What is Money?

[Bill Peckham]

I thought I would start a new thread spring boarding off Peter's comments about the Fed:

The issue of the Fed is one that little is written and few know any details since it is shrouded in secrecy. We do know some facts though:

1) The Fed is not Federal at all, it is a privately owned bank.
2) Our currency is fiat money that are simply printed with nothing backing up their value.
3) The Fed exerts enormous control over our economy and our politics. Look up Andrew Jackson and why he got rid of the national bank during his time in office. The same dangers apply to our situation today.

There is a reason that Ron Paul wants to audit the Fed, something that I don't believe will ever happen since the Fed has power over the US government and people and we have none over the Fed. They are the master and we are the slave in this arrangement.  Finding reliable websites is a difficult chore when it comes to the issues of the Fed. Here is one that looks like it has reliable information.

THEY PRINT IT - WE BORROW IT AND PAY THEM INTEREST

An example of the process of currency creation and its conversion into "people's debt" will aid our understanding. The Federal Government, having spent more than it has taken from its citizens in taxes, needs (for the sake of illustration) $1 billion. Since it does not have the currency, and Congress has given away its authority to create it, the government must go to the creators for the $1 billion. But the Federal Reserve, a private corporation, does not give its currency away for free! The bankers are willing to deliver $1 billion in currency or credit to the federal government in exchange for the government's agreement to pay it back with interest. So Congress authorizes the Treasury Department to print $1 billion in U.S. Bonds, which are then delivered to the Federal Reserve bankers. (The bonds are a kind of "IOU" that bears interest.)

The U.S. Treasury prints $1 billion in bank notes. The printing cost is about $20.62 per 1,000 bills - it costs the same irrespective of the denomination - the cost of printing a $1 note is about the same as for a $100 note: about .0206 cents. The Federal Reserve "buys" these bills from the U.S. Treasury, paying only for the printing costs. The bills are then exchanged at full face value for the bonds. The government uses the currency to pay its obligations. What are the results of this fantastic transaction? Well, the government's bills are paid all right, but the U.S. Government has now indebted the people to the Federal Reserve bankers for $1 billion plus interest!

Since this process has been going on since 1913, the people are now indebted to the bankers to the tune of trillions of dollars. The people are taxed billions of dollars each month just to pay the interest on this "national debt." With both the principal and the interest climbing every month, there is no hope of ever paying off this "debt." The working people of the United States now "owe" the approximately 300 banking families and their consorts more than the assessed value of all the assets in the United States. And realize, the bankers got all this for the cost of paper, ink, and bookkeeping!

http://www.buildfreedom.com/tl/rape3.shtml

Here is another illustration of how the Fed works:

Here is an illustration to explain how the Federal Reserve works.

1-In 1913 the privately owned Federal Reserve Bank issues the first Federal Reserve Notes to the US Treasury for $1,000 (amount is figurative).

2-The US Treasury now owes the Fed Res  Interest + Principal.  So the US Treasury is now indebted for $1,200.

3-The US Treasury owes $1,200 but only $1,000 exists. The additional $200 has not been created yet.

4-The US Treasury now has no choice they must go back to the Fed Res and borrow $200. The Fed Res creates the new money and backs it up with additional debt.

5-The US Treasury now owes $1,400.  Same problem. Only $1,200 exists. More money most be borrowed.

Today- The US Treasury owes 14.5 Trillion. That amount of money does not exist. The US Treasury needs to borrow more to pay back that interest. Which will only increase the total debt owed next year. What we have here is a dog trying to catch its own tail and running in circles.

http://libertythinkers.com/education/debt-ceiling-hocus-pocus-illusions/

America at this point has no choice but to raise the debt limit because otherwise the Fed will call in the debts and the entire system will collapse. The crises we are in today was foreordained from the moment we turned our treasury over to foreign bankers. This is a topic that I doubt anyone will bring up publicly in these debates other than so called conspiracy nuts, but it is at the heart of the entire debate.

Listen to what Thomas Jefferson had to say about this issue 2 centuries ago:

Thomas Jefferson on the dangers of a central bank wrote:


If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation the banks and corporations that will grow up around them will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. Thomas Jefferson, President of the United States 1801-1809

http://www.worldviewweekend.com/worldview-times/print.php?&ArticleID=3264

Jefferson went even further in his comments:

A private central bank issuing the public currency is a greater menace to the liberties of the people than a standing army...We must not let our rulers load us with perpetual debt."

Thomas Jefferson, One of the Founding Fathers 3rd President of the United States of America

Continue reading at NowPublic.com: THOMAS JEFFERSON WARNED AGAINST A PUBLIC CENTRAL BANK | NowPublic Photo Archives http://www.nowpublic.com/world/thomas-jefferson-warned-against-public-central-bank#ixzz1SICs4fWV

What do we do now? If we wish a confrontation with the world bankers, go against the debt ceiling and go further in debt. It would buy some time but lead to the outcome of complete bankruptcy some time in the future, but we would be able to limp along without any great changes. If we choose to not raise the debt ceiling then we will precipitate a conflict with the bankers that have control over our fate through interest rates and other powers completely under their control. Either outcome in my opinion is not acceptable, but for the short term raising the debt limit is less painful. In other words, America is now at the mercy of the international bankers and we are slaves to our lenders. Everyone likes to talk about China, but they are NOT the big player in this entire drama. Can we regain our independence from them? Perhaps but we don't have people willing to go through that painful transition. So be it, raise the debt ceiling and give us a bit more peaceful bliss in our ignorance of what is happening. The politicians and the people cherish security more than true freedom at this time. I see no way but to go forward and raise the debt ceiling since undoing nearly 100 years of slavery to the central bank is probably an impossible act to consider let alone accomplish at this time.

God bless,

Peter

First I would say that a fiat currency - printing money - is not perfect but it is the best of the known alternatives for establishing a basis for exchange and meeting the needs of a modern economy.

Today I worked 11 hours and earned about $300. The company I work for will take the dozens of signs I made and sell them to Microsoft for their two events this week. To Microsoft the signs are worth even more than what Triumph sells them for; to pay for the signs Microsoft will sell a few Office suites to people - including to me because we think Microsoft's software is worth its price.

The money that exchanged hands at each step has value because at each step value was added to the transactions. Money has value because people do in fact work and make stuff that other people value even more. The Fed's job is to control the money supply in such a way that there isn't demand driven inflation. That's about it. In order to do that they judge how much value has been created by American sweat and ingenuity and that is the Fed's speed limit.

Money represents the stored value of our collective industry.