Modern monetary systems

Modern monetary systems have a fiat base – literally money by decree – with depository institutions, ACTING AS FIDUCIARIES, creating obligations against themselves with the fiat base acting in part as reserves.

The decree appears on the currency notes: “This note is legal tender for all debts, public and private.” While no individual could refuse to accept such money for debt repayment, EXCHANGE CONTRACTS COULD EASILY BE COMPOSED TO THWART ITS USE IN EVERYDAY COMMERCE. However, a forceful explanation as to why money is accepted is that the federal GOVERNMENT REQUIRES IT AS PAYMENT FOR TAX LIABILITIES. Anticipation of the need to clear THIS DEBT CREATES A DEMAND FOR THE PURE FIAT DOLLAR. [“Money, Credit and Velocity,” Review, May, 1982, Vol. 64. No. 5, Federal Reserve Bank of St. Louis, p. 25]

Congress ... to exercise a power conferred by the Constitution, [then] the means which it selects are constitutional, whatever may be the opinion of the court of its practical wisdom, because the decision, whether practically conducive to the end proposed, is a political and administrative question, and not a judicial one ... If the government needed gold, and it was in the possession of A, it could take it from him, as they could take his personal service, against his will, or could batter down his house, if it stood in the way of military operations. If A had said, “I owe this gold to B, and am on my way to pay him my debt,” the officers of the government could accompany him to his creditor, and when the payment was made, seize it from him. What difference does it make whether it was the form in which it was done, or whether it was taken from A, and there was furnished him certifies that the money belonged to B, and intended for him, was taken by the government, which would he responsible to B for its payment? Attorney General Akerman; Knox v. Lee, 79 U.S. 287, 304, 12 Wall. 457-681 (1870)

A majority of the court five to four, in the opinion which has just been read, reverses the judgment rendered by the former majority of five to three, in pursuance of an opinion formed after repeated arguments, at successive terms, and careful consideration; and declares the legal tender clause to be constitution; that is to say, that an act of Congress making promises to pay dollars legal tender as coined dollars in payment of pre-existing debts is a means appropriate and plainly adapted to the exercise of powers expressly granted by the Constitution, and not prohibited itself by the Constitution but consistent with its letter and spirit.

And this reversal, unprecedented in the history of the court, has been produced by no change in the opinions of those who concurred in the former judgment. One closed an honorable judicial career by resignation after the case had been decided, after the opinion had been read and agreed to in conference, and after the day when it would have been delivered in court, had not the delivery been postponed for a week to give time for the preparation of the dissenting opinion. The court was then full, but the vacancy caused by the resignation of Mr. Justice Grier having been subsequently filled and an additional justice having been appointed under the act increasing the number of judges to nine, which took effect on the first Monday of December, 1869, the then majority find themselves in a minority of the court as now constituted, upon the question. [The CHIEF JUSTICE, Chase, dissenting; LEGAL TENDER CASES Knox v. Lee, 79 U.S. 287,319 (1870)]

But it has been claimed to be a PROPER REGULATION OF COMMERCE, for Congress to provide a uniform national currency; and THAT THESE LEGAL TENDER NOTES WERE, IN EFFECT, A MORTGAGE ON THE WHOLE PROPERTY OF THE NATION and therefore, the best secured and most uniform currency the nation could have.

ALTHOUGH, IN TRUTH, THE SECURITY FOR THIS OR ANY NATIONAL DEBT IS EXACTLY THE EXTENT TO WHICH THE PEOPLE WILL *******CONSENT TO CONTRIBUTE THROUGH TAXATION********* TO ITS PAYMENT. [Knox v. Lee, 12 Wall. 287,298, (1870)]

[idknow]

Originally Posted by free_martha

Modern monetary systems have a fiat base * literally money by decree * with depository institutions, ACTING AS FIDUCIARIES, creating obligations against themselves with the fiat base acting in part as reserves.

The decree appears on the currency notes: *This note is legal tender for all debts, public and private.* While no individual could refuse to accept such money for debt repayment, EXCHANGE CONTRACTS COULD EASILY BE COMPOSED TO THWART ITS USE IN EVERYDAY COMMERCE. However, a forceful explanation as to why money is accepted is that the federal GOVERNMENT REQUIRES IT AS PAYMENT FOR TAX LIABILITIES. Anticipation of the need to clear THIS DEBT CREATES A DEMAND FOR THE PURE FIAT DOLLAR. [*Money, Credit and Velocity,* Review, May, 1982, Vol. 64. No. 5, Federal Reserve Bank of St. Louis, p. 25]

Congress ... to exercise a power conferred by the Constitution, [then] the means which it selects are constitutional, whatever may be the opinion of the court of its practical wisdom, because the decision, whether practically conducive to the end proposed, is a political and administrative question, and not a judicial one ... If the government needed gold, and it was in the possession of A, it could take it from him, as they could take his personal service, against his will, or could batter down his house, if it stood in the way of military operations. If A had said, *I owe this gold to B, and am on my way to pay him my debt,* the officers of the government could accompany him to his creditor, and when the payment was made, seize it from him. What difference does it make whether it was the form in which it was done, or whether it was taken from A, and there was furnished him certifies that the money belonged to B, and intended for him, was taken by the government, which would he responsible to B for its payment? Attorney General Akerman; Knox v. Lee, 79 U.S. 287, 304, 12 Wall. 457-681 (1870)

A majority of the court five to four, in the opinion which has just been read, reverses the judgment rendered by the former majority of five to three, in pursuance of an opinion formed after repeated arguments, at successive terms, and careful consideration; and declares the legal tender clause to be constitution; that is to say, that an act of Congress making promises to pay dollars legal tender as coined dollars in payment of pre-existing debts is a means appropriate and plainly adapted to the exercise of powers expressly granted by the Constitution, and not prohibited itself by the Constitution but consistent with its letter and spirit.

And this reversal, unprecedented in the history of the court, has been produced by no change in the opinions of those who concurred in the former judgment. One closed an honorable judicial career by resignation after the case had been decided, after the opinion had been read and agreed to in conference, and after the day when it would have been delivered in court, had not the delivery been postponed for a week to give time for the preparation of the dissenting opinion. The court was then full, but the vacancy caused by the resignation of Mr. Justice Grier having been subsequently filled and an additional justice having been appointed under the act increasing the number of judges to nine, which took effect on the first Monday of December, 1869, the then majority find themselves in a minority of the court as now constituted, upon the question. [The CHIEF JUSTICE, Chase, dissenting; LEGAL TENDER CASES Knox v. Lee, 79 U.S. 287,319 (1870)]

But it has been claimed to be a PROPER REGULATION OF COMMERCE, for Congress to provide a uniform national currency; and THAT THESE LEGAL TENDER NOTES WERE, IN EFFECT, A MORTGAGE ON THE WHOLE PROPERTY OF THE NATION and therefore, the best secured and most uniform currency the nation could have.

ALTHOUGH, IN TRUTH, THE SECURITY FOR THIS OR ANY NATIONAL DEBT IS EXACTLY THE EXTENT TO WHICH THE PEOPLE WILL *******CONSENT TO CONTRIBUTE THROUGH TAXATION********* TO ITS PAYMENT. [Knox v. Lee, 12 Wall. 287,298, (1870)]

wow, that's just pure unadulterated crap

good going, martha

It is that, no doubt. What I find fascinating is what they call the derivative market [... one of them is what we call the name-game] was in the works AT LEAST from the 1870’s. Franklin D. Roosevelt, said: Nothing happens in politics by accident. If it happens, it was planned that way." Trite but true.

Mr Buffett argues that such highly complex financial [derivative] instruments are time bombs and "FINANCIAL WEAPONS OF MASS DESTRUCTION" that could harm not only their buyers and sellers, but the whole economic system.

Derivates like futures, options and swaps were developed to allow investors hedge risks in financial markets - in effect buy INSURANCE against market movements -, but have quickly become a means of investment in their own right. Derivates like futures, options and swaps were developed to allow investors hedge risks in financial markets - in effect buy INSURANCE against market movements -, but have quickly become a means of investment in their own right.

Some derivatives contracts, Mr Buffett says, appear to have been devised by "madmen".

[http://news.bbc.co.uk/1/hi/business/2817995.stm]