like a guy that owned a lot of coal mines asked the president of his wife's bank (his wife literally owned it!)...'want to try for vice-president?'

or the young architect that was in charge of refurbishing an old 13 story bank building somewhere in the northeastern u s -- he followed the main lobby hallway past the bank of elevators and made a right turn that led to a single, oak, windowless door on the blank marble wall. he had a ring of brass keys and tried them one at a time until the door unlocked.

it was a narrow unfinished hallway that led to the left and right. to the left it led to a deadend. to the right it offered a left turn halfway down its length opposite the deadend.

another solid oak door demanded a keyed entry.

he tried the keys again and the door unlocked.

he was facing a solid steel wall and narrow walkway to the right. he walked down the narrow walkway and made a left at the corner. he was inside the main vault in front of the safety deposit boxes! the vault was open and not in use because of the renovations of the vacant building.

banks are fronts for whom?

the u s is an open economy where anyone with the bucks can participate; have access to the courts if their investment is compromised; and reside in relative safety -- if you can pay moderate rents. banks are chartered by governments.

our collective wealth is held in trust behind an offensive nuclear shield.

that wealth belongs to the person with the keys to both doors. the combination to the vault really doesn't matter that much...it's just there to build public confidence. they are issued one key when they really need three.

america's enemies don't understand the above fact:

the world's accumulated wealth is only as safe as the janitor who mopped the banks hallways every night.

then again there was the irving trust...now you're talkin' real money (when money mattered).

Forget the keys. Pick up the crystal.

The "world's accumulated wealth" is not the same as the worlds accumulated money. The function of money is to provide a compact and timely alternative to the synchronous transfer of goods to satisfy obligations. For this to be a satisfactory arrangement, only a few restrictions are necessary. First, money should be fungible; that is, money printed by one source should be interchangeable with that printed by another source, with an unchanging relationship between the monies. We have more or less achieved that in the past, but it is no longer true. The amount of money provided should be that which matches the value of trade in the real economy. Either a surplus or a deficit of money available will distort the values of the goods (the real wealth) rather than driving them up or down. That is, a proper control of money supply could put an end to both inflation and deflation.

I hold this truth to be self-evident: The function of money is to allow us to keep score!

fungible? phil, i fear you almost as much as petey the parakeety..

you mean fungible like the euro? which is really the german mark...and just as paranoid!

london discovered in the early sixties that its real wealth was located in numbered accounts in switzerland...not so much currency as bearer bonds?

the pound sterling and the euro have excessive value only because the united states underwrote their security (they were allowed to 'say' what their currency commanded in goods and services) once the nukes were in place and in some sense 'shared'...that's projected power -- once the monopoly of navies.

now that china is feeding off of russia and other third world country resources the usd will have to stretch...but without investment 'in' the u s or 'by' (the free world economy) then europe's currencies will be forced out of the deal whether they print more or less.

the dollar moves with the markets...europe, china and russia (putin can't decide if he's a citizen of the west) will have to come up with another plan if they're supporting something as made-up as their psychological currencies.

currency is a domestic control...internationally, it is mostly a function of how fast you can print it and get it into the hands of emerging markets.

remember when the yen followed the dollar into the high 80s? wonder what they could possibly have been thinking of?

And those bearer bonds will be redeemed in what? Cuckoo clocks? No; it will be in some currency, at an exchange rate that was determined when the bond was first auctioned off. I'll assume it will be Swiss Francs. Then the relationship between the pound and the SF at both ends of the bond's life, and the relationship between those relationships, is of great importance. That, in my view, is unfortunate.

The "nukes ... in place" guarantee the destruction of the US when we have the misfortune of entering a war with some other nuclear equipped nation, since the importance of a nuclear first strike will be understood by all sides, as will the concept of immediate retaliation. MAD, as formulated during the Eisenhower administration, both reduces the chance of a war with a major country and increases the possibility of mutual extinction if that war occurs anyway. I don't see any of that as a satisfactory means to guarantee the value of our money.

I would like to see the financial economy (as contrasted with the real economy) become deadly dull, so that the billions of people who are not in position (and never will be) of either influencing it or profitting from it can be secure in ignoring it. Fungible money, with some control which fixes it to some basket of goods, would be a step in that direction. So would the elimination of floating interest rates and the institution of meaningful usury laws which extend internationally. One step of which I am most enamoured is to fix, for all time, the rate which central banks can charge their member banks for borrowing. Remember, that rate is meant to control the tendency for banks to overleverage their assets (which of course are actually, in large part, their liabilities to depositors and other lenders).

I can go a step further and say that I think that the majority of the world's people would like to see the real economy also be deadly dull.

No, Sov ... I don't believe in the dollar, but there are things I believe about it. I tried to stick to the topic of currencies in general rather than one in particular. If we could realize stability and fungibility in our currencies, then it would be sufficient to have only one. In practice, it would probably be necessary to have only one also.

usury, phil...that's as scarey as fungible!

like, remember when the enemy of inflation (paul volcker) went to the lenders on behalf of the u s treasury and was told the short term interest rate on the deal would be 20+ percent?! now, that was when congress was the bank.

unsecured credit can be successfully leveraged, but the little guy can pay 50 percent or more while the fed pats its friends ass with single number discount rates.

why should the fed charge the treasury for lending back tax revenue money? and the citizens pay 25 per cent or more?

because the world is run by demented oligarchs and plutocrats who think that they are out of reach of strategic circumstances. hence, the arabs and other 3d and 4th world economic colonies betting against and actually combating u s interests (no pun intended).

mad isn't the case anymore...it's first strike and then we'll count the sheckels to see which currency is fungible.

the usd isn't devalued...it's there when the world needs it at market rates: like volcker discovered when he went begging to the opposition.

rate of trade growth, doubled US rate of trade growth ...since 1999? No? Has German holdings doubled US holdings since 1999? No? Then the usd is devalued.

Especially if you look at how the whole is being divided; the whole is constant when viewed that way; the earth didn't grow any, so phil is right. volcker adjusted interest rates to reflect the introduction of oil supply control introduced by OPEC, he didn't give a damn about US consumers. He just wanted his books to balance with the past. He was seeking a real value for the usd when we all believed it had one. Now, we realize that is just fun-n-games, the value comes down to a gentlemen's handshake, there is no real value out there for any of the currencies. phil wants the currencies to keep score, act like real money, but they were never designed to do that. paper money was always a means to do business without keeping score. they shuffled all the real money into Swiss vaults and forgot how that mattered, but every day we price the world according to what percentage of Swiss value we supposedly own. funny how that results in a rising Germany; who would've guessed that result?

days:

'swiss value' as boat anchor...that's apt.

and i once was told by a communist accountant (his haircut may have inspired drew carey) that volcker was doing exactly what you posted 'balancing his books with the past'. my accountant friend said that a proper inflation rate for the u s after onassis took jackie hostage and used his fascist connections (baathists) to corner opec oil with his tanker fleet -- the inflation rate should have been a 'healthy' 250 percent!

i think brazil's was?

the euro is the mark is the swiss franc is the pound sterling...and when it gets too much for europe to deal with as they strangle their economies for the sake of paranoia:

the dollar and the zombie u s 30 year bond market.

your post was very well mannered...haven't seen that since slate's last editorial posting on b. hussein o.

is you have to float value against a standard; the stronger the standard, the stronger the value of your currency. So these idiot bankers arranged too massive plunderings of world gold; one the old fashioned way with a lightening strike army, ala Napoleon upgraded with modern technology from Berlin, stole all the people's gold and stashed it in Swiss vaults, the other through the new fashioned way; total collusion of America's banks with the government utilizing a lightening fast strike on gold held in private accounts stored in vaults which was then ferried off to Fort Knox and slowly moved to Swiss vaults ala redemption of our paper money in gold to foreign central banks. By 1970 that heist was completed and now the idiot bankers had built a gold anchor for the world currencies.

Any time we want to be free again, we can just stop playing central bank games and start coining silver again.

day:

ah, yes! william jennings bryan, ezra pound and the world-gold or western-silver tale of two coasts mint debate...with the greenbacks winning.

does the u s get any credit for fielding those armies? that strategically guarantee access to energy resources and promote individual freedom?

send me your bullion, your tired, your masses yearning to breathe free...or somethin' like that.

how 'bout the rockefeller dime? isn't it time that we had a savior?

i really like the swiss vault rant...it works on just one level: somewhere between the anus and the belly button.

our dollar was based on the Spanish silver dollar. The British control all the gold on the planet; the gold heists are European, the gold standard is European, they want gold to be the standard for all the world's currencies, that's the passion of the Bank of England.

You can pretend that industry created wealth, but it was money creation that drove industry. I wasn't ranting for the gold standard; I have never wanted the gold standard; I'm in favor of a fiatt paper currency based in silver that is actually regulated by Congress coupled with real bank reform. I was just recounting the history that brought us to today's mess; if you want to understand the mess you are in, you have to look at how you got here.

day:

pound sterling...?

wordsworth stoning napolean for the subjugation of switzerland?

i'm not arguing with you and i didn't say that you were complicit...i was pointing out that silver lost bigtime early in the 20th century...and now you say that britain has all of the gold in switzerland. it's very hard to corner the silver market because there's so much of it spread around in lead deposits, etc...

like diamonds (which are hard to control cause they're so small and portable and light) gold seems to be heavy and shiney enough to deserve the crown.

i'll argue about how unnecessary the fed is tho...just to promote ezra if nothing else.

how 'bout the fed charging the treasury to borrow its own revenue?

that happened on an island in the atlantic but it was a sporting club...like you already said.

Silver lost big time in the USA late in the 19th century, but no matter. It really matters little who owns all the money, it's the process of money creation and the regulation of banking that builds up or tears down. You can't change where you are at; at least not without violence, but you can change the direction you are headed.

I said the gold standard was always the passion of the Bank of England, not that they owned all the gold, although they do control quite a few gold mines as well as 90% of the diamond mines (if you allow me to call DeBeers British). The main point here is the gold standard does not and never did enhance the American position; but it was the last effective restraint that we had - that was stopping the paper money inflation explosion of a purely bond based currency issued and regulated by a central bank - when FDR killed the gold coin in 1932, it was all over right then, who cares what he did with all the gold that was "stolen"? It was no longer our money, money became fiat paper of the FED, anchored in the income tax.

Now, I wouldn't call the FED unnecessary on a whole, I understand that you meant the go between in the money creation process, and I agree, there's no way you can call that "necessary" if we did without it for 150 years. But there is a benefit to that operation, I've never called for the extermination of the FED, what I said was that the FED should be exterminated by all rights; that it is an illegal unconstitutional operation; but frankly, who cares? It's nice to have a central bank around if you can use it wisely and keep it from overthrowing the best interests of the republic. So far, we have failed in that department, but the power is still there in Congress and the White House to turn that around.

Ezra Pound was a poet, not a banker. He was a brilliant man and it seems that his virulent anti-semitism was the product of, or certainly heavily influenced by, the propaganda efforts of the Illuminatti to blame central banking operations on the jews. That was just stupid, but it was quite effective in it's day. Look at Hitler. Seems like a pretty sharp cookie, not an Einstein, but no slouch, and he bought into that bait. The most important thing to learn from all this history is that the central bank was formed by the bankers, for the bankers, and consists of the bankers... point being, don't confuse it with our government, and especially don't be so naive as to trust the best interests of the nation to be the motive of the central bank. Quite the contrary, the central bank can be trusted to care most about the central bank; they want the nation to stay intact because the nation gives them their position of power and control, but they don't give a damn about the best interests of the citizenry, especially they don't give a damn about the impoverished, the weak, and the lame.

The nation always sold bonds, the power to sell bonds is right there in Article I alongside the power to coin money. Those Treasury powers need to be kept. But when we go into a systemic trance and stop our own money creation and rely totally on selling bonds to operate, which we have done since 1932, our whole budget is on a tilt, the nation is plunging into catastrophic debt; justifying it by stating that other nations are just as bad off is like saying "Johnny jumped off the bridge, so it must be okay for us to jump, too" Deficits do matter, and exceptionally so when you have ceased to create your own money.

Now if you wake up from your hangover and you have been robbed and blinded, what to do? The only reasonable money creation process available for us to turn into right now is a fiat paper issue backed by silver. It's all an accounting process anyway, the bottom line is returning to creating our own money; at least in measure, while there still is a republic left to do that with.

days:

nice job, you got a checkmark (gush!)

i like what you say about money, but the social crap pretty much is europe with a thermo nuclear shield (they'd be tribal cannibals without the marshall plan and the u s giveaways)..

or just communist courtesy of stalin and philby and like philby's friend angleton said, 'harold wilson'.

europe and the germans (are they anything else?) are nuts about inflation and the euro keeps what those who have...got! the usd moves with the tides and it's suppose to. i think that you agree that the fed is unnecessary, but you counter that the treasury is incapable of ministering to a modern economy..

care to drive home the nail...it can't be silver or gold -- just another polished idea.

us interest rates will rise as one indication of the dollar's value...isn't a modern market simply supposed to react to--if not plan for-- the actual economic indicator.

where do cuddlies fit into that equation?