Dr. Abshier:
John, good to hear from you. Yes, busy. Got the basement framed, now starting on framing out the porch apartment bathroom, and the wall adjoining the house.
Regarding the Hamilton quote: That is a very potent statement condemning fiat money. Of course, the real threat of unlimited issue of fiat money is inflation.
>Or we could say that any increase of money is inflation, and any decrease is deflation. The only options are to keep the same amount of air in the balloon, or to add more air, or let air out. The real threat is a religious crisis if the government’s- or the bank’s fiat creates anything. Because then we would have a rival god superior to the one revealed in the Bible. Then Jesus and His disciples would be guilty of a criminally false witness. The Bible is firm that nothing came into being that our Lord Jesus Christ did not create, out of nothing, by His fiat – His Word that called it into being. He says “Let there Be”, and there is. This is the worshipping angels’ cry,
“Worthy art thou, oh Lord, to receive glory and honor and power, for Thou hast created all things according to Your good pleasure”.
>Hebrews says, “Through Whom also, He made the ages”, and Colossians, “by Whom, for Whom, to Whom - are all things”. When finite Men fiat, and say “let there be”, nothing happens, no matter how many people believe that something does happen. Can you tell the difference between when something happens/comes-into-existence and when something doesn’t? I contend that nothing is issued, and nothing is inflated, and no quantities of anything are increased except the number of human beings who are believing a lie. The God who controls all things is allowing this, because these nations have already rejected Him and chosen to worship what is created instead of the creator. Suffer me to appeal to you to leave off believing any created thing is stronger, or more just or loving than the Triune God of the Bible.
The problem being the government obtaining unlimited goods and services from the market without an equal extraction of value from its citizens.
>If you are implying the problem is inflation, I could say this: Regardless of how men value what is being extracted, it is true something is being extracted. This extraction could be called “decrease in purchasing power”, acknowledging the reckoning of more alleged monetary units in the banking systems, which causes prices of other goods and services to be “bid up” in terms of their nominal prices. Your money, within the nation whose central bank is pretending more units – trades for less stuff. But, it is not just “its citizens” that the ‘purchasing power’ is being extracted from. It is being extracted from the treasuries and governments and citizens of many or all other nations as well, in a global marketplace where (since WW II) the US dollar has become the most common or reserve currency. Now, to say the US Central Banking system is actually adding monetary units in a fiat, create-out-of-nothing way, is also to affirm, logically, that the men doing that own that money. They would then have the right to rent it at interest, and they would have the right to control it, and to change it as regards its purchasing power. If they have the right and power to create more, you have to accept the lessening in purchasing power that this causes around the globe. If they do not have the right nor the power to do this, they you can acknowledge that they offend the Creator and Redeemer by doing this, and that this is truly the theft-through-deceit that He requires societies to punish by forcing double restitution of the wealth stolen.
(cont): The problem being the government obtaining unlimited goods and services from the market without an equal extraction of value from its citizens.
>If you mean there is some problem with the government obtaining something and this is related to inflation, I would suggest that we are not hitting the target. If the government (treasury) needs to spend more money beyond what is coming in from taxes or other non-borrowed sources I would point out it has to borrow money the same way anyone else does. No mystery here other than it may be getting an artificially-low interest rate for the amount and duration of its loans. But if, by saying “government” you mean the hybrid (privately-owned but publically ‘authorized’ in its monopoly privileges) agency that is not owned or controlled by the 3 Branches of the FedGov, it would be better to say [The Federal Reserve or Central Bank system]. If, by saying “government” you mean the Treasury, it would be better to say [The Treasury]. The one other “solution” proposed out there besides having the Federal Reserve “create” the money cheaply to loan, is to just have the Treasury pretend to increase the spendable units.
[More on this later – I have found some very interesting text/video you will find relatable to your dream-solution of keeping prices stable by ‘wise’ inflation of the money supply supposedly without the bad side-effects (theft) that accrue when money-supply is increased and without the ‘problem’ of having to pay interest(rent) on the use of the money.]
>Then the government truly would be supposedly obtaining money to trade for goods and services without benefit of taxing citizens through the normal channels. Yet they are still taxing the citizens through the commonly-understood method of debasing the monetary unit through the increases in quantity. They are also taxing the citizens of other nations who hold US dollars. People can see and feel and trace ordinary taxes, and once in a while they have the satisfaction of voting on taxes that affect them. The Inflation Tax they cannot (easily) see or feel, nor can it be traced or scheduled. Who it robs and when – because it is so hard to analyze and trace -- makes it very hard to assign responsibility for the theft.
(Government employees are tempted to consume excessively to fund their own lifestyle, which includes: the passion to increase the function/capacity/scope of government, which in turn includes the desire to meet the perceived needs of the populace as well as their own innate need/drive to own/control/possess kingdoms.)
The modern era, with the 1913 act legalizing the Fed, was meant to curb such abuses, and institute an era/protocol/law where there was no opportunity for government to use its power to print and spend money with unlimited abandon.
>So far, I have been able to dig out of history that government, per se, did not issue money directly past the Continental of the Founding Era. After the Coinage Act of 1792 Lincoln tried it in 1863 with the greenback, and Kennedy might have been trying to do a similar direct government thing with the silver coins and certificates in the 1960’s. Other than that, the issuing of paper or imaginary money has been coming from the fractional-reserve loaning from banks.
But, of course, that resolve/law has been forgotten, and we find ourselves now in an era where government, in violation of the law that authorizes its existence and intent, is now colluding with the Fed to print the money that the US government is using to fund its deficit of receipts over expenditures.
>Can’t help asking again: Why are you using the verb print, when that is not what you mean, and it is not possible to do so? There is only 2 trillion of FRN’s in the world, 70% of which is outside the US national boundaries, and annual government deficits exceed half of that. Since the majority of new money units are supposedly added by Member Banks, this means that you are saying printed Federal Reserve notes more than doubles every year. Besides the math making this nonsensical, both the Fed and the Treasury denies that money is “created” by printing Federal Reserve Notes. But, as you have never answered my challenge to communicate technically and clearly on this function, I will not expect you to reply to this issue. Nevertheless, I thank you for the free tuition in your training me to think more accurately about these matters.
Your objection to fiat money need go no further than to note that fiat money can be abused by government. To declare its existence as inherently evil goes too far. To note, as Hamilton does, that it is “pregnant with abuse” captures appropriately the implicit/inherent risk of fiat money.
>Money doesn’t care if it is abused or not, nor should any human care about its tragic fate. The question is: are men’s lives, freedom, and property being abused by being taken away or stolen or destroyed. I have reasoned with you that the pretension of creating something out of nothing causes the very real effect of defying the Creator’s unique and supreme power, and His assignment of stewardship to the Families of the Earth. This is why “To declare its existence” is inherently evil, because you are blaspheming the character of God – not treating Him as holy, but as common. He is only one of several beings who can create out of nothing. “To declare its existence” is deceitful because nothing exists. You are not God. Nothing is going to exist just because we say it is. The Fed can say $16 trillion exists. If, suddenly, that much stuff (that is not nothing) does really exist, then we have the aforementioned religious problem.
>Hamilton, when you learn to know him better, will prove not to be trustworthy in these matters. Yes he was a founding father, but, along with Washington, his ideals were for a strong, much-more-centralized government, like the European models – than the decentralized Biblical model. He was in favor of the National Central Bank. I think you are trying to say that there is just the risk of doing wrong by ‘creating’ too much extra money, instead of just the right amount to keep prices stable or prevent deflation, or some other noble purpose. You need to come to realize that people want to make up these stories because the lender wants the extra wealth of being able to collect interest on a loan without having to pay for borrowing any money, or relinquishing the use of his own money. The borrower wants the extra wealth from the savings of paying a lower interest rate than he would have in an honest-money economy. The extra wealth for borrower and lender can’t help but come from others in that hidden way that inflation is famous for.
Scrip/money/tokens, in circulation whether backed by gold or nothing, is money (a medium of exchange, trusted to be redeemable in the market (both as vendor and consumer) for an acceptable value to both parties over an intervening time, acting as a satisfactory storage of value between the acceptance of the scrip and its redemption).
>Yet you are cheating in the words you are using. You say “medium” but there is no medium there that is being exchanged. You mention trust, but there is no proposition to trust in, as no one has made a covenant or promise they are obligated to keep. Even if they had clearly promised and failed, there is little guarantee that they would be punished in a good way – which is very similar to not having a law at all. You can say “satisfactory”, and you can say “acceptable” about the shrinking of inflation because the traders may be satisfied about their own shrinkage caused by inflating the money supply and just write it off as the “cost of doing business”. But God does not give us this freedom, because we are supposed to love our neighbors as ourselves – and our neighbor is being robbed by this whether he is happy about it or not. Also, bear in mind, these “satisfied” traders are satisfied because they think they are gaining more advantage through the fractional-reserve loaning mechanics, than they are going to personally lose through that process. The net gain can’t help but coming from their neighbors.
Defining the value of the unit of money in terms of a stable/fixed/unchanging amount of a particular valuable substance gives an anchor point for the market in terms of judging the value, in terms of money, of any arbitrary object/service in the marketplace.
>Remember, honesty in the 3 components (QMS) of what you are using as money, cares nothing about how people value it. Any attempt to modify the value of it is a violation of freedom. People will insist on valuing the QMS however they please. All the law can care about is check the accuracy of what the money-side trading partner is giving, and require double restitution is there is theft-through-deceit.
>Is the substance/definition being traded really what it is claimed to be? If there is no substance or definition we don’t have to go any farther to know this is fraudulent.
>Is the measurement of the substance accurate?
>Are the quantities of the measures accurate?
Rick says
Ironically, Hamilton pushed for a Central Bank, which Jefferson vehemently opposed. They argued much over the idea, often in the public newspapers where they frequently hurled insults at each other. In the end, the two men who had once been good friends, ended up becoming bitter enemies all the way to their graves.
>Ever since 1694, it has been the People vs. the Banks. If the Triune, God-of-the-Bible-Creator has assigned stewardship of land, labor, and money to the Family, (and this is recognized and honored by a significant sector of the population) you have prosperity and liberty. Some call it Capitalism. If Banks are the new creators, they can’t help owning and renting the money they create out of nothing. It becomes easy for them to end up owning and controlling everything that can be traded for money (remember the boom/bust foreclosure cycle). Controlling money makes it easy to end up controlling the government, communications, transportation, and education. The Jesuits learned, early on, that education controls how men think about law, and law controls everything else. Upon the resources of the Roman Catholic Church, they were able to offer “free” education to the wealthy stakeholders of the Economy. Once they had the kids, they acquired all the rest. Review the counter-Reformation operations in the Polish/Lithuanian empire, France, and the USA.
Money backed by gold or some other substance deemed to have ‘inherent real value” can be as destructive as fiat money with the Great Depression, when the developed world was on the gold standard, being a good example.
>I think you are saying that theft is theft. Theft using imaginary units is easier, because no one can verify or falsify what you “say” has happened on the money-side of a transaction. You can say you are loaning as many units as you want and no other stash of units are decremented and nobody is the wiser. Being on a “gold standard” is not helpful, if law authorizes a monopoly for one central, national bank to “create” as many gold receipts as they can get away with without getting brought up short by the public demand for the actual substance. Not all accounts of the great depression are true to the history. Remember the Great Depression started off (1933) by criminalizing the possession of the US dollar. Henceforth, it was “just trust us”, without any sure way to know if the banks were honest about whether the transactions were happening or if banks were just pretending.
>I believe the story that highlights how the paper/non-gold units were flagrantly loaned and the resultant speculation in the market drove stocks above realistic P/E levels. The bankers, who knew what was going on, coordinated their sell-outs on an agreed signal, leaving the Outsiders to lose their wealth as the perceived-values declined. This “pump” has remained popular to this day as an effective transfer of wealth from the fleecee’s to the fleecers. I have had a living ancestor-generation explain that people were well aware that the banks purposely coordinated a reduction of cash and credit leading up to the Depression, such that the drop in money in circulation led to the unavoidable foreclosures which allowed the banks to take ownership of much more wealth than they would have without such artificial manipulation of the moneystocks.
Europe sank into a deep depression in the ‘30s because it was running trade deficits with the U.S. Periodically, in response to those deficits, the European countries had to send gold equal to the current deficit to the U.S. and take the money backed by it out of circulation within their economies. As you can imagine, as their money supply shrank, so did the European economies. Within a few years’ time, the Europeans went off the gold standard in order to save themselves.
>What you are saying is we sent over what Europe wanted in trade and they sent over what we wanted in trade, and it was a win-win situation. Not mentioned was how their economy was suffering because men were being killed, freedoms were being restricted, and property/wealth was being destroyed – otherwise known as war. Your phrasing of it acknowledges the boom/bust situation. If the money was just “backed” by what they were trading, it would be highly likely that the money was “levered-up” as in more quantities of paper than gold. As the gold leaves, it annihilates more units than the supposedly lesser units of gold. A boom when the money was increasingly available – gets balanced by the bust of the detractor days when the deleveraging makes it hurt more intensely than the boom was delicious (to some). When Europe defaulted on their heretofore honest trade, you might describe the action as “saving themselves”, but what it really means is that some men profited (that should not have), and other men suffered, (that should not have). Some lost by the direct, zero-sum due to the impact of the redistribution of wealth. Some lost due to the inefficiencies of government (wasted motion), some by the effect of destructive impact of unjust governing discouraging productive folks that would have increased the wealth of goods and services available to me. Instead they did not produce. We say that they “saved themselves” because we are not looking at the forgotten men, the Hidden Man.
Over here during that time frame, the juvenile Federal Reserve caused our Great Depression by refusing to loan money to the banks to cover the runs, even though the banks had balance sheets to justify the loans and the Federal Reserve had more than enough gold on hand to back up those loans. This was proven to be the true cause of our Great Depression by Milton Friedman.
>This was done on purpose, for the beneficial effects to the banking system. This was to fulfill the promise of the Covenant with Noah. God said, “I will require, at the hand of every man, the blood of your lives…..whoever sheds man’s blood (takes away life, liberty, property), by man his blood shall be shed”. We see this played out in History, in that God afflicts any society which refused to punish crime in the way He defines – with universal side-effects. Oliver Cromwell found this out, during the time of Charles I, king of England. They gave the monarch every chance to change and repent of his constant attempts to assemble a coalition between the RC faithful in England and Scotland, and forces of France and Ireland in order to persecute and exterminate Protestant leaders of church and state and enslave the population under the Pope. Even when they gave him a chance to leave the country, he was still trying to get help from the Scots to help him make war on the men trying to protect the country from him. They finally had to accept what the Bible required of them: if they didn’t kill this incorrigible capital criminal, he would kill them. In the same way, if we are unwilling to execute this treasonous murderer who is currently the commander in chief of the US military and the executive head of all police forces – he will be the occasion to murder more and more people. I know when I say this I risk capital perjury and treason myself. However, if I don’t, I also risk bloodguiltiness, because I will share in the murder of future innocents. That’s about murder. In the area of theft, since we haven’t (and since we won’t in the future either) required restitution for the banker theft – God will turn us over to even more theft from them and from each other – through them directly and the governments they control.
Nixon finally took us off the gold standard when we began running trade deficits, as he knew where that road led.
>As I recall, France was helping us correct the trade-deficit situation when Nixon was instrumental in the Great Default when the US outlawed quantities of measurable substance as legal tender for debts. France was facilitating getting our bills paid and “balancing” the trade. They had given us stuff, and we had given them promises to pay, so they were working on getting paid and that was stopped by the executive department. Shortly thereafter, every other nation in the world abandoned the substance and measures used for the money-side of trades, so that now we are operating with a guaranteed trade-deficit. For part of our trade, the US allows other countries to cancel some of what we say we owe them when we ship them the goods they want. If we know where the road leads why are we not turning around? Who is responsible to turn the wheel? Why have we not changed the policies that caused the 2008 crisis?
As long as government controls the money supply, whether its fiat money or not, we are always in peril. There are no magic bullets such as gold-backed currencies. EVERY approach has its own risks and fundamental to those risks is the government’s involvement.
Rick
>As you say, the problem is the government controlling the money supply, however indirect it might look. As I speculated above, much of the power to pull The Market towards using a certain type of money comes from the belief that failure to pay a tax is a crime. The coercion of taxation allows – even requires – government to designate the type of money which constitutes satisfactory tax payments. You could bring ever so many pounds of Iron Pyrites to the IRS office to pay your taxes, but if Iron Pyrites are not the money specified in the tax laws, they will not cancel your liability thereby.
>So why did the US Treasury and tax laws morph to using the type of dollar we have today? What were they thinking when they moved from the paper money of the Revolution through the wrestling of using both gold/silver coins with fiat-issue certificates out of various central, national, state, and private banks, switch to gold being required for taxes in 1873, totally redefine the dollar to be gold in 1900, kick in the Federal Reserve and Income Tax laws of 1913, and then pull all gold dollars out of circulation in 1933, remove the silver token coins out in 1964, then abolish the dollar altogether in 1971?
>Was this something the representatives of the People -- good men and true – did out of concern for the greatest good for the greatest number, or because the banks steadily worked through deceit and criminal methods to gradually take over the operations of money and credit?
>There are losses of life, liberty, and freedom when the government criminally manipulates the money supply. This mostly comes about through what they allow(ed) the Federal Reserve to do in reckoning new money to loan. What money we are using is mostly set up by the fact that we can only pay taxes through the medium of the imaginary form of money. The other thing I have realized has a huge impact on what type of money we have to use is the popular conviction that there is authority to take away life, liberty, or property – for failing to pay a minimum amount of tax. If government can punish you for failure to pay, they can’t help forcing you to pay in a certain way. If you come in with handfuls of Federal Reserve Notes, whether you leave them on the table or not, they will not regard your taxes as being paid. You have to use a bank draft (check) or credit account (card).
>If you were voluntarily contributing towards the function of government, you would have freedom in the form of wealth you gave them. They would need to accept it, and exchange it for whatever would be the best trade for them to get the job done. Your contributions would be in accord with the value you placed on their effective function. If they were doing harmful things with your money, you would contribute less. If they were doing things you thought essential – you might contribute more. As it is, you are forced to support whatever they do, and suddenly you realize that you are aiding and abetting criminal damage against God and Man, but if you try to withdraw support, you will lose life, liberty, or property. Such things ought not so to be. There is actually no shortcut to fixing this other than converting the culture to Biblical Christianity which knows and self-governs in following God’s law. If you made support of government optional, there would be no less obligation for good men and true – to support and participate in the law-making, judging, and punishing. They would have to do it even more than they do now. Think of how the Christian Church in America has mostly abandoned involvement with Law since the 1830’s (when they stopped thinking about the Ascension of Christ and His active function as civil head of all nations). Good men have to work in and contribute toward just (by Biblical Standards) governing more than bad men. If they say, “Whee, I don’t have to pay taxes anymore!”, you know the bad men will not be shy about contributing towards and working in the governing in fomenting and defending contra-Biblical laws that steal, murder, kidnap, and destroy for their own gain.
>Kind of like now. Except, now, we have their stealing, killing, and destroying AND stealing by forcing us to pay taxes and burdening the Nations down with increasing inflationary taxes. As is often repeated from the famous-man quote: If you will not have the Ten Commandments, you will have the Ten-Thousand Commandments.
