted history and misinformation. I find that those who use such tactics have a broader agenda in hand.

Gary Kah states that the following are the owners, or at least major shareholders under of the New York FED, however the way Kah denotes these stockholders doesn’t even relate to the way stock is designated at the FED. He calls the following “Class A shareholders” even though there is no such thing in the FED system. There is a classification of directors and how they are appointed under 12 USCA §302. Kah claims that these stockholders own about 60% give or take.

• Rothschild Banks of London and Berlin
• Lazard Brothers Banks of Paris
• Israel Moses Seif Banks of Italy
• Warburg Bank of Hamburg and Amsterdam
• Lehman Brothers of New York
• Kuhn, Loeb Bank of New York
• Chase Manhattan Bank, and
• Goldman, Sachs of New York (Kah, p. 13).

The problem with Kah’s list is that it completely contradicts that of Mullins, who complied this list, again, like Kah, Mullins states that these stockholders own about 60% of the shares, give or take.

• Chase Manhattan Bank
• Morgan Guaranty Trust
• Chemical Bank
• Manufacturers Hanover Trust
• Bankers Trust Company
• National Bank of North America, and
• Bank of New York.

Many of the positions that are popular today about the idea that the FED is a private bank originates from the writings of Mullins. Interestingly enough, the two lists are only separated by 8 years between the two authors writings.

Now, what everyone seems to avoid, the issue that is the fly in the ointment of such positions is that of the Federal Reserve Act itself and the requirements of that law. The law requires that all nationally chartered banks, commercial banks and what were Savings and Loan banks buy stock in their respective Regional Bank, there is no option but ownership. This makes them member banks under 12 USCA §282. State banks have the option of voluntary membership. Stock is proportional to the size of the bank itself, but the dividend is also fixed by law, in other words the return on the shares are fixed at 6%, no more, no less. To get an idea how much that is each year one need look nowhere else but to the annual reports of the FED, after approximately 97% of all revenues of the Federal Reserve are returned to the U.S. Treasury, the remaining revenues are consist of overhead for running the FED and what remains is profit to be paid out in dividends, each member bank receiving 6%, no more, no less. So, who is making the line-share of the revenues? Certainly not the banks, but they definitely benefit in ways that we cannot really imagine from FED policy. The greatest sum of FED revenues goes to the United States Government, it is also the greatest beneficiary of FED monetary policy.

Now, interestingly 12 USCA §286 does not allow the stock of the Federal Reserve Bank to be publicly traded, as in a private corporation, in fact, it is not even allowed to sell its stock to the public at all or individual investors nor can foreign banks or individuals buy or hold stock in the Federal Reserve and, in fact, there is absolute no record in existence that I am aware of where stock can be shown to be held by foreign banks. Additionally, 12 USCA §283 prohibits non-banking firms from buying or holding stock in the FED, therefore the idea that Goldman Sachs has been or is a major stockholder is, at least it appears to be in the minds of some who promote the idea that the FED is a completely private banking corporation, is contrary to the actual law.

Strangely, the New York Federal Reserve lists the largest member banks of the FED:

• Chase Manhattan Bank
• Citibank
• Morgan Guaranty Trust Company
• Fleet Bank
• Bankers Trust
• Bank of New York
• Marine Midland Bank, and
• Summit Bank.3

Or course, those who promote the idea that the FED is owned by old Banking Families of Europe, through ownership of the major American Banks, must disregard a great deal of documentation to the contrary, they must therefore place their whole position on faith in simple assumptions, but not on fact. There are those who state that these European Banking Families hold all the major banks, in one way or another, particular, they claim those in London. The problem then arises for those who make the claim that the FED is owned and thus controlled by Foreign Bankers, where are they on the list of the largest American Banks?

Another problem is that of the major foreign stockholders, few of them match the position held by the advocates of those who say the FED is owned and controlled by European Banking Families, the fact is that there are more Asian and Middle Eastern stockholders in American Banks than there are European, thus their position continues to sink under their own assertions and the assumptions they must make in order to continue holding their position.

Additionally, the entire concept of stock ownership in the Federal Reserve is completely different than what you would find in every other type of actual Private Corporation. Votes in private corporations are based on proportional stockholdings that is not true when it comes to the FED; stockholders get one vote only no matter how many shares they may own. Additionally, stockholders cannot vote to change the bi-laws of the FED as with private corporations. Thus, in order for the idea about a group of European Bankers controlling the FED, they would, in fact, have to own every single member bank to have controlling interest and thus get enough votes to control the entire FED operations, but even if they did, that is not the way that FED policy is determined within the FOMC, which has nothing to do with the votes of stockholders, thus the entire idea of such control is an exercise in little more than mental masturbation and the promotion of a particular belief that is not, from what I have seen, based on any fact or, for that matter, even logical construction. If the goal, as those who promote the idea, is global domination and control, then they must stretch their conclusions to the extreme.

Thus, if the International Banking Elite actually control the FED, they are doing and have done a piss-poor job of it if their goals are, as proposed, to control this country and bring about a global governance through such operations. Additionally, the idea that the FED is a monolithic regime completely disregards the fact that throughout its history there have been and continue to be instances where policy decisions are denied operation because of descent among the ranks of the FED board members. All one need do is look at the way the entire FED is structured to see that such monolithic powers do no exist within the FED itself. The Board of Governors and the FOMC control the FED. The Board is completely appointed, not by member banks, but by the President of the United States and is confirmed by the Senate. These government appointees are essentially the ones that determine reserve ratios, how much new money each of the Regional FEDs may issue each year. If you view the make up of the current Board of Governors you will see a mix of backgrounds, not all of them have a banking background, some are academics, including the FED Chairman Ben Bernanke.

Additionally, despite the hype from those who hold that the FED is private and controlled by the Banking Families of Europe, the decisions of the FED do not always coincide with the interests of either European Banks or, for that matter, U.S. Banks. That is something that those who hold the view that the FED is owned and controlled by these banking powers would rather avoid, because it definitely doesn’t fit in with their view that these banking powers have compete control over the FED. The holders of such views also cannot explain how the Presidential appointed Board of Governors, could all and always be in the pockets of the International Banking Families, but that is exactly what we would have to believe if their position were actually true.

Of course, those who hold the opinion that the FED is a private corporation, which profits off the American people, must, once again, ignore actual documentation in order to maintain their position. Many, like Mullins, stated, that most of the revenues collected by the FED represent huge profits that are, in some odd, roundabout way, diverted to the European Banking Families. Of course, in 2011, the FED brought in $77.4 Billion in revenues, from that the FED sent $75.4 Billion to the U.S. Treasury, thus $2 Billion was the gross revenues of the FED for 2011. Hardly huge profits when you compare them to other actual private corporations, such as Exxon.

Thus, the idea that the FED is a private corporation defies not only the structure of the FED, but the ways its revenues are distributed. For if it were true that the FED was private, as the position is so ardently held, then it would appear that the stockholders are getting the short-end of the stick and the government is reaping the major portion of the so-called “profits”, of course, these that hold the private FED view, cannot give anything close to a satisfying explanation for such a discrepancy in their position.

In the narrowest of sense, the conclusions reached by those who hold that the FED is a completely Private Corporation, are not based on, or at least it appears, facts, but purely on assumptions. If anything is needed more it is truth, no matter if that truth is contrary to popular opinion, if it contradicts what we believe or would like to believe.

The FED is a horrible institution, it is wholly part of the overall Mercantilist system of government that began, in earnest, during the Administration of Lincoln and the Radical Republicans. It is contrary to the Spirit and the Letter of the Constitution and it must END, so too must the END come to its primary instrument of monetary manipulation, that being the Fiat Paper Money Substitutes or any fiat paper money that might be fostered upon the American People as an alternative, such as that proposed by the modern Greenbackers.


"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Money Masters...

...presents some good information, but when they get to proposing solutions, it's classic greenbackerism: i.e. nonsense. At the root of greenbackerism is a lack of understanding of the concept of inflation.

Anyway, this horse has been beat to death here at the DP, and I don't much feel like rehashing it. But for more details, see the following thread, where myself and several other DPers argued against greenbackerism and for the gold standard.


Also, for good information about monetary theory, no resource is better than: www.mises.org (visit the literature section and use the search bar)

I would especially recommend the following books:

On banking:

On money in general and the gold standard in particular:



If you read those you should understand enough about money and banking to know beyond a shadow of a doubt that the gold standard is desirable, and that greenbackerism is nonsense.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."


This film is almost pro-liberty in its take on monetary intervention, isn't it? I mean, at least it draws attention to the present banking corruption. Wikipedia: "William T. Still repackaged some of the material covered in The Money Masters in a 2009 film titled The Secret of Oz." I'm watching it now. It is also freely available: http://youtu.be/swkq2E8mswI

Oh, I see now after watching it that it's actually pro-fiat money while still being anti-Fed! Interesting position!

This second movie makes the mistake of all anti-hard money people, assuming gold should be the ONLY hard money. That is not a good idea. But Paul's (Hayek's/Rothbard's) call for various competing currencies is. It's not a govt fixed standard of gold alone or silver alone or fixed bi-metal standard that would be good. It's just the freedom to let the market decide what things to use for exchange and reserve.

Republicae's picture

Yep....it's all Greenbacker

Yep....it's all Greenbacker Quackery!


"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun


: )

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."


If it's created like a fiat currency, and has no inherent value like a fiat currency...

Party emblem...


"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Republicae's picture

That is

That is fantastic...definitely the Greenback Duck


"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Money is Labor

This is how I see it. Money is an institution that helps us humans work together and benefit one another through ingenuity and service. The Austrian definition of money as labor is therefore the most productive and helpful way for this institution to be defined.

Since money is labor, there should be no party that controls it exclusively, nor should it be created at a whim. Gold requires labor to produce/extract, and it fits all the other reasons for something to be money (rare, easily divisible, widely accepted, fungible).

Money requires respect and the rule of law just like most aspects of our civilization. Unfortunately, when the government controls and prints money, it skews the marketplace greatly and damages the benefits of money.

Just a quick note on printing money. When the government prints money to buy labor, it does not behave with any restraint or reason for applying that labor. Therefore, not only does the government dilute the value of money, but it STEALS labor from the free market. This labor is then put into efforts like building the bridge no nowhere, or Paul Krugman's favorite, preparing for an Alien Invasion.

To put it even more simply...

...money is a claim on property. The State printing money is like a person counterfeiting house deeds or stock certificates: i.e. counterfeiting claims on property which they do not own. So, yes, indeed it (inflation) is theft.

"Alas! I believe in the virtue of birds. And it only takes a feather for me to die laughing."

Yes - these are the reasons

Yes - these are the reasons why gold or any commodity money are the laborer's best friend. It gives him the capability to store his excess production from when he is young and strong to support him when he is old and infirm. No welfare program available to the average person matches the returns of gold savings.

I would qualify the money is labor paradigm slightly, to include money is labor and productive investments. Productive investment comprising applied capital and a plan for productivity. This captures the notion that the combination of raw materials, effort, a plan for productively manipulating those raw materials are the required inputs to produce valuable output. In the simple case, the effort, raw materials and plan for productivity are provided by the same person and therefore a single person owns the return.

But there is no reason that different people cannot provide the different inputs and each take a predetermined agreed-upon portion of the return. That is, a subset can provide the raw materials (capital goods), another subset the plan for productivity, and a third subset the labor, with the returns split among them per some contract.

In effect then, money = productive output = raw material + productive plan + labor


Human capital, our value as contributors to the economy, this is what money really represents. That gold does not oxidize, it is one of the best representations of the human spirit and continuum of civilized behavior.

Cheapening the labor of another by stealth is not civilized behavior.


Republicae's picture

2102luaPnoR, if you have not

2102luaPnoR, if you have not read this piece I wrote a while back, please do:



"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

Republicae's picture

I find it amazing that

I find it amazing that Greenbackers support the monopoly powers of government, only redirected from a Central Banking System, where those monopoly powers are quite evident to everyone it seems but the Greenbackers themselves, to a Central Government System where essentially the same issues we face with the Central Banking System will be transferred to the Central Government or to the new appointees chosen to administer the newly formed agency of the federal government, complete with all the regulations for anti-corruption and transparency, laws that will always be followed by those within the government, we are assured.

Of course, much of the confusion within Greenbackers can be found in their inordinate belief that if only the monopoly powers that the government has granted to the FED were switched over to the government itself that things would be much better. Of course one of the many selling points that the Greenbackers express so adamantly is that the government can print money out of thin air just like the FED, but without interest, of course, Greenbackers go to extraordinary lengths to tell us that none of this money creation would cause inflation. Some have gone as far as to say, there will be no taxes and the government can spend money on all sorts of things from High-Speed Railways, to infrastructure to just about anything imaginable. I can only assume that with this power to print money they have found some magical formula that will suspend the laws of economics and monetary mechanics. I mean that is what you would have to believe if you believe that the issuance of money, especially fiat paper money, would not have the same consequences as any other money where the supply is greatly enhanced artificially. The only explanation for such obtuseness is that most Greenbacker obviously don’t have much knowledge or experience in the matters of either classical economics or even the most general principles of money, fiat or not.

How, viewing the record of our public elected officials, can a Greenbacker actually place faith in such officials to hold the power to print and issue fiat currency. They seem to think that politicians and bureaucrats can be trusted more than bankers and bureaucrats, the truth is that history bears out the record of corruption, particularly political corruption when the power of the purse is opened to those politicians. Imagine the handouts to special interests, the buying of votes when there is absolute no restraint on the issuance of fiat currency, imagine thousands of bridges to nowhere, earmarks up the yinyang, favors upon favors, unrestrained spending…what’s to stop them, a regulation, a law…not if the record of past corruption bears witness. I dare say there are few angels available to administer a direct government run banking agency, anymore than there are angels to run the FED. Yet, Greenbackers, in their seemingly undying faith place such a trust in wise public servants.

Of course, much of the Greenbacker ideology comes from the idea that the FED is a completely autonomous entity that has few, if any connections with government oversight or control. The truth is that the monopoly powers enjoyed by the FED are a direct result of government behest. Without government approval and an Act of Congress, the FED would not nor could it exist. In fact, no Central Bank can exist without government authorization and participation in its exercise of monetary powers. As with all monopolies throughout history, the power behind those monopolies is always government. Monopolies have an extremely difficult time forming and functioning within a competitive free market economy, in fact it is almost impossible for a monopoly to form without government powers to protect and maintain its position. When the Greenbacker finally realizes, when it finally dawns upon him that the FED is a creation and creature of this government, that it operates under the auspices of the government, that the government gives it power through very defined legal tender and protectionist laws, then the Greenbacker must confront a reality that he normally seems to avoid, that the FED is a vital part of this illegitimate government, which long ago tossed aside its responsibilities and requirements provided by the Constitution and used the agency of the FED to side-step the very law that created this government. Greenbackers and others point to the FED as being a private banking system, if that were true then it is the oddest form of a private corporation that ever existed. Shares are fixed with NO voting rights given the member banks, member banks are required by the law to be members, the bi-laws cannot be altered, it is Congressionally chartered, the FED Chairman is appointed and then confirmed by Congress. The Board of Directors in the Regional FED banks are divided into three different classes with three members from each class, all by Congressional Act, with certain limitations on any affiliations. Stock in the FED is fixed, as is the dividend from such shares, they cannot be sold or traded, all of this is fixed, not by the Board of Directors as with a private organization, but by Congressional Act. The various positions within the FED, such as the Board of Governors, the FED Chairmanship, and even the Regional and Branch Boards are all set forth in the Congressional FED Act. While the FED definitely has certain characteristics of a private corporation, it is far from private, it is far worse than any private corporation, it is a government hybrid, an artificial monstrosity that is neither purely private nor purely public.

No other corporation has its leadership, the Board of Governors, appointed by the President of the United States and those appointments confirmed by the Senate, no other corporation in existence has specific qualifications laid down by Congressional Law dictating the make up of the Board of Directors for its subsidiary Regional Banks or Branches. For all practical purposes, the New York FED controls all monetary policy and the New York FED Board of Governors are completely government appointees. While there are GAOs, such as FannieMae and FreddieMac, that are (or were) private in a greater sense, the same cannot be said for the FED, it is a managed system created and used specifically to maintain this government through a monetary system that does not require accountability. While it must be granted that there are most definite external influences within the FED from private banking interests, those interests are essentially the same interests that are in this illegitimate government, there is little separation in a system of Mercantilism.

The question then becomes, how do political and banking interests influence the decision making of the FED? That should be obivious


"We are not a nation, but a union, a confederacy of equal and sovereign States" John C. Calhoun

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Giorgio A. Tsoukalos

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