Go to Eliminating Our National Debt--Takes Real Guts
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Re: Re: Cousin Franklin was some smart fellow alright
My point and my distinction was that our money is backed by credit rather than not being backed at all. The latter I consider to be fiat money.
If the Federal Reserve could "forgive" Treasury issues, then they could remove that backing and the grief it causes us in debt service. As it is, they cannot do this, so that, under the current system, the national debt can only be retired by Treasury revenue. The fractional reserves are simply the monetizing of the national debt, the mechanism of how our money is backed by credit at a multiple. This is similar and derived from fractional gold and silver reserve mechanisms used previously.
A true fiat money, which I consider preferable, only has value in exchange. If the government is pumping out tons of money, the people catch wind of it soon enough and demand more money for anything they sell. If the government is taking in a lot more money than they are spending, the people will only buy things for less. If government is generally balanced in their income and expenses, the people are stable in their exchanges.
posted by
cpklapper
on April 20, 2009 at 12:02 AM
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Re: Cousin Franklin was some smart fellow alright
But that is what they do now. They use fiat money for everything. We have no other currency supported by anything other than the the good faith and credit of the U.S. government. Every bond that matures is paid for with fiat money. Every loan from your bank is funded with fiat money. Every dime of your savings is fiat money.
The Federal Reserve's Ponzi scheme is based on fiat money. All legal tender is fiat money. Created from thin air and backed only by the GF&C of the U.S.G.
The only way to eliminate our national debt in a heartbeat is for the Fed to issue a fiat money note for $14 trillion and send it to the Treasury. The treasury would then make a book entry and retire the note. There would be no exchange of the note for cash.
That is precisely what the Federal Reserve does now through the fractional reserve accounting procedure. It receives interest payments and other forms of legal tender for transactions in financial markets, say $1 million and automatically credits its assets with a book entry of $10 million because that's how the fractional reserve system works, that's fiat money. Bank reserves have not physically increased. But the capacity to create fiat reserves has.
Please read "Web of Debt" by Ellen H. Brown
posted by
Cebes
on April 18, 2009 at 4:41 AM
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The debt needs to experience a reduction for certain! sam
posted by
sam444
on April 16, 2009 at 3:45 PM
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Re: Cousin Franklin was some smart fellow alright
"This would involve the Treasury liquidating the treasuries as they came due or became available by paying with currency or value which was neither collected as revenue nor gained in sales of treasuries."
That's my whole point. What is it you mean to say that is substantively different?
posted by
Cebes
on April 16, 2009 at 3:04 PM
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Cousin Franklin was some smart fellow alright
I believe what he did was to force foreign countries to take our currency instead of its backing in gold. "Monetizing" the debt is what the Federal Reserve does in its shell game. The debt appears to disappear, but instead it becomes money until it comes due, when it must be paid with either revenue or newly issued debt. One method payment not used by the federal government under the Federal Reserve System is fiat money. This would involve the Treasury liquidating the treasuries as they came due or became available by paying with currency or value which was neither collected as revenue nor gained in sales of treasuries.
posted by
cpklapper
on April 16, 2009 at 12:21 PM
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