What Is The Dollar Worth ? |
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Create Date: 2008-08-16 11:46:43 | Popularity Level: 18 |
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2008-08-16 11:48:08
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What Is The Dollar Worth ?
This book comes as a result of more than 40 years of studying the constitution, economics, and banking practices.
The information here will to some, be entirely new ground. For others it will be familiar, enough so that the reader will either agree with its contents or will disagree and most likely consider this author a nut case or even worse a conspiracy advocate.
However, the book does not contain any political views, although the author has his own, as to why global economies have reached the state of disaster. But I will refrain from providing my opinions and only present the facts that have led to where we are today with the value of the dollar.
I should also mention that what is written here can, in most cases, be applied to the currencies of all G8 countries. I need not write about the third world country currencies because once the dollar fails these countries will suffer since their currencies, for the most part, are backed by the dollar either through loans or reserves.
Once the reserves of a central bank become worthless so goes the currency that is being issued.
We are going to cover the following in our study of the dollar.
Constitutional Mandate
Banking History
Central Banks
Backed & Unback currency
Currency Devaluation
Currency Reissue
Chapter I
Constitutional Mandate
The framers of the U.S. Constitution were ardent students of history. They were well versed in both political and economic history. They understood the successes and failures of people, governments and nations of the past, both politically and economically.
It was their intent, when writing the constitution, to give to the American people both a political and economic system that would guarantee liberty and freedom. Plus, a system that would create a nation to be envied, a system of commerce that would make anyone rich through a solid non-fluctuating currency.
In other words, a currency that would not lose its value in the world market or the market at home.
So they determined that the only way to do that was to require that there be but one kind of legal tender which would be used to pay both public and private debt.
And they very carefully worded their intentions in the constitution for the States of America, in these words.
'No state shall...... coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts....'
[Extracted from The Constitution for the United States of America]
The above statement provides us with a formula that not only would have prevented what we see happening to the American family savings but it would have guaranteed that America would have remained the richest country in the world.
There are three very important point to this section of the constitution that need to be understood before one can see the solution to our economic failure.
Those three points are:
No state shall coin money...
Emit bills of credit...
Make anything other than gold or silver coin as legal tender
Read the above several times and see if you can't get a clear picture as to why America has failed.
To give you one other thing to think about that sets forth further the thinking of the founders of the great American Republic when Thomas Jefferson said, 'If the American people ever allow private banks to control the issue of our currency, first by inflation, then by deflation, the banks and the corporations that will grow up will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.'
Now let's see if we can put this in a frame that will make sense, shall we? First, we will put the above constitutional mandate under the microscope, then we will look at what we were being warned about by Thomas Jefferson.
No state shall coin money....
The constitution was agree to and signed by representatives of 13 colonies that had formed a confederation after the revolutionary war for independence from England.
These colonies had begun to coin money of different weights and values which hindered commerce because there was no set value of money between the colonies.
The problem this created was that a product selling for $10 in the united States when sold in another country how much would you sell it for, for example, in Colombian pesos or Canadian dollars. You would first have to find out what these currencies were worth compared to the currency you have priced your item in.
And since there were no currency exchange houses that would exchange say a dollar from South Carolina for a dollar from Maryland you would have to spend the money you received from Maryland in Maryland because no one else knew the value of a Maryland dollar. Plus, the value could change over night by a vote of the Maryland legislature.
So, the founders of the Republic said 'no state shall coin money' in order to solve this problem. The right to coin money was placed in the hand of the federal congress. And they were to set the weight of the coin, thus, the value. They were to coin money that could be used in every state in accordance with the constitutional mandate.
I should also mention that the very word dollar means weight the same as the word peso. So when we use the word dollar we are referencing weight. In other words, $1 in gold or silver could not weigh the same as $5 in gold or silver.
How is it that a $1 and a $5 paper bill can be called a dollar? It can not be and never was called such under law. And I might add it is not today either.
No state shall...emit bills of credit
This is simple to understand. No state could run a debt. Why? First, let me ask you, if you're from the united States, what would your state tax requirement be if your state was not running on debt?
This means no state can borrow money. When a state borrows money it is placing a burden on the back of the taxpayer. The writers of the constitution understood that the taxpayer is the backbone and stability of a society.
The founders of the Republic knew that if the states were allowed to issue bills of credit, such as interest bearing bonds, the corporate world would buy them up and when payment was due the state would have no alternative but raises taxes to pay the debt. This becomes very clear when you understand that governments are leeches on society. They produce nothing of value.
Saddle the taxpayer with debt and you destroy the incentive to produce and prosper. Once that incentive is destroyed the corporate business moves to other countries where it can find more favorable tax laws. The mom and pop business simply goes out of business.
This all results in the state's debt growing larger than the gross product of that state. Once this happens the state turns to the federal government for help in paying it's debts.
Federal governments will always bail out the state but not without strings attached. Whatever the strings might be you can be sure that it places more burden on the taxpayers of that state.
We hear much, from politicians, about balancing the budget. But this is absolute non-sense when you consider the fact that the states, constitutionally, are not allowed to run a deficit. So there should be no budget to balance. The budget should be based solely on the states constitutional right to raise revenue and set in accordance with the mandate of not being permitted to emit bills of credit.
No state shall...make anything but gold and silver coin a tender in payment of debts....
Although the states were not permitted to coin money they were also restricted in allowing anything but gold or silver coin as a means of paying a debt.
Before we consider, why this restriction, we need to make sure we understand the meaning of tender. The word tender means to offer or present. Thus, the states were restricted in allowing anyone to offer or present payment of debts in anything other than gold or silver coin. Not even gold or silver certificates. Why?
The complete answer to the question why is presented in the next chapter 'The History Of Banking'. But for now let me say that gold & silver neither increases or decreases in real value.
Today when we consider the value of gold or silver we are comparing it to paper that is run on printing presses and called money by the unwise. I want to lay a little foundation for the next chapter by stating that paper has never been nor ever will be money.
The capitalist know this. I am completely surprised that people actually sell the Iraq Dinar, on the internet, as an investment in money. This demonstrates that the public does not understand what money is.
But to me the biggest disappointment is that the paper issued by the Federal Reserve, in the united States, is actually considered to be a dollar. Completely FALSE!
To conclude this chapter let me point out that the states were constitutionally required to make gold and silver coin as tender for payment because the founders of the Republic knew that gold and silver represented wealth, therefore, the states had to create a economic atmosphere that created wealth for the people or the people could not and would not be required to pay taxes.
Chapter II
Banking History
Very few people understand banking. And those who do, seldom share their knowledge with the public, because once the public understands what is presented in this chapter they will lose confidence in the integrity of the system as it is today. And rightfully so.
Should bankers and the banking system be respected? After reading this chapter make up your own mind. You will have a grip on what has happened to the great economic power of the united States and your personal wealth when you have completed this chapter.
I want to suggest that you write a letter to the federal reserve system and ask them for a copy of their booklet, 'The History of Banking'. I'm assuming they still distribute this booklet but on the other hand maybe they don't want you to investigate this matter.
But it's not important unless you do not trust what I have presented here for your edification.
Warehouses
Banks started as warehouses. They were like safety deposit boxes on a large scale. You could take your gold and/or silver to these warehouses for safe keeping. You would be issued certificates of deposit which contained the signature and seal of the warehouse in which you had deposited your wealth.
You paid a small fee for this guardianship of your wealth. In order to withdraw your gold or silver coin you simply presented your certificates, take the amount of gold or silver you wanted, and then received new certificates for what remained on deposit.
There was nothing wrong with this. In fact, it worked quite well. Until one day when...
The certificates you received for your deposits where written in your name and could only be cashed by you. Then these warehouses devised a scheme that started us on the road of financial destruction.
Each depositor was told that they could have the normal certificate made payable to them and they could get their gold or silver anytime they wanted or they could receive certificates made payable to bearer.
By taking certificates made payable to bearer they would be able to spend them in the market place rather than come to the warehouse every time they needed cash.
Then the new bearer of the certificate would be able to carry the certificate to the warehouse collect what was owed to him/her and your account balance would be reflected by this transaction.
This certainly sounded good and would have worked out fine if the warehouseman was an honest man. But he was not and is not.
Large Deposits - Small Withdrawals
Here is what happened. You went to the supermarket and purchased your needs with a gold certificate. The proprietor was willing to take your certificate because he knew it was as good as gold. And all he had to do was go to the warehouse to extract his gold.
But being a busy man and not having time to go to the warehouse he decided to use your gold certificate to purchase more stock for the supermarket from it's suppliers. After all your gold certificate was payable to bearer, so the supplier could take your gold when he wanted.
The supplier understood the value of the certificate so he gladly accepted it. But being a busy man, himself, he passes the certificate on to the farmer where he buys his produce that he sells to the supermarket.
Then the farmer uses the certificate as payment for things he needs, etc.,etc.,etc...
The warehouses biggest discovery
The warehouse owner received a great revelation that converts into modern day banking.
That revelation is that the depositors in his warehouse found it easier to circulate the gold certificates than to withdraw their gold. This revelation is the beginning of what we call reserve banking. Which I will present under the chapter 'Central Banks'.
You would think the warehousemen would have been very contented with the fact that people paid him to store gold but little was ever taken out. He could run his warehouse with little labor cost and little physical work.
But he was not contented with this alone. Instead he became a thief.
Read more of this stuff www.guardianequityfund.com/dollarbook.htm |
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