FALSE Myth # FIVE - Federal Reserve Notes are evidence of debt – being nothing but worthless IOUs What Mr. WhoRU wrote that Mr. Vieira purports to comment on:
FALSE Myth # FIVE -
Federal Reserve Notes are evidence of debt – being nothing but worthless IOUs
What Mr. WhoRU wrote that Mr. Vieira purports to comment on:
[1] What is it that actually constitutes "evidence of debt"?? If we were on a 100% gold coin money system and borrowers borrowed real gold coins and spent the coins in the economy no one could tell by looking at the coins that the only reason the coins were circulating in the economy was because some borrower had borrowed them - thus - such coins would be the fruit of debt no matter that such could not be determined from the appearance of the coin - would that in fact cause such coins to not be "evidence of debt"?? Would that fact make certain gold coins worth less that other gold coins??
[2] Please do not interpret the following question as an advocacy of debt, but just, exactly, what is wrong with properly managed debt? Is it not a fact that our entire economy operates on debt?? Would this fact in any way change if by some magical way all paper Federal Reserve Notes could immediately be replaced with actual gold coins - like "poof"? Would the borrowers not still be obligated to repay the loans? If all of the money circulating were gold coins and had been borrowed into circulation would debt then be OK?? What is actually wrong with properly managed debt?? Is it not true that debt problems only really occur when borrowers borrow beyond their ability to repay what they borrowed?
[3] Is it not true that when any borrower applies for a loan the lender only makes the loan when the borrower has a reasonably sound credit rating?? So then, why do so many borrowers later get into debt trouble?? Is it not because of the closed end money system, which causes boom, and bust cycles that I explained in the previous myth?? Is it not because of the interest charged on loans made by a privately owned closed end money system? Is it not true that all loans made by the Fed to borrowers in the private sector are "guaranteed" by the promise to repay made by private sector borrower?? Is it not true that virtually all private sector borrowers strive to their utmost to keep their promise to repay their loans?? Is it not true that these promises made by private sector borrowers constitute a substantial backing for the paper money that serves to facilitate their promises?
[4] What is wrong with an IOU made by an honorable person?? If the good and honorable reputation of the maker of the IOU is well known who would be harmed by accepting his IOU?
[5] On the other hand, it the reputation of the borrower were sorely tainted, then who would want to accept an IOU from such a maker? What if the disreputable IOU maker were able to make its IOUs appear identical to the IOUs of honorable makers of IOUs?? Would such a condition not taint the reputation and reliability of all IOUs?
(6) As I have established herein above that IOUs made by honorable private sector makers are quite worthy and as it is well known that the "honorable" financial reputation of the US government is quite dubious and is sorely tainted, and as the US government issues its worthless Federal Reserve Note IOUs in a format identical to the Federal Reserve Note IOUs placed into circulation by private sector borrowers, is it not self evident that the reason why the private sector Federal Reserve Note IOUs are of questionable value because the US government is the entity that is issuing counterfeit worthless IOUs and is it not true that the reason that Federal Reserve Note IOUs in general circulation are of dubious value is because of the debasing fiscal activities of the US government and not in any way because of any inherent lack of value in IOUs just because they are printed on paper? And, more to the point, is it not true that the actual genuine value of the Federal Reserve Note IOUs issued to fund private sector loans is the only reason that the IOUs issued by the US government are accepted at all?? And is it not also true that it is the rampant and dishonest unrestrained spending by the US government that has destroyed the public's faith in the Federal Reserve Notes lent into circulation to borrowers in the private sector.
End of Mr. WhoRU's Myth Five.
Mr. Vieira's critical commentary on Myth Five: FALSE Myth # FIVE - Federal Reserve Notes are evidence of debt - being nothing but worthless IOUs Mr. Vieira wrote:
Mr. Vieira's critical commentary on Myth Five:
Federal Reserve Notes are evidence of debt - being nothing but worthless IOUs
Mr. Vieira wrote:
5. [1] There can be no question that a "note" is an "evidence of debt", by every economic, and legal definition. A Federal Reserve Note, therefore, is evidence of a debt of some Federal Reserve regional bank. See 12 U.S.C. ºº 412 through 416, which make this pellucid. In particular, observe the "first and paramount lien on all the assets of such bank" that the United States Treasury can assert for payment of FRNS. Obviously, whether FRNs turn out to be "worthless" or not, in whole or in part, depends in the final analysis on the ratio of the bank notes to bank assets. The notes are not the banks' assets, but liabilities- , whereas silver and gold coin are always assets, never liabilities.
[2] FRNs are (says Mr. WhoRU) "backed" by various kinds of public and private debt. True enough. See 12 U.S.C. ºº 411 and 412. So, in that sense, too, they are "evidence of debt" FRNs are, as it were, instruments and evidence of pyramidal debt.
[3] Silver or gold coins, no matter their source, are never "instruments or evidence of debt". If an individual has borrowed gold coins, and then spends them in otherwise honest transactions, the subsequent holders of those coins have no claim against the original lender, or the borrower. If an individual holds FRNs, and then spends them, the recipient of the notes has a claim against both the Federal Reserve regional bank to which the FRNs were originally issued, and the United States Treasury, to have the notes redeemed in "lawful money". And so does every subsequent holder. 12 U.S.C. º 411.
[4] Mr. WhoRU's rhetorical exercise in defense of debt simply begs the very question he asks-- viz., "What is wrong with properly managed debt? " Nothing; provided it is "properly managed". That, by hypothesis. But therein lies the real question, which Mr. WhoRU does not answer, What IS "proper management"? Many people, for good and sufficient reasons, would say that a system, such as the FRS, that create circulating currency by "monetizing" debt is not a 'properly managed" system, It is useless to say that it is, without explaining precisely why.
[5] Mr. WhoRU suggests that the root problem is "because of the interest charged on loans made by a privately owned closed end money system". Leaving aside his own admission that the FRS is not, in actuality, a truly "closed end money system", why would shifting control from bankers to politicians change anything for the better? Would a "public central bank" charge no interest on loans? If not, how would it pay its own operating costs? Only through foreclosures? How would there ever be foreclosures in such a system, in which either (i) the political bankers would make loans to everyone, or (ii) the political bankers, acting strictly in the public interest, would make loans only to such sure and secure credit, risks that foreclosures would almost never occur?
(6) Mr. WhoRU attempts to differential between loans made by bankers to private individuals and loans made to the government, and conjures up a two-tier money supply with "good" FRNs deriving from loans to private parties and "bad" FRNs deriving from loans to the Treasury. Usually, however, people judge the value of loans on the basis of the security offered for them. And a borrower who can lawfully commandeer funds from the pubic at the points of bayonets (through taxes, for example) certainly provides far better security for a loan than a borrower who must depend on the vicissitudes of the free market and the civil judicial system for his income.
[7] Moreover, Mr. WhoRU excoriates the government for its "rampant and dishonest unrestrained spending * * * that has destroyed the public's faith in the Federal Reserve Notes lent into circulation to borrowers in the private sector". Besides the obvious fact that the public makes no such distinction (all FRNs being perfectly, fungible), the obvious self-contradiction in Mr. WhoRU's' theory is that he wants to put the entire national monetary and banking system into the hands of the very politicians who, he quite rightly says, are engaged in "rampant and dishonest unrestrained spending". How much more "rampant and dishonest" will their monetary behavior be when these same politicians can generate for themselves as much currency as they want through their own pet "public central bank'! (As opposed to the present situation, in which the bankers are not required to loan to the government at fixed, low "interest" rates, and therefore can exercise some practical restraint on "rampant and dishonest unrestrained spending".)
In Mr. Vieira's first paragraph Mr. Vieira wrote:
[1] " There can be no question that a "note" is an "evidence of debt", by every economic, and legal definition. A Federal Reserve Note, therefore, is evidence of a debt of some Federal Reserve regional bank. See 12 U.S.C. ºº 412 through 416, which make this pellucid. In particular, observe the "first and paramount lien on all the assets of such bank" that the U. S. Treasury can assert for payment of FRNS. Obviously, whether FRNs turn out to be "worthless" or not, in whole or in part, depends in the final analysis on the ratio of the bank notes to bank assets. The notes are not the banks' assets, but liabilities- , whereas silver and gold coin am always assets, never liabilities. "
Mr. WhoRU's response:
So what else is new?? Mr. Vieira beats another dead horse!! However, as to Mr. Vieira's statement that FRNs evidence the debt of some Federal Reserve regional bank may very well have been true when the Fed was redeeming FRNs for gold coin but for Mr. Vieira to make this claim in 2006 is quite a stretch, as FRNs have served to evidence the debt of borrowers of FRNs rather than evidencing any debt obligation of the Federal Reserve itself, for quite some time. Additionally, Mr. Vieira's latter statement therein presupposes that the bank in question purports to provide some sort of bank assets (what ever might constitute such "assets") as backing for the notes the bank provides to be used as money. In the case of FRNS everyone who cares enough to inquire knows very well that FRNs have absolutely ZERO bank assets as backing, and, therefore, the only value inherent in FRNs in 2006-7, is the promise of the private sector borrower to create goods and/or services equal to the value of the FRNs created at the time the borrower's loan was funded.
So, Mr. Vieira's statement that "...whether FRNs turn out to be "worthless" or not, in whole or in part, depends in the final analysis on the ratio of the bank notes to bank assets...." is obvious, is simply not supported by the facts. The worthlessness of FRNs in 2006, is determined more by how many FRNs the Federal government spends into circulation rather than on any other factor, and in any event, in 2006, bank assets have ZERO influence on the worthiness of FRNs.
In Mr. Vieira's second paragraph Mr. Vieira wrote:
Again, to be entirely correct, I "said" absolutely nothing in my article as it was offered entirely by means of the written word, a writing, if you please, Mr. Vieira, not an oral utterance, but be that as it may, I deny that I in any way conveyed or suggested in my instant writing (or any other writing), that FRNs are in any way backed by any kind of "public debt", to the contrary, I have continually and repeatedly stated that the government's rampant unrestrained spending draws value from the FRNs borrowed into circulation by borrowers in the private sector. All FRNs in circulation draw whatever value they have from the promises of private sector borrowers.
As Mr. Vieira here states his agreement that FRNs are backed by public and private debt, while in his previous paragraph Mr. Vieira insisted that "...FRNs evidence the debt of some Federal Reserve regional bank ..."; which is it, Mr. Vieira?? Mr. Vieira then concludes this short paragraph stating that, "... FRNs are ... instruments and evidence of pyramidal debt." What, pray tell, is "pyramidal debt"? And how do FRNs evidence that they are "... instruments and evidence of pyramidal debt"?
In Mr. Vieira's third paragraph Mr. Vieira wrote:
"[3] Silver or gold coins, no matter their source, are never "instruments or evidence of debt". If an individual has borrowed gold coins, and then spends them in otherwise honest transactions, the subsequent holders of those coins have no claim against the original lender, or the borrower. If an individual holds FRNs, and then spends them, the recipient of the notes has a claim against both the Federal Reserve regional bank to which the FRNs were originally issued, and the U. S. Treasury, to have the notes redeemed in "lawful money". And so does every subsequent holder, 12 U.S.C.º 411."
If Mr. Vieira had written, "Silver or gold coins, no matter their source, can never be identified from their face, to be or to have originated as "instruments or evidence of debt," then I would agree, but that is NOT what Mr. Vieira wrote. Mr. Vieira clearly intended to imply that no matter that such silver or gold coins might very well have originated into circulation as the principal of a borrower's loan, such coins could not - would not ever be either instruments or evidence of debt; pure hogwash, Mr. Vieira, pure hogwash!
It is of course clearly obvious that no one could ever tell by looking at a silver or gold coin that such coin entered circulation as the principal of a borrower's loan - but that fact would not in any way change the fact (if such were the case), that the coin was indeed, the instrument of debt, if not then what would be such instrument? Moreover, all FRNs in circulation are NOT evidence of debt.
When FRNs are given over to a borrower, and then spent into circulation by the borrower, such FRNs are, without any doubt, clearly instruments and evidence of debt; however, how do those classifications remain attached to the FRNs after the same FRNs are paid back to the lender as a payment against the loan?? And the FRNs that comprise the interest portion of the loan payment - those FRNs are deemed by the lender to be the lender's profit (although in reality they are not the true source of the lender's profit - but in any event, such FRNs, are clearly no longer evidence of the borrower's debt), and then the lender thereupon owns those FRNs and the lender is then free to spend those FRNs in the economy, whereupon those FRNs will mingle with all the FRNs previously in circulation. However, when the borrower paid those (interest) FRNs over to the lender, those FRNs no longer constituted an evidence of debt even though such designation was still clearly printed on the face thereof.
But back to silver and gold coins; what if a lender of silver or gold coins had his coins imprinted with the same information that is imprinted on a FRN?? Would such coins then not clearly present evidence on their face as to their origin?? Would such an imprint on such coins make them any less desirable to various or multiple holders in due course? Obviously not! The silver or gold coin would still have the same commodity value no matter if they had any imprint thereon or not, the benefit of the standard government mint imprints are that they makes it easier and more convenient to identify the metal content in order to use the silver or gold as money.
No holder in due course would have the slightest concern as to who the original borrower was nor would such holder look to the original borrower nor the lender for value expected in return for such coins, in the same manner as holders in due course of FRNs care not one whit who borrowed the FRNs into circulation nor do such holders concern themselves that the Fed was the origin, other than in regard to a concern that the FRN did not originate in a counterfeiter's garage or off of com criminal's high-tech copy machine..
Additionally, Mr. Vieira states, " If an individual has borrowed gold coins, and then spends them in otherwise honest transactions, the subsequent holders of those coins have no claim against the original lender." The clear implication here is that if the borrower of gold coins spends the gold coins in dishonest transactions then the subsequent holders of those gold coins would have a claim against the original lender..." But how would anyone know any of the implied "facts" in this superfluous gobbledygook?
And on that same note, Mr. Vieira states, "If an individual holds FRNS, and then spends them, the recipient of the notes has a claim against both the Federal Reserve regional bank to which the FRNs were originally issued, and the United States Treasury, to have the notes redeemed in "lawful money". And so does every subsequent holder. 12 U.S.C. º 411." This flies in the face of the fact that FRNs are no longer redeemable for lawful money and have not been redeemable for over 30 years and begs the question, Mr. Vieira, "When has any subsequent holder of FRNs ever had or exercised a claim against the original lender or the original borrower?" What could possibly be the basis for any such claim, Mr. Vieira?
It is certainly true that if a receiver in due course discovers that what purports on its face to be a genuine FRN is discovered to be a counterfeit FRN, then the receiver certainly does have recourse against whomever the counterfeit item was received from, but that has nothing at all to do with the Fed or the loan/borrowing system.
What is particularly aggravating to me is that Mr. Vieira used only 6 ½ lines to write his gibberish but it took me 50 lines to explain away all of Mr. Vieira's erroneous thinking.
In Mr. Vieira's fourth paragraph Mr. Vieira wrote:
"[4] Mr. WhoRU's rhetorical exercise in defense of debt simply begs the very question he asks-- viz., "What is wrong with properly managed debt? " Nothing provided it is "properly managed". That by hypothesis. But therein lies the real question, which Mr. WhoRU does not answer, What IS "proper management"? Many people, for good and sufficient reasons, would say that a system, such as the FRS, that create circulating currency by "monetizing" debt is not a 'properly managed" system, It is useless to say that it is, without explaining precisely why."
Mr. WhoRU's' response:
I contend that as the context in which I mentioned, "properly managed debt", was as a rhetorical question, I contend that the meaning was/is self evident and needed no further explanation. However, that being stated, I did indeed set forth several examples immediately after I posed that question, as to what would constitute properly managed debt, further addressed immediately below. Additionally, the fact that what ever it is that constitutes "well managed debt" is self evident is true because neither I nor anyone has any authority to determine or mandate what it is that constitutes properly managed debt for any one other than myself. Every person has the individual personal authority and responsibility to determine for his or her own self what it is that constitutes properly managed debt.
In addition, Mr. Vieira intentionally overlooks what I wrote immediately following my second positing of the same question, in the same paragraph in which I wrote it the first time, wherein I did, indeed, set forth thereafter, an examination as to what constituted "properly managed debt"; here below are my exact comments from that paragraph:
"What is actually wrong with properly managed debt? Is it not true that debt problems only really occur when borrowers borrow beyond their ability to repay what they borrowed?? Is it not true that when any borrower applies for a loan the lender only makes the loan when the borrower has a reasonably sound credit rating?? So then, why do so many borrowers later get into debt trouble?? Is it not because of the closed end money system, which causes boom, and bust cycles that I explained in the previous myth?? Is it not because of the interest charged on loans made by a privately owned closed end money system??"
I did indeed, explain in some considerable detail exactly what Mr. Vieira contends I did not do. Mr. Vieira here is just a mite beyond mildly disingenuous!!
Additionally, in the above paragraph Mr. Vieira clearly implies that any monetizing of debt is evidence of an improper management of debt. This is true because it cannot be denied that each and every time any borrower takes out a loan (in any form of money) from any lender (whether it be a pawn shop, credit union, lender of gold coins or the Fed's paper, or the borrower's next door neighbor or from the borrower's own mother), such a transaction constitutes a monetization of debt.
But the phrase, "monetization of debt", a seeming favorite of Mr., Vieira, is in fact a misnomer and is unfairly misleading. The very words "debt" and "debtor" carry with them implications of immoral conduct on the part of the borrower, and when borrowers intentionally and knowingly borrow beyond their ability to repay, such borrowing is, indeed, immoral - flat dishonest - and ultimately hurts everyone to some extent - similar to a traffic accident where a large load of watermelons are destroyed - such an accident will cause everyone to pay more for watermelons in the super market. A fairer and more accurate phraseology would be, and is, "A monetization of the future income of the borrower."
And, whenever a loan is taken our, the funding of the loan, no matter who it is that funds the loan, and no matter what kind of money is loaned, the loan/borrowing transaction causes money to enter active circulation. The only aspect of Mr. Vieira's statement that I omitted was Mr. Vieira's reference to the fact that when it is the Fed that funds the loan the lent money is created, which is an important point but the reason I omitted that point is because the primary point of my mention of "proper management of debt" was in reference to the propriety of borrowing, as a principle, I was not at that time addressing the source of the borrowed funds. However, as Mr. Vieira has raised that issue, I have no choice but to waste more of my time by addressing it.
"...Many people, for good and sufficient reasons, would say that a system, such as the FRS, that create circulating currency by "monetizing" debt is not a 'properly managed" system... "
As I have already explained the borrowers' role in these transactions, all that remains to be addressed is the problems inherent in the closed end aspect of the FRS, that is, why is it that our economy suffers when the FRS creates money by "monetizing debt", or as I prefer to more fairly state it, "when the FRS creates money by "monetizing the future income of the borrowers."
The problems we experience in our economy are not caused by (1) the creation of the money by the FRS nor (2) in the fact that the money is created to monetize the future income of the borrowers, nor (3) in the fact that interest is charged on the created money. (I will state here, as an aside, that the FRS has no just or proper business or investment claim to any profit on the money it creates as the FRS has no investment of its own in the loan process, therefore no risk and no proper entitlement to any profit. The FRS is, in effect, loaning the borrower the borrower's own money and charging the borrower interest on the borrower's own money - and that is not entirely a bad. Situation, when properly understood).
The problems in our economy are not caused by any of those three things I mentioned in the previous paragraph - the problems in our economy are caused entirely by the fact that, as a privately owned money system, the FRS is a closed end system ("closed end" means the collecting entity keeps all of the interest collected), and it is that closed end aspect that causes all of the problems inherent in out present money system!!
Why?
Because the portion of the borrowers' monthly payments designated to be interest, is distributed to the private owners and is thereby removed from circulation. This causes the circulating supply of FRNs to shrink faster than the reduction of the total obligation of all bowers. It is as simple as that. Our economic problems can be fixed by simply crediting the interest portion of the loan payments to the Treasury so the treasury can spend the interest portion of the monthly payments back into circulation. The private owners of the Fed do indeed, spend a small portion of their profits back into circulation, but they rake in billions and billions so it is impossible for them to spend any significant portion back into circulation. The real fix would be to credit the Federal Treasury with the portion of the monthly payments designated as interest, so that the government could use these billions of interest money to pay for the regular expenses of the government, instead of using armed robbery, sanctified by euphemistically referring to armed robbery as "taxation".
In Mr. Vieira's fifth paragraph Mr. Vieira wrote:
"[5] Mr. WhoRU suggests that the root problem is "because of the interest charged on loans made by a privately owned closed end money system". Leaving aside his own admission that the FRS is not, in actuality, a truly "closed end money system", why would shifting control from bankers to politicians change anything for the better? Would a "public central bank" charge no interest on loans? If not, how would it pay its own operating costs, only through foreclosures? How would there ever be foreclosures in such a system, in which either (i) the political bankers would make loans to everyone, or (ii) the political bankers, acting strictly in the public interest, would make loans only to such sure and secure credit, risks that foreclosures would almost never occur? "
Contrary to Mr. Vieira's continued misstatements of what I wrote - no where have I ever in the slightest way ever stated or acknowledged that the FRS is anything other than a totally closed end lending system. Mr. Vieira continually imagines all manner of ridiculous scenarios and then proceeds to ridicule me for his own inane concoctions
In the first place, in my opening sentence above, I did not state that there was anything wrong with the charging of interest, what I stated was that the root problem was in that it was a privately owned system that was charging the interest, it is the private ownership that is the problem as it is the private ownership that causes it to be a closed end lending system. In answer to Mr. Vieira's question, " why would shifting control from bankers to politicians change anything for the better?" - in the first place both bankers and politicians are men - I agree that this is the basic underlying problem - that men are involved - maybe we should turn it all over to chimpanzees - but here in the real world we have no choice - it will be men who administer the monetary system, however the reason it would be better under ownership of the people is because then the money system can be made into an open ended system where the interest charged on loans made to private sector borrowers will be credited to the Treasury (and to all levels of government), allowing the total elimination of all taxation. The government's spending of the interest charged on loans will recycle the interest portion of the borrowers payments back into circulation thus eliminating the circulating imbalance inherent in a privately owned closed end lending system, (whether or not it is paper or gold that is used as money). The manner of the selection of the Board of Governors of the Central Bank that I suggest be adopted, is set forth in my rebuttal of Mr. Vieira's adolescent castigations, set forth in Mr. Vieira's seventh paragraph herein below.
In response to Mr. Vieira's further inane comments, As I stated in response to Mr. Vieira's similar idiocy previously herein above, under public ownership the system we currently have would operate pretty much as it currently does in regard to lending and charging of interest on loans to private sector borrowers, therefore the proposed monetary system would have virtually the same source of income for its operating expenses as it currently does. The elimination of the closed end flaw in the current privately owned system by the recirculation of the interest portion of borrowers' loans into circulation by government spending would immediately eliminate the imbalance in the circulating money supply which would likewise eliminate the boom and bust cycles caused by the imbalance, thereby eliminating the foreclosures also caused by the imbalance inherent in the closed ended private ownership. Lending to private sector borrowers would continue on the same basis as currently, with appropriate credit checks as currently (lending to the government, i.e., government borrowing at interest or otherwise, would be totally eliminated under this plan. Emergency funding of the Federal Government would require the approval of 75% of the legislatures of the Several Member States of the Federation - in an amount to be likewise approved, which would then be credited (not loaned at interest) to the Federal Treasury).
Mr. Vieira's asinine scenario only serves to cast considerable doubt as to his true intend, which seems to clearly be to cast as much doubt as he possibly can on this wonderful Solution in order to insure that the solution set forth here is never adopted - which brings some doubt as to where Mr. Vieira's true loyalties lay!
In Mr. Vieira's sixth paragraph Mr. Vieira wrote:
" Mr. WhoRU attempts to differentiate between loans made by bankers to private individuals and loans made to the government, and conjures up a two-tier money supply with "good" FRNs deriving from loans to private parties and "bad" FRNs deriving from loans to the Treasury. Usually, however, people judge the value of loans on the basis of the security offered for them. And a borrower who can lawfully commandeer funds from the pubic at the points of bayonets (through taxes, for example) certainly provides far better security for a loan than a borrower who must depend on the vicissitudes of the free market and the civil judicial system for his income."
Mr. Vieira's veracity is truly in question!! My explanation of the two separate parallel money systems we have operating in our economy has absolutely nothing whatsoever to do with how anyone judges the value of loans nor the security of loans and Mr. Vieira cannot be so inept that he does not know better.
My explanation has nothing whatsoever to do with the loans per se, nor how or whether or not loans will be repaid; my explanation has to do with the purchasing power of FRNs in circulation and why the inflation of the money supply by government spending causes prices to rise. Generally, attacks on the Fed consist of statements that all FRNs created by the Fed are unbacked by gold, and therefore totally worthless. No writer (other than myself), seems to have taken the time to analyze our economy to recognize and acknowledge that, as our society as a whole, has built a rather substantial infrastructure from the Atlantic to the Pacific and from Canada to Mexico, such has to a great extent been enabled and funded by Federal Reserve Notes, to take note that with all that we have done with them, they just can't be all bad!!
So why is it that paper money does not work long term?? Why do prices continue to rise - where does all this "worthless" money come from? Think about it! We hear about this $4.5 trillion fund that belongs to the people of the United States that "should be distributed to the people of the United States" - without addressing the pros or cons of whether or not this 4.5 trillion actually exists or who it belongs to - just think about this: there are about 300 million people in the US; if we consider an average of 4 people per family, 300 million people would equal 75 million families. If the 4.5 trillion were to be distributed equally to these families each family would receive $60,000.00. Can you imagine the economic turmoil that would occur if every family in the US were to receive $60,000.00 in the mail tomorrow?? Why am I the only one to consider this would NOT be a good thing!! What would this do to prices in the market?? Do I have to draw pictures??
This is an example of bad money. The $60K would virtually be coming from nowhere - easy come - easy go - just like money spent into circulation by the government. Why does the money we use every day have any perceived value?? Is it not because it is in reasonably short supply. We have to go to work every day and produce goods and services to get paid.
The money we get on payday represents the work we did during the week - working to produce goods and services equal to our pay check - it is our work that imbues the paper money we use with value - it is the borrower working to keep his promise to produce goods and services equal to the FRNs borrowed that imbues the FRNs with value - if we were all to receive $60K with no production of goods or services to back the $60K - where would the $60K get its value?? The only possible source would be from the FRNs that we already had in circulation - that we were working for every day - producing goods and services in exchange for - so - if all of a sudden every family had an easy $60K to spend such spending would constitute a serious sudden inflation of the circulating supply and market prices would sky-rocket. The bad money from the $60K would dilute the value of the good money that the hard working productive borrowers in the community had borrowed into circulation - based on their promise to work hard to produce value equal to the FRNs they borrowed into circulation.
In my example that Mr. Vieira is castigating me for I stated the money spent into circulation by the government, with no promise to repay, was bad money and the money that was created to fund loans of credit worthy private sector borrowers was good money, and I further stated that the only reason the bad money was accepted was because it was the same color as the good money and Mr. Vieira faults me for my comparison - he is again a fraud - whose side is he really on??
In Mr. Vieira's seventh paragraph Mr. Vieira wrote:
" [7] Moreover, Mr. WhoRU excoriates the government for its "rampant and dishonest unrestrained spending * * * that has destroyed the public's faith in the Federal Reserve Notes lent into circulation to borrowers in the private sector". Besides the obvious fact that the public makes no such distinction (all FRNs being perfectly, fungible), the obvious self-contradiction in Mr. WhoRU's theory is that he wants to put the entire national monetary and banking system into the hands of the very politicians who, he quite rightly says, are engaged in "rampant and dishonest unrestrained spending". How much more "rampant and dishonest" will their monetary behavior be when these same politicians can generate for themselves as much currency as they want through their own pet "public central bank'! (As opposed to the present situation, in which the bankers are not required to loan to the government at fixed, low "interest" rates, and therefore can exercise some practical restraint on "rampant and dishonest unrestrained spending".) "
Mr. Vieira once more invents and concocts more straw men in his efforts to make me look silly.
It is unfortunately true, as Mr. Vieira points out, that the public makes no distinction between the value of FRNs (1) entering circulation as principle funding private sector loans or (2) entering circulation through inflationary unbridled government spending. Hover it is interesting to note that Mr. Vieira does not deny the validity of my analysis - he only states that the public makes no distinction - perhaps the reason for this lack of public concern is (1) because all of the money is exactly the same size, color and denomination and (2) because those of us who take it upon ourselves to be the "watch-dogs" over government have not previously brought out this distinction - we have been remiss - I am attempting to correct that oversight, while Mr. Vieira seems to be intent upon sweeping it back under the rug - I wonder why?
It is of course obvious that no matter how a money system is organized it will be, unfortunately but unavoidably, administered by men. I have already addressed this issue in some depth in my response to paragraph 5, herein above, but there is an additional point or two to bring out.
As it is clear that men can never be entirely trusted, it is therefore necessary to make as much of the money system as transparent and public as possible, and to have those men managing the money system as distant as possible from those men who are charged with the responsibility of paying the government's financial obligations; likewise it is necessary to do everything possible to make the selection of the men to serve on the Board of Governors of the Central Bank to be as politically distant from those charged with the responsibility of paying the government's financial obligations as possible.
To accomplish this selection I propose that the nominees of Central Bank's Board members be selected by the governors of the Several States and approved by the legislatures thereof and that the State Governors who are to nominate the candidate be determined by lottery and likewise the confirming state legislature, and that in no event shall the confirming state legislature be of the same state as the governor making the nomination; and that each position on the Central Bank's Board of governors be determined by a separate similar procedure with a different state governor and a different state legislature for every position on the Board of Governors.
I will not further comment on this paragraph of Mr. Vieira's as it is so inane that it self destructs.
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FALSE Myth # SIX - Debts cannot be paid with Federal Reserve Notes - only discharged. What Mr. WhoRU wrote that Mr. Vieira purports to comment on:
FALSE Myth # SIX -
Debts cannot be paid with Federal Reserve Notes - only discharged.
[1] All the reasoning I set forth herein above regarding gold borrowed into circulation applies to this myth also.
[2] As an additional point however, has there even been even one instance where a seller who offered an item for sale valued in Federal Reserve Notes, where the seller received and accepted Federal Reserve Notes in payment for the item, where the seller ever sued the buyer, claiming the item had not been paid for because the purchaser tendered Federal Reserve Notes as payment??
End of Mr. WhoRU's Myth Six
Mr. Vieira's critical commentary on Myth Six: FALSE Myth # SIX - Debts cannot be paid with Federal Reserve Notes - only discharged. Mr. Vieira wrote:
Mr. Vieira's critical commentary on Myth Six:
6. [1] Again, gold "borrowed into circulation" is not itself an instrument or evidence of debt, whereas all FRN currency is, by statutory definition. So, under the common-law rule that a debt could be "paid" only with "money", but not with another "debt", the supposed "myth" Mr. WhoRU debunks turns out to be not a "myth" at all. The reason it no longer matters in practice is that FRNs have been declared by law to be "legal tender," 31 U.S.C. º 5103. This designation sets aside and. renders irrelevant the common-law rule.
[2] Given the special statutory legal privileges that FRNs enjoy, it is not surprising that there are no court cases (at least to my immediate knowledge) in which a willing recipient of FRNs has denied that his receipt of those notes constituted "payment" of a debt owed to him, and some court has agreed.
[3] However, in a legal system that followed the Constitution, the result would be radically different. I suggest that Mr. WhoRU study the Supreme Court's decision in Craig v. Missouri, and apply its principles mutatis mutandis to FRNs and the FRS.
In his commentary above, Mr. Vieira states in the first paragraph thereof, in relevant part:
" [1] Again, gold "borrowed into circulation" is not itself an instrument or evidence of debt, whereas all FRN currency is, by statutory definition. So, under the common-law rule that a debt could be "paid" only with "money", but not with another "debt", the supposed "myth" Mr. WhoRU debunks turns out to be not a "myth" at all. The reason it no longer matters in practice is that FRNs have been declared by law to be "legal tender," 31 U.S.C. º 5103. This designation sets aside and. renders irrelevant the common-law rule."
In my previous writings herein above, I have totally addressed and destroyed Mr. Vieira's self serving concocted assertions that gold borrowed into circulation is not an instrument of debt, as it certainly and obviously and self evidently is, when loaned/borrowed into circulation, an instrument of debt!! How could it reasonably be otherwise?
Then Mr. Vieira congers up what he characterizes as "the common-law rule that a debt could be "paid" only with "money", but not with another "debt" - I'm sorry, Mr. Vieira, there never ever was and there is no such common law rule as you conger up!! You are once more, Sir, sadly mistaken!! The patriot myth that a debt cannot be paid with another debt arose about 20 years ago when interest rates were over 20% and credit card debtors were paying one credit card by charging the payment on one card to another card - the courts ruled in those cases (and properly so) that one debt could not be used to pay another debt. These rulings had absolutely no application to paying debts with FRNs!
Any simpleton ought to be able to reason that when parties to a contract comply with the terms of the contract that there can be no legitimate complaint on either side - what would there be to complain about. On the other hand, no owner of property, of whatever nature whatsoever, can be required to give over or sell his property to another person just because the wannabe purchaser offers that which has been legislated to be legal tender for all debts public and private. This is certainly undeniably true in instances where the owner has not yet released his property to some wannabe purchaser. Historically, in instances where the owner has already released the property to the wannabe owner, and where gold had been the contractual agreed upon form of payment, and in the meantime gold coin was legislated "out" and paper money was legislated "in", courts have (quite improperly - but not surprisingly) ruled that the seller must accept paper money as payment no matter that the written contract clearly specified payment was to be in gold coin. The courts, employing the same defective imagination as Mr. Vieira, opined that the contract's mention of gold coin was just euphemistic and did not really mean gold - yea - right.
In Mr. Vieira's second paragraph Mr. Vieira wrote: "[2] Given the special statutory legal privileges that FRNs enjoy, it is not surprising that there are no court cases (at least to my immediate knowledge) in which a willing recipient of FRNs has denied that his receipt of those notes constituted "payment" of a debt owed to him, and some court has agreed. " Mr. WhoRU's response:
"[2] Given the special statutory legal privileges that FRNs enjoy, it is not surprising that there are no court cases (at least to my immediate knowledge) in which a willing recipient of FRNs has denied that his receipt of those notes constituted "payment" of a debt owed to him, and some court has agreed. "
It has nothing to do with any special statutory legal privilege accorded FRNs - it simply has to do with reason - something of which Mr. Vieira seems to be totally devoid of applying. Mr. Vieira's reasoning (or lack thereof), would establish that the only reason truck driver's stop at stop signs is because the "law" requires it.
I posit, that if the stop sign law was repealed that thereafter most drivers (and all sane drivers) would continue to respect the stop signs and those that did not would, sooner or later, live to regret it, or at least their survivors would.
It is axiomatic (or at least it used to be), that if party "A" to a written contract had to point out (read) the terms of the contract to party "B", that party "A" had most probably entered into a contract with the wrong person.
In his third paragraph above, Mr. Vieira acknowledges that the Constitution is not being adhered to so what would be the purpose?? Moreover, attorneys litigating on opposite sides can always find many cases to support their opposing positions, then we have the Supremes ruling 5-4 so many times it has become the norm, when, if the Supremes were honest, their rulings would consistently and almost invariably be 9-0, so much for court cases.
My purpose in writing about the Myths regarding the Federal Reserve was merely my feeble attempt to point out that the Fed is not all bad, that, when properly and fairly examined, it is a quite marvelous invention, and if paper money and a central bank were to be properly understood and properly utilized, such can allow the total elimination of all armed robbery (euphemistically called "taxation") as the means of funding the government of a people intent on deluding themselves into believing that they are free, while at the same time the government that they created to protect their freedom funds itself by pointing its guns at them; but it seems quite clear that Mr. Vieira has quite a different agenda!!
Yes, it is true, the implementation of this Solution will require some Constitutional Amendments and statutory adjustments – so what?? This is precisely what the Constitutional Amendment process is for!! The current state of the "law" is irrelevant as it is, being man made, always temporary!!
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FALSE Myth # SEVEN - The inflation inherent in the use of Federal Reserve Notes is a hidden tax .
FALSE Myth # SEVEN -
The inflation inherent in the use of Federal Reserve Notes is a hidden tax
[1] Taxation is a euphemism for armed robbery - the collection of taxes is ultimately enforced at the point of the government's gun; no borrower is ever forced to borrow from any lender so this myth is technically untrue, however the damage caused by this myth is that it takes the focus away from where the focus needs to be placed - on the government's uncontrolled spending as it is the government's uncontrolled spending that constitutes the inflation of the money supply and the resulting increase in commodity prices. It is misleading and unfair to place the blame for increased prices on paper money or the Federal Reserve.
[2] Inflation is not in any way an inherent aspect of the use of Federal Reserve Notes - inflation is the increase of the circulating supply of money caused when the government spends money into circulation that the government did not collect through normally approved funding channels. Taxation, although widely used to fund government, is not an appropriate means of funding a government of a people who purport themselves to be free.
End of Mr. WhoRU's Myth Seven.
Mr. Vieira's critical commentary on Myth Seven: FALSE Myth # Seven - The inflation inherent in the use of Federal Reserve Notes is a hidden tax Mr. Vieira wrote:
Mr. Vieira's critical commentary on Myth Seven:
FALSE Myth # Seven -
7. [1] The emission of FRNs is often likened to a "hidden tax" because the emission of any such currency results in redistribution of wealth from society as a whole to the emitter and the immediate beneficiaries of the emission. On this phenomenon, see the sections on money in Ludwig von Mises, Human Action, and Murray Rothbard, Man, Economy, and State. In the private sector, this redistribution is called "forced savings". In the public sector, it is called "the inflation tax", Neither term, though, is particularly descriptive of what is actually going on.
[2] Mr. WhoRU' argument that "no borrower is ever forced to borrow from any lender so this myth "'the hidden tax"] is technically untrue" misses the point. "The hidden tax" is not imposed on the emitter of the currency, or on the initial borrower, but on other parties down. the economic line, as the new currency percolates throughout society, changing the structure of prices of all goods and services it affects. Many (probably most) of these parties believe themselves to be required to accept FRNs perforce of the legal-tender law. 31U.S.C. Section 5103. So, to the extent of their ignorance on that score, they are "forced" into a system that cheats them of real wealth.
[3] Even if the government were not engaged in "uncontrolled spending", the natural effect. of "monetization" of private debt through the banking system would be redistribution of wealth-which, by the way, would occur whether or not there were a general increase in prices resulting from the emission of new currency. That is, "inflation" (as the public and apparent Mr. WhoRU understand that term to denote a general increase in prices) need not occur as the inevitable result of increases in the money supply. But redistributions of wealth always occur.
[4] I shall not attempt to unravel Mr. WhoRU' comments on taxation in his final paragraph on Myth No. 7. If what he means is that a government should finance itself entirely by voluntary contributions from the citizens, I suppose that is a philosophical position which is at least arguable. What it has to do with the present system in the- United States--or any system likely to be put into effect in any lifetime--escapes me.
In his commentary above, Mr. Vieira states in the first paragraph thereof: " [1] The emission of FRNs is often likened to a "hidden tax" because the emission of any such currency results in redistribution of wealth from society as a whole to the emitter and the immediate beneficiaries of the emission. On this phenomenon, see the sections on money in Ludwig von Mises, Human Action, and Murray Rothbard, Man, Economy, and State. In the private sector, this redistribution is called "forced savings". In the public sector, it is called "the inflation tax", Neither term, though, is particularly descriptive of what Is actually going on." Mr. WhoRU's response:
In his commentary above, Mr. Vieira states in the first paragraph thereof:
" [1] The emission of FRNs is often likened to a "hidden tax" because the emission of any such currency results in redistribution of wealth from society as a whole to the emitter and the immediate beneficiaries of the emission. On this phenomenon, see the sections on money in Ludwig von Mises, Human Action, and Murray Rothbard, Man, Economy, and State. In the private sector, this redistribution is called "forced savings". In the public sector, it is called "the inflation tax", Neither term, though, is particularly descriptive of what Is actually going on."
Of all the miss stated musings that Mr. Vieira has emitted thus far, those set forth in the preceding paragraph are by far, the most totally convoluted!!
In the first instance, how are FRNs "emitted" and who or what is the "emitter"? I suppose Mr. Vieira wants us to infer and presume that the unspecified emitter is the FRS and therefore, by inferential deduction, we are to somehow conclude that the FRS "emits" FRNs - but we are left without any explanation or suggestion or implication by Mr. Vieira, as to what it is that constitutes the act of emission. The word "emissions" is commonly understood to be reference to some sort of undesirable pollution?? (Also, please note here, that the words "tax" or "taxation" are always used and are limited to references to some means of funding the government - and the word "tax" is never used in reference to profits of private business - including the profits of the privately owned Federal Reserve).
I have been studying the FRS since 1964 and in all those years I have never ever before encountered a statement likening the emissions of FRNs to a "hidden tax" - NEVER EVER!!
On the other hand, what I have continually encountered are statements that rising prices, caused by the inflation of the money supply, through unbridled government spending, constitute a hidden tax on the population. Using an oversimplification which is generally but not technically accurate: The way this "hidden tax" is "collected" is (1) the government prints up billions of dollars and just spends or grants it into circulation (red money) through various give away programs. (2) These billions of printing press government dollars enter circulation and dilute the value of the dollars borrowed into circulation by private sector borrowers (green money). This infusion of printing press red dollars into circulation causes food, fuel, rent and all market prices to rise so the general public has to pay more dollars for everything than they would if the government had not printed up and spent the billions of red dollars into circulation - this is the way the government is funded by this "hidden tax. The "introduction" (by lending) of FRNs into circulation in and of itself has nothing whatsoever to do with (1) the distribution of the profits of the Federal Reserve nor (2) the redistribution of wealth that are both indeed inherent negative aspects of the FRS under its private closed end system.
Both (1) and (2) herein are related to each other but neither necessarily an inherent aspect of the lending of FRNs that could not be corrected under public ownership of the Fed.
Then Mr. Vieira states that the "hidden tax" he congers up is caused, "... because the emission of any such currency [FRNs] results in redistribution of wealth from society as a whole to the emitter and the immediate beneficiaries of the emission.... "
What is notably absent from Mr. Vieira's MEMORANDUM is any explanation as to how this redistribution of wealth is caused by the infusion of paper money (because the redistribution is NOT caused by the infusion – read more below!!). Additionally, it is noteworthy that. Mr. Vieira characterizes the infusion of paper money as a "hidden tax" – money deemed to be tax revenues are invariably credited to some government treasury but in this instance Mr. Vieira states that what he characterizes to be "hidden taxation" results in the redistribution of wealth from the society as a whole to the emitter of the FRNs rather than to any government treasury – so how can this redistribution possibly be properly characterized as any kind of "taxation", hidden or otherwise??. It is my clear understanding that the "emitter" of FRNs is the Federal Reserve, but all of this, although seemingly logical – is none the less – laced with error!!
Although it is indeed true that FRNs are furnished (made available) by the Fed – the Fed is powerless to get FRNs into circulation all by itself – borrowers are required!! Private sector borrowers all work diligently to produce wealth (goods and services) equal to the quantity of FRNs created by the Fed to fund their loans so there is no way that the infusion of FRNs into circulation to fund loans to private sector borrowers can be the actual cause of the redistribution of wealth from themselves to the emitter of the FRNs. Likewise, the same privately owned Federal Reserve also emits FRNs to fund loans to the government, while the government does nothing to create goods and services equal to the `emission", and while the government does nothing to create anything equal to the quantity of FRNs created to fund loans to the government, there is still no way that the infusion of FRNs into circulation to fund loans to the government can be the actual cause of the redistribution of wealth from "society as a whole" to the emitter of the FRNs.
So then, how does the redistribution of wealth occur – what is the cause??
The redistribution of wealth has nothing directly to do with any of the foregoing, but is a by product of the "emission" of FRNs to fund all loans made to both government and private sector borrowers. It is not in any way the emission of FRNs that cause the redistribution but, rather, because of the interest surcharge attached to the "emissions".
This goes back once more to the Single Source Doctrine; the "emitter" of FRNs cannot possibly receive back any more FRNs than were originally "emitted" to fund all of the loans. Once again, the designation of a portion of the loan payments as interest, allows the "emitters, the self same banksters, to apply only a portion of the loan payments to the reduction of the borrowers outstanding balance. This causes the circulating supply of FRNs to be reduced more rapidly than is the reduction of the outstanding loan obligation of the borrowers, whether the borrower is the government or borrowers from the private sector.
The imbalance in the circulating money supply causes a recession (depression) , bust cycle, with the inherent foreclosures and confiscation of mortgaged homes and other assets pledged by private sector borrowers. The "redistribution of wealth" actually occurs when the Fed sells the assets acquired through the foreclosures which resulted from the shrinking of the circulating money supply caused by interest charged on loans.
The inflation of the circulating money supply occurring when FRNs "emitted" to fund loans made to the government merge with and dilute the FRNs "emitted" to fund loans made to private sector borrowers. (This is known as "inflation"; inflation causes prices to rise).
The FRNs "emitted" to fund the loans made to private sector borrowers are backed by the promised future production of the private sector borrowers while the FRNs "emitted" to fund the loans made to the government are backed only by the ability of the government to engage in the armed robbery of the populous!!
The salient point here is that the workers of the society are capable of producing only so much goods and services – when that limit is reached there is no ability to create any more – there are only 24 hours in a day – and no more!!
Consider how each individual private sector borrower's credit rating is established; an individual's credit rating is based on the individual borrower's perceived and proven ability to create goods and services desired by the community. Each individual person's ability to produce goods and services is determined by each person's individual naturally acquired (God given) talents, and no more.
If private sector borrowers have borrowed money to the maximum of their individual capability to repay their individual personal loans, then how could it be possible for such maxed out borrowers to produce an additional amount to provide funds to repay FRNs "emitted" to fund loans made to the government??
Does it take a rocket scientist to answer that question?? Or an accountant?? Or an economics professional? ? Or, Heaven forbid, an attorney such as Mr. Vieira??
Would the long term answer to the foregoing question be for the wives and mothers to get a job?? Thus neglecting their children?? The actual answer is to reassess the manner in which the government is funded and the manner in which money is "emitted" into the economy.
Mr. Vieira also correctly states that "...the emission of any currency [in this case FRNs] results in redistribution of wealth from society as a whole to the emitter...", however, what Mr. Vieira misses is that this very same phenomenon will still invariably manifest itself whether the money lent is silver or golf coin or paper Federal Reserve Notes.
In his commentary above, Mr. Vieira states in the second paragraph thereof:
" [2] Mr. WhoRU' argument that "no borrower is ever forced to borrow from any lender so this myth ["the hidden tax"] is technically untrue" misses the point. "The hidden tax" is not imposed on the emitter of the currency, or on the initial borrower, but on other parties down. the economic line, as the new currency percolates throughout society, changing the structure of prices of all goods and services it affects. Many (probably most) of these parties believe themselves to be required to accept FRNs perforce of the legal-tender law. 31U.S.C. Section 5103. So, to the extent of their ignorance on that score, they are "forced" into a system that cheats them of real wealth."
Mr. WhoRU response:
Why am I not surprised that in order to make his point Mr. Vieira had to omit the qualifying statement that I had inserted immediately prior to the snip Mr. Vieira quoted.
Mr. Vieira wrote: "Mr. WhoRU' argument that "no borrower is ever forced to borrow from any lender so this myth ["the hidden tax"] is technically untrue" misses the point..." However what I actually wrote, that Mr. Vieira conveniently omitted was the following:
"Mr. WhoRU' argument that "no borrower is ever forced to borrow from any lender so this myth ["the hidden tax"] is technically untrue" misses the point..."
However what I actually wrote, that Mr. Vieira conveniently omitted was the following:
"Taxation is a euphemism for armed robbery - the collection of taxes is ultimately enforced at the point of the government's gun; no borrower is ever forced to borrow from any lender so this myth [that inflation is a hidden tax] is technically untrue,..."
My statement stands as entirely true and un-refuted by Mr. Vieira because what my statement clearly and correctly asserts is that borrowers are not forced to take out loans at gunpoint, so the inflation and rising prices resulting from loans made to the government is not properly deemed to be a tax.
Moreover, Mr. Vieira's contention that I missed the point is 180 degrees out of line as it is Mr. Vieira who again errs as Mr. Vieira could not have possible inadvertently missed my point in addressing this Myth, as I had very clearly presented my point, which was to point out in my original writing, that taxation constitutes nothing but armed robbery and that taxation is not an acceptable means of funding a government of a people who purport to be free. How could Mr. Vieira possibly have inadvertently missed this point?? Mr. Vieira has once more brought his credibility as an unbiased critic into serious question!!
In his commentary above, Mr. Vieira states in the third paragraph thereof: " [3] Even if the government were not engaged in "uncontrolled spending", the natural effect. of "monetization" of private debt through the banking system would be redistribution of wealth-which, by the way, would occur whether or not there were a general increase in prices resulting from the emission of new currency. That is, "inflation" (as the public and apparent Mr. WhoRU understand that term to denote a general increase in prices) need not occur as the inevitable result of increases in the money supply. But redistributions of wealth always occur." Mr. WhoRU's response:
In his commentary above, Mr. Vieira states in the third paragraph thereof:
" [3] Even if the government were not engaged in "uncontrolled spending", the natural effect. of "monetization" of private debt through the banking system would be redistribution of wealth-which, by the way, would occur whether or not there were a general increase in prices resulting from the emission of new currency. That is, "inflation" (as the public and apparent Mr. WhoRU understand that term to denote a general increase in prices) need not occur as the inevitable result of increases in the money supply. But redistributions of wealth always occur."
Except for Mr. Vieira's non- related multiple errors in the foregoing, everything that I wrote in exposing this Myth is in total accord with what Mr. Vieira wrote in his third paragraph, however that did not stop Mr. Vieira from misstating what I had written; it is not reasonable that Mr. Vieira was innocently mistaken about what I wrote. In this paragraph Mr. Vieira states, "...That is, "inflation" (as the public and apparently Mr. WhoRU understand that term, to denote a general increase in prices) need not occur..."
My original writing in refuting this Myth is only two short paragraphs long. Twice in those two paragraphs I wrote the opposite of what Me. Vieira contends is my ignorance in understanding the proper meaning and application of "inflation", as opposed to "rising prices"; here are my exact words, in relevant part:
"... As it is the government's uncontrolled spending that constitutes the inflation of the money supply and the resulting increase in commodity prices. It is misleading and unfair to place the blame for increased prices on paper money or the Federal Reserve.
Inflation is not in any way an inherent aspect of the use of Federal Reserve Notes - inflation is the increase of the circulating supply of money caused when the government spends money into circulation that the government did not collect through normally approved funding channels. Taxation, although widely used to fund government, is not an appropriate means of funding a government of a people who purport themselves to be free."
Mr. Vieira is once more proven to be fast and loose with the truth!!
But in regard to Mr. Vieira's unrelated miss-statements, Mr. Vieira wrote, in relevant part: " [3] "... (1) The natural effect of "monetization" of private debt through the banking system would be redistribution of wealth-which, .... (2) But redistributions of wealth always occur." Mr. WhoRU's response:
But in regard to Mr. Vieira's unrelated miss-statements, Mr. Vieira wrote, in relevant part:
" [3] "... (1) The natural effect of "monetization" of private debt through the banking system would be redistribution of wealth-which, .... (2) But redistributions of wealth always occur."
Twice in his third paragraph (as numerated above), Mr. Vieira wrote statements that are only true when the central bank is a privately owned closed end money system, as is currently the case. If the ownership of the central bank were taken over by the People of the United States (while keeping Congress and the President totally out of the Central Bank's monetary loop as provided for in the Solution I have devised), both of these current serious problems would cease and all taxation (armed robbery), in the entire country could be phased out.
One point I find to be more than somewhat disconcerting and noteworthy, is that twice in these two short paragraphs I made statements regarding the impropriety of taxation (armed robbery) as being the appropriate means of funding our government, yet Mr. Vieira ignored both of these two points, which were/are the basic purpose of my entire writing. Mr. Vieira uses this once more to conger up an excuse to ridicule and belittle me in Mr. Vieira's fourth paragraph!
Here, for your immediate ready reference, are my original words on this point:
"Taxation is a euphemism for armed robbery - the collection of taxes is ultimately enforced at the point of the government's gun...
"Taxation, although widely used to fund government, is not an appropriate means of funding a government of a people who purport themselves to be free."
In his commentary above, Mr. Vieira states in the fourth paragraph thereof: " [4] I shall not attempt to unravel Mr. WhoRU' comments on taxation in his final paragraph on Myth No. 7. If what he means is that a government should finance itself entirely by voluntary contributions from the citizens, I suppose that is a philosophical position, which is at least arguable. What it has to do with the present system in the- United States--or any system likely to be put into effect in any lifetime--escapes me. " Mr. WhoRU's response:
In his commentary above, Mr. Vieira states in the fourth paragraph thereof:
" [4] I shall not attempt to unravel Mr. WhoRU' comments on taxation in his final paragraph on Myth No. 7. If what he means is that a government should finance itself entirely by voluntary contributions from the citizens, I suppose that is a philosophical position, which is at least arguable. What it has to do with the present system in the- United States--or any system likely to be put into effect in any lifetime--escapes me. "
No place in my writings have I ever suggested that government should be funded by passing the hat, as Mr. Vieira clearly implies that I did, however Mr. Vieira's claimed inability to grasp any connection of my castigations of the present private ownership of the closed end central bank with a means of funding government through the interest charged on loans to private sector borrowers if the central bank were owned by the People, in place of armed robbery, in a paper in which Mr. Vieira himself continually addresses and comments on the sever detrimental monetary effects caused by the manner in which the interest profits of the privately owned FRS redistribute wealth, is just a little hard to accept as genuine, this is especially true as I set forth the exact explanation Mr. Vieira claims I did not present, just three paragraphs down in my expose of Myth 8, wherein I wrote:
"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."
Mr. Vieira has once more proven himself to be an unmitigated prevaricator!!
End of PART TWO of THREE
Eric WhoRU Teaches Fundamental Principles