What is Money?

elohiym

New member
Hello elohiym! In the show, I roughly followed the outline of the OP, and so it might be easy for you to find the section in which I gave a simple overview of how fractional banking works. I expanded on this statement, that in the, "fractional banking system... lenders bring money into existence when making loans, and expunge the principal as it is repaid." Please feel free to tell me if you can identify anything I said about how fractional banking "actually works" that might be incorrect. I'd correct any error if I can be shown and convinced of it.

The part in bold is proved false by the fact that banks cannot increase an transaction account balance without first depositing money.

Think about what you are saying Bob. You've basically just repeated the banker's vague claim that they can create money out of thin air (tax free principle) that they get to loan out at interest. If if they could legally do that (they can't really), it would be completely immoral. Calling that rapacious usury would be a gross understatement.
 

Bob Enyart

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David Brumley, thanks for your email which I've just opened...

David Brumley, thanks for your email which I've just opened...

I emailed him asking...
Thanks David! As you wrote, "Dear Bob... Do you agree then by what your stating on your program means there are two sets of laws being applied? One for bankers and another for the common man like you and I?"

David, great questions. Of course, God gave multiple sets of rules, for various institutions. Families spank disrespectful children (not churches). Churches can excommunicate people for their greed (but governments can't). Governments can execute those convicted of a capital crime, but churches and parents cannot. Parents can do to their children things that businesses cannot do to their customers. Etc., etc.

But to your question specifically, no. Regarding a monetary system, I don't think there should be different laws for banks and for common people. But realize that banks are run by common people, or at least they should be. And the government should stay out of it and leave a more level playing field. Banks should have the right to issue their own money (as was common in American history) and happens today only with the Federal Reserve Bank. You David should have the right to issue transferable receipts for gold and silver that you may warehouse. Businesses (individuals or people working together, whether "banks" or not) should have the right to issue transferable certificates of shares of stock, as any bank should be able to do as currency. And you should be able to request payment for your goods and services in the currency of your preference. And thanks to technology, when needed but with an additional transaction cost, any of a great variety of currencies could be converted at current market values during a transaction.

David, does this answer demonstrate that I'm not arguing for an unjust imposition of two different sets of laws?

-Bob Enyart, KGOV.com
 
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Bob Enyart

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Staff member
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How could you ever possibly call a monarchist a supporter of the US Constitution? Just sayin'.
Granite, I'm not disputing your implication, but I'd like to ask, Would you call John Adams a supporter of the US Constitution?

-Bob Enyart, KGOV.com

p.s. Granite, I haven't looked this up, and I'm pulling this from memory from decades ago, but was it true that when Jefferson won the presidency, it was said that the monarchists had been defeated?
 

Bob Enyart

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elohiym, I think I did answer this question of yours...

elohiym, I think I did answer this question of yours...

Justin never answers the question: Can a bank increase a transaction account balance without first depositing money?

It's a very important question to answer if one is claiming that banks can legally create money out of thin air... Only God can create something from nothing.
elohiym, I address this exact question during the program and develop the answer, I think before you get half-way through the show. Just in case you're interested, because then you can attempt to show if my answer is flawed.

Also elohiym, I've just read your post #21 and it presents the same challenge. So I'll leave the above as my reply for now.

Thanks!
-Bob Enyart, KGOV.com
 

The Graphite

New member
And what do you think would happen if we reinstituted the gold standard? You would radically change the value of other people's property by that action! Exactly what you declare to be wrong. If you declared aluminum to be the monetary standard, everybody's collection of crushed soda cans would suddenly transform in value, wouldn't they?

There is no question in my mind that Bob does not truly understand how deposit expansion under a fractional reserve system actually works.
I certainly can't speak for Bob, but if you are able to demonstrate some form of credentials that you are an expert on the subject, perhaps Bob would consider debating you on his show? The fact that you're a TOL regular would certainly help your case if you wished to do so.

I emailed him asking how he came to that conclusion on Fractional Reserve Banking. One point I did ask him is if he is agreeing with the policy of two sets of rules, one for banks and one for us common man, cause we sure are not allowed to do what bankers get away with.
Not allowed? Are you sure?

If I carve and assemble an amazingly beautiful, high-quality chair, I could sell 100 of it for X units of money. Because they are rare and highly prized, their value would be relatively high, compared to ordinary furniture.

But, then, if I -- the creator of those original 100 chairs -- decided to make 1,000 more identical chairs, what would happen to the value of all of those first 100 chairs? Their value would drop. Is that wrong? Have I, the furniture-maker, no right to make additional chairs, because making more of them would (or at least might) devalue the existing chairs? You are the one suggesting that a banker does not have the same rights as you or I, in this respect. (And I say this as someone who detests the corruption in the Fed and the corruption that is ubiquitous in the banking industry.)

I am not convinced by Bob that the Fed should be allowed to exist and to print money as a private institution, although I understand his case. I heartily agree it should be audited! But, here again, I somewhat disagree with Bob, since I have enormous mistrust of the efficacy of such an audit if done - or even sponsored - by our existing system of government, since it is in collusion with the Fed to begin with and would only indict itself in the process. I do, however, completely agree with him that the idea of a mandatory gold standard is fallacious, and although not inherently immoral, is very ill-advised and has many negative consequences, as he explained.
 

elected4ever

New member
Ok, so e4e, I've been busy with personhood and haven't even been in my own forum lately, so what do I find when I come back, but a post by e4e. So, I thought I'd read until I got to three claims that were false even on their face (that is, without the need for argumentation to prove their wrong). So this is as far as I got (I haven't even read the rest of your post e4e):

1. Bob is a Marxist: I've always aggressively opposed communism, Karl Marx, and even socialism.

2. Bob doesn't believe in constitutional government: I've published a proposed constitution.

3. Bob believes in a religious dictatorship: In the proposed constitution I've published, there is no requirement that the leader of the government be a Christian or even a religious person, since that merely sets up a "religious test" for office which historically has the goal of improving government but which in reality has the effect of harming Religion.
Soe4e3so.

-Bob Enyart, KGOV.com
Fair enough, Bob. One thing I do like about you is that you are willing to defend yourself even when your opinion is wrong. Like you say, Do right and suffer the consequences.

1. Bob is a Marxist: I've always aggressively opposed communism, Karl Marx, and even socialism.
If that is so then why do you now support a monetary system that enables the socialist state even when the foundation of the socialist state is basted on a fraudulent monetary system not envisioned by the constitution?

2. Bob doesn't believe in constitutional government: I've published a proposed constitution.
We are not discussing your proposed constitution. Even dictators have a Constitution. I am speaking of our present constitution so this statement of yours holds no water. I have heard you say that you think this constitution is flawed. So I ask you, Bob, Does the constitution of the United States suborn fraud?

3. Bob believes in a religious dictatorship: In the proposed constitution I've published, there is no requirement that the leader of the government be a Christian or even a religious person, since that merely sets up a "religious test" for office which historically has the goal of improving government but which in reality has the effect of harming Religion.
Perhaps I should have said monarchist instead of dictatorship. The religious part is supposition on my part but if you don't support a religious monarch, that is ok but it is a one person rule beyound question. A strong dictatorial cental government which is in my estamation progressive or markist in nature.
 

drbrumley

Well-known member
drb, I do appreciate your humility in your request. All I found out in your posts though is that you disagree with my defense of fractional banking, but it would be helpful if you could try to rebut that defense. Then I'd have something to go on. As it stands now, all I would do is just repeat my defense, and that wouldn't get us anywhere. Any thoughts on that dbr?

-Bob Enyart, KGOV.com

Ok, thats fair.....all I have done is disagree. I shall work on a response.

p.s. drb, do you think it would have been better for me to stick with theology because I was in over my head on this economics show also: Bob Debates Neal Boortz on a Nat'l Sales Tax ? Neal is one of the national spokesmen for the Fair Tax movement, and I'm just a fundamentalist pastor. Any thoughts on this?

Actually Bob, I misspoke. The show you reference is one of my all time favorites. That along with the Eagle Eggs.
 

elected4ever

New member
The only money permitted by the Constitution of the United States is gold and silver coin. That coin can be domestic or foreign sense the congress has the power to regulate the value of each.

Article I - The Legislative Branch
Section 8 - Powers of Congress
Paragraph 5
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To coin money is to create the medium of exchange for the conduct of commerce. That,coined money shall have a value set by congress that will be common in all states and the value of foreign coin will also have a common value in all the several states set by congress.

What is a dollar? A dollar is a unite of measurement for what ever is used to define the currency of The Federal government. Its value and substance and the amount of that substance are specific, set into law by the congress of the United States by statute. No other branch of government or privet enterprise has this power and it cannot be delegated. The congress of the United States cannot delegate this constitutional responsibility to any bank or other privet or public enterprise without first amending the constitution. No such amendment has ever been passed. The stock market, Federal Reserve Bank or any other entity, not even the Supreme Court can change what a dollar is as for as weights and measurements is concerned.

You will also note that gold or silver are not mentioned here. Article 1' Section 8, paragraph 5 does not specify what it is that constitutes coining money.

Section 10 - Powers prohibited of States

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

The states cannot coin money because that is the exclusive obligation of the Congress of the United States and no state shall make any thing but gold or silver a tender of a payment of debt. If congress makes any thing other than gold or silver legal tender for all debt, it is unlawful for the state to use what ever that thing is as a payment for debt.

The federal government may not be on a gold and/or silver standard but the states are, constitutionally. No constitutional amendment exist that changes that.
 

Newman

New member
Definition of Money: In the 1990s here at Bob Enyart Live, I wrongly believed that justice required a return to the gold standard, whereby currency was formerly backed by reserves of precious metals. So years ago, you could bring a $10 gold certificate into a bank and receive a certain amount of gold. After studying and thinking about money for years, reading economic texts and reflecting on the Bible, asking questions of internationally renowned economists, I now know that money is not gold or silver. [Update: For clarification, the definition of money is not gold or silver (although they can be used as money). But rather...] money is more like a transferable IOU. Most accurately, money is the accounting of a transferable incomplete transaction. That is what money actually is.

Money is just a medium of exchange. No more, no less. Gold and silver have been the most successful and have been the most used as such.

http://wiki.mises.org/wiki/Money

Metal, Paper, Web: Back when technology did not exist to support a more effective and lower-cost accounting system, Bible cultures reasonably implemented metal-based money. Since no one can create gold, no one could "counterfeit" gold coins, and silver coins. Later, the printing press enabled the convenience of paper currency, and initially, gold was used to back the paper bills that people used to transact business. Eventually, we kept the paper, but dropped the gold backing. Today, many people live without spending much paper currency at all, and they use digital bank accounts and online transactions over the Internet that provide tremendous convenience which helps to grow the economy. The extraordinary benefit to the lives of millions of people from these conveniences outweigh the risks of counterfeits and deception. And finally, there's the phenomenon of cyber cash on the web which is used similarly but not backed by the federal reserve or any national bank, and it's value changes daily based on real-world market pressures expressed in cyberspace.

But even "digital dollars" could/should be back by the precious metal. Just because something is convenient doesn't mean it's reliable, stable, or sound. In fact, the opposite usually holds true.

Here's What Makes the Economy Function: God commands men to "serve one another" (Galatians 5:13). Men shipwrecked onto a deserted island would gradually build an economy as they served one another. And that economy would grow most quickly if these men were free, for the Bible says that, "liberty" provides the "opportunity... [to] serve one another." If they started to keep to themselves, and did not trade goods and services, their economy would sputter and die. So an economy thrives when men serve one another.

An economy could thrive without any serving attitude. Economies don't grow because people want to serve people, unfortunately. Economies grow when entrepreneurs, capitalists, and consumers combine to supply and demand new technology that makes our wants and necessities easier to come by, safer to use/consume, and with greater quality.

Money Is Properly Created By Fiat: If these shipwrecked men washed ashore on a deserted island that had no gold, still, they actually would create money, "by fiat," as they entered into agreements that created something like transferable IOUs. Thus in any nation, every time someone buys a car or a home, etc., on credit, they thereby commit themselves to years of hard work (or at least, to the obligation to pay off the loan), which commitment actually brings more money into existence.

This is hogwash. The natural currency that would arise would be something durable, portable, recognizable, valuable, and divisible, or the best approximation or mixture of such characteristics. It would also probably have other functions besides serving as a medium of exchange.

Fractional Banking Is Justifiable: Understanding how money actually functions justifies the modern world's fractional banking system, whereby lenders bring money into existence when making loans, and expunge the principal as it is repaid. God regulated Israel's system of debt, showing that debt is not inherently immoral, but can be good or bad, like fire. As to the particulars of America's Federal Reserve System, the Fed should be audited (it never is), and other methods of implementing money may surpass the benefit of America's current system. The proper way to judge a monetary standard is to evaluate it's effectiveness (accountability) and efficiency (low cost).

Fractional banking is theft. Central banks fail. Fiat currencies don't work. The Federal Reserve has failed at all of its stated goals.

I believe in the separation of the economy and the state.

Gold is Not the Gold Standard in Money: Requiring a gold standard inflates the value of gold by fiat. As a result there is an unnecessary redistribution of wealth by which various governments transfer wealth to other countries that happen to find gold on their land. This is how America ciphered manufactured goods from Europe in return for inflated gold, and then we demineralized our money, devaluing England's vaults.

Actually, gold is more valuable when it ISN'T legal tender. See the price of and demand for gold since Bretton-Woods.

Gold Does Not Have Intrinsic Value: Gold does not have intrinsic value but as with all valued items, its worth lies in the eye of the beholder. A wealthy nation dying of thirst would trade its gold for water.

This is true. A first for this post.

Gold Is Not For Hiding: Basing a nation's currency on gold results in building Fort Knox-like fortresses, hidden from view, and filling them up with gold to back the certificates that are issued. But God did not create gold to be dug up and then forever buried again, stored away from sight in underground vaults, which is an inefficient and extremely expensive way of implementing an accounting system, robbing that gold from its practical uses for technology and beauty.

I don't know about God's intentions for whether gold is above or below ground (he seems to have put it below ground first, before we did). I think that individuals, private banks and storers should be in charge of keeping gold, not a government.

My "today's resource": www.mises.org
 

elected4ever

New member
What is Money?

This is the show from Monday December 27th, 2010.

SUMMARY:

Definition of Money: In the 1990s here at Bob Enyart Live, I wrongly believed that justice required a return to the gold standard, whereby currency was formerly backed by reserves of precious metals. So years ago, you could bring a $10 gold certificate into a bank and receive a certain amount of gold. After studying and thinking about money for years, reading economic texts and reflecting on the Bible, asking questions of internationally renowned economists, I now know that money is not gold or silver. [Update: For clarification, the definition of money is not gold or silver (although they can be used as money). But rather...] money is more like a transferable IOU. Most accurately, money is the accounting of a transferable incomplete transaction. That is what money actually is.
Kansan economics is socialist. It is the median that funds the socialist agenda in America. According to scripture the borrower is servant to the lender. Next time I put my offering in the plate I will put my personal IOU in there and keep what money I have to my self. If I am ask about it I will just say I am good for it. Don't worry. If payment is demanded then maybe I will take some of your money and if you object I will send some goons after you to show you it is better for you to just give me your money voluntarily so I can pay my debt that I incurred. Church is a good cause and you should not complain that I took your money. If that doesn't work I will give you another IOU. You will never collect because I will never give you anything of value. You can save my IOU's and when you have enough then you can give them to Government Motors Corporation for that new Hy-Bred Chevy you wont. After all my IOU is money according to you.

Metal, Paper, Web: Back when technology did not exist to support a more effective and lower-cost accounting system, Bible cultures reasonably implemented metal-based money. Since no one can create gold, no one could "counterfeit" gold coins, and silver coins. Later, the printing press enabled the convenience of paper currency, and initially, gold was used to back the paper bills that people used to transact business. Eventually, we kept the paper, but dropped the gold backing. Today, many people live without spending much paper currency at all, and they use digital bank accounts and on line transactions over the Internet that provide tremendous convenience which helps to grow the economy. The extraordinary benefit to the lives of millions of people from these conveniences outweigh the risks of counterfeits and deception. And finally, there's the phenomenon of cyber cash on the web which is used similarly but not backed by the federal reserve or any national bank, and it's value changes daily based on real-world market pressures expressed in cyberspace.
Same as above but this time I will go high teck and use a computer. I can print my worthless IOUs faster that way. I will be a trillionare in no time. Bigger market.

Here's What Makes the Economy Function: God commands men to "serve one another" (Galatians 5:13). Men shipwrecked onto a deserted island would gradually build an economy as they served one another. And that economy would grow most quickly if these men were free, for the Bible says that, "liberty" provides the "opportunity... [to] serve one another." If they started to keep to themselves, and did not trade goods and services, their economy would sputter and die. So an economy thrives when men serve one another.
The economy would survive only if there were something of value to be exchanged. I would not trade my coconut for your sea shell. And not if you promised to go fishing and not yet gone fishing. I wont the fish and not the sea shell.

Money Is Properly Created By Fiat: If these shipwrecked men washed ashore on a deserted island that had no gold, still, they actually would create money, "by fiat," as they entered into agreements that created something like transferable IOUs. Thus in any nation, every time someone buys a car or a home, etc., on credit, they thereby commit themselves to years of hard work (or at least, to the obligation to pay off the loan), which commitment actually brings more money into existence.
There is no due date on a Federal Reserve Note. It is not even a legal IOU. It does not even offer any thing of value. It creates nothing of value. It obligates the Federal Reserve to nothing. It is not even the dollar it purports to be. It is a total fraud

Fractional Banking Is Justifiable: Understanding how money actually functions justifies the modern world's fractional banking system, whereby lenders bring money into existence when making loans, and expunge the principal as it is repaid. God regulated Israel's system of debt, showing that debt is not inherently immoral, but can be good or bad, like fire. As to the particulars of America's Federal Reserve System, the Fed should be audited (it never is), and other methods of implementing money may surpass the benefit of America's current system. The proper way to judge a monetary standard is to evaluate it's effectiveness (accountability) and efficiency (low cost).
The Federal Reserve Note is not a dollar in Federal statute and congress has never stated that it is in any federal law.

Gold is Not the Gold Standard in Money: Requiring a gold standard inflates the value of gold by fiat. As a result there is an unnecessary redistribution of wealth by which various governments transfer wealth to other countries that happen to find gold on their land. This is how America ciphered manufactured goods from Europe in return for inflated gold, and then we demineralized our money, devaluing England's vaults.
It does not inflate the value of Gold but offers a value in relationship to another good or service. The Higher value of gold in relationship to the Federal Federal Reserve Note shows the worthlessness of the Federal Reserve Note.

To Days gold -------1403 Federal Reserve Notes per oz. According to law a 1 oz. $50 double eagle bullion coin if used as currency is worth $50 Dollars. If used as a collectible is worth more like 1500 Federal Reserve notes. So a Dollar according to Federal law is 1/50 0f an oz of gold or about 30 Federal Reserve notes.

To days Silver ------- 30 Federal Reserve Notes per oz According to law 1 standing liberty 1 dollar billion coin if used as currency is $1 and if used as a collectible is worth more like 35 Federal Reserve Notes.

The Federal Reserve Notes are becoming less and less stable and more and more valueless as time goes by. It is not that what you buy is becoming more and more expensive as time goes by but what you buy with is becoming worth less and less. So you have it backward Bob. The amount of Gold and silver has not changed but what is used to by it with because of the fiat money of the Federal Reserve and the socialist agenda of our federal government. It is not China that is killing this nation. It is us and the progressive socialist monetary system of the corrupt federal System. The lawful dollar is becoming more and more valuable and that which fraudulently stands in its place, the fiat money, is driving us to rune.


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elohiym

New member
I certainly can't speak for Bob, but if you are able to demonstrate some form of credentials that you are an expert on the subject, perhaps Bob would consider debating you on his show?

There are two problems with your proposal:

1. I have no interest in debating whether or not a bank liability is money. It is indisputable that a bank liability is not money but owing money. Debate over.

2. Bob does not have the credentials he would need to have for me to enter into a debate with him on this subject. However, if Bob can find a bank president who will debate me on his show, and I can remain anonymous, and if the show is live, I would seriously consider the offer. Although, any bank president stupid enough to enter into a public debate with me would end up in jail if he actually answered all my questions truthfully.

Not allowed? Are you sure?

Neither you nor the banks are allowed to do what they are doing. If you understood what they were actually doing (I provided a brief explanation on this thread), you would have to agree.

I am not convinced by Bob that the Fed should be allowed to exist and to print money as a private institution...

Relatively little currency is even printed. The problem is what the national and state banks are doing through deposit expansion.

I do, however, completely agree with him that the idea of a mandatory gold standard is fallacious, and although not inherently immoral, is very ill-advised and has many negative consequences, as he explained.

That may be, but it's not either or. The current system of deposit expansion is inherently immoral, and we are presently experiencing the many negative consequences it has brought us.
 
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elohiym

New member
Hello elohiym!

Hi Bob!

Thanks for addressing my comments. I want to first thank you for your consistent vocal opposition to abortion and for your tireless effort fighting for the personhood of the unborn. You have my respect and admiration.

Please feel free to tell me if you can identify anything I said about how fractional banking "actually works" that might be incorrect. I'd correct any error if I can be shown and convinced of it.

I already mentioned that the claim "lenders bring money into existence when making loans" is proven false by the fact banks cannot increase transaction account balances without first depositing money.

...I address this exact question during the program and develop the answer, I think before you get half-way through the show. Just in case you're interested, because then you can attempt to show if my answer is flawed.

I listened to the entire show. While I can see how you have reasonably come to some of your conclusions, there were a few positions you have taken that disturbed me, and I hope to address them (if my time permits) on this thread or in a lengthy OP on another thread. A casual TOL one-on-one discussion (not debate) without time pressure would be my preference, if you are interested, keeping in mind that we are both very busy.

As to you addressing my question regarding a banks ability to increase a transaction account balance without first depositing money, you really did not answer or develop that in your show. You claimed that banks have a license to print money, but that's simply not true and you didn't offer any evidence to support your claim or explain the substance of how that's possible.

I'm sure you will agree that a bank will not increase your checking account balance without receiving a deposit from you. A checking account balance is a bank liability. A bank liability shows that the bank owes someone money. In the case of your checking account, it shows the bank owes you on demand what you deposited. The money you deposited becomes an asset on the banks books, and the liability shows they owe you the money.

To claim that a bank can increase a transaction account balance without first depositing money is to claim that a bank can create a liability on its books without having a matching asset. It is claiming that only the bank liability increases without an offsetting asset increasing. That defies logic, Bob. Consider the substance of the bank "loan":

"What [banks] do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise..." Modern Money Mechanics: A Workbook on Bank Reserves and Deposit Expansion, Federal Reserve Bank of Chicago​

The asset is the money the bank deposited; and having received that money from the borrower (in the form of a promissory note), the bank's liabilities increase showing that bank owes the value of the promissory note to the borrower. That's simply an indisputable fact. Therefore, the bank is not really creating money at all, but actually receiving money from the borrower (promissory note) and recording it (in substance) as a loan from the borrower to the bank. In form the transaction is called a "loan" from the bank to the borrower.

Do you agree?

Also elohiym, I've just read your post #21 and it presents the same challenge.

Did you read and understand post #18? I think if you consider it from a contract law perspective you might agree that banks do not have a license to do what they are doing. Shall I develop that post further to attempt to convince you?
 

Granite

New member
Hall of Fame
Granite, I'm not disputing your implication, but I'd like to ask, Would you call John Adams a supporter of the US Constitution?

I would indeed. I'd also say that there's a galaxy of difference between yourself and Mr. Adams, so don't bother pulling that stunt. Adams eventually saw the wisdom of a representative republic, albeit reluctantly (calling himself a "mortal and irreconcilable enemy to monarchy" pretty much sums it up). You do not, and do not support the Constitution of your own nation. End of story.

p.s. Granite, I haven't looked this up, and I'm pulling this from memory from decades ago, but was it true that when Jefferson won the presidency, it was said that the monarchists had been defeated?

I'm not familiar with this saying at all so either I haven't run into it or your memory doesn't serve. Doesn't change the fact that the comparison you're attempting is feeble, misleading, and inaccurate.
 

Granite

New member
Hall of Fame
Bob doesn't believe in constitutional government: I've published a proposed constitution.

Yet you removed it from the web (at least it was gone from the Shadow Gov site last time I checked). Why?
 

Granite

New member
Hall of Fame
So years ago, you could bring a $10 gold certificate into a bank and receive a certain amount of gold.

Yes, exactly; you could hold your government and banks to their word, and limit the power of both.

Since no one can create gold, no one could "counterfeit" gold coins, and silver coins.

Technically incorrect; you could indeed counterfeit them both (ever see somebody in a period piece bite a coin after being handed one? There's a reason for that).

Later, the printing press enabled the convenience of paper currency, and initially, gold was used to back the paper bills that people used to transact business.

The Chinese developed paper currency centuries before the printing press was invented, FYI.

Eventually, we kept the paper, but dropped the gold backing. Today, many people live without spending much paper currency at all, and they use digital bank accounts and online transactions over the Internet that provide tremendous convenience which helps to grow the economy.

I don't need to actually say that making a system convenient does not make it sane, reasonable, honest, transparent, or stable, right?

The extraordinary benefit to the lives of millions of people from these conveniences outweigh the risks of counterfeits and deception.

...or abuse. Or unstable markets. Or hyperinflation. Or corruption within the system that's allowed to print cash on demand as it sees fit without much if any oversight.

Understanding how money actually functions justifies the modern world's fractional banking system, whereby lenders bring money into existence when making loans, and expunge the principal as it is repaid.

Fractional reserve banking is nothing more than legalized fraud on a global basis. Throughout history, man has been trained to serve one class of people: bankers. There's a reason for that: the system is designed to enslave and indebt all but the powers that be.

As to the particulars of America's Federal Reserve System, the Fed should be audited (it never is), and other methods of implementing money may surpass the benefit of America's current system.

I'd suggest The Creature From Jekyll Island if one were to be interested in the "particulars" of the Fed.


This is how America ciphered manufactured goods from Europe in return for inflated gold, and then we demineralized our money, devaluing England's vaults.

Are you actually trying to say "no fair" to a system that's endured for thousands of years?:think:

Gold does not have intrinsic value but as with all valued items, its worth lies in the eye of the beholder. A wealthy nation dying of thirst would trade its gold for water.

True...

Basing a nation's currency on gold results in building Fort Knox-like fortresses, hidden from view, and filling them up with gold to back the certificates that are issued.

Yes. What of it?
 

Stripe

Teenage Adaptive Ninja Turtle
LIFETIME MEMBER
Hall of Fame
Just a question for Elo - Is it possible that fractional banking, while not inherently evil, has had many men use it for ill-gotten gain?

Is there any way in which fractional banking would work if people were not so corrupt?
 

elohiym

New member
Just a question for Elo - Is it possible that fractional banking, while not inherently evil, has had many men use it for ill-gotten gain?

It was created by evil men to use for ill-gotten gain, and is inherently evil. It is also immoral (contrary to law).

Is there any way in which fractional banking would work if people were not so corrupt?

No.
 

elohiym

New member

1. Monopolies are inherently evil and immoral.

2. It is inherently unstable.

3. It always results in economic slavery.

Do we really need any more reasons?

Is it not men that make evil rather than an economic system?

The two are inextricably tied together in this case. It is a system created by evil men designed to commit evil deeds.
 
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