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Thread: How a national monetary system should work

  1. #1

    How a national monetary system should work

    [url]http://www.globalresearch.ca/index.php?context=va&aid=5615[/url]

    This article was written by Richard C. Cook, a Policy Analyst in the US Treasury Dept from 1986-2007. It is essential reading as he points out the systemic flaws in our monetary system which cause us to police the world in a futile effort to exercise control over natural resources to make up for the false monetary standard.
    The only way for the US to have prosperity under the current monetary regime is to inflate a bubble in a certain asset class and ride the wave until the bubble bursts and the Federal Reserve then once again sets interest rates artificially low to start the process all over again. It's a policy of inflate and then inflate even more.
    As John M. Keynes and Vladimir Lenin both wrote, this process of constant debasement is the easiest, most subtle way to destroy a middle class and free-market economy.

  2. #2
    Social Credit is not sound money... all it would do is create hyperinflation. You cannot just give everyone in the country 12 grand a year, plus 60,000 grand when they turn 18 and expect the economy to fuction well. You also cannot have private property if you're money supply is communal and used to finance government.


    Sound money means:
    [B]1. Abolish the Federal Reserve.[/B]
    This prevents government from artifically manipulating interest rates and being able to secretly pay their debts through inflation.

    [B]2. Mandate only Gold, Silver, and Plantinum backed certificates legal tender.[/B]
    This prevents governments from secretly confescating property and redistrubing wealth through currency manipulation.

    [B]3. Abolish Fractional Reserve Banking.[/B]
    This prevents banks from lending money they themselves do not posses. If you can't do it neither should the banking elite.

  3. #3
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    [QUOTE=jefethegreat;2622744]Social Credit is not sound money... all it would do is create hyperinflation. You cannot just give everyone in the country 12 grand a year, plus 60,000 grand when they turn 18 and expect the economy to fuction well. You also cannot have private property if you're money supply is communal and used to finance government.


    Sound money means:
    [B]1. Abolish the Federal Reserve.[/B]
    This prevents government from artifically manipulating interest rates and being able to secretly pay their debts through inflation.

    [B]2. Mandate only Gold, Silver, and Plantinum backed certificates legal tender.[/B]
    This prevents governments from secretly confescating property and redistrubing wealth through currency manipulation.

    [B]3. Abolish Fractional Reserve Banking.[/B]
    This prevents banks from lending money they themselves do not posses. If you can't do it neither should the banking elite.[/QUOTE]

    Another anachronistic and impractical scheme from our local kook, Ron Paul. I know, you're going to quote that old saw from Alan Greenspan in 1981. But even he noted that it was practically impossible to return to a gold standard without major impediments being overcome. Hayek was not correct. Not to mention that even when countries had a gold standard, they bailed on it when there was a panic, which creates enormous uncertainty. The gold standard is just a back-door method by Paul to shut down government and restrict credit. Both are bad ideas. We formed a Federal Reserve system precisely because of the failure of the gold standard and the inelasticity it created. If you noted, congress is headed toward giving more power to the federal reserve, not less.

    Paul is unfortunately NOT a representative of libertarian ideals. He's a Christian, States Rights, anti-federal zealot. His constitutional theories are just plain silly. This is a guy who dismissed rice farmers in his district because he couldn't find rice as an enumerated item in the Constitution. He's frankly a kook.

  4. #4
    [QUOTE=jefethegreat;2622744]Social Credit is not sound money... all it would do is create hyperinflation. You cannot just give everyone in the country 12 grand a year, plus 60,000 grand when they turn 18 and expect the economy to fuction well. You also cannot have private property if you're money supply is communal and used to finance government.


    Sound money means:
    [B]1. Abolish the Federal Reserve.[/B]
    This prevents government from artifically manipulating interest rates and being able to secretly pay their debts through inflation.

    [B]2. Mandate only Gold, Silver, and Plantinum backed certificates legal tender.[/B]
    This prevents governments from secretly confescating property and redistrubing wealth through currency manipulation.

    [B]3. Abolish Fractional Reserve Banking.[/B]
    This prevents banks from lending money they themselves do not posses. If you can't do it neither should the banking elite.[/QUOTE]

    What you are suggesting is convertibility. I am as big a Ron Paul supporter there is, and even I am aware that convertibility in this day and age would cause the greatest depression ever.

    The existence of fractional reserve banking in the 1st place was entirely due to commodity money and its shortcomings. When there is not enough real money to go around, we must create it out of thin air.
    As long as government has existed, money has been an abstract legal concept. You simply cannot have commodity money without fractional reserve banking. It would cause the greatest depression EVER.

    Social credit would not cause hyperinflation because the money supply is going up at an agreed upon steady rate. It would cause much less inflation than we have today. It is entirely possible and it is in fact self-evident to use the government's credit as a public utility, backed by its national income.

    Under the present system, GDP is about ~12 trillion, national income is ~9 trillion, and we make up for the remaining ~3 trillion with new debt. This is precisely the problem that a modernized social credit system would solve.
    Last edited by JetsCrazey; 07-10-2008 at 10:36 PM.

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