What Mr. WhoRU wrote that Mr. Vieira purports to comment on:
[1] I have fairly well addressed this myth above but I hear this claim quite often and I challenge anyone who makes this claim to set forth a detailed explanation of the means whereby the Fed has any ability to cause Federal Reserve Notes to enter circulation in any other way other than as the principal to fund borrowers' loans. The flip side of this myth is that the Fed also pulls money out of circulation to cause recessions. Both of these myths are FALSE!
[2] The Fed facilitates the addition of FRNs by lending to qualified borrowers during a boom cycle; FRNs are removed from circulation as borrowers make payments on their loans, this causes the recessions or bust cycles. These are normal occurrences under a privately owned closed end money system and although the Fed does adjust interest rates to speed up or retard the economic surges, the Fed has no ability to directly add or remove money from circulation.
[3] The boom and bust cycles could/would be totally eliminated if the Fed ownership was assumed by the people of the United States and then, under the new ownership, all interest collected on loans would be credited to the Federal Treasury and to all state, county and municipal treasuries, thus allowing the entire elimination of all taxation in the entire Federation.
[4] The Federal Reserve should not be totally eliminated but should be kept in operation pretty much as it is now, with just the simple changes I have delineated in the previous paragraphs!
[5] Opponents of a Central Bank point out that the Federal Reserve is the fourth or fifth central bank that the United States has been cursed with - this may very well be true so why does the United States continue this cycle of implementing and rejecting a central bank?? Isn't it about time that we recognized that as long as there are greedy humans around and our Federation is functioning on a gold coin money system that there will always be those pushing and manipulating things to impose another privately owned paper money closed ended central bank - if we were to impose a publicly owned open ended central bank then that would make it impossible for the greedy would be banksters to impose their own privately owned closed end bank.
(6) When are we going to come to a realization that it is not paper money that is the problem and it is not the creation of money to fund loans that is the problem but rather, it is the charging of interest on loans made in a privately owned closed end system that is the cause of all of our economic ills?
[7] When are we going to come to a realization that if we were to somehow go to a 100% gold coin money system in 2006 or 2007 or 2008 or whenever, it would be inevitable that the money changers who currently own vast hoards of gold, would still be in a position to implement their dirty little boom and bust cycles? How could we expect otherwise?? Would not the moneychangers then lend their privately owned gold into circulation?? Would the lenders not charge interest on their gold lent to borrowers? And just exactly where would the borrowers get the additional gold coins to pay the interest? I suggest that you go up above and reread the paragraphs in Myth FOUR, where I describe in considerable detail the evil way that interest on loans made in a closed end lending system causes boom and bust cycles and inevitable foreclosures no matter whether the money be paper or gold.
When I present this plan I am always besieged with arguments that gold to pay the interest on borrowed gold is available from other sources, that there is still more gold "out there" in nature, just waiting for borrowers of gold to go pick up off the ground to use to pay the interest on the gold they have borrowed at interest - and yes, I suppose a lot of that gold "out there" is already coined up just laying on the ground waiting and ready to just be picked up and presented to the gold lenders - yes, I am sure - at least in the wild dreams of those who fail to think!
[9] But, yes, there is some considerable quantity of gold coin in thousands of smaller private caches which the owners thereof will be able to spend into circulation without borrowing at interest, so those who do borrow gold at interest will be able to use this from these smaller private caches as a source of gold to make the gold coin interest payments on their gold loans - yes, that is certainly true - and how long will that gold last?? How long will it be before the gold lending Banksters become the owners of all those smaller caches of gold? And then we will be right back where we are now - except even worse, because with a 100% gold system there will be a natural limitation on how much gold there is to be lent to qualified borrowers so that many otherwise qualified borrowers will not be able to obtain the funding necessary to finance their entrepreneurial endeavors, thus effectively stifling economic growth! And what do you suppose that would do to the interest rates charged on the lent gold?
End of Mr. WhoRU's Myth Eight
Mr. Vieira's critical commentary on Myth Eight: FALSE Myth # EIGHT - The Fed just prints money and pumps it into circulation. Mr. Vieira wrote: 8 [1] This is largely a rehash of Myth No. 1. Mr. WhoRU appears to add a new point that "it is not the creation of money to fund loans that is the problem but rather, it is the charging of interest on loans made in a privately owned closed end system that is the cause of our economic ills" [2] Unfortunately, Mr. WhoRU does not describe how his "public central bank" would correct the situation (other than being public, rather than private). Presumably, it would still engage in "the creation of money to fund loans". Would it not charge any interest? Or is "interest" bad only when private parties charge it, but permissible for politicians and the special-interest groups that pull their strings? Presumably, too, Mr. WhoRU' "public central bank" would not be a "closed end system", But he concedes that the present private system is not really a "closed end system". So wherein will the difference lie? Will the "public central bank" make loans to anyone and everyone, in whatever amounts they desire? Will the "public central bank" loan the currency necessary to repay not only the principal but also the "interest" on these loans? Will the "public central bank" collect its operating revenues by foreclosures? (It will, after all, have numerous expenditures, and should not---at least according to Mr. WhoRU---be subsidized by taxation.) But why should there ever be foreclosures, when the "public central bank" can lend more currency to defaulting debtors, and perhaps even without charging any interest? And, without foreclosures that result in the transfer of property from borrowers to the "public central bank", where will the "public central bank" derive the ostensible "profits" to plow into operating capital? [3] Mr. WhoRU contends that, even under "100% gold coin money system *** it would be inevitable that the money changers who currently own vast hoards of gold, would still be in a position to implement their dirty little boom and bust cycle". To support this assertion, however, Mr. WhoRU will first have to study the Austrian theory of the business cycle, and then demonstrate that, absent "monetization" of debt and bank credit-expansion, such cycles can reasonably be predicted to occur. He might also consider why it was, throughout modern financial history, that "the money changers" have worked assiduously alongside politicians to eliminate the 100'/o silver and gold coin standard in favor of "monetization" of debt and central bank credit-expansion. Have they perhaps known something of which Mr. WhoRU is ignorant? Mr. WhoRU's rebuttal to Mr. Vieira's Continuing String of Concocted Strawmen and Outright Lying Commentary:
Mr. Vieira's critical commentary on Myth Eight:
FALSE Myth # EIGHT -
The Fed just prints money and pumps it into circulation.
Mr. Vieira wrote:
8 [1] This is largely a rehash of Myth No. 1. Mr. WhoRU appears to add a new point that "it is not the creation of money to fund loans that is the problem but rather, it is the charging of interest on loans made in a privately owned closed end system that is the cause of our economic ills"
[2] Unfortunately, Mr. WhoRU does not describe how his "public central bank" would correct the situation (other than being public, rather than private). Presumably, it would still engage in "the creation of money to fund loans". Would it not charge any interest? Or is "interest" bad only when private parties charge it, but permissible for politicians and the special-interest groups that pull their strings? Presumably, too, Mr. WhoRU' "public central bank" would not be a "closed end system", But he concedes that the present private system is not really a "closed end system". So wherein will the difference lie? Will the "public central bank" make loans to anyone and everyone, in whatever amounts they desire? Will the "public central bank" loan the currency necessary to repay not only the principal but also the "interest" on these loans? Will the "public central bank" collect its operating revenues by foreclosures? (It will, after all, have numerous expenditures, and should not---at least according to Mr. WhoRU---be subsidized by taxation.) But why should there ever be foreclosures, when the "public central bank" can lend more currency to defaulting debtors, and perhaps even without charging any interest? And, without foreclosures that result in the transfer of property from borrowers to the "public central bank", where will the "public central bank" derive the ostensible "profits" to plow into operating capital?
[3] Mr. WhoRU contends that, even under "100% gold coin money system *** it would be inevitable that the money changers who currently own vast hoards of gold, would still be in a position to implement their dirty little boom and bust cycle". To support this assertion, however, Mr. WhoRU will first have to study the Austrian theory of the business cycle, and then demonstrate that, absent "monetization" of debt and bank credit-expansion, such cycles can reasonably be predicted to occur. He might also consider why it was, throughout modern financial history, that "the money changers" have worked assiduously alongside politicians to eliminate the 100'/o silver and gold coin standard in favor of "monetization" of debt and central bank credit-expansion. Have they perhaps known something of which Mr. WhoRU is ignorant?
Mr. WhoRU's rebuttal to Mr. Vieira's Continuing String of Concocted Strawmen and Outright Lying Commentary:
In his commentary above, Mr. Vieira states in the first paragraph thereof: In his first paragraph Mr. Vieira states that what I present in Myth 8 is a rehash of Myth 1, in which I addressed the creation of money out of this air and only that issue - Myth 8 addresses the claim that the Fed has some ability to pump money into and remove money out of the economy. These are two entirely separate issues, however Mr. Vieira, in his fruitless pursuit of error in my writing, must create error or confusion where none exists. As to my "adding a new point", being, according to Mr. Vieira, " the charging of interest on loans made in a privately owned closed end system" - this is certainly not a new point in this writing as it has been a major point throughout the writing, as the lying Mr. Vieira very well knows; but I do want to place emphasis on the fact that it is the "closed end" aspect of the current system that causes the interest to be a major problem! It is not the interest, in and of itself, that is the problem with out current system, but rather, the fact that in a privately owned closed end money system there is no source of money in circulation for borrowers to use to pay the interest on their loans other than money that originated into circulation as the principal of some borrower's loan! When the money that originated into circulation as principal money to fund borrower "A's" loan is used by borrower "B" for the purpose of paying the interest on borrower "B's" loan - then that reduces the circulating supply of principal money below the total owed by both borrowers (all borrowers), which causes the imbalance complained of by the Austrian economists, which then brings on the bust cycle and the profit taking foreclosures! In his commentary above, Mr. Vieira states in the second paragraph thereof: " [2] Unfortunately, Mr. WhoRU does not describe how his "public central bank" would correct the situation (other than being public, rather than private). Presumably, it would still engage in "the creation of money to fund loans". Would it not charge any interest? Or is "interest" bad only when private parties charge it, but permissible for politicians and the special-interest groups that pull their strings? Presumably, too, Mr. WhoRU' "public central bank" would not be a "closed end system", But he concedes that the present private system is not really a "closed end system". So wherein will the difference lie? Will the "public central bank" make loans to anyone and everyone, in whatever amounts they desire? Will the "public central bank" loan the currency necessary to repay not only the principal but also the "interest" on these loans? Will the "public central bank" collect its operating revenues by foreclosures? (It will, after all, have numerous expenditures, and should not---at least according to Mr. WhoRU---be subsidized by taxation.) But why should there ever be foreclosures, when the "public central bank" can lend more currency to defaulting debtors, and perhaps even without charging any interest? And, without foreclosures that result in the transfer of property from borrowers to the "public central bank", where will the "public central bank" derive the ostensible "profits" to plow into operating capital? " Mr. WhoRU's response: I have quite thoroughly addressed there issues herein above but Mr. Vieira seems to ascribe to the theory that a lie, told often enough, will be finally accepted as truth, and the bigger the lie and the more often it is told then quite often will it be even easier to sell, especially to those people who are not well versed in the subject matter - unfortunately for Mr. Vieira, I happen to be the foremost expert on these issues, on the entire planet - now let Mr. Vieira have a hay day with that claim!! In his first paragraph Mr. Vieira first erroneously states: Mr. WhoRU responds: Mr. Vieira claims I have not explained how a "public central bank" would correct the situation, the situation being the "ills" caused, "...by the charging of interest on loans made in a privately owned closed end system ...". In my explanation of Myth #4 I wrote that under a publicly owned central bank the interest collected on loans made to private sector borrowers would be credited to the Federal Treasury and that such crediting would put an end to the boom and bust cycles. I did not therein explain what the government would do with that money because I expect that anyone with enough interest to read my paper would already know what the government would do with that money - the government would do that which it has proven itself to be most proficient at - the government would spend it, Mr. Vieira, what do you think the government would do with the money? So how would that help the situation - cure the "ills", because, as I also explained in paragraph three of Myth Eight, and it would put and end to the closed end lending system by opening up a source from where private sector borrowers could obtain a re-circulated source of money to pay the interest on their loans without using other borrowers circulating principal money. This recirculation of the interest money (by government spending of the interest charged on loans to the private sector borrowers back into circulation), would put an end to the imbalance in the circulating money supply inherent in every closed end privately owned lending system no matter what is used as money, whether the money be paper or gold coins, the imbalance caused because of the closed end aspect of a privately owned money lending system!! The imbalance (being the lack of a circulating supply of money sufficient to balance the total loan obligations of all borrowers), is as much an inherent aspect of a privately owned closed ended money system as is wetness an inherent aspect of water! In his first paragraph Mr. Vieira further correctly presumes but superciliously asks: "Presumably, it would still engage in "the creation of money to fund loans". Would it not charge any interest? Or is "interest" bad only when private parties charge it, but permissible for politicians and the special-interest groups that pull their strings? " Mr. WhoRU responds: Yes, Mr. Vieira, the publicly owned central bank would still create money to fund loans, but only to borrowers in the private sector - the government would be prohibited from borrowing money from the central bank, and of course, as I have already mentioned several times, the central bank would charge interest on such loans, and, as I have repeatedly stated, this interest would be credited to government treasuries to fund government thereby allowing the phasing out of all taxation (armed robbery). Mr. Vieira's silly suppositions and inane presumptions only serve to illustrate and illuminate Mr. Vieira's viciousness. Under the operating system I have devised there would be as little possibility of special interest group access to or influence over the distribution of the public's money as can be devised with humans involved, but there is no doubt that there will always be unscrupulous individuals who will engage the services of dishonest men, to attempt to worm their way into access to the public's money. In his first paragraph Mr. Vieira further erroneously presumes and asks: " Presumably, too, Mr. WhoRU's "public central bank" would not be a "closed end system", But he concedes that the present private system is not really a "closed end system". So wherein will the difference lie? " Mr. WhoRU responds: Yes, the publicly owned central bank would most certainly be open ended, "open ended" means the interest charged on loans to private sector borrowers would be quickly spent back into circulation, restoring the circulating supply, eliminating the imbalance caused under the current privately owned closed end system. Here again, Mr. Vieira trots out his often repeated self generated misrepresentation, wherein Mr. Vieira wrongly contends that I have somewhere conceded that the current privately owned closed end system is not closed ended; once more, I have never ever suggested any such thing, I have always steadfastly maintained that under private ownership, a money system will always be closed ended, just as water will always be wet, and as lawyers will, inevitably, play fast and loose with the truth!! So, Mr. Vieira, that is where the difference will be, in that, under public ownership, the interest collected on private sector loans will be re-circulated into the system, thus maintaining a balance in the circulating money supply, between the amount of money in circulation and the total obligation of all borrowers; putting an end to the shrinkage of the circulating supply which is the cause of the "bust" cycles and sets the stage for the profit taking foreclosures - all of this evil will cease, under this solution, and, all armed robbery ("taxation") could be phased out! In his first paragraph Mr. Vieira once more superciliously asks: "Will the "public central bank" make loans to anyone and everyone, in whatever amounts they desire? " No, Mr. Vieira, the central bank will not make loans to anyone or everyone, all prospective borrowers will be required to demonstrate a high level of moral character and financial responsibility. All lending will be screened as is currently done. The general public will not even be aware of the change, other than they will no longer be required to submit to armed robbery to fund the government. In his first paragraph Mr. Vieira further superciliously asks: " Will the "public central bank" loan the currency necessary to repay not only the principal but also the "interest" on these loans? Mr. WhoRU's response:
In his first paragraph Mr. Vieira states that what I present in Myth 8 is a rehash of Myth 1, in which I addressed the creation of money out of this air and only that issue - Myth 8 addresses the claim that the Fed has some ability to pump money into and remove money out of the economy. These are two entirely separate issues, however Mr. Vieira, in his fruitless pursuit of error in my writing, must create error or confusion where none exists.
As to my "adding a new point", being, according to Mr. Vieira, " the charging of interest on loans made in a privately owned closed end system" - this is certainly not a new point in this writing as it has been a major point throughout the writing, as the lying Mr. Vieira very well knows; but I do want to place emphasis on the fact that it is the "closed end" aspect of the current system that causes the interest to be a major problem! It is not the interest, in and of itself, that is the problem with out current system, but rather, the fact that in a privately owned closed end money system there is no source of money in circulation for borrowers to use to pay the interest on their loans other than money that originated into circulation as the principal of some borrower's loan!
When the money that originated into circulation as principal money to fund borrower "A's" loan is used by borrower "B" for the purpose of paying the interest on borrower "B's" loan - then that reduces the circulating supply of principal money below the total owed by both borrowers (all borrowers), which causes the imbalance complained of by the Austrian economists, which then brings on the bust cycle and the profit taking foreclosures!
In his commentary above, Mr. Vieira states in the second paragraph thereof:
" [2] Unfortunately, Mr. WhoRU does not describe how his "public central bank" would correct the situation (other than being public, rather than private). Presumably, it would still engage in "the creation of money to fund loans". Would it not charge any interest? Or is "interest" bad only when private parties charge it, but permissible for politicians and the special-interest groups that pull their strings? Presumably, too, Mr. WhoRU' "public central bank" would not be a "closed end system", But he concedes that the present private system is not really a "closed end system". So wherein will the difference lie? Will the "public central bank" make loans to anyone and everyone, in whatever amounts they desire? Will the "public central bank" loan the currency necessary to repay not only the principal but also the "interest" on these loans? Will the "public central bank" collect its operating revenues by foreclosures? (It will, after all, have numerous expenditures, and should not---at least according to Mr. WhoRU---be subsidized by taxation.) But why should there ever be foreclosures, when the "public central bank" can lend more currency to defaulting debtors, and perhaps even without charging any interest? And, without foreclosures that result in the transfer of property from borrowers to the "public central bank", where will the "public central bank" derive the ostensible "profits" to plow into operating capital? "
Mr. WhoRU's response:
I have quite thoroughly addressed there issues herein above but Mr. Vieira seems to ascribe to the theory that a lie, told often enough, will be finally accepted as truth, and the bigger the lie and the more often it is told then quite often will it be even easier to sell, especially to those people who are not well versed in the subject matter - unfortunately for Mr. Vieira, I happen to be the foremost expert on these issues, on the entire planet - now let Mr. Vieira have a hay day with that claim!!
In his first paragraph Mr. Vieira first erroneously states:
Mr. WhoRU responds:
Mr. Vieira claims I have not explained how a "public central bank" would correct the situation, the situation being the "ills" caused, "...by the charging of interest on loans made in a privately owned closed end system ...". In my explanation of Myth #4 I wrote that under a publicly owned central bank the interest collected on loans made to private sector borrowers would be credited to the Federal Treasury and that such crediting would put an end to the boom and bust cycles. I did not therein explain what the government would do with that money because I expect that anyone with enough interest to read my paper would already know what the government would do with that money - the government would do that which it has proven itself to be most proficient at - the government would spend it, Mr. Vieira, what do you think the government would do with the money?
So how would that help the situation - cure the "ills", because, as I also explained in paragraph three of Myth Eight, and it would put and end to the closed end lending system by opening up a source from where private sector borrowers could obtain a re-circulated source of money to pay the interest on their loans without using other borrowers circulating principal money. This recirculation of the interest money (by government spending of the interest charged on loans to the private sector borrowers back into circulation), would put an end to the imbalance in the circulating money supply inherent in every closed end privately owned lending system no matter what is used as money, whether the money be paper or gold coins, the imbalance caused because of the closed end aspect of a privately owned money lending system!! The imbalance (being the lack of a circulating supply of money sufficient to balance the total loan obligations of all borrowers), is as much an inherent aspect of a privately owned closed ended money system as is wetness an inherent aspect of water!
In his first paragraph Mr. Vieira further correctly presumes but superciliously asks:
Yes, Mr. Vieira, the publicly owned central bank would still create money to fund loans, but only to borrowers in the private sector - the government would be prohibited from borrowing money from the central bank, and of course, as I have already mentioned several times, the central bank would charge interest on such loans, and, as I have repeatedly stated, this interest would be credited to government treasuries to fund government thereby allowing the phasing out of all taxation (armed robbery).
Mr. Vieira's silly suppositions and inane presumptions only serve to illustrate and illuminate Mr. Vieira's viciousness. Under the operating system I have devised there would be as little possibility of special interest group access to or influence over the distribution of the public's money as can be devised with humans involved, but there is no doubt that there will always be unscrupulous individuals who will engage the services of dishonest men, to attempt to worm their way into access to the public's money.
In his first paragraph Mr. Vieira further erroneously presumes and asks:
Yes, the publicly owned central bank would most certainly be open ended, "open ended" means the interest charged on loans to private sector borrowers would be quickly spent back into circulation, restoring the circulating supply, eliminating the imbalance caused under the current privately owned closed end system. Here again, Mr. Vieira trots out his often repeated self generated misrepresentation, wherein Mr. Vieira wrongly contends that I have somewhere conceded that the current privately owned closed end system is not closed ended; once more, I have never ever suggested any such thing, I have always steadfastly maintained that under private ownership, a money system will always be closed ended, just as water will always be wet, and as lawyers will, inevitably, play fast and loose with the truth!!
So, Mr. Vieira, that is where the difference will be, in that, under public ownership, the interest collected on private sector loans will be re-circulated into the system, thus maintaining a balance in the circulating money supply, between the amount of money in circulation and the total obligation of all borrowers; putting an end to the shrinkage of the circulating supply which is the cause of the "bust" cycles and sets the stage for the profit taking foreclosures - all of this evil will cease, under this solution, and, all armed robbery ("taxation") could be phased out!
In his first paragraph Mr. Vieira once more superciliously asks:
"Will the "public central bank" make loans to anyone and everyone, in whatever amounts they desire?
No, Mr. Vieira, the central bank will not make loans to anyone or everyone, all prospective borrowers will be required to demonstrate a high level of moral character and financial responsibility. All lending will be screened as is currently done. The general public will not even be aware of the change, other than they will no longer be required to submit to armed robbery to fund the government.
In his first paragraph Mr. Vieira further superciliously asks:
" Will the "public central bank" loan the currency necessary to repay not only the principal but also the "interest" on these loans?
Yes, Mr. Vieira, just as soon as lawyers begin to tell the truth and right along with the dispensing of dry water - such asinine suppositions hardly call for any response but due to the fact that you, Mr. Vieira, are counting on the alphabet soup appended to the end of your name to mesmerize readers into the acceptance of your idiocy, while I, with only an eight grade pubic fool system indoctrination, must respond to your gibberish, silly point by idiotic lying silly point!
As you well know, Mr. Vieira, there is no possible reasonably honest mechanism whereby a lender can loan currency into circulation for the purpose of borrowers to use to pay the interest on the loans they take out, and, moreover, as you also are very much aware, the reason lenders lend money is so that they can collect interest - and this does not constitute any acknowledgment on my part that such interest, in and of itself, constitutes a profit to the lender in a privately owned closed ended money system!
In his first paragraph Mr. Vieira further superciliously asks and purports:
No, Mr. Vieira, there will be virtually no foreclosures under this publicly owned central bank because the imbalance in the circulating money supply which is the cause of the foreclosures under the current privately owned closed end central bank will be overcome when the government spends the collected interest back into the circulating supply. But to address your first silly question, the operating expenses of the central bank and all of its local branches, will be derived from the interest collected on loans made to private sector borrowers.
"But why should there ever be foreclosures, when the "public central bank" can lend more currency to defaulting debtors, and perhaps even without charging any interest?
As I have already stated herein above, there will be virtually no foreclosures under this reorganization of the central bank, but I must make a comment of the repeated asininity of your supposition that the publicly owned central bank would lend more money to borrowers merely for the purpose of providing such borrowers with the ability to pay their loan payments, and/or, that the central bank would loan money without charging interest. All you really accomplish with such inane hogwash Mr. Vieira, is to magnify the exposure of your determination to manufacture defects in this Solution where there are none.
" And, without foreclosures that result in the transfer of property from borrowers to the "public central bank", where will the "public central bank" derive the ostensible "profits" to plow into operating capital?"
As I contend you well know Me. Vieira, it is because of the closed end aspect of the privately owned central bank that establishes the only means by which the privately owned central bank must take its profits - being through foreclosures. As the publicly owned central bank is open ended, foreclosures and boom and bust cycles will be a thing of the past. Under an open ended central bank, the interest charged on loans to private sector borrowers will truly be a profit to the publicly owned central bank. Operating capital for the operation of the central bank will consume just a small portion of the interest profits that will accrue under the open-ended public ownership of the central bank. The vast majority of the interest profits will be distributed to all levels of government for the purpose of providing the funding of all government programs, enabling the gradual (but total) elimination of all taxation in the entire Federation!
In his commentary above, Mr. Vieira states in the third paragraph thereof, in relevant part:
[3] Mr. WhoRU contends that, even under "100% gold coin money system *** it would be inevitable that the money changers who currently own vast hoards of gold, would still be in a position to implement their dirty little boom and bust cycle". To support this assertion, however, Mr. WhoRU will first have to study the Austrian theory of the business cycle, and then demonstrate that, absent "monetization" of debt and bank credit-expansion, such cycles can reasonably be predicted to occur.
Mr. Vieira is correct in that I contend that under a 100% gold coin money system that the banksters would still be in a position of collecting profits through foreclosures on their loans to borrowers, no matter that the loans were funded by 100% gold coins. In my explanation of this, in my comments on Myth Eight, I wrote (in relevant part): " ... that if we were to somehow go to a 100% gold coin money system ..., it would be inevitable that the money changers ... , would still be in a position to implement their dirty little boom and bust cycles !! ... Would not the moneychangers then lend their privately owned gold into circulation?? Would the lenders not charge interest on their gold lent to borrowers?? And just exactly where would the borrowers get the additional gold coins to pay the interest?? I suggest that you go up above [Mr. Vieira,] and reread the paragraphs in Myth FOUR, where I describe in considerable detail the evil way that interest on loans made in a closed end lending system causes boom and bust cycles and inevitable foreclosures."
Please take note that Mr. Vieira invokes the Austrian theory of the business cycle, as though it were some mystical scriptural writing that only the Austrians could figure out and only Mr. Vieira can understand - however, please note that Mr. Vieira does not himself set forth this mystical Austrian Scripture, contenting himself to merely imply its magical properties, while thoroughly castigating me for my failure to address the venerable Austrians theory - let all readers be hereby advised, I have addressed all of the aspects set forth by the Austrian's and then some, but I have addressed all of them in simple everyday laymen's terms rather than in indecipherable legalese.
All of the Austrian analysis are based on a privately owned central bank and fail to consider a publicly owned central bank where the interest would be re-cycled back into circulation through government spending, thereby eliminating the need for using armed robbery to fund the government. The Austrian's were not only closed ended, they were, like Mr. Vieira, also closed-minded! And the Austrians also failed to properly examine how the lending of gold constitutes the "monetization of debt" and accomplishes the very same insidiousness as does "central-bank credit-expansion".
Under a privately owned gold lending system you have the exact same situation, it just appears different because of the great physical difference between gold coins and paper money.
Then Mr. Vieira sets up another imagined hurdle for me to jump - Mr. Vieira conjures up and loads me with a money system where monetization of debt, according to Mr. Vieira, is purportedly absent - As Mr. Vieira well knows, monetization of debt is unavoidably an inherent aspect of lending - what can a loan of money possibly be if not a monetization of debt? It makes no difference whatsoever, whether the monetization of the debt be by paper or by gold coins. This likewise extends to Mr. Vieira's idiotic conjuring up of the "expansion of credit," which is nothing but a different way of expressing the monetization of debt!
Expansion of credit constitutes and is nothing more than additional monetization of debt. No matter if the medium be paper or gold - in a privately owned closed ended system, the borrowers are always, inevitably trapped, without a means of paying the additional interest, with the slight temporary exception in a gold coin system during the initial invocation thereof during which the gold lenders will be the recipient of any privately held gold coins spend into circulation by the general population, then received by the gold lenders as a portion of the interest the lenders receive as loan payments.
It is true that when the money medium is unbacked paper that it is easier for the lenders to expand credit but the boom and bust cycles are an inherent aspect of lending money at interest in a closed end money system, no mater whether the medium be paper or gold.
Mr. Vieira additionally states in the third paragraph, in relevant part:
"He [Mr. WhoRU] might also consider why it was, throughout modern financial history, that "the money changers" have worked assiduously alongside politicians to eliminate the 100 % silver and gold coin standard in favor of "monetization" of debt and central-bank credit-expansion."
Modern financial history does indeed seem to reveal, as Mr. Vieira posits, " that "the money changers" have worked assiduously alongside politicians to eliminate the 100 % silver and gold coin standard in favor of "monetization" of debt and central-bank credit-expansion." but everything is not always as it seem, Mr. Vieira! How is it that when we have historical patterns involving money lending banksters manipulating our monetary system to replace gold coins and instill their paper money that we just accept surface appearances and continually fail to examine beneath the surface?? Why do we just presume that the banksters hate gold and silver coins and love paper money?? This seems more than somewhat strange in view of the fact that when the dust settles, it is always the banksters who are operating the lending aspect of our monetary system, whether the system be the banksters' paper or our "wonderful" Constitutional gold coin.
With just a little examination and thought we will find a pattern that reveals that whenever lending is done by private lenders (being inherently, a closed ended money system), whether the money lent be paper or Constitutional gold coins, it is inevitable that whatever medium is in place, it will (because of the closed end aspect inherent in the private ownership of the lending of the money), whatever is used as money will fall into disrepute and/or, the government created debt will become so totally unserviceable that a change of the medium will seem to be the only appropriate solution, at which time, if the medium be paper money then in use, the people will scream for a return to a Constitutional gold and silver money system, on the other hand if gold coin then happens to be the money system, then the banksters will then, indeed, be working assiduously alongside politicians to eliminate the 100 % silver and gold coin standard . No matter what is used as money the lenders thereof are always the same private banksters - no matter what - they win - we loose!!
Could it possibly be that the reason we have so continually missed this fact be because the banksters have planned it that way, Mr. Vieira?? Is it that we have been intentionally indoctrinated to believe that the only true money is gold and/or silver coins?? So that "we" will clamber, one again, on cue, for the inevitable switch back to gold coin, while the banksters covertly hide their smiles??
Mr. Vieira concludes in his third paragraph, in relevant part:
"Have they [the banksters] perhaps known something of which Mr. WhoRU is ignorant? "
Mr. WhoRU's response No, Mr. Vieira, the banksters do not know something of which I am ignorant but it is indeed true that both the banksters and I do know something of which you, Mr. Vieira, are blatantly, ignorant!! Or at least you are pretending to be in order to posture yourself so you can ridicule the truth, in order for you to do everything you possibly can to make the truth I offer to appear silly by your incessant twisting of everything I wrote around to make me appear as though I am uneducated, uninformed and unintelligent - I have news for you on all three fronts, Mr. Vieira!!. While it is true that the banksters are able to profit to a much greater extent under a paper money system, due to the ability to engage in lending unrestrained by any physical limitation of the paper money medium, the banksters must move back and forth, from the one to the other, because both have the same built in defect when lent to borrowers under private ownership of the lent medium - under private ownership the lending of either paper or gold by private lenders constitutes a closed ended lending system which will result in a circulating imbalance with boom and bust cycles resulting in rampant foreclosures, and ultimately; a cry from the people for a return to a Constitutional gold coin money system. The appearance that the banksters are only in favor of a paper money system is because in order to get their paper money system adopted the banksters must work assiduously alongside politicians to eliminate the 100 % silver and gold coin standard in favor of paper money, but that does not mean that the banksters do not profit greatly during the time that gold coins are used as money. The banksters do not have to work to bring about a return to gold money because the people have been indoctrinated to believe that it is natural for them to perceive gold money to be good and paper money to be bad. This has always been an easy sell because, by the very nature of both, it is abundantly self evident that a gold coin has significantly more intrinsic value than does a mere scrap of paper. However, although this is certainly true when each is considered only as a commodity, it is a fallacy when either is considered as money, because when either is used as money, it is NOT the money itself that is desired, but, rather, that which the bearer can obtain in exchange for the money. Mr. Vieira, in his castigations of my writing, repeatedly refers to times of great economic stress to demonstrate the intrinsic value of gold, and I certainly must agree that when paper money has run its course (such as now, in 2007), individuals who have not already done so would be well advised to convert everything possible into basic "bullion" gold coins, however during more normal economic times few people are much concerned one way or the other as to whether or not the money medium be gold coins or unbacked paper FRNs. 9999999999999999999999999999999999999999999999999999999999999999999999999 FALSE Myth # NINE - Federal Reserve Notes are nothing but FIAT money What Mr. WhoRU wrote that Mr. Lying Vieira's purports to comment on: [1] Just what exactly is FIAT money?? Fiat money is paper money created by government edict, without any gold or silver backing, and is usually just spent into circulation by the government. However, under our present privately owned Federal Reserve system, this is untrue. The government of the United States does not just print and spend money into circulation; the government must provide US Treasury Bonds, T Bills or other negotiable interest bearing instruments to the Fed in exchange for the FRNs the Fed credits to the Federal treasury, so, technically, we do not have a FIAT money system. [2] The reason I am making an issue over the technical inaccuracy of this myth is not merely because it is technically incorrect but because those who tout this myth totally fail to acknowledge or in any way recognize that we actually have two separate and distinct money systems operating in the United States; (1) the money system of the private sector and (2) the money system of the government. [3] As I mentioned herein above, it is the value imbued into the FRNs borrowed into circulation by the promise of private sector borrowers that allows the FRNs spent into circulation by the government to have any value at all. If the FRNs spent into circulation by the government were RED and the FRNs spent into circulation by private sector borrowers were GREEN - who in their right mind would accept any of the RED money? [4] Most but not all of the ills attributed to the Federal Reserve and paper money are caused by the manner in which the US government misuses and abuses the Federal Reserve!! These government abuses cause the entire system to become suspect and hated by those who fail to take the time to do an actual personal evaluation of how the Fed actually works!! Those ills not caused by the US government are explained in considerable detail herein above, and are caused entirely by the fact that the Fed is a privately owned closed end money system. All of these ills can be cured by the assumption of the ownership of the Fed by the people of the United States (while keeping the control and operation of the People's Central Bank away from Congress and the president!), and at the same time all taxation in the entire Federation can be phased out! End of Mr. WhoRU's Myth Nine Mr. Vieira's critical commentary Myth Nine: FALSE Myth # NINE - Federal Reserve Notes are nothing but FIAT money Mr. Vieira wrote: 9. [1] Mr. WhoRU employs a rather idiosyncratic definition of "fiat money". Traditionally, fiat money is simply any currency that is not redeemable as a matter of law in silver or gold at a fixed rate of exchange. More recently, it has come to mean any currency that is not redeemable in any fixed amount of any commodity as a matter of law. That being so, FRNs are not a true flat currency because a statute does require them to be redeemed "in lawful money," presumably "dollar for dollar". 12 U.S.C. º 411. Unfortunately, pursuant to 31 U.S.C. º 5118(b and c), the Treasury is not required to redeem FRNs in silver or gold. Instead FRNs are redeemed only in "clad" coinage consisting of base metals. [2] In any event, Mr. WhoRU' notion that FRNs that arise from "monetization" of public debts have value only because of the "backing" of other FRNs that are emitted on the collateral of private debts is rather fanciful. My supposition is that, if there were actually two varieties of FRNs based on their sources---red notes from "monetization" of private debts and green notes from-a "monetization" of public debts---most citizens would prefer the green ones on the grounds that those notes would more likely be paid in the event of an economic meltdown, because the government could commandeer the necessary real value from the market, whereas no private borrowers could do so. In any event, under the present system, if the FRS fails to redeem its notes, whatever their "backing", the Treasury is required to. And then the Treasury can enforce its lien on whatever assets the banks have. So, in the final analysis, whatever the original source of collateral for "monetization", the ultimate liability for redemption of FRNs lies on the Treasury, See 12-U.S.C. ºº 411 and 416. Therefore, anyone actually reading the statutes would conclude that his bottom-line reliance is on the government (whatever that may be worth). Mr. WhoRU's rebuttal to Mr. Vieira's continuing out of context lying commentary: In his commentary above, Mr. Vieira states in the first paragraph thereof:
No, Mr. Vieira, the banksters do not know something of which I am ignorant but it is indeed true that both the banksters and I do know something of which you, Mr. Vieira, are blatantly, ignorant!! Or at least you are pretending to be in order to posture yourself so you can ridicule the truth, in order for you to do everything you possibly can to make the truth I offer to appear silly by your incessant twisting of everything I wrote around to make me appear as though I am uneducated, uninformed and unintelligent - I have news for you on all three fronts, Mr. Vieira!!.
While it is true that the banksters are able to profit to a much greater extent under a paper money system, due to the ability to engage in lending unrestrained by any physical limitation of the paper money medium, the banksters must move back and forth, from the one to the other, because both have the same built in defect when lent to borrowers under private ownership of the lent medium - under private ownership the lending of either paper or gold by private lenders constitutes a closed ended lending system which will result in a circulating imbalance with boom and bust cycles resulting in rampant foreclosures, and ultimately; a cry from the people for a return to a Constitutional gold coin money system.
The appearance that the banksters are only in favor of a paper money system is because in order to get their paper money system adopted the banksters must work assiduously alongside politicians to eliminate the 100 % silver and gold coin standard in favor of paper money, but that does not mean that the banksters do not profit greatly during the time that gold coins are used as money. The banksters do not have to work to bring about a return to gold money because the people have been indoctrinated to believe that it is natural for them to perceive gold money to be good and paper money to be bad. This has always been an easy sell because, by the very nature of both, it is abundantly self evident that a gold coin has significantly more intrinsic value than does a mere scrap of paper.
However, although this is certainly true when each is considered only as a commodity, it is a fallacy when either is considered as money, because when either is used as money, it is NOT the money itself that is desired, but, rather, that which the bearer can obtain in exchange for the money.
Mr. Vieira, in his castigations of my writing, repeatedly refers to times of great economic stress to demonstrate the intrinsic value of gold, and I certainly must agree that when paper money has run its course (such as now, in 2007), individuals who have not already done so would be well advised to convert everything possible into basic "bullion" gold coins, however during more normal economic times few people are much concerned one way or the other as to whether or not the money medium be gold coins or unbacked paper FRNs.
9999999999999999999999999999999999999999999999999999999999999999999999999
FALSE Myth # NINE -
Federal Reserve Notes are nothing but FIAT money
What Mr. WhoRU wrote that Mr. Lying Vieira's purports to comment on:
[1] Just what exactly is FIAT money?? Fiat money is paper money created by government edict, without any gold or silver backing, and is usually just spent into circulation by the government. However, under our present privately owned Federal Reserve system, this is untrue. The government of the United States does not just print and spend money into circulation; the government must provide US Treasury Bonds, T Bills or other negotiable interest bearing instruments to the Fed in exchange for the FRNs the Fed credits to the Federal treasury, so, technically, we do not have a FIAT money system.
[2] The reason I am making an issue over the technical inaccuracy of this myth is not merely because it is technically incorrect but because those who tout this myth totally fail to acknowledge or in any way recognize that we actually have two separate and distinct money systems operating in the United States; (1) the money system of the private sector and (2) the money system of the government.
[3] As I mentioned herein above, it is the value imbued into the FRNs borrowed into circulation by the promise of private sector borrowers that allows the FRNs spent into circulation by the government to have any value at all. If the FRNs spent into circulation by the government were RED and the FRNs spent into circulation by private sector borrowers were GREEN - who in their right mind would accept any of the RED money?
[4] Most but not all of the ills attributed to the Federal Reserve and paper money are caused by the manner in which the US government misuses and abuses the Federal Reserve!! These government abuses cause the entire system to become suspect and hated by those who fail to take the time to do an actual personal evaluation of how the Fed actually works!! Those ills not caused by the US government are explained in considerable detail herein above, and are caused entirely by the fact that the Fed is a privately owned closed end money system. All of these ills can be cured by the assumption of the ownership of the Fed by the people of the United States (while keeping the control and operation of the People's Central Bank away from Congress and the president!), and at the same time all taxation in the entire Federation can be phased out!
End of Mr. WhoRU's Myth Nine
Mr. Vieira's critical commentary Myth Nine:
9. [1] Mr. WhoRU employs a rather idiosyncratic definition of "fiat money". Traditionally, fiat money is simply any currency that is not redeemable as a matter of law in silver or gold at a fixed rate of exchange. More recently, it has come to mean any currency that is not redeemable in any fixed amount of any commodity as a matter of law. That being so, FRNs are not a true flat currency because a statute does require them to be redeemed "in lawful money," presumably "dollar for dollar". 12 U.S.C. º 411. Unfortunately, pursuant to 31 U.S.C. º 5118(b and c), the Treasury is not required to redeem FRNs in silver or gold. Instead FRNs are redeemed only in "clad" coinage consisting of base metals.
[2] In any event, Mr. WhoRU' notion that FRNs that arise from "monetization" of public debts have value only because of the "backing" of other FRNs that are emitted on the collateral of private debts is rather fanciful. My supposition is that, if there were actually two varieties of FRNs based on their sources---red notes from "monetization" of private debts and green notes from-a "monetization" of public debts---most citizens would prefer the green ones on the grounds that those notes would more likely be paid in the event of an economic meltdown, because the government could commandeer the necessary real value from the market, whereas no private borrowers could do so. In any event, under the present system, if the FRS fails to redeem its notes, whatever their "backing", the Treasury is required to. And then the Treasury can enforce its lien on whatever assets the banks have. So, in the final analysis, whatever the original source of collateral for "monetization", the ultimate liability for redemption of FRNs lies on the Treasury, See 12-U.S.C. ºº 411 and 416. Therefore, anyone actually reading the statutes would conclude that his bottom-line reliance is on the government (whatever that may be worth).
Mr. WhoRU's rebuttal to Mr. Vieira's continuing out of context lying commentary:
In his commentary above, Mr. Vieira states in the first paragraph thereof:
9. [1] " Mr. WhoRU employs a rather idiosyncratic definition of "fiat money". Mr. WhoRU's response:
Mr. Vieira characterizes me as being "idiosyncratic" in my explanation of what it is that actually constitutes fiat money while he then proceeds to explain how the meaning of the use of the term "fiat money" has evolved - it is apparently meet, right and salutary for the venerable Dr. Vieira to mess with the meaning of fiat money but when Eric WhoRU does so Eric WhoRU is immediately "idiosyncratic". Here is Mr. Vieira's idiosyncratic musing:
"Traditionally, fiat money is simply any currency that is not redeemable as a matter of law in silver or gold at a fixed rate of exchange. More recently, it has come to mean any currency that is not redeemable in any fixed amount of any commodity as a matter of law."
Tradition certainly dose have its place but when "tradition" establishes and promotes significant misunderstanding then it is clearly time to start a new tradition - one based on reason and truth, both apparently strangers to Mr. Vieira!! Mr. Vieira also purports to solidify his position by his employment of the ever magic word "law". This has nothing to do with "law" Mr. Vieira as "law" is, traditionally perfect, never changing, always right, never wrong - that is the traditional meaning of the word "law"!! "Law" is made by Nature - not man - never man made!! All puny man can do is enact statutes, so what you are referring to Mr. Vieira, is not in any way "law", nothing but man made statutes, and as they are merely man made, then they can and should be changed, to reflect the truth.
However, my purpose is not to examine tradition or law or statute, my purpose is to conduct an abstract examination of the term "fiat money," in order to demonstrate that the traditional understanding of the term is misleading as applied specifically to our money system, and that the traditional understanding should not be applied because it wrongly represents how paper money functions in the private sector under our current monetary system compared to how the same paper money malfunctions in the government sector
However, although what you mention here Mr. Vieira, may very well be what it is that constitutes backing for FRNs brought into circulation to fund government loans - be that as it may, what you present has nothing whatsoever to do with the issue I addressed, which is that FRNs that enter circulation, created to fund loans made to private sector borrowers, are backed, not by statutory lying political empty promises, but by honest promises of private sector borrowers, to create goods and services beneficial to the community in which the FRNs were created. My point was/is that all paper money is not necessarily in and of itself automatically fiat money.
It may well be true that all FRNs are created by government authorization, however government authorization does not, in and of itself, bring even one FRN into circulation in the private sector - it takes the promises of a private sector borrowers to enable such creation and those private sector promises are not empty government fiat promises based on future armed robbery!! These promises are, for the most part, valid promises, promises that are fulfilled by those in the private sector who take out the loans.
Mr. Vieira goes on to write:
" That being so, FRNs are not a true flat currency, because a statute does require them to be redeemed "in lawful money", presumably "dollar for dollar". 12 U.S.C. º 41 1. Unfortunately, pursuant to 31 U.S.C. º 5118(b and c), the Treasury is not required to redeem FRNs in .silver or gold. Instead FRNs are redeemed only in "clad" coinage consisting of base metals.
In as much as Mr. Vieira has agreed with my basic premise that FRNs are not actually FIAT money, then what are they? Well sometimes FRNs are FIAT money and sometimes not. As tradition teaches, anytime a government merely prints and spends money, where there is no true value behind the money - then such money is, indeed worthless FIAT money. And just because a government may have the power to coerce those subject to its authority to do what ever the government demands - when the government purports to demand that the citizens do that which is physically impossible, such will never be done no matter how coercive the government's power may be. When there is no wealth left in the citizenry the government is powerless to extract it!! And a truly devious criminal government will find other means, as it has done in the United States.
So when is paper money issued under authority of the government not properly designated as worthless FIAT money?? This occurs when the paper money is not created by the mere order of the government but, rather, is created when a private sector borrower applies for a loan and in doing so, the private sector borrower pledges physical collateral, and the borrower has an established credit history of repayment or, in the event or a non-collateralized loan, the borrower has demonstrated a history of moral character and financial responsibility justifying the borrower be extended a loan based on nothing other than his mere promise to repay.
[2] In any event, Mr. WhoRU' notion that FRNs that arise from "monetization" of public debts have value only because of the "backing" of other FRNs that are emitted on the collateral of private debts is rather fanciful. My supposition is that, if there were actually two varieties of FRNs based on their sources---red notes from "monetization" of private debts and green notes from-a "monetization" of public debts---most citizens would prefer the green ones, on the ground that those notes would more likely be paid in the event of an economic meltdown, because the government could commandeer the necessary real value from the market, whereas no private borrowers could do so. In any event, under the present system, if the FRS fails to redeem its notes, whatever their "backing", the Treasury is required to. And then the Treasury can enforce its lien on whatever assets the banks have. So, in the final analysis, whatever the original source of collateral for "monetization", the ultimate liability for redemption of FRNs lies on the Treasury, See 12-U.S.C. ºº 411 and 416. Therefore, anyone actually reading the statutes would conclude
Mr. WhoRU's further response:
Paper money created to fund such private sector loans are backed by the sincere previously demonstrated integrity of the borrower, wherein the borrower keeps his promises to create goods and services equal, not only to the principal created and advanced to fund the loan, but in addition, to create goods and services equal to the additional interest surcharge.
It is more than interesting to note that in my original writing addressing this Myth, I characterized the FRNs created to fund private sector loans as green and FRNs created to fund government loans as red. Mr. Vieira, in his unrelenting insistent attack on my work has found it necessary here, in his castigation, to change the colors to the opposite of that which I had assigned - how sad!! Additionally, in my writings, I never refer to government debt as public debt because, by my phraseology, I want it clear where the responsibility for creating the debt originated - the responsibility originated with the perps running the government - not with the public; but Mr. Vieira has to rephrase my characterization by referring to the government's debt as the public debt, again - how very sad!
And then, in order to demonstrate his (erroneous), point of the fallibility of private sector borrowing constituting a valid backing for FRNs created to fund private sector loans, Mr. Vieira has to invoke a condition of economic failure; which begs the question, (1) "What has been the historical cause of economic failures??" and/or (2) "When has borrowing by private sector borrowers ever been the root cause of an economic catastrophe??"
How about (1) Rampant government spending and (2) NEVER - NOT EVEN ONCE!!
There are generally two causes of general monetary failure (1) private lenders have created and lent more paper than the private lenders had gold to back up the paper and (2) governments have printed and spent enormous quantities of money into circulation, where there was a significant insufficient quantity of specie and/or goods and/or services to underwrite the government's FIAT issue, to the point where the worthlessness of the government's issue became abundantly self evident.
In what is at least perceived by the general populous to be a stable economy, gold works no differently as money than does paper.
How can that be when gold has an intrinsic value of its own - yes that is true gold certainly does have an intrinsic value of its own but here I am addressing and considering the actual purpose of the medium of exchange and how the medium is perceived in a stable economy - the obvious purpose of money (whatever the medium) is to enable the bearer to exchange the medium for those items, goods and/or services that the bearer actually wants and needs in order to live. No one in his right mind would want to acquire money merely for the sake of having more and more money - the reason for acquiring more money is only for one reason - so the bearer can exchange the money for something the bearer actually needs to sustain or improve his life.
My basic point here, in addressing this Myth, is to point out that it is always the productivity of the private sector that imbues money with value and this applies equally to gold money as well as paper; And it is NEVER EVER government that actually imbues money with value - this is true because government is ALWAYS a parasite and NEVER a source of productivity!!
If a couple, a husband and wife, were to be marooned by themselves on a remote uninhabited island, similar to Hawaii, which would they be better supplied with, all of the gold coins on the planet or one bushel basket filled with miscellaneous food seeds??
The only time the "redeamability " of central bank issued paper money has come into question is when the central government or a privately owned central bank has been allowed to administer the system; it is time we recognized this defect and took that power totally away from the central government, which is precisely what the plan I have devised will do!! And, additionally, this plan will allow the total elimination of all taxation - "taxation" is nothing but a euphemism for armed robbery.
Myth # TEN - RIGHT!! Mr. Vieira wrote: [1] 10, Mr. WhoRU is correct that all the banks in the FRS are private entities. His conclusion that a "public central bank" will avoid what he sees as the pitfalls of "private central bank" is naive, though. Does he really believe that, if "dishonest humans seem to congregate together and run for public office", such individuals will suddenly become honest, public-spirited office holders when they appoint the members of Mr. WhoRU's new "public" Federal Reserve Board of Governors? (By the way, the present members of the Board of Governors are appointed by the President and confirmed by the Senate. Why are they not acting in the public interest already, then!) Or will the politicians appoint "dishonest" people just like themselves, for the purpose of feathering their own nests and the nests of their pet special-interest groups through misuse of the "public central bank'? [2] Really, the idea that the nature and responsibilities of the agency will somehow temper or eliminate the vices of the people controlling it is childish. The more potential for looting society that a "public central bank" has---and it will have a tremendous potential---the more admittedly "dishonest" politicians will attempt personally to profit from that potential. On this, Mr. WhoRU should study the works of James Buchanan and Gordon Tullock on "the theory of public choice". [3] In sum, I am sorry to say that, were I grading Mr. WhoRU's paper as an undergraduate essay, I should have to give him a low mark. He has a vivid imagination. But the monetary and banking systems are too important to be analyzed on the basis of fictions. Your servant, Edwin Vieira, Jr Mr. WhoRU's rebuttal to Mr. Vieira's continuing out of context commentary: In his commentary above, Mr. Vieira states in the first paragraph thereof: Mr. Vieira wrote: [1] 10, Mr. WhoRU is correct that all the banks in the FRS are private entities. His conclusion that a "public central bank" will avoid what he sees as the pitfalls of "private central bank" is naive, though. Does he really believe that, if "dishonest humans seem to congregate together and run for public office", such individuals will suddenly become honest, public-spirited office holders when they appoint the members of Mr. WhoRU's new "public" Federal Reserve Board of Governors? Mr. WhoRU's response: It is quite apparent that Mr. Vieira, having purportedly read my entire writing on the Ten Myths of the Fed, wherein I several times mentioned that the pitfalls of the Fed were in the private ownership thereof, Mr. Vieira still insists on making up something that I did not write just so he can write something that will indicate how silly I am. I am sorry Mr. Vieira, but I did not in any way ever suggest that what you describe as the "pitfalls" of the Fed are in its Board of Governors. As a matter of fact, although I did state that the Publicly Owned Central Bank (as I envision it), would have a Board of Governors, and I did also state that as the current Board was doing a good job so why not keep them (until they indicate otherwise or until the transition to the new Board selection process is in place), I am quite certain that I did not mention the Board of Governors as a problem, in and of itself. In case you have not noticed, Mr. Vieira, in every instance where humans are congregated sufficiently, there are always some humans in charge - as of this date God has not sent any angels here to run things - so we just have to bumble along with some humans in charge - we wouldn't be all that bad off either, if we were just smart enough to keep all attorneys out, like OUT and OFF the planet!! My Ten Myth essay, Mr. Vieira was, self evidently on its face, obviously not intended to be a detailed blueprint of the publicly owned central bank that I have in mind. You cannot possibly be so totally stupid that you could not comprehend that my presentment was for the purpose of addressing the specific topics titles, not to address every point that I might have mentioned in addressing the substantive issues. Mr. Vieira continues: (By the way, the present members of the Board of Governors are appointed by the President and confirmed by the Senate. Why are they not acting in the public interest already, then!) Or will the politicians appoint "dishonest" people just like themselves, for the purpose of feathering their own nests and the nests of their pet special-interest groups through misuse of the "public central bank'? Mr. WhoRU responds:
[1] 10, Mr. WhoRU is correct that all the banks in the FRS are private entities. His conclusion that a "public central bank" will avoid what he sees as the pitfalls of "private central bank" is naive, though. Does he really believe that, if "dishonest humans seem to congregate together and run for public office", such individuals will suddenly become honest, public-spirited office holders when they appoint the members of Mr. WhoRU's new "public" Federal Reserve Board of Governors? (By the way, the present members of the Board of Governors are appointed by the President and confirmed by the Senate. Why are they not acting in the public interest already, then!) Or will the politicians appoint "dishonest" people just like themselves, for the purpose of feathering their own nests and the nests of their pet special-interest groups through misuse of the "public central bank'?
[2] Really, the idea that the nature and responsibilities of the agency will somehow temper or eliminate the vices of the people controlling it is childish. The more potential for looting society that a "public central bank" has---and it will have a tremendous potential---the more admittedly "dishonest" politicians will attempt personally to profit from that potential. On this, Mr. WhoRU should study the works of James Buchanan and Gordon Tullock on "the theory of public choice".
[3] In sum, I am sorry to say that, were I grading Mr. WhoRU's paper as an undergraduate essay, I should have to give him a low mark. He has a vivid imagination. But the monetary and banking systems are too important to be analyzed on the basis of fictions.
Your servant,
Edwin Vieira, Jr
Mr. WhoRU's rebuttal to Mr. Vieira's continuing out of context commentary:
[1] 10, Mr. WhoRU is correct that all the banks in the FRS are private entities. His conclusion that a "public central bank" will avoid what he sees as the pitfalls of "private central bank" is naive, though. Does he really believe that, if "dishonest humans seem to congregate together and run for public office", such individuals will suddenly become honest, public-spirited office holders when they appoint the members of Mr. WhoRU's new "public" Federal Reserve Board of Governors?
It is quite apparent that Mr. Vieira, having purportedly read my entire writing on the Ten Myths of the Fed, wherein I several times mentioned that the pitfalls of the Fed were in the private ownership thereof, Mr. Vieira still insists on making up something that I did not write just so he can write something that will indicate how silly I am.
I am sorry Mr. Vieira, but I did not in any way ever suggest that what you describe as the "pitfalls" of the Fed are in its Board of Governors. As a matter of fact, although I did state that the Publicly Owned Central Bank (as I envision it), would have a Board of Governors, and I did also state that as the current Board was doing a good job so why not keep them (until they indicate otherwise or until the transition to the new Board selection process is in place), I am quite certain that I did not mention the Board of Governors as a problem, in and of itself.
In case you have not noticed, Mr. Vieira, in every instance where humans are congregated sufficiently, there are always some humans in charge - as of this date God has not sent any angels here to run things - so we just have to bumble along with some humans in charge - we wouldn't be all that bad off either, if we were just smart enough to keep all attorneys out, like OUT and OFF the planet!!
My Ten Myth essay, Mr. Vieira was, self evidently on its face, obviously not intended to be a detailed blueprint of the publicly owned central bank that I have in mind. You cannot possibly be so totally stupid that you could not comprehend that my presentment was for the purpose of addressing the specific topics titles, not to address every point that I might have mentioned in addressing the substantive issues.
Mr. Vieira continues:
(By the way, the present members of the Board of Governors are appointed by the President and confirmed by the Senate. Why are they not acting in the public interest already, then!) Or will the politicians appoint "dishonest" people just like themselves, for the purpose of feathering their own nests and the nests of their pet special-interest groups through misuse of the "public central bank'?
As I wrote above, we are cursed with the necessity of human leaders, but to minimize the possibility of corruption, the means of selecting members of the Board of Governors will be taken away from the President and the Senate - there will be a public (TV) Bingo game number cage with 50 numbers, one for each state. When the first ball (state) is selected the governor of that state will have two weeks to select one candidate - if that governor does not have a candidate within two weeks, another ball will be selected and another governor will have an opportunity to select a candidate.
After a candidate is selected then another Bingo ball will be selected in like manner, this ball will determine the state legislature that is to approve or not (ratify or not), the candidate nominated by the governor. The states who's numbers were selected for the nominating by their governors will not be eligible to have the legislature thereof participate in the ratification process.
In the event, during the day to day operation of the Board of Governors there shall be a suspicion of corruption, a vote of 25% of the state legislatures (currently 13 states) would be sufficient to recall (fire) any Board member or the entire board.
The Federal Government will never be allowed to borrow money from the Central Bank. The local city, county and several state legislatures shall set their local interest surcharge on loans made to private sector borrowers. The Congress shall determine the interest surcharge for the federal government, which must then be approved by 75% of the legislatures of the several states.
The power to declare war will be taken from the Congress and the President. In the event the Federation is attacked militarily, it will take a vote of 75% of the state legislatures to approve a declaration of war, the same state legislatures shall have the duty and responsibility to determine the amount of money the Central Bank is to advance to Congress to fund the war; whereupon the Central bank will credit the US treasury with this amount - this will not be a loan to be repaid by the Federal Government.
When it appears to 25% of the state legislatures that the war emergency is ended the war will be declared ended. At that time the Board of Governors will begin a gradual withdrawal of the money that was advanced to fund the war. Market price indicators (as is currently the practice) will be used to monitor the circulating money supply to adjust the flow of collected interest to the Federal Government.
It is unbelievably shameful that Mr. Vieira continues to resorts to castigation of me for statements that Mr. Vieira creates, which I never in any way suggested, and then Mr. Vieira characterizes me as "childish" for stating something, which I never stated nor proposed.
The Board of Governors function will be limited to regulation of the flow of interest profits to the Federal Government. The Board will have authority to decrease the interest floe but shall not have any ability or power to increase the flow (create money) without the approval of 75% of the state legislatures, and then only based on market price indicators to adjust for money loaned into circulation and thereafter lost or destroyed by fire or otherwise.
Every thirty days the Board will publish a full accounting; the several state legislatures will audit the Board of Governors on a rotating Bingo ball selection system.
In his commentary above, Mr. Vieira states in the third paragraph thereof:
This writing does not constitute a full presentation of all the thousands of details, such as, how many rolls of toilet paper shall be allowed or how many flowers shall be provided for the funeral of an attorney.
It is this writers understanding that most people who attend funerals of attorneys is not for the purpose of grieving but just to make sure that they are finally dead
End of PART THREE of THREE