Lizards: Making Money System

Sumitted by Mike Krieger of Kam LP

The people must be helped to think naturally about money. They must be told what it is, and what makes it money, and what are the possible tricks of the present system which put nations and peoples under control of the few.

- Henry Ford

U.S. investors should welcome, not fear, climbing commodity prices. The increases are "largely a reflection of the fact that the pace of economic growth, particularly in the U.S., has picked up," said Nariman Behravesh, chief economist at consultants IHS in Lexington, Massachusetts, and a former Federal Reserve official who has been covering the global economy for more than 35 years. "It's not something to be worried about."

- Bloomberg article from yesterday

Why Fiat Money is Immoral

Today’s email is going to be a little different. A couple of weeks ago a friend of mine from NYC who is not in the business but is on my weekly email distribution list asked me to explain fiat money and why I think it is the wrong way to go. Below I am going to paste my response to her. There is so much disinformation out there about money it is scary. Sadly, the strategist at my former employer added to this several weeks ago. He wrote: “Gold, which is effectively just another fiat currency.”

Clearly he failed to look up the definition of fiat currency.

Fiat money is money that has value only because of government regulation or law.

Definition of Fiat: An authoritative or often arbitrary official order or decree. THIS DOES NOT EXIST TO GOLD AS MONEY TODAY AT ALL.

Gold is not money under “fiat” in any country at the moment. Rather the market is making gold as money today which is the OPPOSITE of fiat money.

With that off my chest, here is the response to my friend…

Ok, so let’s do a brief thought exercise on why I believe commodity money is preferable to fiat money. When you have fiat money, a government, or in the case of the United States today, a banking cartel (the Federal Reserve), is granted exclusive authority to create the nation’s money. Laws are used to enforce the use of this money otherwise people probably wouldn’t use it. Under a commodity money system, where let’s say the U.S. issues dollars but those dollars are backed or convertible to a commodity (in many cases gold but it can be other things) there is a limit to the amount the government or banking cartel can print or issue and this is in relation to the amount of the commodity that exists or is available to the government or central bank. The current propaganda that is rife throughout economics textbooks and the like tell is the notion that commodity money is bad since it stifles human innovation in relation to the amount of gold or whatever commodity used. They say this is bad and that there should be no “limit” on money creation based on something as arbitrary as a commodity and that this is bad for growth. This is complete nonsense and is used to keep people in the current fiat system where money power is exercised most egregiously by the few against the many. The reason they defend the current system is simple. With the power to create unlimited currency at will (via the Federal Reserve) you possess total and absolute power over almost EVERYTHING in the economy and society at large. The Fed not only creates the money but they distribute it where they want. In QE1 and QE2 they decided to buy specific assets. In the case of QE1 where they bought toxic assets, this was just another bailout of the banks and others that made poor investment decisions. Did the money go to build new schools? No. Did the money go to build high speed trains as is done in China? No. Did it go to building out massive alternative energy infrastructure? No. It went to save the banks because at the end of the day the Fed exists as a backstop to the banks and it is to the banks that the Fed answers to at the end of the day. It is a brilliant scam that 95% of Americans do not comprehend. So in this case all of the money is going to the banks (which destroyed the global economy in the first place) and other players in the financial world. Remember, the banks ARE the Fed and the Fed creates the money. Gate keepers at the Federal Reserve and academia make understanding economics, the Fed and money seem so “complex” but the scam is really VERY simple.

I am not saying that I necessarily back the classic gold standard but it is much more of a moral and genuine capitalistic system than what we have today. One of the arguments against the gold standard is that the rich have all the gold anyway and they will still have the power. Ok, well let’s suppose this is true. Under a gold standard they would need to mobilize this gold to exercise their power and influence and pay people off to do their bidding. This has a real cost to them. Gold will be spent. At some point they will choose not to spend it on this or that and ultimately they will lose their power/money by spending too much gold. They can’t just create more out of thin air to exercise unlimited money power on the populace.

This is in complete contrast to how things work today. With the dollar they can create more and more everyday and buy people off without ANY cost in the short term (until the dollar itself collapses). This is why the most dangerous thing that can happen would be a global fiat currency to replace the U.S. dollar.   They could start over in their never ending system of money power with a new currency that can be printed at will and used to buy up the world and all its resources at no cost to them. The end result would be slavery for the masses of humanity. The global monetary system as it stands is one of the most immoral social structures ever created by man. Most of us in America do not understand this since we have been the beneficiaries of it up until now. We are like the feudal lords in pre-revolutionary that couldn’t see the world beyond their favored social status until they lost their heads. The system as it stands has led extreme exploitation and corruption, not true capitalism. If we continue on this path the next stop is a feudalistic fascism.

In a Fiat System Banks Must be Like Utilities

At the Sanford Bernstein conference several years ago Joseph Stiglitz spoke and said a good and healthy financial system is a small financial system. I couldn’t agree more. This is especially the case in a purely fiat money system. Money is too important to allow greedy children in expensive suits on Wall Street and dangerous academics at the Fed to play around with. I do not claim to know what the ideal money system is but I want to be very clear on this point. If we have a fiat system like today the banks should be the most regulated industry on the planet and operate like utilities. They are supposed to help the productive economy innovate and create wealth. They are not supposed to be parasites that suck the lifeblood out of the real economy and compose 16% of the weight in the S&P500 (only technology is bigger at 17%). Something is VERY, VERY wrong here.

I placed the quote at the top of the email to demonstrate just how entirely disconnected the corrupt elite class is in the United States is today from the average citizen. Many historians assert that Marie Antoinette never said “let them eat cake,” but surely she made comments similar to those at the top of this email from the Bloomberg article. What is happening now is nothing new. It has happened over and over again for millennium. The elites of every era always think they will stay in control no matter what. They will be wrong once again.

Watching the circus from Colorado,
Mike

In the same Good Morning America interview in which he said that Jared Lee Loughner "wasn't on the left, he wasn't on the right," former Loughner friend Zach Osler mentioned a documentary film called Zeitgeist, which he says heavily influenced the alleged Tucson gunman.

Osler, who George Stephanopoulos described as perhaps "Loughner's last close friend," said, "I really think that this Zeitgeist documentary had a profound impact upon Jared Loughner's mindset, and how he viewed the world that he lives in."

And though by Osler's account he and Loughner stopped hanging out two years ago, and there's no way of knowing what Loughner thinks of the documentaries today, there are a few resonances between the film and the online videos attributed to Loughner.

Zeitgeist: The Movie, produced in 2007 by a man named Peter Joseph, is actually the first film in what's now a trilogy. A sequel, Zeitgeist: Addendum, came out in 2008, and a third film, Zeitgeist: Moving Forward, was scheduled to be released over the weekend. Together, they form the foundation for The Zeitgeist Movement, which, according to the movement's website, "works globally to spread information about a new social system called a Resource Based Economy." The website claims 420,000 people have registered as part of the movement, and says "estimates" put the number of online views of the original Zeitgeist: The Movie at over 100 million. (In March 2009, The New York Times reported on a "Z-Day" event in New York City.)

The first film (which you can watch in its entirety here) "debunks" myths and "exposes" conspiracies about religion, monetary policy, wars and 9/11. The film features a nameless narrator, and combines graphics, news footage and trippy animations with words from famous thinkers, stand up comedians and public officials, topping it all off with commentary from various conspiracy theorists. Among other things, the movie critiques the central bank model, controlled by the "ruthless banking interests," which it says leads inexorably to debt.

"The end result of this system is essentially slavery," the narrator says. "For it is technically impossible for a government and thus the public to ever come out of this self-generating debt."

Getting rid of the gold standard, according to the film, was a way to rob the public of wealth, and lock it into a system controlled by an elite few.

"The only thing that gives our money value is the public faith and how much of it is in circulation," the narrator says. "Therefore, the power to regulate the money supply is also the power to regulate its value, which is also the power to manipulate and control entire economies."

In online videos attributed to him, Loughner shows an obsession with "currency" that echoes the arguments from Zeitgeist. He spoke of "mind control" and government control. One video, titled "Introduction: Jared Loughner," was concerned with the creation of "new currency."

"No! I won't pay debt with a currency that's not backed by gold and silver!" Loughner wrote. "No! I won't trust in God!"

[TPM SLIDESHOW: TPM Retraces Shooting Suspect's Steps]

In another video, titled "hello," Loughner writes, "the current government officials are in power for their currency, but I'm informing you for your new currency!"

After Osler mentioned his movie to the press, Peter Joseph issued a statement criticizing the media for making any connection between the massacre that occurred in Tucson and his film.

It has come to my attention that various mainstream news organizations are beginning to run an association between my 2007 performance piece/film, "Zeitgeist: The Movie" and the tragic murders conducted by an extremely troubled young man in Tucson, Arizona. They are also slowly beginning to bleed the obvious line between my 2007 documentary work, my film series as a whole and The Zeitgeist Movement, which I am the founder. Frankly, I find this isolating, growing association tremendously irresponsible on the part of ABC, NBC and their affiliates - further reflecting the disingenuous nature of the America Media Establishment today.

Make no mistake: The Social System is to blame for the rampage of Jared
Loughner - not some famous online documentary which is known as the most viewed documentary of all time in internet history. Are the other 200 million people who have seen the film also preparing for murder sprees? I think not.

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Monday, January 24, 2011

Making Money System

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