Wow you read that fast.
I answered your question what more did you want?
To read a book on economics.
I’m offended you just glazed over Schiff’s cartoons. I think they’re excellent.
Since you seem to be ignoring my links. I’ll post it twice.
Ummm…do you not see the non sequitur you just created?
Money is not debt, little crank.
If there would have been enough gold/silver they why did the people ever have to borrow from the goldsmith in the first place?
Depends on the meaning of enough. There is always enough gold/silver existing in a country to have a viable economy, as Rothbard explains in What Has Gov Done to Our Money.
'The people" are individuals. A certain individual saw that he needed gold to buy seeds for his farm, or for some other reason, and he just didn’t have enough gold in his purse. There is plenty of gold in the country, but not enough in his particular pocket for his particular needs. So he goes to a goldsmith or anyone else who has gold to lend, and borrows some.
The goldsmiths (basically everyone says this is how fractional reserve lending got started) expanded the money supply by X times the actual amount of gold to keep up with mans ability to produce.
The Austrian version of how fractional reserve banking got started is that the goldsmiths saw a way to make easy money by lending more money than they actually had. If they only lent the 100 gold coins that they actually had in their vaults at say 10%, they wound up with 10 coins of profit. But if they lent 1,000 pieces of paper at 10%, and asked for the interest to be paid in gold, they get 100 coins of profit [besides getting their pieces of paper back].
How lucky we are that man has an ability to produce more and more! But there is no need to increase the money supply to “keep up” with man’s ability to produce. As a simple example, say there are ten gold coins in the realm, and ten loaves of bread. Nothing else is produced. So bread costs one coin for one loaf. Man learns to produce, and next year there are 1,000 loaves of bread, but still ten gold coins. So the price of bread goes down to one coin for 100 loaves. Everyone is happy. No need for more gold coins.
What they didn’t say in this statement is that the people prefferred the paper over the gold otherwise the people would have wanted to borrow the gold and not the paper.
That is true to an extent. Paper weighs less than gold, and is thus more convenient to lug around all day. BUT they only would take the paper in the first place because they knew [or assumed] that when push came to shove, they could go with their paper to somebody who had put his signature on that paper promising to redeem the paper for gold and get good solid reliable useful gold for it. if they knew in advance that all they would ever have is a piece of paper, they would never have agreed to it. What are they, fools?
Enough supply to satisfy the purchasing requirements of the people. The only problem with gold is that there wasn’t enough of it. History proves this. The principles of gold and silver were 100% correct. It always moved into circulation as a wealth under the 1792 coinage act with no debt and no taxation allowing the people access to a debt free medium of exchange.
I agree with you here 100%. That is exactly what happened. The goldsmiths (now becoming bankers) saw an easy way to make more profit.
But now lets fast forward a few hundered years.
Now that the banks create 100% of our medium of exchange as interest bearing loans where does the money come from to pay the interest? The banks loan out 1000 dollars but demand back 1100 dollars, and there is one key element we had to really understand here. Money is created when loans are issued and debts incurred; money is extinguished when loans are repaid. If the debt does not exsist nor does the money.
You’re correct when you said they assumed. The banking system absoltely tricked the people into believing they had something they did not. If banks loaned out 5 times as many receipts as they did gold wouldn’t it be impossible for everyone to demand payment? They weren’t fools, they were mearly tricked by the banker as people still are today. Ask almost anyone you know and they’ll tell you when they got a loan the bank actually loaned them money when in fact the bank didn’t loan them anything at all. Just some numbers in a checking account. Numbers do not consist of any known chemical substance.
You’re correct. Money is not debt, credit is, but credit is what we use for money.
Then we should have a commodity-based money system, e.g. gold.
Where is the gold going to come from?
How much are we going to need?
How is it going to be put into circulation?
Think we’ve answered this repeatedly to you now. In your zeal you seem to be ignoring the correct answers to your questions.
Not relevant.
Definitely not relevant.
Again not relevant
What’s here and what’s mined, however much we need, and private mints/banks, in that order.
Now, little crank: how about you actually read about what a gold-standard is and stop your Chicagoite thinking that you can tweak the money supply and all that nonsense.
They borrowed because there wasn’t enough time. People, when they borrow, demand time, not money.
I’ve had a chance to page through it but I found this cartoon to be of much higher quality and more information packed. http://www.wealthmoney.org/cartoons.html
I’ve had a chance to page through it but I found this cartoon to be of much higher quality and more information packed. http://www.wealthmoney.org/cartoons.html
Now I get what this whole thread was about.
May I summarize your position tomozope:
Instead of the valuable function of money creation being done by the FREE coinage of metals into money, it is now done by the extraction of a pound of flesh in return: by creating debt. And this is destroying America, making us “pay” by assuming debt for something that we need badly and should be free.
Put more poetically, we are forced by the laws of economics that insist that new money must be created for a growing economy to succeed, to go begging to the banks and say “Please please, put more money into the economy. Otherwise we will all starve.”
The cruel rapacious banks realize we are at their mercy, and reply, "You want more money in the economy? OK, you will have it. But you must go into debt to get it.’
Since they have us by the balls, we have no choice but to agree.
I think that is your position, and I think it’s wrong.
The flaw is that there is no need whatsoever to create new money, i.e. new coins or paper. What for? Good ole Rothbard explains this position very clearly in What Has Gov Done to Our Money.
So we have no need to go begging to the banks and say “Please please, put more money into the economy. Otherwise we will all starve.” We won’t starve. Nothing bad will happen at all. In fact we are infinitely better off if NOT ONE CENT more of any kind of money, coin, paper, or new checking accounts, is ever again introduced into the economy.
Indeed it is a pretty wild scenario, what I have described as being your viewpoint. Because nobody ever goes into a bank “to increase the money supply in the economy”, and walks out with a face of death because he has been forced to borrow money. People go into banks of their own free will for the express purpose of borrowing money. For that reason only. And they care not one whit if they are lent sloppy worn out ancient hundred dollar bills [which doesn’t increase the money supply], or shiny new checking accounts [which does].
The debt they incur is voluntary. Why is lending people money a great crime? Au contraire, it’s a good deed.
It is now done when a person signs a promissory note with a bank and they deposit those numbers into a checking account. There is no flesh extraction. If we could pay with our flesh there would be a way to get out of this debt.
The interest on that debt is what is crushing America. No later that 2016 the interest on the total debt (gov, private, business) at just 6% will be greater than the total consumer income. There is no such thing as free money.
We are forced by the laws of mathematics that in order to keep this rediculous system going more money must always be borrowed in order to keep this system going, only compounding the problem due to the nature of compound interest. When banks put more money in the economy they only allow that to happen by loaning it at interest, but this could change if we start passing laws to put debt free money into circulation.
The only choice we got (if you want to be free) is to start passing laws to put debt free, wealth money into circulation so that we aren’t under the complete servitude and control of the banking system.
If there is no need what so ever to create new money then how do we pay off a 57 trillion dollar interest bearing debt with only 7.7 trillion dollars? Rothbard makes two false statements alone in the title of his article. First, government creates no money, and second, it’s not our money. The banking system owns and controls every last penny there is in circulation. It’s their money, not ours. If it’s our money then why do we have to pay interest on it?
Do you understand that as the debt is paid off that money is extinguished? If the banking system shut down the money supply right it wouldn’t take but a few months before almost all businesses would completely shut down. Farms wouldn’t be able to plant any crops, the grocery stores would go empty within a week since the trucks couldn’t buy fuel to deleiver the food. Your electrical service would be shut off when you couldn’t pay your bill, and then you wouldn’t be able to argue with a person over the internet that understands that money is the fuel that drives this economy. If you really believe that you would be infinately better off without any new money being injected into the system then by all means please try living without any money from this day forward.
But that is exactly what happens when someone walks into a bank and gets a loan. They increase the money supply. I guarentee you that most people feel pretty good the moment they get a big fat loan but after awhile and after crushing interest the reality sets. Then after forecloser (theft by deception). If anyone is going to have any money in circulation under our current system someone has to borrow it. There is no money until someone borrows it. You may have money and no debt but that still means someone else is holding the debt, and paying interest on it.
If there is no money until someone borrows it what other choice do they have?
Banks don’t lend hundered dollar bills. The only way coin or paper currency enters circulation is by drawing down on your checking account. You have to purchase those from a bank, and FRN’s and U.S. Coinage does not bear interest, but those numbers in those checking accounts do bear interest.
Lending at interest is a crime defined by statue in every state as “theft by deception” when the banking system is the only source of the money and they’ll only allow us to have some by loaning it to us at interest. The interest is what makes it a crime because now the bank demands back more than what was ever created. All mortagages are fraudulate in the USA because of these facts. Every contract in America has to adhear to three things for it to be a legal, enforceable contract.
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All contracts must be able to stand on their face.
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Any contract repugnant to the nature of a contract, illegal, or impossible to fufill is an illegal contract.
Do you really think it’s a good idea to have a monetary system designed to transfer all of the wealth of the people into the hands of a few?
Do you really think it’s a fair and honest system when the only way you can get ahead is by putting your neighbor into poverty better than they can put you into poverty?
Do you believe that the next generation of American’s can possible handly any more debt that we currently have today? In order to keep this system going by 2016 we will have to expand the total indebtiness to over 100 trillion dollars. Do you really believe we can borrow our way out of this mess?
There is nothing ethically, or economically wrong with lending plus interest. Such contracts are entirely valid and have a market purpose. THey address temporal issues of the lendee.
There is however a level of stupidity for thinking that such services should be free.
Do you think it’s ok to steal from people?
Do you understand what non-sequitur means? Lending is not stealing. I lend lunch money to my co-workers every day. I do so voluntarily. How do you equate that to them stealing from me?
It is strange how people have returned to the anti-usury medieval days. Next we will be talking about ‘just prices.’
Dear Tomozope,
TY for your detailed reply.
Just to be sure I have completely understood you, do you agree or disagree with the following statements. They are all highly theoretical, even silly situations, but knowing your stand on them will help me understand what you are saying.
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If the Good Lord would create a rain of Ipods that would fall from the sky indiscrimanately upon us all, we would all be wealthier.
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Same as above, but in this case He rains down paper dollars instead of Ipods.
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Same as above, but now it’s gold coins, [and makes us all accept His law that these coins are legal tender, in addition to our current money].
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Same as above, but now it’s gold bars.
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It is immoral, in fact it is a form of theft, to charge interest for a loan.
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The only way I as an individual can have more money to spend is by borrowing from a bank.
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Anyone who borrows money from a bank at interest is shooting himself in the foot and will eventually impoverish himself.
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If banks would keep on creating new money as they do now, by creating new checking accounts as loans as so clearly explained in the cartoon page you referred to, but would be forced to make these loans interest free, that would be a huge economic step forward.
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If banks were forced to give interest free loans, and the govt would create a huge stockpile of money, say triple what exists at the moment in all forms, by minting gold coins at no charge to anyone, that would be two huge steps forward.
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If in addition to 9, all existing debts had the interest portion cancelled retroactively, we would be sitting pretty.