I think we know why, well its academic whether the intent was there or not, the outcome is the same, the collapse of sovereign currencies around the world and a need to replace them with something else. Actually I think the result will be anarchy and poverty worldwide rather than a "savior curency."

@ Bill Ross

This is the summary of the treaties on one of the websites which you linked:

"Summary: We have been and are in an eternal war between the productive (those who produce more than they consume) and the greedy (those who consume more than they produce). Civilizations rise (honesty in control) and fall (predators in control)."

The NaziSocioPath website's basis on which the mathematical formular of "Productivity" vs. "Greed" is produced amounts to nothing more than an attempt to explain the effects of human nature in the form of numbers.

Humans by instinct want to sustain themselves by direct action (what the site calls "Greed"), but since humans must exists in an environment for which nature did not provide them with a suitable genetic profile, they are obliged to sustain themselves by indirect transactions. (What the site calls "Productivity")

So, what the numbers tell you in this context, is that if "rulers" use people as the proverbial "tree" from which to pluck the fruits (direct transaction), instead of first planting a tree to then harvest the fruit (indirect transaction), then there will be certain results which end in societal upheaval or societal collapse.

I just wonder, whether people can interpret these numbers to come to the conclusion that we are talking about human nature, or whether they would more easily understand the concept in the way I just explained it?

@ Bill Ross

As to "recognizing a fixed monetary standard", fixed, how? by whom?

Can agree if it is fixed by voluntary collective free choice of those who choose to trade on that basis. Totally disagree if it is "fixed" by forceful decree of power, in which case we have limiting of trade opportunities / nature of trade (market distortions), to the monopoly advantage of those who seek unearned commissions, as a decreed part of any trade, making trade, by definition "not freely chosen"

The "free market" had long decided before you were ever born that the standard of value was GOLD. It was as long as 2,500 years ago. You act as if world trade was a recent development. You might know that the size of world trade in 1890 was larger than that in 1990. Gold has always been the monetary standard. ALWAYS for 2,500 years.

Just because some dictator or government told you that it wasn't so and insisted that their paper promises were money, just doesn't make it so. If the dictator or government forces you to use their paper promises, you put your gold savings aside where those dictators or governments can't get to it, and you use their paper promises, as long as everybody else does. Does that do away with the monetary standard of gold? Please tell me it isn't so.....

@ Bill Ross

You take issue with my statement that "Since neither I nor anybody else is involved in what the market decides", by saying "Surely you jest? This one statement devastates all of your fine arguments."

I ask you then, as I asked Onebornfree, what constitutes a "Market"?

You cannot seriously argue that, the "market" is the "unseen hand", the cumulative sum total of all of our value choices in the area of what we choose to trade and, for what"......and then go ahead and claim that my individual choice combined with those of billions of other people in the world have nothing to do with the market decision.....that there is instead some "invisible hand" which makes these decisions......???

Please, tell me you are not serious.......

@Ingo

"Since neither I nor anybody else is involved in what the market decides"

Surely you jest? This one statement devastates all of your fine arguments.

The "market" is the "unseen hand", the cumulative sum total of all of our value choices in the area of what we choose to trade and, for what.

Choice is EVERYTHING:

Click to view link

As to "recognizing a fixed monetary standard", fixed, how? by whom?

Can agree if it is fixed by voluntary collective free choice of those who choose to trade on that basis. Totally disagree if it is "fixed" by forceful decree of power, in which case we have limiting of trade opportunities / nature of trade (market distortions), to the monopoly advantage of those who seek unearned commissions, as a decreed part of any trade, making trade, by definition "not freely chosen"

The negative effects of the "carrots and sticks" bias of those who survive by "a commission" on economic transactions cannot be overestimated. In particular, by taking free choice out of the trade equation, profit for power becomes independent of whether the trades are productive or, unproductive, at least, until the overall economy collapses, as we observe now and, as proven by the grim reaper of "Mathematics of Rule":

/Click to view link

The market is and will decide: No productivity until those who produce are fully rewarded for their efforts and, those who steal pay the consequences of their actions. At a minimum, the productive are refusing to associate with thieves.

Thieves don't like this fact and are pointing their stolen guns at those who resist. Won't help them, one bit. History is very clear on this point. Without "consent of the governed", there is no peace, nor civilization (the rules by which we cooperate for MUTUAL self-interest).

@ Onebornfree

"...the market gets to decide what is and is not money, and what it is worth relative to all other goods/services and other forms of "money" as well- not you or anybody else; just as it does now without your imagined fixed standard."

What would interest me very much is your definition of a "market". Since neither I nor anybody else is involved in what the market decides, could you tell me how the market works according to you.....???

I only try to establish a reality for myself. When I write here, I want to share my reality to see how it overlaps with that of other people. I will never claim that my reality is the "correct" one.

I am always anxious to learn from others. However, I subject the arguments of others to my logic and my reasoning before I change my paradigm.

Carl Menger and the Austrians have done great work as regards the discovery of prices in "free markets". There is a great body of economic theory in the German language relating to a monetary standard, but the German economic thinkers did differ with the Austrian economic thinkers on the question of a monetary standard. The Germans made sure that there was not to be a confusion as to their thinking and they started to call the Vienna School the "Austrians".

To understand my imagined "fixed standard", I commend to you read the works of the Germans, particularly the writings of the German economic thinker Heinrich von Rittershausen.

The marginal utility analysis of the Austrians to discover prices through arbitrage is a tremendous improvement on the Demand/Supply model. However, where the Austrians went wrong is in recognizing a fixed monetary standard which existed and always has existed for 2,500 years even to this very day. I can point to von Mises great work of proving that without the gold standard capital cannot be properly evaluated, but then claiming that Bills of Exchange, which are social circulating capital, are inflationary even so they are valued in terms of gold.

As to your comments to my remarks, I fail to see how a market of at least a billion people in the world is not a market large enough for you to determine what "Money" is.....???

There are an estimated 150,000 tons of Gold in above ground inventory stored in vaults all over the world. Can you tell me why all these private individuals and central banks are so stupid to hold gold in that fashion, and why there is more and more the stuff mined.....??? Do you think these private individuals and central banks holding gold in this fashion are just waiting for the "free market" to decide what "Money" is.....???

Ingo Bischoff said : "I believe in a fixed standard for money based on gold.Therefore, it is no wonder that the definition of "inflation" differ. When one talks about inflation, it also depends on what one considers to be "Money"."

IB :"I believe in a fixed standard for money based on gold."

I understand, and have no problem with that, because I know that if you got your way it would make no difference, because ultimately, the market gets to decide what is and is not money, and what it is worth relative to all other goods/services and other forms of "money"as well- not you or anybody else; just as it does now without your imagined fixed standard.

As for the term "inflation", regardless of what is being used by a society as money, as already explained, the economic _effect_ of inflation [i.e. a lowering of per unit purchasing power],will occur if the total social demand to hold it and not spend it is less than the total available supply available to hold and not spend.

The action of "inflating"[i.e increasing] a money supply at source, whether via a central bank system fiat system, or via increased mining production under ,say, a private gold standard [freely floating or fixed], as I mentioned before, does not necessarily cause the economic condition [or "effect"], commonly called "inflation" [i.e. a continual loss of purchasing power of the monetary unit of exchange in use].

Depending on the supply/demand equation, the final outcome of the interaction of the supply factor, and the, [for want of a better term] total-demand-to-hold-and -not-spend-that-supply factor, the action of increasing the money supply at source may, or it may not cause that economic condition commonly called inflation; there is no sure way of knowing ahead of time [because future demand to hold cannot be reliably known/predicted in advance, even if future supply can be].

@ Onebornfree@yahoodotcom

I disagree with the Austrians as regards the money standard. The Austrians accept a floating standard, such as exists today. I believe in a fixed standard for money based on gold. Therefore, it is no wonder that the definition of "inflation" differ. When one talks about inflation, it also depends on what one considers to be "Money".

DB: "Central Banks Now Creating Hyperinflation?"

In context:

"Power group X Now Creating Problem Y"

We need to get proactive, as opposed to reactive...

Ingo Bischoff said:

"This statement has to be related to the type of inflation practiced. Inflation of a currency is defined as the "excess issuance of currency to the value of goods and gold in possession of the issuer".

Ingo, I gave the definition used in the article in the next post after the one you took the quote from. Here it is again:

"What Is Inflation?- For the purposes of this article, inflation is a term used to describe a specific economic state of affairs- that is, a condition which results in a steadily occurring increase in the general price level [i.e. the cost of most goods and services in a economy, as measured by units of the government issued legal tender in use], so that overall, more units of the legal currency [$'s in the U.S.] are required to buy the same mount of goods and services than were required 3 months, 6 months, or a year or more ago...."See:

Click to view link

As to the cause of that inflation "effect", the [same] linked article says:

"...just like everything else, the value, or price of money [i.e. its per unit value, or purchasing power] is subject to the laws of supply and demand, therefor it is more accurate to say that inflation[i.e. a lower value or "price" for each $] is caused by an increase in the supply of money above and beyond the demand for it, with the result that each $ unit loses value."

For myself [and Von Mises], the inflation "effect" is caused by an excess of money supply above and beyond society's total demand to hold it- that is, for the sum of the majority of individuals within it to hold on to units of it and not spend them.

In pure Austrian theory, inflation will occur even if the money supply is shrinking, as long as the total demand by society to hold onto monetary units is shrinking at a faster rate [for whatever reason].

Conversely, if the money supply is growing, and yet society's total demand to hold onto individual units and not spend them is growing at a higher rate,for whatever reason, that "access" supply will be readily absorbed, and monetary inflation will _not_ result.

Increasing the money supply by a central bank does not necessarily result in a general price inflation [i.e.a lowering of purchasing power per individual monetary unit], no more than shrinking the money supply will necessarily not result in inflation occurring.

It is not as simple as that [is it ever?] " as always, the demand factor of the supply/demand equation; the equation that ultimately controls the final value of a monetary unit at any point in time, is a full 50% of the final marketplace price/value of money equation, no more, no less, so its not just about supply,demand for that supply is equally important, in my opinion.

@ Bug

"I am not an expert in the Federal Reserve Act. I will take your word on what it allows. However, given that individuals at the New York Fed "violated" these provisions without personal or institutional consequence, I would say they certainly CAN create FRNs willy-nilly out of thin air."

Yes, you can thank the ratification of the 17th Amendment which put the U.S. Senate into the pocket of the NY mega banks for that. The progressive movement, financed by the big banks, urged the ratification of the 17th Amendment. If people do such stupid things, is there any wonder that there is no institutional consequence...???

@ Onebornfreea@yahoodotcom

"....although inflation appears to be a historical constant and future certainty, realistically there is no hard guarantee or economic rule that says that rampant, incessant, damaging, inflationary effects and conditions must definitely occur in your own lifetime. It might, but then again, it just might not, it is impossible to know one way or another for certain........"

This statement has to be related to the type of inflation practiced. Inflation of a currency is defined as the "excess issuance of currency to the value of goods and gold in possession of the issuer".

Under a "commercial banking" system, the creation of "Double Bills" or the failure to take out of circulation currency which is in excess of un-matured "Real Bills" cause inflation. This can happen at any time or never in one's lifetime, though the odds are good that it will happen.

In a "central banking" system, gold is shunted aside which makes a "Bills Market" impossible. Currency is created instead by "monetizing government debt". However, that debt must be serviced by the taxpayers. The interest rate on the debt is no longer set by the willingness of savers to invest their gold, it is set by the central bank. Central bankers will always manipulate the interest rate to benefit themselves. When the interest on the debt is monetized again and again, the amount of interest due will eventually go "exponential". The time frame in which that will happen, depends on the prevailing interest rates set by the central bank. The natural rate of interest hovers around 2.5% to 3%. Even, if the central bank maintains that kind of interest rate, by monetizing debt, inflation will definitely occur within one's lifetime.

There is also inflation when a parallel currency in the form of "Bills of Credit" are created by the government and brought into circulation alongside "commercial bank" currency. This sort of inflation is actually a tax, which in the case of the "U.S. Greenback" most of the population happily accepted in lieu of an income tax or later of a higher income tax. In that case, inflation was actually demanded by the people.

So, you can see that the statement must be viewed much more broadly.......

DB

Please post my entire reply to Ingo Bischoff directly to this thread. I thank you in advance for your support.

Click to view link


Following, the first portion of my comments:

@Ingo Bischoff

I find several aspects of your post confusing.

"You must understand that the Federal Reserve cannot just willy-nilly create "Federal Reserve Notes" out of thin air...The New York Federal Reserve started to violate these provisions in Section 14 of the FRA by monetizing Treasury debt in the 1920s."

I am not an expert in the Federal Reserve Act. I will take your word on what it allows. However, given that individuals at the New York Fed "violated" these provisions without personal or institutional consequence, I would say they certainly CAN create FRNs willy-nilly out of thin air.

Reply from The Daily Bell

Here you go ...

Fractional Reserve Lending, etc.

@Ingo Bischoff

I find several aspects of your post confusing.

'You must understand that the Federal Reserve cannot just willy-nilly create "Federal Reserve Notes" out of thin airThe New York Federal Reserve started to violate these provisions in Section 14 of the FRA by monetizing Treasury debt in the 1920s.

I am not an expert in the Federal Reserve Act. I will take your word on what it allows. However, given that individuals at the New York Fed 'violated these provisions without personal or institutional consequence, I would say they certainly CAN create FRNs willy-nilly out of thin air.

'(The claim that fractional reserve lending creates additional currency is bogus. A little bit of math applied to the claim blows it out of the water.)

I am quite aware you have in mind precise definitions of currency and money, so perhaps my confusion here is definitional. On 60 Minutes, when Ben Bernanke was asked about the Fed printing money (which I believe in your definition, really refers to currency), he honestly replied no. The Treasury prints the money. However, he was being quite precise as well.

Of course, the technically honest reply wasn't the honest reply. Ben knew this.

So, in this same light, I can understand the fractional reserve lending does not create additional currency units: neither the banks nor the Fed have a printing press.

However, fractional reserve lending does produce additional units of digits that can compete for and purchase materials, goods, labor, and assets. These digits are currency units in my definition. Perhaps not in yours. Thus my confusion.

I can understand your statement in the 'Ben Bernanke literal sense. However, I do not understand it in the real world sense. I also understand why you believe it, as you defend Real Bills from the same charge. Real Bills also enable fractional reserve lending in exactly the same manner, and for Real Bills you also appear to claim it does not create additional currency (or in my terms, digital or paper purchasing units), as you are quite insistent Real Bills are not inflationary. As you know, I disagree in the case of Real Bills, just as I disagree with you as regards fractional reserve lending. The root of your belief is the same in both, and it is helpful to me (and perhaps others) that you have stated the equivalency of the two so clearly.

'After 2008, FRNs were created with two different kinds of quality, those which represented taxpayer productivity and those which represented private debt. The problem is that you cannot distinguish between them.

The distinction is unimportant. That digits are created out of thin air is the key. The Fed buys securities with digits it created just as easily as the digits I am creating in typing these words. The difference is, my digits don't trade in the market for billions (or trillions) of 'dollars. That the securities come with different risk profiles is important around the edges, but the crux of the crime is in the creation of digits from nothing.

'The FED is now running out of defaulted mortgages and defaulted credit card debt to monetize. The only solution left is to print "money" out of "thin air" with which to pay the interest and debt payments due.

The Fed need not run out of things to purchase. There is no limit on what they can buy. Can they not buy municipal bonds? There is no shortage of these in want of buyers. To say nothing of a couple trillion dollars of treasuries annually. Why not corporate bonds?

All of the Feds purchases, of any security of any quality are made by printing 'money out of 'thin air. No one at the Fed is producing product by which they can earn real money in the marketplace. It is ALL funny money. What is purchased is less important that the fact that digits from nothing are created to purchase the assets.

Daily Bell said :"Sounds like they are confusing inflation with price inflation."

The article says:

"What Is Inflation? " For the purposes of this article, inflation is a term used to describe a specific economic state of affairs- that is, a condition which results in a steadily occurring increase in the general price level [i.e. the cost of most goods and services in a economy, as measured by units of the government issued legal tender in use], so that overall, more units of the legal currency [$'s in the U.S.] are required to buy the same mount of goods and services than were required 3 months, 6 months, or a year or more ago...."

See "Inflation Myths,The Federal Reserve,The Consumer Price Index 1913-2000, and How to Profit From Renewed Inflation":

Click to view link

@ KP

"Ingo that is a great explanation above- do you have a blog or essays explaining more of the Fed and how it runs the Govt??"

Yes, I just happend to have a project which explains all this in great detail. If you are an investor, you simply have to understand this, or at least question your financial advisors about it.

Here is the link:

Click to view link

"In Switzerland, every able bodied male 18 to 48 years of age is required to keep an Army issue rifle ready for use at his home. Those Swiss are "dead" serious about that. No joke there.... " .... Posted by Ingo Bischoff on 2/5/2011 12:39:31 AM

Well, whenever you are one of the global centres for money laundering and the stashing of ill gotten gains, as this tale would suggest/prove ...... Click to view link ...... is it probably a wise precaution, Ingo Bischoff.

And re KP's post ... Posted by KP on 2/5/2011 5:17:40 AM ... which brought in Egypt and looting to the thread, it seems as if the business of Mubarak & Sons has been looting Egypt and impoverishing Egyptians for, well it takes quite some time, I imagine, to amass seventy thousand million dollars whenever you are not working/have no real job, but holding onto it whenever an educated population discover the deeds that diminish the treasury cupboards is an art which is not without its inherent abiding dangers.

Mubarak though is in good company, for many have preceded him on such a path and many more will follow him whenever there are so many supposed respectable and legitimate institutions and bankers, ready, willing and able and enabled to handle what is probably best described as stolen national treasure.

The City in London is another dodgy centre where every straight kind of a guy in a suit can be as crooked as a counterfeit treasury note for a debt which can and will never be paid. Crime pays don't you know, and obscenely well too, so don't knock it, for that is the System.

Jump in, the water's lovely and warm.

Excerpt from "Inflation Myths,The Federal Reserve,The Consumer Price Index 1913-2000, and How to Profit From Renewed Inflation":

"....although inflation appears to be a historical constant and future certainty, realistically there is no hard guarantee or economic rule that says that rampant, incessant ,damaging, inflationary effects and conditions must definitely occur in your own lifetime. It might, but then again, it just might not, it is impossible to know one way or another for certain........"

Article link:Inflation Myths,The Federal Reserve,The Consumer Price Index 1913-2000, and How to Profit From Renewed Inflation:

Click to view link

Reply from The Daily Bell

Sounds like they are confusing inflation with price inflation.

Well, if the Fed ruins the value of the dollar and collapses the economy, who will suffer. Will the poor go rioting on the streets and destroy those who ruined them... will they string up Bernanke from a light pole?? Take Egypt right now- The poor and unemployed and politically opposed are demonstrating and looting. Are the looting the banks? Are they looting the Egyptian Fed or its equivalent & hanging bureaucrats?? No, they're looting the local booze store, supermarkets and TV stores.

I have this feeling that demonstrations and rioting against 'the system' will not hurt the bankers at all. They will happily offer their politician poodles up for sacrifice and sit on the gold.

I sometimes wonder hw we got into this state, an overly complex world where every second person can tell me what to do just because they work for 'the Govt'. I used to think my father was a hero for going off to bomb Germans and fight for freedom, but I've long got too cynical for that now.

Ingo that is a great explanation above- do you have a blog or essays explaining more of the Fed and how it runs the Govt??

Interesting commentary, by the way; "Jean-Claude Trichet (left)" he's actually on the right, unless you are dyslexic.

Removing the fiat currencies? Chinese declaring not beholden to Rothschilds, Rockefellers, etc.? Is this the step back TBD has been describing?

Is this real?

"bix-weir-the-conference-call-on-the-end-game"

Click to view link

Reply from The Daily Bell

We are not entirely sure about Mr. Bix Weir ...