Thomas said: John, a snippet from the post you made on your website.  (I cannot find this again to reference the full conversation.)

In short, this last effort to analyze why the Fed was a bad idea has finally taken the mystery out of the question “Where is the error in allowing the Fed to create fiat money?”  The Fed is a de facto monetary tyranny, they are in effect gods of money creation.

John F: Remember ‘tyranny’ comes from the word-root for ‘Without Authority’. And if they did create, they would be the supreme God, not just gods. Lower-case gods can only manufacture, since they cannot create themselves. But we have proven that money-issuers do not create, they can only dilute. Any value their ‘new’ money has, can only have value to the extent they leach purchasing-power out of previously-existing money. If somehow the ‘new’ money was distinguishable from the ‘old’ money, people would not accept it because the fraud would be evident. I’m sure you could do an experiment yourself that would confirm this. Thus, they cannot create, they can only dilute. If you pour your gallon of water in the barrel of wine, and then scoop out a new gallon of well-mixed solution, your new ‘water’ is sweeter to the exact degree that the other 54 gallons are going to be watered-down.

 Thomas: John, I agree with your concept to some extent, but not enough to agree with you. 

John now says: Then you could help by showing discernment, that is, separate out the idea that you agree with, from the idea that you disagree with.

You have focused on the "species", the token, and noted that people can only dilute the money supply by increasing the number of tokens. 

To speak of 'money' and the 'tokens' that represent that money, you are still addressing the distant past, and not the recent past of the last 42 years -- and the present -- which is the time in which you and I need to make our life-decisions whether we will be partners with the most massive Thief in human-history-to-date, or repudiate this blasphemous system and depend upon the provision and protection of our Lord Christ.

As far back as 1933, by a dictatorial, presidential executive order, it became severely punishable by law to be caught with money in your possession. The American Public was pretty compliant with this but there were some prosecutions. http://en.wikipedia.org/wiki/Executive_Order_6102 is an instructive read. At that point, all we were allowed were the Tokens of Silver-Certificates which represented the 'dollars' banks would now owe you (these could also be redeemed for the 90% dime-to-dollar silver coins, which functioned as token-representatives of banking dollars that could be owed), and Federal Reserve Notes.

It was at this point that America was essentially moved to the imaginary owings I keep speaking of, even though silver was still widely used. So, the steps were: 1873 Federal Taxes must be paid in gold, not silver or paper certificates; 1900 definition of dollar changes from silver to gold; 1933 citizens cannot hold more than 5 ounces ($100 face) in continental US; 1965 no new minting of token silver coins of lower denominations; 1968 paper Silver Certificates no longer redeemed in silver coin. After a generation of brainwashing the public out of thinking gold is money, then allowed gold ownership again and gold contracts.

You don't write as if you understand I am pointing out that we no longer have any tokens or anything tokens can represent. The Federal Reserve Notes and cupra-nickel & zinc coinage that we use as debt-transfer certificates are not tokens that represent any thing. There is no debt if there is any thing loaned or owed. There is no thing that can be paid-out as a loan or paid-back. This obliterates the truthful meaning of 'token'.

Control of the language is very important. Meditate on the twisting of language of the Dragon in the Eden-Tree.

This is strictly true if you look at the situation as the Fed simply issuing new money, and spending it.  But, this concept does not reflect reality when you look at the actual context of the creation of new money.

You make it sound like the Fed increases money-units and spends them directly. This obscures my point that no new money is created by this central banking system except at the request of borrowers. The kid, standing on the chair in the kitchen, alone, getting the cookie jar down from the shelf -- when discovered by the disapproving parent will attempt to inform us, that he only meant to be getting a cookie to bring to the parent. Whether loaned by Fed Central NY to Primary Dealers, or by Member Banks to real or legal persons (corporations) -- imaginary additional 'owings' are only 'created' at the request of the Borrower. The 'money' does not exist in the banking system until the bank increases the quantities in your account (that they say they owe you), at the same instant they are registering your Loan of what they say you owe them. These contracts do not define measure or substance of what is owed, are are therefore deceptive, fraudulent, and unenforceable. Yet they are accepted by the Public, because of the benefits they incur. The interest/rent-rates are cheaper this way. It used to be that when you loaned them your money (on deposit in CD, savings, or checking account) that they would offer you a higher income-interest-rate with more safety than a non-Bank savings-and-loan business. And the overall transactional costs are cheaper, since the system looks like it is self-funding. 

In reality, the "subsidy" comes from the system being able to rent money that does not exist and does not belong to them. Listen to Fred!

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

When the Fed creates money and loans it to the Primary Dealers, it is in effect giving them more money that they can use to loan to borrowers, who are committed to producing and paying back a percentage of the profit associated with the loans and their associated production.

Allow me to offer a 20,000 ft elevation view upon what you are starting to do, here, with the words producing & profit . Your overall theme is, that "authorizing" or allowing this blasphemous fraud (and I use the 'b' word on purpose as I have shown you how what they pretend to do displaces God-The-Son's sole creative ability and ownership) enables more "growth" or net general prosperity for the human race. However you describe the "good" effect which is used to justify the operations under our scrutiny -- the issue is not whether we think they are good (in our confidence that we can discern good and evil without dependence upon God's Word) -- but whether they are in accordance with God's Word and character.

Temptations to do evil, sin, and crime attract because they offer the illusion of a better outcome that obedience to God and His law. The Apostle Paul phrased it well:

Rom 3:8 And why not say (as we are slanderously reported and as some claim that we say), “Let us do evil that good may come”? Their condemnation is just.

It is good to put this together with similar, "priority" verses.

My point, is that the illusion of good or gain will turn up a negative through the omnipotence of a righteous God, no matter how much we try to justify something that is contrary to His law. Remember law means if/then. When God says a then/consequence will follow an if/cause - He will always prove right, but Satan's temptation will never show it in that light. It would be well for us to seek wisdom from those who are above us in understanding the Bible, history, and economics and who can communicate their consistent integration in a way that glorifies our Lord(Owner)  Christ. I am always eager to learn from sources that are doing it better than the ones I already follow. Keep the emails and links coming.

We have in fact, as a society/economy, which has given the Fed the authority to increase and decrease the money supply by increasing the amount of credit available to be issued by the Primary Dealers. 

Remember all the previous demonstrations that Fed issuance to the Primary Dealers is less of an issue to us and our neighbors than what Wells Fargo on NE Sandy and 122nd pretends to issue to us in loans and services. Congress and Fed are going to do what the banking system tells them to do, or die in assorted ways, until the air-hose to the bankers is cut but General Public marshaling his army against using their 'money'. They only have the "power" (or as you say 'authority) that we give them.

From God's perspective no society has the power or the authority to give the Fed the authority to increase and decrease the money supply. As far as power, Fed cannot create gold or silver out of nothing. Dollar is not a thing that can exist, so it cannot be created or manufactured. As far as authority, the banking system may not create additional money. Even human law recognizes title of ownership cannot be transferred until it is held. Since the  nothing we pretend the banking system loans does not exist they can have no title to it. If they do not have title to it, they cannot give it, loan it, or charge interest on it as if they did have title to it.

It works kind of like authority in democracy. Since each individual voter has zero authority to define crime and punishments upon others, no matter how many of those zeros you add up to get a majority, you still have zero authority or power to define a righteous penology. No human considered sane or rational is going to admit to judging all law because of what one person says or many people say (even though we do it all the time, mostly when we see it is to our "advantage"). You keep listening, they will soon betray themselves and they will evidence the fact that they are drawing on some other source of authority when they attempt to imply that they what their human authority decrees is good or bad. Aha! How do they know it is good, except that it conforms to some other standard they hold as determinative.

Even if 100% of the citizens of your country thinks an action is a good thing, we are still required by our Creator, Redeemer, lawgiver, judge, and king/enforcer to recognize and obey His law for our protection and blessing, and the protection and blessing of all around us.

This is not fraud, this is not without authority, and this is not creation of something from nothing (in the sense of God, it is rather the manufacture of "gods" -- it is the taking the good will and trust of men that there is a corresponding trade value of money for goods and services. 

There you go on "value" again without explaining what thing is being valued? Of course we utilize current currency because we trust others will value it in the future. We are responsible to point out that that trust is a mis-placed faith. It is belief in a lie. For instance, the debts will not be repaid. There will be default, and unfortunately, much foreclosure to the wrong owners (though just judgement from God). You already know that the National Debt will not be paid off as the words imply. In the way govt officers are locked-in to functioning, there will never be a turn-around in this economy in order to produce enough discretionary excess in order to pay down this debt. It will be "paid" by stiffing the creditors who have 'loaned' it what ever it is that was loaned. Whatever will get paid back (over and above any current operating expenses) can only be said to be stolen from taxpayers (see rationale in up-coming treatise, "For this Cause, You Pay Tax"). Either way - not good.

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The Fed, the money manufacturers, have given the willing producers a quanta of money to expend as they wish to produce capital goods, which will eventually restore the parity of relationship of goods/services to money). 

We have trusted the Fed with the role of issuing new money at an appropriate rate so that the economy will expand at a rate that corresponds roughly to the demand of the consuming public to consume the newly produced goods and services.  So, if you are going to use the definition of "Tyranny" to mean "without authority", then I would have to disagree with my own categorization of the Fed as acting as "tyrants".  But, if using the more common, or alternate, definition of tyranny, meaning, acting unilaterally with force as a god-like entity, then my categorization of the Fed as a god-like tyrant stands.

There are two ways that new money can be introduced.  1) By printing it and spending it.  This truly is dilution.  In this context, I completely agree with your concept of the inability of the Fed to create more wealth by printing new money. 

But, there is a second concept, which reflects the actuality of the creation of new money (when the system is not perverted to simply print money and give it to the government to spend on buying constituent votes by various "entitlement" or other consumption-based support): 2) Printing it, and then using those monetary pieces, those symbols of wealth, as seeds of wealth to entrust to men committed to production increases the pool of value available for consumption.  That is, when new money is used as a symbol of a social contract that is used to inspire men to commit to the effort of creating new capital expenditures, there is a downstream production of new consumable value that results.  The production of goods/services, for which there is demand by consumers, results in work for those who produce, and goods/services for those who consume.  This is in fact new wealth/value, and it is the reason that the issuance of new money, and giving trustworthy producers societal credit to consume from the pool of value, is not dilution in the long run (it is dilution in the very short term).  Thus, it is possible for the Fed to issue new dollars, and through various subsidiary channels, create contracts with borrowers, who are committed to producing new goods and services, and not dilute the money supply.  The effect is value generation, an increase in the amount of consumable goods/services.  The net effect, if done appropriately, is that the new money that is "printed" and loaned, and while initially raising the money to goods/services ratio, that ratio will be brought down over time as the production goes online, resulting in a return to the initial relationship in the money supply to goods/services ratio.

This brings up the question of the Keynesian School of "pump priming" by government expenditure, which is supposed to inspire increased consumption, vs. the Austrian school which advocates "saving" as the appropriate tool for generating new wealth.  But, we shall save that discussion for a later correspondence.