The End of Dollar Hegemony

The End of Dollar Hegemony

HON. RON PAUL OF TEXAS Before the U.S. House of Representatives ??February 15, 2006

http://www.house.gov/paul/congrec/co...6/cr021506.htm

Since PRINTING PAPER MONEY IS NOTHING SHORT OF COUNTERFEITING, the issuer of the international currency must always be the country with the military might to guarantee control over the system. This magnificent scheme seems the perfect system for obtaining perpetual wealth for the country that issues the de facto world currency. The one problem, however, is that such a system destroys the character of the counterfeiting nation’s people-- just as was the case when gold was the currency and it was obtained by conquering other nations. And this destroys the incentive to save and produce, while encouraging debt and runaway welfare.

The pressure at home to inflate the currency comes from the corporate welfare recipients, as well as those who demand handouts as compensation for their needs and perceived injuries by others. In both cases personal responsibility for one’s actions is rejected.
When paper money is rejected, or when gold runs out, wealth and political stability are lost. The country then must go from living beyond its means to living beneath its means, until the economic and political systems adjust to the new rules-- rules no longer written by those who ran the now defunct printing press.

For the most part the true victims aren’t aware of how they pay the bills. The LICENSE TO CREATE MONEY OUT OF THIN AIR ALLOWS THE BILLS TO BE PAID THROUGH PRICE INFLATION. American citizens, as well as average citizens of Japan, China, and other countries suffer from price inflation, which represents the “tax” that pays the bills for our military adventures. That is until the fraud is discovered, and the foreign producers decide not to take dollars nor hold them very long in payment for their goods. Everything possible is done to prevent the fraud of the monetary system from being exposed to the masses who suffer from it. If oil markets replace dollars with Euros, it would in time curtail our ability to continue to print, without restraint, the world’s reserve currency.

The ECONOMIC LAW THAT HONEST EXCHANGE DEMANDS ONLY THINGS OF REAL VALUE AS CURRENCY CANNOT BE REPEALED. The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or Euros. The sooner the better.

[idknow]

Originally Posted by free_martha

The End of Dollar Hegemony

HON. RON PAUL OF TEXAS Before the U.S. House of Representatives ??February 15,
2006

http://www.house.gov/paul/congrec/co...6/cr021506.htm

Since PRINTING PAPER MONEY IS NOTHING SHORT OF COUNTERFEITING, the issuer of
the international currency must always be the country with the military might
to guarantee control over the system. This magnificent scheme seems the
perfect system for obtaining perpetual wealth for the country that issues the
de facto world currency. The one problem, however, is that such a system
destroys the character of the counterfeiting nation*s people-- just as was the
case when gold was the currency and it was obtained by conquering other
nations. And this destroys the incentive to save and produce, while
encouraging debt and runaway welfare.

The pressure at home to inflate the currency comes from the corporate welfare
recipients, as well as those who demand handouts as compensation for their
needs and perceived injuries by others. In both cases personal responsibility
for one*s actions is rejected. When paper money is rejected, or when gold runs
out, wealth and political stability are lost. The country then must go from
living beyond its means to living beneath its means, until the economic and
political systems adjust to the new rules-- rules no longer written by those
who ran the now defunct printing press.

For the most part the true victims aren*t aware of how they pay the bills. The
LICENSE TO CREATE MONEY OUT OF THIN AIR ALLOWS THE BILLS TO BE PAID THROUGH
PRICE INFLATION. American citizens, as well as average citizens of Japan,
China, and other countries suffer from price inflation, which represents the
*tax* that pays the bills for our military adventures. That is until the fraud
is discovered, and the foreign producers decide not to take dollars nor hold
them very long in payment for their goods. Everything possible is done to
prevent the fraud of the monetary system from being exposed to the masses who
suffer from it. If oil markets replace dollars with Euros, it would in time
curtail our ability to continue to print, without restraint, the world*s
reserve currency.

The ECONOMIC LAW THAT HONEST EXCHANGE DEMANDS ONLY THINGS OF REAL VALUE AS
CURRENCY CANNOT BE REPEALED. The chaos that one day will ensue from our
35-year experiment with worldwide fiat money will require a return to money of
real value. We will know that day is approaching when oil-producing countries
demand gold, or its equivalent, for their oil rather than dollars or Euros.
The sooner the better.

Well, a few of these comments of the Congressman have been posted here and while I'm
grateful that he stands in the well and says these things or has them entered
into the record, I wonder if he has ever said that the law which created the
Federal Reserve System was an unconstitutional delegation of authority by
Congress back in 1913.

He refers to "price inflation" in the third paragragh above; I'm not so sure that's
the only means; it can be clearly seen that taxation is Government taking "property"
out of the economy but before the current war began, and since, it is even MORE
apparent that the money the government required to execute this war was removed
and is being removed directly from the economy and this is part of the reason for
the current inflation of prices across the board.

also, the rise in the cost of gasoline is also because of government's need
to execute a war!

There's plenty of oil.

There is not plenty of paper to spend it on.

[charlesa6]

Hehehehhe!! funny.

[David Merrill]

April 4, 2006. I have been waiting...

http://www.ecclesia.org/forum/images...Statement5.gif

Kudos to you, David ... I notice that the 3 year limit was up on March 2, 2006 and Ron Paul’s talk to Congress was on February 15, 2006 – so where does it go from here?

Note how economist Addison Wiggin on February 6, 2006 refers to the thralldom of men, women children as a ‘grand experiment’ with ready knowledge that the political class are counterfeiting with paper money.

Ron Paul: A Real Washington Scandal

February 6, 2006

http://www.house.gov/paul/tst/tst2006/tst020606.htm

As economist Addison Wiggin states, however, "The GRAND EXPERIMENT WITH PAPER MONEY IS RUNNING ITS INEVITABLE COURSE. Bernanke's biggest challenge is the challenge of central banking itself: You can control some things, but not everything. In the Fed's case, it can control the quantity of money or the quality of it, but not both at the same time."

All of these factors make it likely the U.S. dollar will continue to decline in value, perhaps precipitously, in the coming decade. WILL IT TAKE AN ECONOMIC DEPRESSION BEFORE THE AMERICAN PUBLIC FINALLY HOLDS THE POLITICAL CLASS ACCOUNTABLE FOR ITS reckless borrowing, spending, and ****COUNTERFEITING****?

[UGA Lawdog]

Originally Posted by David Merrill

April 4, 2006. I have been waiting...

http://www.ecclesia.org/forum/images...Statement5.gif

Ah yes....nothing like wasting time and money filing meaningless gibberish with the county clerk's office.

I can't wait to hear the excuses when the date has come and gone and nothing has changed.

The Lawdog

Rather defeatist, wouldn’t you say?

For posterity, UGA Lawdog, which side are you in agreement with – Ron Paul or Greenspan-Bernanke-Federal Reserve?

November 28, 2005

http://www.house.gov/paul/tst/tst2005/tst112805.htm??
‘ ... Mr. Bernanke appears to have embraced the idea that the Federal Reserve can create prosperity more than Mr. Greenspan ever did. Like his predecessor, Mr. Bernanke views our SYSTEM OF FIAT CURRENCY AS A TOOL FOR CREATING WEALTH OUT OF THIN AIR BY PRODUCING MORE DOLLARS, WHETHER PAPER OR ELECTRONIC.

But he seems to take things further than Greenspan by refusing even to consider the destructive consequences of monetary expansion. In fact, he earned dubious notoriety for this quote in a 2002 speech discussing the supposed threat of deflation in the American economy: "THE U.S. GOVERNMENT HAS A TECHNOLOGY, CALLED A PRINTING PRESS, THAT ALLOWS IT TO PRODUCE AS MANY DOLLARS AS IT WISHES AT ESSENTIALLY NO COST."

[REDCLOUD]

The ECONOMIC LAW THAT HONEST EXCHANGE DEMANDS ONLY THINGS OF REAL VALUE AS CURRENCY CANNOT BE REPEALED. The chaos that one day will ensue from our 35-year experiment with worldwide fiat money will require a return to money of real value. We will know that day is approaching when oil-producing countries demand gold, or its equivalent, for their oil rather than dollars or Euros. The sooner the better.

The US has been using fiat money since 1933 (72 years) when Roosevelt took the country off the gold standard. It was also done during the Civil War when the Northern states issued over $4,000,000,000 in "Greenbacks" that weren't retrired for over 40 years. It was also done during the revolutionary war and is memorialized in the Constitution as "honoring"debts". This economic law of exchange of which you speak has never been repealed. You can easily exchange your Federal Reserve Notes for gold any day of the week anywhere and proceed to exchange goods and services for it with anyone willing. For that matter you can also use bushels of wheat, sacks of potatoes, or old tires. The 1933 Act banned the use of "gold clauses" in contracts but was restored in 1977, you could require all your dealings in gold or silver coin at any time.

The pressure at home to inflate the currency comes from the corporate welfare recipients, as well as those who demand handouts as compensation for their needs and perceived injuries by others. In both cases personal responsibility for one*s actions is rejected.
When paper money is rejected, or when gold runs out, wealth and political stability are lost. The country then must go from living beyond its means to living beneath its means, until the economic and political systems adjust to the new rules-- rules no longer written by those who ran the now defunct printing press.

Prior to the 1913 Federal Reserve Act, the problem was not inflation but defaltion. Gold based currency was decidely deflationary, bank "runs" were common, and there were over 20,000 different "currencies" in circulation because banks were allowed to issue their own money based upon their gold reserves. This system was also highly exlusionary, being limited to a small portion of the educated white male population and some aggressive entreprenuers. The problem was that when currency was backed by gold it was highly manipulable by simple withdrawing gold from deposit, reducing the currency base, causing deflation, "bank runs", and panics. It was readily apparrant that there was not enough gold in government or private hands to to create a stabile currency base. And, how do you combine the two to create such a base, without confiscating that in private hands? At the time, it was thought that what was needed was an "elastic" currency, modelled on that of the Bank of England's system.
That this system created a massive cartel outside the scope of the US constittion was considered problematic by its designers but they felt that these things should be best left in private hands, as the government was not capable and as freemen it was their right to do so. Almost as a concession, they let the federal government appoint its directors and made the stock in it non-voting and non-transferrable. This fear of government regualtion is evident today in many areas as well.
John Keynes helped the cause by demonstrating mathematically that the is no upper limit on how far currency can be inflated (elastic). So far, he seems to have been right. The Fed has done some massive computer modeling of this theory that also seems to support this theory.
Left out of all of this, of course, is the fact that this system has been done without any consent of the people, Congress just did it, and the Constitution was not properly amended. However, this presupposes that the economic therory in the Constitution was worth keeping in the first place.

For the most part the true victims aren’t aware of how they pay the bills. The LICENSE TO CREATE MONEY OUT OF THIN AIR ALLOWS THE BILLS TO BE PAID THROUGH PRICE INFLATION. American citizens, as well as average citizens of Japan, China, and other countries suffer from price inflation, which represents the “tax” that pays the bills for our military adventures. That is until the fraud is discovered, and the foreign producers decide not to take dollars nor hold them very long in payment for their goods. Everything possible is done to prevent the fraud of the monetary system from being exposed to the masses who suffer from it. If oil markets replace dollars with Euros, it would in time curtail our ability to continue to print, without restraint, the world’s reserve currency.

Banks create checking account deposits (part of M1) when they advance money to customers. This is the creating money out of thin air to which you refer. This process was develped during the age of mercantilism when gold was left for storage with jewlers who gave warehouse reciepts in exchange. The warehouse reciepts became tradeable in and of themselves and these warehousemen reliezed they could issue more receipts than they had gold and thus was born the argument that has raged for over five hundred years. The banks have long since won the argument and the process is now regulated with loans made against "reserves" or "equity capital". The Church felt the practice was Unholy. In this sense only is it counterfeiting. The law has completely legitimized it, congress supports it and the courts back it 100%.

M1 consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) traveler's checks of nonbank issuers; (3) demand deposits at commercial banks (excluding those amounts held by depository institutions, the U.S. government, and foreign banks and official institutions) less cash items in the process of collection and Federal Reserve float; and (4) other checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts, and demand deposits at thrift institutions. Seasonally adjusted M1 is constructed by summing currency, traveler's checks, demand deposits, and OCDs, each seasonally adjusted separately.
2. M2 consists of M1 plus (1) savings deposits (including money market deposit accounts); (2) small-denomination time deposits (time deposits in amounts of less than $100,000), less individual retirement account (IRA) and Keogh balances at depository institutions; and (3) balances in retail money market mutual funds.

It is worth noting here that the March 23, 2006 Fed says m1 and m2 are $7.6 trillion ( the money supply)Total world gold stocks are estimated at 3.8 billion ounces, banks hold 1.49 billion ounces and the US government has about 35 million ounces or about $50 billion.

http://www.financialsense.com/fsu/ed...2004/0525.html

This means that a switch to a strict gold standard of 1: 1 would result in a deflationary devaluation of the entire economy by about 98% downward. ($50 billion/$7.2trillion) or you would need to issue gold backed currency at a ratio of about 1000 to 1 vs the current ratio of around 10 to 1 for currency backed by US treasuries. We would be flooded with valueless paper currency fully backed by gold that couldn't be touched.

The problem would then be there is about 100 times more gold in private hands and out of the country than available to cover the currency issued and currency would then be highly manipulable again. This would hardly represent the ECONOMIC LAW of HONEST EXCHANGE.

The history of this system holds many questions. Was the Federal Reseve Act of 1913 a sinister conspiracy of greedy bankers? To a large degree yes. Was the banking ACT of 1933 a violation of the Constitution Article I section 9? Clearly no amendment has ever been passed to justify it. Was the country on the verge of total econimic failure in 1933? In retrospect, probably not, however it is impossible to tell what would have happened had Roosevelt allowed all the New York banks to fail. Is there some inherent majic to gold as a medium of money? The answer to this is undeniably no. Subsequent events have proven alomost anything will do. Has the Federal Reserve system been fairly and properly managed? Yes and no and mostly no. It has smoothed out the devasting deflations of the past but substituted it with a creeping inflation that many find hard to manage and others have used to very well. It is contolled by a monopoly (70% of the Fed charimen have come from JP Morgan & Co.) and uses the most brutal of cartel practices to achieve its ends. The pricing cartel of Experian, Transunion, and Equifax being a case in point.To its credit, more people than ever have access to bank loans through this mechanism but at what price in personal freedom?

I think it is this Cartel that is the most obnoxious. yes, some of the economic polices have created an unlimited expanding money supply. But it is heavy handed, one sided, and has created a sort of "fourth legal system" all of its own making for which you and I have almost no input. Congress and the courts have chosen to look the other way on the Constituional issues.

The technolgy exists today to eliminate "hard" money altogether. By using biometrics (eye scans) linked to debit cards and credit reports the money supply could be completely regulated and controlled as could every person using these cards. With these cards, it could quicky become impossible to buy or sell anything without them as all the Fed would need to do is take all the Federal Reserve Notes out of circulation. Ankle bracelets for everyone.

So, Red Cloud, if you do not support the gold standard which has worked for eons because money is the gold and the gold is the money. Plus gold, needs no government interference to ‘make’ it work.

What is your solution to a viable ECONOMIC LAW of HONEST EXCHANGE that does not include gold? Perhaps instead of trying to fix a system that is fundamentally dishonest from the get-go, it would be better to institute a entirely new monetary system?

[REDCLOUD]

So, Red Cloud, if you do not support the gold standard which has worked for eons because money is the gold and the gold is the money. Plus gold, needs no government interference to ‘make’ it work.

What is your solution to a viable ECONOMIC LAW of HONEST EXCHANGE that does not include gold? Perhaps instead of trying to fix a system that is fundamentally dishonest from the get-go, it would be better to institute a entirely new monetary system?

The gold standard has not worked for eons. It was just as manipulable as the present system, except more so. In fact, in practice, gold needed excessive government interference to make it work. My point is, that gold is not magic, or inherently fair and honest money. The minute that currency is issued "backed" by gold the system is manipulable.

There are other things where the system can be said to be unfairly manipulated as well. Such as electricity. There is a product manufactured from thin air, that can't be explainded or defined , that is arbitrarily measured that people buy without thinking what it it is, that anyone with a generator could produce themselves. How fair is that?


Is money inherently necessary in society? In the abstract, no. Can goods and services be exchange in a purely barter economy without a middleman (bank) and enforcerer(government). Prior to the age of small computers and the Internet probabvly not. Today, I see no reason why a system such as that used in International trade (Special Drawing Rights SDR's) could not be used among individuals. VISA and MASTERCARD provide the same independent clearing service for their member banks. Why not such a system among consenting individual members? You could exchange drawing rights for initial deposits of money, gold, silver, gems or anything valuable and draw goods and services.Maybe even add services and products.

The same technology that allows banks and credit card companies to do it is available to individuals. All it requires is some inventive entreprenuers.