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Thread: Faith-Based Currency

  1. #1

    Faith-Based Currency

    [QUOTE]By Congressman Ron Paul, R-Texas, 7/23/2008 12:16:07 AM
    [url]http://www.hawaiireporter.com/story.aspx?781d2b4a-2815-4d6f-9c98-a02fec91d947[/url]

    [B]The Latin term “fiat” roughly translates to “there shall be”. When we refer to fiat money, we are referring to money that exists because the government declares it into existence. It is not based on production or earnings, and not backed by any commodity. It is solely based on trusting the government. Fiat money is exchanged in the economy as long as there is faith in the government that issues it.
    [/B]
    Some are blaming the recent shakeup in the markets to “whining” or financial fear-mongering, which misses the whole point. History has shown that fiat money, or “faith-based currency” always fails, because when governments claim this power, they always behave irresponsibly.

    When government has the ability to create and spend all the money it wants, priorities shift, and the concept of budgeting, as most Americans know it, loses all meaning. Hand a teenager a credit card, and tell him there is no limit and no accountability for what he spends, and the effect would be the same. You see, this problem is not unique to our government. It is a predictable outcome based on human nature, and we’ve seen variations of what we are experiencing now happen over and over throughout history. I didn’t have a crystal ball or a fortune teller when I predicted this 3, 7, or even 30 years ago. Actions have logical consequences. The government becomes the reckless teenager with the credit card, and in the end, the taxpaying citizens get the bill. What happens after that is never pretty.

    This is why our founding fathers considered, but decidedly rejected the creation of a national central bank. They understood that governments, even the best of governments, cannot control spending. Even the current administration, which promised strict fiscal responsibility, has had to increase the national debt limit by 65 percent to keep up with its spending sprees. Every dollar created and spent by government makes the dollars in your pocket worth less and less. Eventually any currency controlled by government will be debased to worthlessness, and will wipe out the savings of the citizens who put faith in that currency.

    Hard currencies, on the other hand, force governments to remain in check, strictly limited to the revenues they can raise from the country’s economic health. This is also an incentive for government to stay out of the way of productivity. The hyper-regulation in today’s economy demonstrates that this is no longer the case. What does it matter if the economy is crippled and the tax-base eroded, if government can create whatever dollars they need to keep the special interests happy?

    We have been building economic castles on the sand, and the tide is coming in. The answer is not to bring in more sand, but to move to more solid foundation.

    So yes, it is true that many are complaining about our economic trouble, but our economic trouble is not caused by their complaining. Many are being forced to wake up to the predictable troubles associated with faith-based currency. As more people notice the hardships, more will lose faith.

    We are long overdue for a course correction and I can only hope that this awakening translates to a solid approach to currency reform.
    [I]
    Congressman Ron Paul, R-Texas, is a candidate for President in the 2008 election. [/I][/QUOTE]

    1. The 5th plank of communism is the Central Bank for the purpose of regulating credit.. its in the Communist Manifesto.

    2. Gold and silver-backed currencies are completely free-market and prevent the government from unlawfully taking your property by reducing your purchasing power.

    3. Fiat currencies never last forever... they last only until the people realize the gross misconduct by their government and demand sound currency... or when the system fails (America! YAY!)...

  2. #2
    Gold and Silver hold exactly as much inherent purchasing power as paper. They have value because people value them.

  3. #3
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    Historically, countires went to war over gold to support their economies. We already have that problem with oil. I don't think we want to add gold back into the mix.

    All we need is a little rational (read: spend less) behavior out of our government, and our fiat currency will be fine. The United States' promise to repay it's debts has been the gold standard of currency for half a century, and it works.

    It's not the currency's fault the country is run by a pack of schmucks.

  4. #4
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    [QUOTE=jefethegreat;2641324]1. The 5th plank of communism is the Central Bank for the purpose of regulating credit.. its in the Communist Manifesto.

    2. Gold and silver-backed currencies are completely free-market and prevent the government from unlawfully taking your property by reducing your purchasing power.

    3. Fiat currencies never last forever... they last only until the people realize the gross misconduct by their government and demand sound currency... or when the system fails (America! YAY!)...[/QUOTE]

    Another idiotic statement from Ron Paul that touts "the founders" while not mentioning the fact that the government under the Articles of Confederation had a National Bank, that George Washington and Alexander Hamilton instituted a national bank based on their understanding of the Constitution (I guess Paul does not consider them "founders"), and that in 1816, James Madison and Gallatin created the second national bank out of desperation to stabilize credit. (I guess Madison is not a founder either). Even when Madison attempted to argue a strict construction approach against the first bank (abetted by Jefferson) he was forced in the debate to concede that his argument was inconsistent. So I guess all these guys were just "commies" in disguise.... Paul is one of the WORST interpreters of the Constitution out there. Just terrible...

  5. #5
    [QUOTE=doggin94it;2641735]Gold and Silver hold exactly as much inherent purchasing power as paper. They have value because people value them.[/QUOTE]

    Correct... but the government can create new paper money on demand... the government cannot however flood the market with newly created gold whenever its necessary to 'stimulate' the economy.

  6. #6
    The problem is not fiat money itself. Here are the problems:
    1) Issuing too much fiat money
    2) Creating money by forcing the entire citizenry to go into debt to a cartel of private banks

    Kellogism would have solved this but the banksters silenced those who wanted an honest money system in the late 1800s. The Chicago School in the 1930s, led by Irving Fisher and later Milton Friedman, revived the movement somewhat but today Americans are totally ignorant of the fact that our monetary system is totally inefficient and fascist.
    Last edited by JetsCrazey; 07-23-2008 at 04:49 PM.

  7. #7
    [QUOTE=rbstern;2641754][B]Historically, countires went to war over gold to support their economies. We already have that problem with oil. I don't think we want to add gold back into the mix.[/B] This is true... but gold doesn't support an economy... production and savings support an economy. Gold is just a commodity.

    [B]1. All we need is a little rational (read: spend less) behavior out of our government, and our fiat currency will be fine.[/B] If you trust government to do what they say then yes. [B]The United States' promise to repay it's debts has been the gold standard of currency for half a century, and it works. [/B] Its worked so far.. but it won't when the rest of the world wakes up to reality.... we have no production and no savings... the two pillars of capitalism.
    [B]
    3. It's not the currency's fault the country is run by a pack of schmucks.[/B] No its not... but why would we give these schmucks a blank checkbook if we all agree we cannot trust them?[/QUOTE]

    :D

  8. #8
    [QUOTE=long island leprechaun;2641812]Another idiotic statement from Ron Paul that touts "the founders" while not mentioning the fact that the government under the Articles of Confederation had a National Bank, that George Washington and Alexander Hamilton instituted a national bank based on their understanding of the Constitution (I guess Paul does not consider them "founders"), and that in 1816, James Madison and Gallatin created the second national bank out of desperation to stabilize credit. (I guess Madison is not a founder either). Even when Madison attempted to argue a strict construction approach against the first bank (abetted by Jefferson) he was forced in the debate to concede that his argument was inconsistent. So I guess all these guys were just "commies" in disguise.... Paul is one of the WORST interpreters of the Constitution out there. Just terrible...[/QUOTE]

    This is about currency... not central banks. I ask you this, were any of the founding fathers publicly supportive of fiat currency? Fiat currency like the continental dollar or the British Pound Sterling of the time.

  9. #9
    [QUOTE=jefethegreat;2641978]This is about currency... not central banks. I ask you this, were any of the founding fathers publicly supportive of fiat currency? Fiat currency like the continental dollar or the British Pound Sterling of the time.[/QUOTE]

    Ben Franklin played a part in the invention of colonial fiat currency called "colonial bills of credit". They remained at par with gold and silver the entire time because the government used moderation in issuing the money and it was not based on debt. The colonial economy thrived. It was the British outlaw of this currency in 1764 that created economic unrest and was a root cause of the American Revolution.

  10. #10
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    [QUOTE=jefethegreat;2641978]This is about currency... not central banks. I ask you this, were any of the founding fathers publicly supportive of fiat currency? Fiat currency like the continental dollar or the British Pound Sterling of the time.[/QUOTE]

    [I][B]This is why our founding fathers considered, but decidedly rejected the creation of a national central bank. They understood that governments, even the best of governments, cannot control spending. [/B]Even the current administration, which promised strict fiscal responsibility, has had to increase the national debt limit by 65 percent to keep up with its spending sprees. Every dollar created and spent by government makes the dollars in your pocket worth less and less. Eventually any currency controlled by government will be debased to worthlessness, and will wipe out the savings of the citizens who put faith in that currency.[/I]

    This is the usual Ron Paul nonsense. That man simply skews everything he touches when it comes to the Constitution.

  11. #11
    [QUOTE=long island leprechaun;2642011][I][B]This is why our founding fathers considered, but decidedly rejected the creation of a national central bank. They understood that governments, even the best of governments, cannot control spending. [/B]Even the current administration, which promised strict fiscal responsibility, has had to increase the national debt limit by 65 percent to keep up with its spending sprees. Every dollar created and spent by government makes the dollars in your pocket worth less and less. Eventually any currency controlled by government will be debased to worthlessness, and will wipe out the savings of the citizens who put faith in that currency.[/I]

    This is the usual Ron Paul nonsense. That man simply skews everything he touches when it comes to the Constitution.[/QUOTE]

    There's a big difference between a bank run by private banks and a bank run by Congress. That's one of the major issues here. The Federal Reserve is, in practice, unaccountable to Congress.

  12. #12
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    [QUOTE=JetsCrazey;2642017]There's a big difference between a bank run by private banks and a bank run by Congress. That's one of the major issues here. The Federal Reserve is, in practice, unaccountable to Congress.[/QUOTE]

    Well, that's not true either. The Federal Reserve was created by Congress and could be dismantled by Congress. See below:

    [I]The Federal Reserve's ultimate accountability is to Congress, which at any time can amend the Federal Reserve Act. Legislation requires that the Fed report annually on its activities to the Speaker of the House of Representatives, and twice annually on its plans for monetary policy to the banking committees of Congress. Fed officials also testify before Congress when requested.

    To ensure financial accountability, the financial statements of the Federal Reserve Banks and the Board of Governors are audited annually by an independent outside auditor. In addition, the Government Accountability Office, as well as the Board's Office of Inspector General, can audit Federal Reserve activities. [/I]

    I'm personally getting really tired of JefftheParrot's regurgitation of Ron Paul here. Not to mention that he posts the same things over and over again. There should be a policy that if you aren't going to say anything new, your post gets deleted. JefftheParrot will never be heard from again...

  13. #13
    [QUOTE=long island leprechaun;2642043][B]1. Well, that's not true either.[/B] The Federal Reserve was created by Congress and could be dismantled by Congress. See below:

    [I]The Federal Reserve's ultimate accountability is to Congress, which at any time can amend the Federal Reserve Act. Legislation requires that the Fed report annually on its activities to the Speaker of the House of Representatives, and twice annually on its plans for monetary policy to the banking committees of Congress. Fed officials also testify before Congress when requested.

    To ensure financial accountability, the financial statements of the Federal Reserve Banks and the Board of Governors are audited annually by an independent outside auditor. In addition, the Government Accountability Office, as well as the Board's Office of Inspector General, can audit Federal
    Reserve activities. [/I]

    I'm personally getting really tired of JefftheParrot's regurgitation of Ron Paul here. Not to mention that he posts the same things over and over again. [B]2. There should be a policy that if you aren't going to say anything new, your post gets deleted.[/B] JefftheParrot will never be heard from again...[/QUOTE]

    1. The Fed was created by congress but they do not oversee the Feds policy or its operations. Congress does not run the Fed.

    2. Well then... you should be banned sometime soon :yes:

  14. #14
    [QUOTE=JetsCrazey;2642003][B]Ben Franklin played a part in the invention of colonial fiat currency called "colonial bills of credit". They remained at par with gold and silver the entire time because the government used moderation in issuing the money and it was not based on debt. The colonial economy thrived.[/B] It was the British outlaw of this currency in 1764 that created economic unrest and was a root cause of the American Revolution.[/QUOTE]

    The fiat Continental Currency did not promote healthy economic growth and when it collapsed it prompted the founders to ban 'bills of credit' from circulation.

    [QUOTE]From Wikipedia:

    Continental currency was a paper currency issued by the Continental Congress, after the Revolutionary War began in 1775. Eric P. Newman, a leading authority on the early paper money of America, distinguishes between Continental Currency, issued by the authority of the Continental Congress, Colonial currency, issued by the colonies before the revolution, and state currency, issued after the Declaration [though many collectors lump together state and colonial issues and refer to both as Colonial Currency]. [Continental currency was denominated in dollars [from 1/6 of a dollar to $80, including many odd denominations in between], while Colonial currency was denominated in pounds, shillings, and pence, as well as in dollars.] [B]With no solid backing and being easily counterfeited, the continentals quickly lost their value, giving voice to the phrase "not worth a continental".

    The painful experience of the runaway inflation and collapse of the Continental dollar prompted the delegates to the Constitutional Convention to include the gold and silver clause into the United States Constitution so that the individual states could not issue bills of credit.[/B][/QUOTE]

  15. #15
    [QUOTE=long island leprechaun;2642011][I][B]This is why our founding fathers considered, but decidedly rejected the creation of a national central bank. They understood that governments, even the best of governments, cannot control spending. [/B]Even the current administration, which promised strict fiscal responsibility, has had to increase the national debt limit by 65 percent to keep up with its spending sprees. Every dollar created and spent by government makes the dollars in your pocket worth less and less. Eventually any currency controlled by government will be debased to worthlessness, and will wipe out the savings of the citizens who put faith in that currency.[/I]
    [B]
    This is the usual Ron Paul nonsense. That man simply skews everything he touches when it comes to the Constitution.[/B][/QUOTE]

    After Andrew Jackson dismantled the 2nd National Bank around 1835 the United States lasted until 1913 without a Central Bank. Explain to me how such a prosperous time in American history was accomplished on a gold standard and without your precious central bank? Central Banks do nothing but what Jackson said:
    [QUOTE]
    The Second Bank of the United States was authorized for a twenty year period during James Madison's tenure in 1816. As President, Jackson worked to rescind the bank's federal charter. In Jackson's veto message (written by George Bancroft), the bank needed to be abolished because:

    [B] * It concentrated the nation's financial strength in a single institution.
    * It exposed the government to control by foreign interests.
    * It served mainly to make the rich richer.
    * It exercised too much control over members of Congress.
    * It favored northeastern states over southern and western states.[/B][/QUOTE]

  16. #16
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    [QUOTE=jefethegreat;2641934]Correct... but the government can create new paper money on demand... the government cannot however flood the market with newly created gold whenever its necessary to 'stimulate' the economy.[/QUOTE]

    Great point. The mismanagement of our currency and the resulting outrageous national debt and skyrocketing inflation is the main reason why our economy is being flushed down the toilet and you're seeing a disaster like IndyMac.

    The current administration and the federal reserve's solution every time it looks the stock market might dive a little is to cut interest rates. Short-term solution meant to keep voter outrage at bay that has horrific long-term consequences since it's being used so much. It's killing the value of the money in our pockets, causing a mortgage crisis and killing our economy. This is really an outrage.

    The dying dollar, even more than Iraq, should be the #1 issue in this election - unfortunately not enough Americans will care about it until we have a Black Monday-type disaster happen.

    But hey, in the wise words of Phil Gramm I guess I'm just a whiner because I don't like the fact that a 1 Euro equals $1.60 and I have to worry about the bank I put my life savings into going under.
    Last edited by VincenzoTestaverde; 07-23-2008 at 09:03 PM.

  17. #17
    [QUOTE=VincenzoTestaverde;2642223]Great point. The mismanagement of our currency and the resulting outrageous national debt and skyrocketing inflation is the main reason why our economy is being flushed down the toilet and you're seeing a disaster like IndyMac.

    The current administration and the federal reserve's solution every time it looks the stock market might dive a little is to cut interest rates. Short-term solution meant to keep voter outrage at bay that has horrific long-term consequences since it's being used so much. It's killing the value of the money in our pockets, causing a mortgage crisis and killing our economy. This is really an outrage.

    The dying dollar, even more than Iraq, should be the #1 issue in this election - unfortunately not enough Americans will care about it until we have a Black Monday-type disaster happen.

    But hey, in the wise words of Phil Gramm I guess I'm just a whiner because I don't like the fact that a 1 Euro equals $1.60 and I have to worry about the bank I put my life savings into going under.[/QUOTE]

    Your right, my good sir, I agree 100% :clapper::clapper::clapper:

  18. #18
    [QUOTE=jefethegreat;2642075]The fiat Continental Currency did not promote healthy economic growth and when it collapsed it prompted the founders to ban 'bills of credit' from circulation.[/QUOTE]

    I'm not talking about Continental Currency (a wartime currency). I'm talking about Colonial Scrip prior to 1764. Even Adam Smith wrote in the Wealth of Nations that Pennsylvania's currency (which Ben Franklin created) did not depreciate vs. gold and silver.

  19. #19
    [QUOTE=long island leprechaun;2642043]Well, that's not true either. The Federal Reserve was created by Congress and could be dismantled by Congress. See below:

    [I]The Federal Reserve's ultimate accountability is to Congress, which at any time can amend the Federal Reserve Act. Legislation requires that the Fed report annually on its activities to the Speaker of the House of Representatives, and twice annually on its plans for monetary policy to the banking committees of Congress. Fed officials also testify before Congress when requested.

    To ensure financial accountability, the financial statements of the Federal Reserve Banks and the Board of Governors are audited annually by an independent outside auditor. In addition, the Government Accountability Office, as well as the Board's Office of Inspector General, can audit Federal Reserve activities. [/I]

    I'm personally getting really tired of JefftheParrot's regurgitation of Ron Paul here. Not to mention that he posts the same things over and over again. There should be a policy that if you aren't going to say anything new, your post gets deleted. JefftheParrot will never be heard from again...[/QUOTE]

    Only in technical terms are you correct. The Fed was created by act of Congress, BUT IN PRACTICE, The Fed does not answer to Congress.

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