Banking For Muggles 101, The Par Value Of A Dollar

[mandalisj]

greetings and salutations to all! this is my first post on what i consider to be one of the best forums on the internet, read it carefully to be sure to understand it!

like many posters in this thread, for years i struggled to understand what was happening with loans and how it all worked before discovering the keystone concept to it all ... many here talk about ' acceptance for value' but do they understand what 'value' is at all? or more importantly, how is 'value' denominated? Ask yourself:

WHAT IS THE 'VALUE' OF A DOLLAR?

If you answered ' a dollar ' you are correct but still no closer to understanding the par value of a dollar. The first clue I discovered was found in the footnotes on the website of the Federal Reserve where gold reserves are accounted for when I was trying to determine how much actual gold there was at the Federal Reserve banks, here:

http://www.federalreserve.gov/releas...1107assets.htm

In the 'Statistical Supplement to the Federal Reserve Bulletin' the official gold stock of the United States is $11,041,000,000.00 and official gold stock held on behalf of foreign central banks is $8,967,000,000 - WHICH IS >>>>> VALUED <<<<< AT $42.2222 PER OUNCE!!!!!!!

So $11,041,000,000.00 / 42.2222 equals 261,497,506 ounces of gold on the Federal Reserve balance sheet which has a current market PRICE of $209,198,004,841.00. How can something VALUED at eleven billion trade at a PRICE of over two hundred billion?

(if you really understand the UCC and 3-303 Title, Value, and Consideration then the horrible truth should be dawning on you)

Why would the Federal Reserve undervalue gold so dramatically on their balance sheet? (At the time, gold was trading around $420 per ounce and has recently traded above $840 per ounce.) What reason does the central bank have for VALUING gold for less than 1/10'th or 1/20'th it's current market PRICE? The answer is because THEY HAVE TO since $42.2222 per ounce of gold is the par value of the dollar.

The par value of gold is defined by the government at 31 USC 5117, Transferring gold and gold certificates.
http://frwebgate.access.gpo.gov/cgi-...ite:+31USC5117

The par value of silver is $1.292929292 (gold dollars) in accordance with 31 USC 5116 which is actually a higher value than the normal market ratio where gold usually trades over fifty times it's weight in silver.
http://frwebgate.access.gpo.gov/cgi-...ite:+31USC5116

THIS IS A 'DOLLAR'


THIS IS A TOKEN FOR A DOLLAR TAX CREDIT


THIS IS A NOTE FOR A DOLLAR TAX CREDIT


The little green stamp means that the government SWEARS they will ACCEPT IT INSTEAD OF GOLD OR SILVER. However, if you want to pay taxes with gold and silver United States coins they will happily accept them.

To explain this in a more simple way ... let's say that you owe a bartender a bar tab of $42.22 ... THE VALUE YOU OWE TO THAT BARTENDER IS ONE OUNCE OF GOLD! If the bartender accepts Federal Reserve notes, then the bartender is getting ripped off for over ninety some cents on the dollar. If the bartender has a license on the wall obtained with a taxpayer identification number (valuable consideration) from a municipality incorporated in one of the United States then the bartender is required by law to accept the Federal Reserve notes FOR VALUE AS IF THEY WERE WORTH GOLD AT $42.2222 PER OUNCE!

Why do you think they call it 'negotiation' when you cash checks at your banks? Do you realize that your bank teller is ripping you off? They owe you 'value' and they give you notes worth less than that value. However, did you not agree to this with a valid contract under the law of admiralty (re-insured by the Federal Reserve) when you gave them the valuable consideration of your taxpayer identification number on your application for the valuable consideration of a deposit and transaction account number? Even if you do not have an account at the bank where you cash your check, did you not swear and testify (as evidenced by the endorsement of your signature) that you received 'value' from the bank teller? Why would you endorse checks that way when you should endorse them - EXCHANGE FOR CREDIT ONLY OR FEDERAL RESERVE NOTES NON-NEGOTIABLE AT PAR VALUE?

Even today, only gold and silver and lawful money despite many misconceptions. Read any Federal Reserve publication or press release about open market operations and you will never see anywhere that the Federal Reserve creates 'money' because they cannot, THEY CREATE CREDIT! BANKS DO NOT LOAN MONEY THEY ONLY LOAN CREDIT! The Federal Reserve understands exactly how they rip everyone off, hence they do not create 'money' and only create 'reserves' which your government accepts instead of money.

SO IF YOU OWE SOMEONE $42,222.20 WHAT YOU REALLY OWE THEM IS ONE THOUSAND OUNCES OF GOLD!

Federal Reserve notes and United States treasury base metal token coins (including silver) circulate so you may discharge your debts BECAUSE NEITHER YOU NOR YOUR GOVERNMENT CAN AFFORD TO PAY DEBTS IN GOLD ANYMORE! In 1913 the banks were not willing to continue extending credit to the United States government without a monopoly on tax credits. Thus, the United States government (or any entity incorporated under their authority with a taxpayer identification number) must ACCEPT FOR VALUE THE CREDITS OF THE FEDERAL RESERVE BANKS INSTEAD OF GOLD! This was when the United States government officially went into bankruptcy with the Federal Reserve as the receiver on behalf of it's member banks. When the new bonds came due twenty years later, the United States government went into liquidation in 1933. Although, while people could not longer redeem credit at Federal Reserve banks and get gold coins, the Federal Reserve could no longer get gold from the government. Also, the revaluation of gold from $20 per ounce to $35 per ounce caused every foreigner holding gold to send it to the United States for $35 shiny new silver dollars and the gold reserves of the United States increased dramatically to become larger than any gold hoard in history. Effectively, silver had been remonetized for the first time since the 'Crime of 1873' which demonetized silver in favor of a gold standard which is a fascinating tangent that may be further researched at http://coinschool.blogspot.com/ yet irrelevant to the current thread about the negotiability of promissory notes and other 'negotiable' instruments.

[mandalisj]

The holder in due course of the note is irrelevant. If I am a lender in London for a real estate project in Chicago it does not matter if I have an attorney in Chicago collect the payments for me or enforce the note if the borrower goes into default. Very few banks today actually make loans to customers and just broker them. As the servicer of the loan the bank is perfectly entitled (pun intended) to enforce it on behalf of Sallie, Fannie, Freddie, Ginnie or any other holder of due course that they sold it to. The lender is perfectly entitled to endorse the negotiable instrument in due course to whomsoever may give them 'valuable' consideration.

If your neighbor sells you a farm and holds the note, he does not lend you your note or your own credit as the farm is the valuable consideration. Your own credit is unlimited and cannot be taken away from you. However THE UNITED STATES GOVERNMENT DOES NOT HAVE TO ACCEPT YOUR CREDIT FOR VALUE AS LAWFUL CONSIDERATION IN PAYMENT OF TAXES THE WAY THEY HAVE TO ACCEPT THE CREDITS OF THE FEDERAL RESERVE BANKS!!!!!!!!! This is why people who say that their credit is acceptable for VALUE by the United States government run into problems. If you have ever sent a Bill of Exchange or other such nonsense to the United States treasury or offered it as good for the payment of taxes you have committed fraud.

Banks do not lend money, they only lend credit as valuable consideration for your credit. You do not sign a note and get a house, you get credit which the seller of the house then accepts for 'value' in lawful exchange for the property in turn. The promissory note is not collateral for the credit they create - their credit which is good for the payment of taxes unlike yours, is created by virtue of their charter (think charter under admiralty) AND EXCHANGED AS VALUABLE CONSIDERATION FOR THE PROMISSORY NOTE.

This creates two problems for the bank.

The first is that you GAVE YOUR WORD/CREDIT/EQUITY that you would repay the loan AT PAR VALUE, hence if you signed a $42,222.20 note you then owe one thousand ounces of gold AND THE BANK ACCEPTED IT FOR GOLD VALUE OF THEIR OWN FREE WILL AND ACCORD WITHOUT ANY EQUIVOCATION, HESITATION, OR RESERVATION WHATEVER. Since neither banks nor any other creditor can demand lawful money (gold) in repayment of an obligation, THEN HOW CAN THEY REFUSE TO ACCEPT YOUR CREDIT FOR VALUE AGAIN WHEN THEY ALREADY DID IT ONCE BEFORE? For example, if you owe a note for $42,222.20 to a bank what is to prevent you from taking a piece of paper and writing on it ' CREDIT ONLY $42,222.20 WITHOUT DEBIT TO ORDER ' then signing it and sending it to your creditor? They already accepted your credit once FOR VALUE, what legal right do they have to refuse it now? The only thing is that if the bank (or anyone else they sell it to) owes you a debt of lawful golden money and gives you back your own paper credits, then you have to accept it for VALUE because your signature evidences your word/credit/equity that you would. Do you get it yet? CREDIT FOR CREDIT, on the level as VALUE FOR VALUE. In order to be negotiated, an instrument must be NEGOTIATED FOR VALUE.

For example, compare the creditor/debtor relationship of the Federal Reserve and the United States with that of you and your electric company. First, the United States CREDITS THE FEDERAL RESERVE by giving treasury securities to them (runs the meter) and the Federal Reserve accepts them for value by CREDITING (giving juice) to THE UNITED STATES. CAN THE FEDERAL RESERVE THEN DEMAND GOLD DOLLARS OR MUST THEY ONLY ACCEPT MORE GOLD DOLLAR DENOMINATED TREASURY SECURITIES THAT THE UNITED STATES GOVERNMENT MUST THEN ACCEPT IN DUE COURSE? Can your electric company demand Federal Reserve credits, United States government credits, starbucks credits, disney credits or any other credits other than yours WHEN THEY ALREADY ACCEPTED YOUR CREDIT FOR VALUE WHEN THE ACCRUED THE INCOME? Not since 1933. Do you still think Roosevelt was wrong? However, don't forget that your electric company is under no obligation to keep you lights on and continue accepting your credits instead of the Federal Reserve credits that they really want.

The second problem is that the banks loaned you their credit for VALUE when THEY KNEW IT WAS NOT WORTH VALUE. In case you haven't noticed, the price of gold has not been $42.2222 per ounce in quite some time. The banks know this too however they pretend otherwise every time they make a loan. In order for a negotiable instrument to be negotiable (enforceable) it must be EXCHANGED FOR VALUE. When you signed a note for $42,222.20 you gave your word you would pay back the thousand ounces of gold, however they gave you CREDIT that they knew was NOT NEGOTIABLE FOR VALUE and that is fraudulent. Nevertheless, once you have accepted their consideration (credits) for value, or driven the car off the lot so to speak, then their fraud becomes legal. However, if during your foreclosure you demand that they testify as to what the VALUE was that they gave you they will not show up in court just like what happened in METRIS VS EDWARDS which can be found at: http://www.citizensoftheamericanconstitution.org/ EDWARDS achieved a victory without understanding the why of how. The real answer is because the par value of a dollar is 0.02368422299169631141911127321646 ounces of gold and METRIS did not want to go on record that what they loaned was not the same VALUE.

This concludes 'BANKING FOR MUGGLES 101' and I hope that you enjoyed it. As you are now aware, no matter what you think you understand about commerce, finance, law, banking, or trade it amounts to nothing if you don't understand the par value of a dollar in gold.

Good luck!

[mandalisj]

Additionally, the par value of a dollar is why the 'liberty dollar' people are going to jail.

When silver was under $10 they used to pawn off an ounce of silver for $10, way above the market price. Now that silver is well over $10 do they still put a ten dollar denomination on an ounce of silver or do they try to swindle more? Who do they think they are, the Federal Reserve? I think it's no less crooked. They think they can get people to use 'liberty dollars' for more than the price of the metal. The current denomination of the silver liberty 'dollar' is $20 while silver is trading around $14 ... I can buy a nice new shiny silver dollar with the attestation of weight and purity from a sovereign government for less than $20, why would anyone buy a 'liberty dollar' from a brand new mint nobody has ever heard of for such a premium?


But their real problem is because they issue a one ounce gold coin with a face value of $1000 when they have no lawful authority to do so since the government does not have to accept the one ounce gold 1000 liberty 'dollar' coin for payment of $1000 in taxes. Additionally, the United States government does not certify that the VALUE of the coin contains $1000 worth of gold which is over 23 ounces (1000/42.2222) par value. This is what is really getting them in trouble. If they had minted coins or bars AND DID NOT REPRESENT THEM AS DOLLARS just like Credit Suisse, Johnson Mathey, Englehard or anyone in that business does then they would not have had a problem. The sad thing is that they had a good business plan but were too ignorant to carry it out since Credit Suisse will not let me spend my warehouse receipts with other members on the website and will only buy them from me with government money. If they minted a one ounce gold coin and called it '1000 liberties' OR ANYTHING ELSE BESIDES DOLLARS then they would not have had any problems.

[weishaupt1776]

good posts, keep it up

The banking deal is not one of my strong points

[ThomPaine]

Great post man, not that I understood it all, but it seems like you do, so let's break things down a bit, maybe based on common concepts, which may also be misconceptions, so please correct me if I am wrong.

Consideration: The inducement into a contract, typically motive, price, influence, etc. Basically the reason for entering a contract.

Example: I want to acquire a dirt bike and a friend offers to sell his for $1000 which I think is a good deal, so I give him $1000 in FRNs. He has $1000 and I have his bike, both agreed they have something worth $1000 and are happy. I could have traded him a sofa that was 'worth' $1000 for his bike that was worth $1000 just as easily, so long as we both agreed on it, its a valid contract.

Valuable Consideration: A class of consideration, upon which a promise to pay may be founded. It entitles the promisee to enforce his claim against an unwilling promisor.

Example: I agree to pay my buddy $1000 next week when I get my bonus and he says I can go ahead and take the bike. I dont get my bonus and cant pay him or refuse to, so he can take back the bike, as it was never paid for. Likewise if I never brought him the sofa.

Credit: The right granted by a creditor to a debtor (or buyer) to defer payment of the debt.

Without getting into lots of technicals, everyone has a concept of credit, whether on a gas card or credit card or receiving goods for a business and then paying an invoice at some later time. In accounting, credit increases revenues, liabilities and equity and decreases assets and expenses.

Currency: Coined money and banknotes or other paper currency as authorised by law, circulating as a medium of exchange.

Money: Coins and paper currency, circulating as a medium of exchange, but does NOT embrace notes, bonds or evidences of debt.

I am sure this discussion could go on and on and on about how banks create credit, how the FED works, etc., but I am thinking that we should run with your Banking 101 concept and make this a very simple and basic explanation that everyone can understand. Maybe even a Banking 100 with definitions of terms and concepts.

[ThomPaine]

Continuing on with that example, if I wished to acquire a new BMW from that same buddy and we agreed on a price of $42,220.20, several things could happen.

I could trade him something worth that amount, I could bring him a check drawn on my bank for that amount, I could borrow the funds from a lender or I could bring him that amount in FRNs.

I am not sure that I understand the 1000 ounces of gold thing, as that would mean that I owed him some 800,000 'dollars' for the car. (if I were to go purchase 1000 ounces of gold using FRNs.)

What if I didnt participate in the system by having a bank account, a regular job, a house, insurance, etc. and just kept tons FRNs stashed away? Am I still participating in the credit system by using these FRNs? Most would say yes, so what if I exchanged them for gold or US Notes and used that to purchase the car, food, etc.??

If I go to a coin dealer and purchase a silver dollar, it will cost me something around $15 in FRNs. SO, then is that silver dollar worth a dollar or is it worth $15 bc it contains an ounce of silver? Same thing would apply with gold.

Along these lines, I must also consider the recent insanity that has consumed the real estate market in many cities. Examples of houses being bought and then in a very short time, sometimes less than a year, selling them for 2-3 times the purchase price. Nothing changed about the house, so is it worth more bc someone is willing to pay that amount or does value come from something else. The purchasing power of the dollar didnt go down that fast, so why would I pay $500,000 FRNs for a house that sold for $250,000 FRNs only 6 months ago?

Thom

[mandalisj]

Originally Posted by ThomPaine

Great post man, not that I understood it all, but it seems like you do, so let's break things down a bit, maybe based on common concepts, which may also be misconceptions, so please correct me if I am wrong.

Go reread it slowly, take the time to understand it. I don't want you to confuse anyone with your posts. What the lawful par value of a dollar is as measured in gold is the key concept to understand regarding all of these various redemption and national bankruptcy issues. Many on here already have most of the information they need, they just need to understand that the par value of a dollar is as a weight of gold, in order to understand what the contracts are really saying.

Consideration: The inducement into a contract, typically motive, price, influence, etc. Basically the reason for entering a contract.

Correct. It could be a building, farm, promise to perform an act, or even the deposit of credits in a transaction account that the government accepts for the payment of taxes INSTEAD of gold.

Example: I want to acquire a dirt bike and a friend offers to sell his for $1000 which I think is a good deal, so I give him $1000 in FRNs. He has $1000 and I have his bike, both agreed they have something worth $1000 and are happy. I could have traded him a sofa that was 'worth' $1000 for his bike that was worth $1000 just as easily, so long as we both agreed on it, its a valid contract.

Correct ... but you do understand that basically by signing a contract valuing the consideration at $1000, the parties are saying legally saying that the bike and sofa (or Federal Reserve notes) are worth $1000/$42.2222 or 23.68422299169631141911127321646 OUNCES OF GOLD! Seems a little steep don't you think? Can you buy 23 ounces of gold with a $1000 'worth' of Federal Reserve notes? Do you understand that this is why the gold and silver coins minted by the government cannot have a face value greater than their par value?

Valuable Consideration: A class of consideration, upon which a promise to pay may be founded. It entitles the promisee to enforce his claim against an unwilling promisor.

Correct ... however the sixty four thousand dollar question is WHAT IS THE (gold) VALUE OF THE CONSIDERATION? For consideration to be legal, it MUST HAVE A SUM CERTAIN IN MONEY (gold) ONLY! AND THAT THE VALUE OF THE CONSIDERATION IS BASED ON THE PAR VALUE OF GOLD AT $42.2222 PER OUNCE! Think of it like this - what is the weight of the consideration in terms of gold at $42.2222? On one side of the scale called 'value' there is the consideration, on the other side there is an ounce of gold for every $42.2222 in consideration.

Example: I agree to pay my buddy $1000 next week when I get my bonus and he says I can go ahead and take the bike. I dont get my bonus and cant pay him or refuse to, so he can take back the bike, as it was never paid for. Likewise if I never brought him the sofa.

or he could say 'no give backs' or 'for keeps' and refuse to take the bike back and sue you for $1000/42.2222 ounces of gold ...

Credit: The right granted by a creditor to a debtor (or buyer) to defer payment of the debt.

The right granted by a creditor to a debtor to NOT pay the debt AT ANY TIME ...

Without getting into lots of technicals, everyone has a concept of credit, whether on a gas card or credit card or receiving goods for a business and then paying an invoice at some later time. In accounting, credit increases revenues, liabilities and equity and decreases assets and expenses.

That is THEIR CREDIT NOT YOURS ... YOUR Credit is the ability to tell someone that THEY DON'T OWE YOU (gold) MONEY and it is unlimited ... the seller of the bike can always say, 'hey don't worry, i'll credit you and we'll call it even ... '

keep in mind that the government has agreed to accept the credit of Federal Reserve banks INSTEAD OF gold for the payment of taxes ... the government does not have to accept YOUR credit as good as gold (at $42.2222 per ounce) in payment of taxes ...

Currency: Coined money and banknotes or other paper currency as authorised by law, circulating as a medium of exchange.

Correct. Anything with a CREDIT VALUE that has been agreed to by the parties can be currency ... to the mob, the right to pick up garbage and charge for it in a certain area is currency ... what they call 'juice' ...

Money: Coins and paper currency, circulating as a medium of exchange, but does NOT embrace notes, bonds or evidences of debt.

NOOOOOOOOOOOOOOOOOOO!!!!!!!!!! NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, NO, A THOUSAND TIMES NO! (as i try to hit you upside the head with a bag of gold coins slightly over one ounce each that say $50 on them)

Paper currency by definition is a note evidencing a debt. Essentially the banks and government say they will accept the paper CREDITS denominated in lawful (gold) money INSTEAD of gold. Credit cannot be denominated in credits, it has to be denominated in money.

THIS ALONE IS LAWFUL MONEY


Look right on there, the coin that weights 1.0909 troy ounces of 0.91670 fine gold (50/1.0909*0.91670=~42) says FIFTY DOLLARS!

THE VALUE OF AN OUNCE OF PURE 100% GOLD IS $42.2222 (while the PRICE trades much higher so the Federal Reserve can rip everyone off)

THIS IS A NOTE FOR GOLD MONEY DENOMINATED CREDITS ACCEPTED AT PAR BY THE GOVERNMENT AND BANKS INSTEAD OF LAWFUL GOLD MONEY



NEITHER THE GOVERNMENT NOR THE BANKS CAN DEMAND LAWFUL GOLD MONEY WHEN YOU HAVE THEIR CREDITS.

I am sure this discussion could go on and on and on about how banks create credit, how the FED works, etc., but I am thinking that we should run with your Banking 101 concept and make this a very simple and basic explanation that everyone can understand. Maybe even a Banking 100 with definitions of terms and concepts.

You don't need more information. What you really need is to eliminate the information that you already have which is confusing. You can try all the remedy regarding redemption and sovereignty that you want, however if you don't understand the (gold) VALUE of the contracts in which you are involved you will never get anywhere. A more appropriate title for my article would have been 'wizard banking for muggles 101' ... who cares about normal banking? Basically signing on the dotted line and working for them for the rest of your life is what they want. Don't you know that already? I am interested in sovereignty.

However I do appreciate your questions, and I want everyone to understand the par value of one dollar (in your contracts) is a weight of gold much higher than what a one dollar Federal Reserve credit is worth despite the fact that it is good for the payment of taxes at par in lieu of lawful golden money. Don't make this more complicated than it needs to be. The reality is deceptively simple.

The fact that no creditor can accept gold is why you can pay off your debts with YOUR OWN paper. THEY ALREADY AGREED TO ACCEPT YOUR CREDIT FOR VALUE WHEN THE DEBT WAS INCURRED DIDN'T THEY? Just make sure that it is for CREDIT ONLY and NOT redeemable in lawful (gold) money. Also, do not pretend that it is GOOD FOR THE PAYMENT OF TAXES like their credit is and don't send any letters to the treasury stating so or you will end up being prosecuted, and rightly so. The fact that banks accept YOUR CREDIT (when you sign the note) as VALUABLE (golden) CONSIDERATION and then get you to repay them with THEIR CREDIT is the biggest secret in the world. If this information became widely understood the world would be free.

[mandalisj]

Originally Posted by ThomPaine

Continuing on with that example, if I wished to acquire a new BMW from that same buddy and we agreed on a price of $42,220.20, several things could happen.

I could trade him something worth that amount, I could bring him a check drawn on my bank for that amount, I could borrow the funds from a lender or I could bring him that amount in FRNs.

Or you could theoretically give him the gold eagles for face value. But why would you when you can get Federal Reserve notes for so much cheaper than the eagles? Do you think there is a coin dealer that will sell $50 eagles for $50? What makes it confusing is that the eagle is a little more than an ounce of gold and thus has a fifty dollar face value instead of 42.2222, however it is because the eagle weighs 1.0909 ounces of 0.91670 fine gold so $50 / 1.0909 X 0.91670 = ~42 ... this is why the face value of the coin is $50 and not $42.2222 ....

I am not sure that I understand the 1000 ounces of gold thing, as that would mean that I owed him some 800,000 'dollars' for the car. (if I were to go purchase 1000 ounces of gold using FRNs.)

essentially yes, which is why using Federal Reserve notes is a better deal if he is willing to accept them when you owe him the VALUE of one thousand ounces of gold ... however, when you accept Federal Reserve notes (particularly from your bank) you are getting ripped off ...

What if I didnt participate in the system by having a bank account, a regular job, a house, insurance, etc. and just kept tons FRNs stashed away? Am I still participating in the credit system by using these FRNs? Most would say yes, so what if I exchanged them for gold or US Notes and used that to purchase the car, food, etc.??

George Mercier argues in Invisible Contracts that the use of a single Federal Reserve note attaches admiralty jurisdiction ... I don't necessarily agree, however you are only really getting ripped off when you accept Federal Reserve notes and not when you pawn them off on someone else ... (if someone accepts them in lieu of lawful gold money then they are getting ripped off since Federal Reserve notes are not worth their golden par value)

If I go to a coin dealer and purchase a silver dollar, it will cost me something around $15 in FRNs. SO, then is that silver dollar worth a dollar or is it worth $15 bc it contains an ounce of silver? Same thing would apply with gold.

silver makes this very confusing since it is also lawful money, however the unit of money is based on gold and not silver since the Coinage Act of 1873 ...
http://coinschool.blogspot.com/

for the purposes of the United States monetary system since 1873, silver is like a base metal which the government must accept instead of gold ... if you owe tariffs and taxes of $50, you have several choices ... you can pay with one $50 gold eagle with a value of one ounce of pure gold, fifty $1 silver eagles with a value of one ounce of pure gold, or fifty dollars worth of Federal Reserve credits with a value of one ounce of pure gold ... now while all three of these things have the same VALUE but what about PRICE? The fifty dollar gold eagle with a contract exchange par VALUE of one ounce of pure gold currently has a PRICE OF $800, the fifty $1 silver eagles with a contract exchange par VALUE of one ounce of pure gold currently has a market PRICE of $750, and the fifty dollars worth of Federal Reserve credits with a contract exchange VALUE of one ounce of pure gold currently has a market PRICE of $50 ... clearly, if you had all three of these things you would use the paper despite their legal value all being equal ...

Along these lines, I must also consider the recent insanity that has consumed the real estate market in many cities. Examples of houses being bought and then in a very short time, sometimes less than a year, selling them for 2-3 times the purchase price. Nothing changed about the house, so is it worth more bc someone is willing to pay that amount or does value come from something else. The purchasing power of the dollar didnt go down that fast, so why would I pay $500,000 FRNs for a house that sold for $250,000 FRNs only 6 months ago?

Thom

people are free to contract ... if they want to pretend that their real estate (ray-al, royal) estate is worth a certain amount of gold than the are free to do so ... the purchasing power of the dollar is defined by how much you can buy with it ... the reason why you should pay $500K for a house that went for $250 six months ago is because the dollar PRICE is getting weaker (while the dollar value stays fixed at the par value of $42.2222 per ounce of gold) ... the dollar did loose fifty percent of it's purchasing power ... don't pay attention to any of the Consumer Price Index or any other nonsense that the Federal Reserve puts out to confuse the muggles by boring them ... the real price of a dollar is determined by how much stuff it will buy and not by economic statistics based on subjective data ... if a $250K house sells for $500K then the gold VALUE will have doubled, however if the gold price went from $400 per ounce to $800 per ounce than the gold PRICE of the real estate stayed the same ...

[ThomPaine]

Thanks for the responses and explanations. Hopefully I will be able to digest it all and make sense of it.

Thanks for your time and help,

Thom

[mandalisj]

Originally Posted by ThomPaine

Thanks for the responses and explanations. Hopefully I will be able to digest it all and make sense of it.

Thanks for your time and help,

Thom

just ask yourself, why would the Federal Reserve value their gold reserves at $42.2222 per ounce?

the answer is: because they are pretending the value of their notes is higher than it is ...

generally every promissory note begins 'for value received'

what if you didn't receive value? is the note still enforcible? is the value of their credit really worth an ounce of gold for every $42.2222 that they credit you?