I thought it might be fun to have a bit of a discussion about the current financial crisis, and our financial system in general. I’ll post some information I’ve found interesting, although I don’t necessarily agree with every point or conclusion made. Feel free to reply with your ideas/info, and/or opinions/questions about this.
pkb
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Presentation on current financial crisis:
http://uk.youtube.com/watch?v=XBT052jHnmE
–Solid points, and well researched. I do disagree with his brief statement on the reason for the Iraq invasion.
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Peter Schiff points out problems in 2006, gets laughed at (seriously priceless — you think peter got the penny?):
http://uk.youtube.com/watch?v=LfascZSTU4o
And again (there are many more examples of this):
http://uk.youtube.com/watch?v=W8LlJceLSxI
Schiff on Glen Beck yesterday, focus on debt:
http://uk.youtube.com/watch?v=YH-D6E9vK9s
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IOUSA trailer:
http://video.google.com/videosearch?q=iousa+trailer&hl=en&emb=0&aq=f#
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Comptroller general on 60 Minutes — our irresponsible spending practices:
http://uk.youtube.com/watch?v=OS2fI2p9iVs
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Ron Paul cross examining Bernanke:
http://uk.youtube.com/watch?v=A4kxTkhwR_Q
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Alan Greenspan thinks we were better off on the gold standard, implies no fed would be preferable:
http://uk.youtube.com/watch?v=z5MVsm2cpc0
Early Greenspan piece opposing government intervention and manipulation of the money supply
http://www.constitution.org/mon/greenspan_gold.htm
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Bernanke admits the Fed caused the great depression, or at least made it much worse than it needed to be:
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021108/default.htm
Money quote:
Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.
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History of money in the U.S:
http://video.google.com/videosearch?q=history+of+money+us&hl=en&emb=0&aq=f#
–Good stuff, although I don’t think it’s feasible to return to the gold standard, since government reserves of gold and silver are mostly depleted — that genie has left the bottle. I’m in favor of monetary freedom, however. Eliminate “legal tender” laws, and simply allow people to use what money they choose.
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Money as debt:
http://video.google.com/videoplay?docid=-9050474362583451279
–Good explanation of our jacked up banking system, and good eye opener. Fun tidbit from the NY Fed’s own site, admitting that money creation is effectively unhindered by reserve requirements (and I quote — bold is mine):
Reserve Requirements and Money Creation
Reserve requirements affect the potential of the banking system to create transaction deposits. If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+…=$1,000). In contrast, with a 20% reserve requirement, the banking system would be able to expand the initial $100 deposit into a maximum of $500 ($100+$80+$64+$51.20+…=$500). Thus, higher reserve requirements should result in reduced money creation and, in turn, in reduced economic activity.
In practice, the connection between reserve requirements and money creation is not nearly as strong as the exercise above would suggest. Reserve requirements apply only to transaction accounts, which are components of M1, a narrowly defined measure of money. Deposits that are components of M2 and M3 (but not M1), such as savings accounts and time deposits, have no reserve requirements and therefore can expand without regard to reserve levels. Furthermore, the Federal Reserve operates in a way that permits banks to acquire the reserves they need to meet their requirements from the money market, so long as they are willing to pay the prevailing price (the federal funds rate) for borrowed reserves. Consequently, reserve requirements currently play a relatively limited role in money creation in the United States.
Edit: Note, I have been unable to verify the first 10X money expansion factor (referred to in the video) regarding deposits at the Fed, so you may want to take that with a grain of salt. The second 10X factor due to re-lending of money with a 10% reserve requirement is certainly correct. As the above quote points out, however, these reserve requirements do not effectively put a limit on money creation.
There is another point which I believe to be a misconception in the video — greater production does not necessarily imply greater use of natural resources. Things of greater or lesser value can be made from the same natural resources.
Also, I strongly disagree with the conclusions of the video that suggest more socialization is a solution. What we need is more freedom, — the problems of a fixed money supply would be solved by simply eliminating legal tender laws.
All the quotes used in the video are verifiable.
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Very funny Australian satire on the (their) fed:
http://uk.youtube.com/watch?v=NIfH0vY2ANA
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Comic book entitled, “how an economy grows and why it does not”:
http://freedom-school.com/money/how-an-economy-grows.pdf
I disagree with a poll tax, but otherwise good stuff.
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Comic book explaining (and satirizing) inflation:
http://www.constitution.org/tax/us-ic/schiff/moltz.pdf
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Great political cartoon (scroll down a little):
http://globaleconomicanalysis.blogspot.com/2008/10/essence-of-rescue-plan-in-comic-form.html
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Here’s a few quotes to consider:
Regarding federal banking and money supply:
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“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a moneyed aristocracy that has set the government at defiance. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
- Thomas Jefferson (Abolished the first national bank)
“The bold effort the present bank had made to control the Government, the distress it had wantonly produced … are but premonitions of the fate that awaits the American people should they be deluded into a perpetuation of this institution, or the establishment of another like it.”
- Andrew Jackson (Abolished the second national bank — Engraved on his tombstone: “I killed the bank!”)
“This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President [Wilson} signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill."
- Charles A. Lindbergh, Sr. , 1913
"Give me control of a nation's money and I care not who makes it's laws"
- Mayer Amschel Bauer Rothschild
"Whoever controls the volume of money in any country is absolute master of all industry and commerce."
- James A. Garfield, President of the United States
"If the American people ever allow private banks to control the issue of currency, first byinflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered."
- Thomas Jefferson
"The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies, all who question it's methods or throw light upon it's crimes. I have two great enemies, the Southern Army in front of me and the Bankers in the rear. Of the two, the one at my rear is my greatest foe.. corporations have been enthroned and an era of corruption in high places will follow, and the money powers of the country will endeavor to prolong it's reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed.
- Abraham Lincoln
A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."
- Woodrow Wilson (Instituted third national bank -- Federal Reserve)
"It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford
"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States"
- Sen. Barry Goldwater (Rep. AR)
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On government spending and debt:
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No pecuniary consideration is more urgent, than the regular redemption and discharge of the public debt: on none can delay be more injurious, or an economy of time more valuable.
- George Washington
"I will not go into an argument to prove that Congress has no power to appropriate this money as an act of charity. Every member on this floor knows it. We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right to appropriate a dollar of the public money."
- Colonel David Crockett (1786-1836) Frontiersman & Congressman:
"The sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection."
- John Stuart Mill
"Congress has not unlimited powers to provide for the general welfare but only those specifically enumerated."
-- Thomas Jefferson
"[T]he powers of the federal government are enumerated; it can only operate in certain cases; it has legislative powers on defined and limited objects, beyond which it cannot extend its
jurisdiction.”
- James Madison, Speech in the Virginia Ratifying Convention [June 6, 1788]
When the people find that they can vote themselves money, that will herald the end of the republic.
- Benjamin Franklin
“To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.”
- Thomas Jefferson
“I cannot find any authority in the Constitution for public charity. [To approve the measure] would be contrary to the letter and spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded.”
- President Franklin Pierce
“We still find the greedy hand of government thrusting itself into every corner and crevice of industry, and grasping at the spoil of the multitude. Invention is continually exercised to furnish new pretenses for revenue and taxation. It watches prosperity as its prey and permits none to escape without a tribute.”
- Thomas Paine
I believe there are more instances of the abridgement of freedom of the people by gradual and silent encroachments by those in power than by violent and sudden usurpations.
-James Madison