As we segue to WORLD FEDERAL BANK policies let's remember as today's right wing rants against regulations that kill free market. We spend weeks making clear it is the RIGHT WING that creates these regulatory laws geared towards small and regional business because they want to KILL COMPETITION FOR CORPORATIONS. They spent all of last century chipping away FDR regulations meant to hold corporation power in check replacing those regulatory laws protecting against MONOPOLY with laws just as the one below in the JOBS ACT. As the article yesterday stated----the commerce laws around what is fast becoming the only ECONOMY IN TOWN---TECHNOLOGY----is repressive with aims at killing FREE MARKET COMPETITION.
ONE WORLD GLOBAL WALL STREET POLS DO NOT EVEN THINK OF THE US 99% AS HAVING RIGHTS OR BUSINESSES---THESE LAWS ARE GEARED FOR GLOBAL CORPORATIONS HAVING AN EVEN PLAYING FIELD IN US FOREIGN ECONOMIC ZONES.
'The ultimate goal of the JOBS Act was to infuse capital into the small businesses that account for 65% of job growth in the United States. Ultimately, the equity crowdfunding portion of the bill fell short, creating too many regulatory hurdles to appeal to high-growth startups'
Below we see an article written by MISES back in 1988 talking about ONE WORLD ONE WORLD CENTRAL BANK----this was REAGAN era. So every time one hears someone say ONE WORLD is conspiracy theory--which these 5% players still do today----these articles show the discussion through last century. MISES is a Austrian political philosophy think tank and source for today's University of Chicago NEO-LIBERALISM in US.
Global Wall Street pols do indeed think these ONE WORLD STRUCTURES ARE MOVING FORWARD. Let's remember this----everything done these few decades was illegal and can be VOIDED EASY PEASY. Eliminating US FED would be a start in rebuilding our US economy and financial stability so we don't need connections to any WORLD CENTRAL BANK.
We see in 1988 the plan to create the EUROZONE eliminating those European nation currencies this was followed in US by breaking GLASS STEAGALL and deregulating banks---ONE WORLD ONE GOVERNANCE was the goal for 1990s Congress and Clinton. Look how the plan also takes Euro Central Bank and Bank of Japan as the first stage.
'European governments have targeted 1992 for abolishing individual European currencies and replacing them with the European Currency Unit, the ECU. Next they plan to set up a European central bank. The next step is the merger of the Federal Reserve, the European central bank, and the Bank of Japan into one world central bank'.
The Free Market
The Coming World Central Bank
fm1088_0.pdf fm1088_0.pdfThe Free Market 6, no. 10 (October 1988)
International statists have long dreamed of a world currency and a world central bank. Now it looks as if their dream may come true.
European governments have targeted 1992 for abolishing individual European currencies and replacing them with the European Currency Unit, the ECU. Next they plan to set up a European central bank.
The next step is the merger of the Federal Reserve, the European central bank, and the Bank of Japan into one world central bank.
The ECU is a basket of ten European currencies weighted according to their respective country's economic strength. The German mark gets the highest weight while the Irish pound, the Danish krone, and the Greek drachma get lower. The ECU doesn't qualify as a working currency yet, but it is already being used by international banks and multinational corporations. And traveler's checks denominated in ECU's are also popular in Europe.
The ECU first appeared in 1979. Its creators quickly found that its usefulness was limited without a clearing system, so Credit Lyonnais of Paris and Morgan Guaranty Bank of New York formed the ECU Banking Association, made up of top central bankers and government officials. In March 1986 they set up the European Investment Bank and SWIFT (the Society for Worldwide Interbank Financial Telecommunications) to process ECU transactions. Within a few months, all major central banks had signed on, and today, ECU transactions represent the fifth largest trading volume in international currency markets.
The big push for the European central bank began after the October 1987 stock market crash as politicians seized the moment of crisis to advance their agenda. "The logic of developments... demand that the European currency takes over from the national ones," argued socialist French President Francois Mitterrand.
In November 1987, European politicians, businessmen, and bankers formed the Action Committee for Europe to promote the European central bank, arguing that Europe needs one currency and "a common authority to manage it."
The European central bank (ECB) will be modeled after the Federal Reserve. Like the Fed in 1913, it will have the institutional appearance of decentralization, but also like the Fed it will be run by a cartel of big bankers in collusion with politicians at the expense of the public.
Margaret Thatcher is the only influential holdout in Europe. And she objects because she thinks the influence of Germany's central bank will allow less inflation than she wants! But like all central banks, the ECB is designed to inflate. And it will have a particularly free hand. With twelve separate currencies, exchange rate fluctuations allow people to sell more inflationary currencies for the stronger ones, providing some constraint on inflation. That will no longer be the case with the Ecu.
The head of the European Monetary System, former French President Valery Giscard d'Estaing, says Thatcher will join when the ECU becomes "a real currency." However, no government or group of governments can create a currency out of thin air. They must pay attention to the economic laws that Ludwig von Mises proved with his "regression theorem," namely, that currencies must originate in the free market. But unlike the International Monetary Funds Special Drawing Rights (SDRs), European governments did not create the ECU out of nothing. It is composed of existing currencies which in turn had their origins in gold and silver.
The plan for the transition has central banks fixing the trading range of the ECU relative to. other currencies while allowing them to freely circulate side by side. Then governments will overvalue the ECU relative to other European currencies, and people will sell their pounds, lira, and marks for the ECU, putting into effect a kind of backwards Gresham's Law.
"There is one hitch," says Forbes magazine. "Although currencies that make up the ECU maintain a balance relative to one another, the entire currency basket fluctuates against the dollar, so cashing in ECU's for dollars could result in a gain or a loss."
One of the few constraints now operating on the Fed is that if it inflates too much, people will dump the dollar for a more stable currency. That's why there is a push to achieve international monetary "stability" (that is, equal rates of inflation) by cartelizing what will then be three remaining central banks of the indutrialized world into one world central bank charged with manipulating one world currency.
The Economist of London says that "Thirty years from now, Americans, Japanese, Europeans, and people in many other rich countries" will be "paying for their shopping with the same currency. Prices will be quoted not in dollars, yen, or D-marks" but in terms of a new world currency.
Central banking is a horrendous idea to begin with. Merging central banks will be even worse. The resulting institution would become, as Dr. Edwin Vieira has remarked, "the biggest agent of economic and political irresponsibility the world has ever seen." Today, if the u.s. Congress has a sudden fit of economic sanity, it could restrict the Fed's power. The mere threat of that serves as a limit. But the world central bank would be subject to no authority.
The world central bank might be based on the International Monetary Fund or the World Bank, says the Economist. But I think the more likely candidate is the Bank for International Settlements (BIS), the "central banker's bank" in Basle, Switzerland. World central bankers have been holding "consultative meetings" there once a month for over a year. Recently, the meetings have concentrated on giving the BIS "lender of last resort functions and responsibilities. " That means the power to create money and credit out of thin air.
They all want, as Banker magazine noted, "a world in which national policy authority is greatly reduced, and replaced by more powerful international policy-making bodies."
Finance Minister Edouard Balladur of France writes in the Wall Street Journal that we should "entrust a small group of distinguished people of unquestionable moral authority" with the job of designing "a world order" that is "binding on all." But such an elitist idea would only produce a monster. That is why those of us who believe in individual liberty and free markets must actively oppose this plan, despite the proponents' use of free-market rhetoric. (One free-market publication praised the Ecu as "an extension of Hayek's work on competitive currency.")
None of this is to say that I approve of the status quo. The world monetary system is shaky. The system of floating exchange rates between fiat currencies only adds to the volatility. And we do need more international cooperation. But we want economic integration without political integration.
We all know the troubles we have dealing with city hall, let alone the state house or Washington, D.C. A world system would be unimaginably worse. Internationally as well as domestically, the answers to economic problems are free markets, free trade, free labor, and a gold standard. All would build the only kind of world economic order consistent with sound economics and individual freedom.
When our Baltimore politicians say THEY wouldn't like that when WE THE PEOPLE THE 99% keep fighting for our US Constitutional rights to legislate and have voice in our public policy------this is the THEY====THE GLOBAL 1%. Right away we know that politician needs to go.
The article posted yesterday discussing BANCOR----THAT WORLD CURRENCY FOR A WORLD CENTRAL BANK-----used this word in describing MOVING FORWARD---it is this----a cruel, all-controlling ruler oppressing everyone. That will be the end result if we continue to allow ONE WORLD ONE CENTRAL BANK MOVE FORWARD---UNITED NATIONS GOALS. You can see why global 1% need SMART CITIES DEEP STATE in all FOREIGN ECONOMIC ZONES.
'A despot, is a cruel, all-controlling ruler. For example, a despot does not allow people to speak out against the leadership, nor really want them to have much freedom at all.
The word despot came into English in the sixteenth century from Old French, but it traces all the way back to the Greek word despotes, meaning "master of a household, lord, absolute ruler." The word is often used to describe someone who abuses power and oppresses others. Obviously, it's not a nice thing to call someone, especially within earshot of the despot who has absolute power over you'.
'They all want, as Banker magazine noted, "a world in which national policy authority is greatly reduced, and replaced by more powerful international policy-making bodies."'
We have already spent a week shouting out against this move towards GLOBAL ONLINE BANKING. It is of course being pushed from CALIFORNIA and NYC as our US community banks and credit unions have been targeted by US Treasury fraud and Congressional laws passed during OBAMA to bring down our small and regional banking system......only global Wall Street banks will survive and they will all morph into global online banking. We have refused to go to online banking because of this goal-----but we know if MOVING FORWARD continues everyone will be REQUIRED to do only online banking and that bank will be international. Global Wall Street and a US FED will be merged into international banks and this WORLD CENTRAL BANK.
Each time these financial policies unfold----99% OF WE THE PEOPLE think that's fine----it's more convenient. WAKE UP FOLKS.
Global online banking penetration in April 2012, by region
Percentage of internet audience using online banking45%37.8%28.7%25.1%22%8.8%North AmericaEuropeWorldwideLatin AmericaAsia PacificMiddle East and Africa
© Statista 2017Show further information
Complete Source Details
About This Statistic
This statistic shows the global online banking penetration as of April 2012, by world region. Globally, 423.5 million people accessed online banking sites during April 2012, reaching 28.7 percent of the internet audience. In North America, 45 percent of internet audiences accessed banking sites.
Mobile banking in the U.S. – additional information
Mobile banking allows customers to manage and control their financial accounts and transactions via their mobile device whether this is a mobile phone or tablet.
In November 2015, a separate survey among adults in the U.S. asked its participants; ‘What are the main reasons you have decided not to use mobile banking?’ During the survey, the most popular reason provided, with 87.9 percent of respondents, was that they felt their mobile banking needs were being met without mobile banking. Other popular answers included respondents who didn’t see any reason to use mobile banking and concerns about the security of mobile banking.
In the same survey taken in November 2015, the distribution of mobile payment users in the U.S. in terms of their income group was revealed. Of respondents who earned less than 25,000 U.S. dollars a year, only 15.9 had used mobile payment services. At the other end of the scale, those who earned 100,000 U.S. dollars or more a year made up 29.7 percent of mobile payment users.
Many Americans have these few decades of watching a United Nations take more control of US policy thought that the IMF AND WORLD BANK is controlled by US since our Federal tax money is sent to support these institutions and since FDR was the founding President of United Nations. Remember, the global OLD WORLD MERCHANTS OF VENICE 1% still think of US as a colony----those controlling WORLD BANK AND IMF are people working for that global 1% ----not 99% of US citizens. The IMF/WORLD BANK has been used by the global 1% to create all the world civil unrest and wars each time installing that global Foreign Economic Zone.
Each time they say they are helping the poor----they are bringing a stable economy---when the only goal was creating this ONE WORLD ONE GOVERNANCE structure. Life for citizens in all nations tied to IMF/WORLD BANK has gotten worse because their rights as sovereign citizens disappeared and because each time an extreme wealth extreme poverty societal structure is installed ----that 1% inside that nation.
This has now been staged for WE THE PEOPLE THE 99% by these several years of massive US TREASURY BOND debt fraud with states loading as well with municipal bond debt all to take down the US dollar.
Even though IMF and World Bank are supported largely with US taxpayer money---these are not people tied to American sovereignty---we are one more economic colony.
The IMF and the World BankMay 16, 2017
The International Monetary Fund (IMF) and the World Bank are institutions in the United Nations system. They share the same goal of raising living standards in their member countries. Their approaches to this goal are complementary, with the IMF focusing on macroeconomic issues and the World Bank concentrating on long-term economic development and poverty reduction.
What are the purposes of the Bretton Woods Institutions?
The International Monetary Fund and the World Bank were both created at an international conference convened in Bretton Woods, New Hampshire, United States in July 1944. The goal of the conference was to establish a framework for economic cooperation and development that would lead to a more stable and prosperous global economy. While this goal remains central to both institutions, their work is constantly evolving in response to new economic developments and challenges.
The IMF’s mandate.
The IMF promotes international monetary cooperation and provides policy advice and capacity development support to help countries build and maintain strong economies. The IMF also makes loans and helps countries design policy programs to solve balance of payments problems when sufficient financing on affordable terms cannot be obtained to meet net international payments. IMF loans are short and medium term and funded mainly by the pool of quota contributions that its members provide. IMF staff are primarily economists with wide experience in macroeconomic and financial policies.
The World Bank’s mandate.
The World Bank promotes long-term economic development and poverty reduction by providing technical and financial support to help countries reform certain sectors or implement specific projects—such as building schools and health centers, providing water and electricity, fighting disease, and protecting the environment. World Bank assistance is generally long term and is funded both by member country contributions and through bond issuance. World Bank staff are often specialists on particular issues, sectors, or techniques.
Framework for cooperation
The IMF and World Bank collaborate regularly and at many levels to assist member countries and work together on several initiatives. In 1989, the terms for their cooperation were set out in a concordat to ensure effective collaboration in areas of shared responsibility.
During the Annual Meetings of the Boards of Governors of the IMF and the World Bank, Governors consult and present their countries’ views on current issues in international economics and finance. The Boards of Governors decide how to address international economic and financial issues and set priorities for the organizations.
A group of IMF and World Bank Governors also meet as part of the Development Committee, whose meetings coincide with the Spring and Annual Meetings of the IMF and the World Bank. This committee was established in 1974 to advise the two institutions on critical development issues and on the financial resources required to promote economic development in low-income countries.
The Managing Director of the IMF and the President of the World Bank meet regularly to consult on major issues. They also issue joint statements and occasionally write joint articles, and have visited several regions and countries together.Staff collaboration. IMF and Bank staffs collaborate closely on country assistance and policy issues that are relevant for both institutions. The two institutions often conduct country missions in parallel and staff participate in each other’s missions. IMF assessments of a country’s general economic situation and policies provide input to the Bank’s assessments of potential development projects or reforms. Similarly, Bank advice on structural and sectoral reforms is considered by the IMF in its policy advice. The staffs of the two institutions also cooperate on the conditionality involved in their respective lending programs.
The 2007 external review of Bank-Fund collaboration led to a Joint Management Action Plan on World Bank-IMF Collaboration (JMAP) to further enhance the way the two institutions work together. Under the plan, Fund and Bank country teams discuss their country-level work programs, which identify macroeconomic and sectoral issues, the division of labor, and the work needed in the coming year. A review of Bank-Fund Collaboration underscored the importance of these joint country team consultations in enhancing collaboration.
Reducing debt burdens.
The IMF and World Bank have also worked together to reduce the external debt burdens of the most heavily indebted poor countries under the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).
They continue to help low-income countries achieve their development goals without creating future debt problems. IMF and Bank staff jointly prepare country debt sustainability analyses under the Debt Sustainability Framework (DSF) developed by the two institutions.
In 1999, the IMF and the World Bank launched the Poverty Reduction Strategy Paper (PRSP) approach as a key component in the process leading to debt relief under the HIPC Initiative and an important anchor in concessional lending by the Fund and the Bank. While PRSPs continue to underpin the HIPC Initiative, the World Bank and the IMF adopted in July 2014 and July 2015, respectively, new approaches to country engagement that no longer requires PRSPs. The IMF streamlined its requirement for poverty reduction documentation for programs supported under the Extended Credit Facility (ECF) or the Policy Support Instrument (PSI).
Setting the stage for the 2030 development agenda.
Between 2004 and 2015 the IMF and the Bank jointly published the annual Global Monitoring Report (GMR), which assessed progress towards meeting the Millennium Development Goals (MDGs). In 2015, with the replacement of the MDGs with the Sustainable Development Goals (SDGs) under the 2030 Global Development Agenda, the IMF and the Bank have actively engaged in the global effort to support the Development Agenda. Each institution has committed to new initiatives, within their respective remits, to support member countries in reaching their SDGs. They are also working together to better assist the joint membership, including by an enhanced support of stronger tax systems in developing countries.
Assessing financial stability. The IMF and the World Bank are also working together to make financial sectors in member countries resilient and well regulated. The Financial Sector Assessment Program (FSAP) was introduced in 1999 to identify the strengths and vulnerabilities of a country's financial system and recommend appropriate policy responses.
'Preparing to rebuild the international economic system while World War II was still raging'
This is why the start of WW 1 and WW 2 seems planned as an aftermath of the LAST ROBBER BARON FRAUDS during early 1900s AND it is why we shout that all this RUSSIA, RUSSIA, RUSSIA is simply the same false actions being taken as an excuse for a WW3 after this coming ROBBER BARON fraud. History does repeat itself. So, these global NGOs in our US cities deemed Foreign Economic Zones are indeed geared to creating these civil unrest tensions and promoted the FAKE reasons for war. Sadly they were preparing the financial institutions for reparations while the wars were raging. This is why we must look more closely at BRUTAL FASCISTS LEADERS who suddenly appear just as a WORLD ORDER is being installed. Hitler/Stalin/MAO all installed by global 1% having nothing to do with left MARXISM.
This is why the US FED was installed in early 1900s ----and this was the beginning of the assault on our national sovereignty. We have known these ONE WORLD policy goals have existed from mid-twentieth century but it was drowned in CONSPIRACY theory claims by national media and global Wall Street 5% to the 1%.
The Bretton Woods system of monetary management established the rules for commercial and financial relations among the United States, Canada, Western Europe, Australia and Japan in the mid-20th century. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states. The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate (± 1 percent) by tying its currency to gold and the ability of the IMF to bridge temporary imbalances of payments. Also, there was a need to address the lack of cooperation among other countries and to prevent competitive devaluation of the currencies as well.
Preparing to rebuild the international economic system while World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference, also known as the Bretton Woods Conference. The delegates deliberated during 1–22 July 1944, and signed the Bretton Woods agreement on its final day. Setting up a system of rules, institutions, and procedures to regulate the international monetary system, these accords established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group.
Here is NIXON putting into place that same ONE WORLD ONE GOVERNANCE ONE WORLD CENTRAL BANK back in 1971----remember, Nixon went to China to 'OPEN' China to the idea of installing FOREIGN ECONOMIC ZONES so US corporations could leave US and take down its economy. TRICKY DICKY was more than just dishonest.
All this fancy financial talk simply means this-----our US dollar was deliberately made FIAT CURRENCY when gold standard was removed---our currency simply had no backing placing total control of monetary value on CENTRAL BANKING.
'On 15 August 1971, the United States unilaterally terminated convertibility of the US dollar to gold, effectively bringing the Bretton Woods system to an end and rendering the dollar a fiat currency. This action, referred to as the Nixon shock, created the situation in which the US dollar became a reserve currency used by many states. At the same time, many fixed currencies (such as the pound sterling, for example) also became free-floating'.
As we see below the goal of FIAT-MONEY is to create the structure for value swings and in this case HYPER-INFLATION----MUGABE did the same to his citizen in Zimbabwean hyper-inflation---it is simply a tool to kill all the wealth in a nation for the 99% of citizens.
Loss of backing
A fiat-money currency greatly loses its value should the issuing government or central bank either lose the ability to, or refuse to, further guarantee its value. The usual consequence is hyperinflation. Some examples where this has occurred are the Zimbabwean dollar, China in 1945 and the Mark in the Weimar Republic in 1923.
So, NIXON set the stage for what became the ROBBER BARON CLINTON/BUSH/OBAMA------in destabilizing global economy with the US FED working with the IMF/WORLD BANK.
The global Wall Street crowd shout constantly about the benefits of FIAT MONEY-----taking down the GOLD STANDARD. Know what that goal was? Do we see it today? Today we have a US Treasury soaked in debt unable to back its currency and not a drop of GOLD ON HAND FOR OUR FEDERAL TREASURY to back this debt. It deliberately created the ability to bankrupt a national economy. The GOLD STANDARD kept America's economy stable and honest.
So, where is America's gold reserves? Much were privatatized to global 1%. This is what will leave the US with no financial leg to stand on. Now, all these privatizations of all that is public---is another gutting of America's wealth again leaving WE THE PEOPLE THE 99% without a dime of financial backing.
This is why Obama and his US Treasury Secretaries GEITHNER AND LEW-----had to create a massive $20 trillion in US debt----with the US FED Bernanke fueling this bond fraud with manipulated interest rates and inflation. Basically, the global 1% has bought all the gold in Western nations and have it in vaults tied to World Bank/IMF. They are forcing this goal of ONE WORLD ONE WORLD BANK.
ALL DELIBERATE AND ALL DONE BY OUR US PRESIDENTS----THOSE OLD WORLD MERCHANT OF VENICE GLOBAL 1% .
Fiat Currency: What It Is and Why It's Better Than a Gold Standard
The value of money has to be has to be based on something of value. A fiat currency (or fiat money) is one example.
Dec 6, 2015 at 6:00AM
The gold standard-versus-fiat currency debate will be waged for years to come.
This article was updated on Jan. 4, 2017
"In God we trust. All others pay cash."
The most important thing about money is this: People need to be able to count on its value, and that value needs to be stable over time. For that reason, many countries have, over the past century, shifted to a fiat currency.
But what exactly is fiat currency, and what makes it the best alternative? Let's take a closer look.
Underpinning the value of money Fiat currency is legal tender whose value is backed by the government that issued it. The U.S. dollar is fiat money, as are the euro and many other major world currencies.
This approach differs from money whose value is underpinned by some physical good such as gold or silver, called commodity money. The United States, for example, used a gold standard for most of the late 19th and early 20th century. A person could exchange U.S. currency -- as well as many public and even some private debts -- for gold as late as 1971.
A fiat currency's value is underpinned by the strength of the government that issues it, not its worth in gold or silver.
Why a fiat currency is better economic policy Here's a look at U.S. inflation since the beginning of the 20th century:
US Inflation Rate data by YCharts.
The most important aspect of a currency is the relative stability of its value. And while there are certainly more aspects to inflation than just the currency standard, it's a major factor in monetary policy and a government's ability to control the money supply.
The U.S. dollar -- as well as many public and private debts -- could be converted into gold until the mid-1930s, and the U.S. dollar was tied to the value of gold until the early 1970s, when President Nixon completely severed the relationship between the U.S. dollar and gold. With the exception of the late 1970s' and early 1980s' oil crisis and recession, inflation has become much less volatile, and deflation hasn't been an issue.
A key reason is U.S. monetary policy. Since the Federal Reserve has more flexibility to control supply and demand of currency, it is more able to limit the impact of major economic shocks, such as the financial crisis of 2008-2009. Many economists acknowledge that the government's ability to control the supply of currency played a major role in keeping the crisis -- easily the worst in 80 years -- from causing even greater harm to the American and global economy.
What gold advocates ignore Those who advocate for a gold or similar standard often use the argument that fiat currencies aren't really "worth" anything, since there isn't anything tangible that underpins its value. That's really not a very accurate description of a fiat currency, versus a gold standard. Simply put, the value of any currency, whether a commodity or a fiat currency, is only relative to what people think it's worth.
And gold hasn't exactly been stable or reliable in recent years:
Gold Price in US Dollars data by YCharts.
What does that chart tell us? In times of uncertainty, people hoard gold. You can see it in the early '80s oil crisis and recession and the most recent financial crisis, when gold prices soared, only to fall sharply once the overall economic environment improved.
This situation is largely what led Franklin D. Roosevelt to sever the convertibility of U.S. currency and debt into gold during the Great Depression. Under the gold standard (especially when currency could be converted to gold), hoarding gold had a direct impact on monetary flow, hurting commerce and exacerbating recessions. By severing the link between gold reserves and currency, the Federal Reserve is better able to combat major economic shocks to the economy.
Think gold is a great investment? Historically, it really hasn't been:
Gold Price in US Dollars data by YCharts.
The U.S. stock market has been a far superior long-term investment since Nixon severed the relationship between gold and the dollar in the 1970s. And since September 2012, gold has fallen 30%, while the S&P 500 has seen total returns of more than 77%.
Stability is key It's fair to argue that the Federal Reserve's efforts to limit the impact of economic crisis could have unforeseen long-term effects, based on the additional money that has been put in circulation, versus a gold or silver standard that limits how much money circulates. The problem gets back to times of major economic crisis: When governments need tools to stop or reduce the harm, a commodity standard has historically had the opposite effect as people hoard it.
By severing the tie between a commodity that people tend to hoard in times of crisis and the value and supply of money, a fiat currency is a better alternative, but only so long as those pulling the levers of monetary supply keep the balance between supply and demand stable.
Here's the bottom line: Currency is a tool of trade. People tend to hoard gold and silver when things are uncertain, and that's harmful when it limits currency flows on a large scale. Removing the relationship between a currency and commodity doesn't create "worthless money."
It simply keeps panic from causing greater economic harm in times of crisis when people hoard the underpinning of a commodity currency and stop the wheels of commerce. And that makes a fiat currency far better than a gold standard.
We hear all the time in Baltimore ----ground zero for ONE WORLD ONE GOVERNANCE how Nixon was great----how FIAT MONEY was great-----and we do not believe the 5% to the 1% saying all this KNOW WHAT ALL THIS MEANS.
Basically, Bretton Woods created the platform for global banking under a stable Gold Standard---and Nixon simply pulled the rug on safe banking ----just as Clinton did in 1990s breaking Glass Steagall. If you knew of the ONE WORLD goals stirring in US--- you would have known that was the goal of Nixon in 1970s.
'Under the Bretton Woods system, foreigners could convert their local currencies into US dollars and then exchange these dollars for a certain amount of gold with the US Federal Reserve through the “gold window.” It was not a true gold standard, because governments did not necessarily maintain gold reserves in direct proportion to their currencies in circulation. It was, however, reasonably effective in keeping trade imbalances from forming across global economies and kept currencies tethered to something of fixed value. Here’s a snapshot of the US current account balance in the 10 years preceding the decision to close the gold window'.
'Note that the United States maintained a small surplus before exiting the gold standard. How sad and pathetic that Nixon got away with claiming that there was an urgent problem. Now consider what happened to the US current account balance in the years following the departure from the gold standard'.
FIAT MONEY built the RUG to be pulled out from US economy and Clinton's DEREGULATED LAISSEZ FAIRE created the ability to move all of America's wealth to that global 1% ----including all our GOLD . We really think people supporting all this think these US Presidents and players are on team UNITED STATES when they are on team global 1%.
It wasn't until the 1990s with Clinton staging the ROBBER BARON fleecing of America that many American citizens thought all these plans to take down US could be pulled off-----that is why 1990s was the time for massive protests and marches by right wing and left wing citizens---but too many listened to all the CONSPIRACY THEORY stories.
13 March 2013
President Nixon: The Man Who Sold the World Fiat Money
By Ron Rimkus, CFA
Posted In: Economics, History & Geopolitics
Today, the United States lives with federal budget deficits of more than $1 trillion each year, interest rates that are artificially held below market levels, aggregate debt that is growing much faster than the economy, and a chronic trade deficit that is larger than whole industries.
Yet each of these problems could be tamed and mollified, in my view, with a true gold standard. Of course, the world used to be on a type of gold standard known as the Bretton Woods Agreement. Tracing the history of this gold standard and its demise ultimately led me to one man — US President Richard Milhous Nixon — the man who untethered the chord linking currencies to gold; the man who sold the world fiat money.
What happened? How did we get from there to here? And what lessons can we draw from this relatively recent economic history to inform where we should be going?
On 15 August 1971, President Nixon announced to the world that the United States was closing the gold window in a move known as the Nixon Shock. You can watch it here:
Wow. Heady stuff. The American dollar was a “hostage in the hands of international speculators“? Hmmm . . . let’s get back to that. Note the sense of urgency he is creating with his language. “We will press for the necessary reforms to set up an urgently needed new international monetary system.” He then goes on to declare, “I am taking one further step to protect the dollar, to improve our balance of payments, and to increase jobs for America.” So, Tricky Dick (as he was known in politics) presented himself as a protector of the dollar, a warrior against inflation, and a jobs creator. That was his sales pitch. In reality, Nixon was doing the exact opposite, and, according to an analysis by Burton A. Abrams and James L. Butkiewicz of the University of Delaware, Nixon knew it. Thanks to the Nixon Tapes from the White House, we have a looking glass that gives great insight into Nixon’s true thoughts and feelings — and how they differ markedly from what he said publicly.
For instance, despite calling himself a Keynesian, he was also a monetarist — at least to the extent he thought it might help him get elected in 1972. He believed that easy monetary policy could reduce unemployment in the short run and knew that presidents have a hard time getting reelected when unemployment is high. On 26 July 1971, Nixon was captured on tape stating, “I’ve never seen anybody beaten on inflation in the United States. I’ve seen many people beaten on unemployment.” When Nixon took office, unemployment was only 3.4%, but after the recession in 1969–1970, unemployment rose to 6%, where it remained. Given that Nixon had publicly stated that he would improve employment, he was committed to getting the number down by election time. Even the great Milton Friedman, who is on tape urging caution to the president over his desire for easy money, couldn’t persuade him. The tapes further reveal that Nixon arranged credible threats to the then-Fed Chairman Arthur Burns’ power as head of the Federal Reserve, including: adverse leaks about Burns to the public; the appointment of easy-money, pro-Nixon doves to the Fed board; and threats of Burns not being reappointed at the end of his term.
Nixon and his Administration placed repeated pressure on Burns to ease monetary policy in late 1971 and early 1972 — with the goal of reducing unemployment in time for the election. For example, on 19 March 1971, Nixon urged Burns, “We’ve got to think of goosing it [the money supply] . . . late summer and fall of this year  and next year . As you know, there’s a hell of a lag.” So, the self-fashioned “inflation warrior” pressured the Fed to print money? Say it ain’t so. In one recording, Burns states, “If interest rates go down further through my actions . . . the probability as I see it is, they will go up later on in the year and in 1972. Housing, which is recovering very nicely, will go into a tailspin in 1972. Where will we be, as a country, and as a party and me personally?” Clearly, Burns is warning Nixon of the adverse longer-term consequences of easy money.
By December of 1971, Burns ultimately succumbed to the pressure, reducing the discount rate and accelerating the expansion of money supply. Moreover, the wage and price controls created the illusion of stability against a powerful backdrop of easy money. So much for the independence of the Fed. So much for the inflation warrior. So much for the defender of the US dollar. So much for the creator of jobs. These tapes clearly reveal that Nixon was looking out for himself at the expense of long-term benefits for the country and — because of the international monetary system — the world.
So, ignoring what Nixon said publicly, what did his policies actually do? Nixon’s package of proposals included:
- Closing the gold window (elimination of the Bretton Woods gold standard).
- Letting the dollar float.
- Placing a temporary freeze on prices and wages to “combat inflation.”
- Placing a temporary 10% tariff on imports to “improve balance of payments.”
Under the Bretton Woods system, foreigners could convert their local currencies into US dollars and then exchange these dollars for a certain amount of gold with the US Federal Reserve through the “gold window.” It was not a true gold standard, because governments did not necessarily maintain gold reserves in direct proportion to their currencies in circulation. It was, however, reasonably effective in keeping trade imbalances from forming across global economies and kept currencies tethered to something of fixed value. Here’s a snapshot of the US current account balance in the 10 years preceding the decision to close the gold window.
United States Current Account Balance % GDP (1961–1970)
Sources: St. Louis Federal Reserve, CFA Institute.
Note that the United States maintained a small surplus before exiting the gold standard. How sad and pathetic that Nixon got away with claiming that there was an urgent problem. Now consider what happened to the US current account balance in the years following the departure from the gold standard.
United States: Current Account Balance % GDP (1960–2011)
Sources: St. Louis Federal Reserve, CFA Institute.
Just as both Arthur Burns and Milton Friedman had warned, in the years immediately following this new policy, the world endured sharply rising inflation and elevated interest rates — and the balance of payments swung from a persistent surplus to a chronic deficit.
Had Bretton Woods remained intact, these events would not have happened. Under a gold standard, trade deficit countries (such as the United States today) pay trade surplus countries in gold to compensate them for the exchange of goods. This is the balancing mechanism of a gold standard, and it prevents countries from misallocating capital. Under the floating exchange rate system, if countries should let their currencies float, exchange rates would change until trade deficits and surpluses shrink toward zero.
For Nixon, departing from the gold standard meant that the Fed was free to expand monetary policy much more easily. For the United States, it meant that trade gaps need not be resolved — ever — which is why we see the emergence of persistent, large, and growing trade deficits in the United States. Lastly, for the rest of the world, the loss of the gold exchange standard meant that they could maintain persistent trade surpluses with countries like the United States and thereby increase local employment and trade off exchange rates and inflation.
Under a floating exchange system, if country A fails to print as much currency as country B, either their currency appreciates or they experience inflation “imported” from country B. Escalating government debt, however, can help offset this inflation. Have you ever considered what might happen to inflation if a government never raised any federal debt and simply printed every dollar (or other currency unit) that they required to meet their spending needs on a pay-as-you-go basis? All else being equal, inflation would be greater. Likewise, as government debt rises, inflation is less than it otherwise would be. So, you can think of government debt as a reservoir of potential future inflation.
Consequently, after the departure from Bretton Woods, countries could afford to be more lax about exchange rate policy. For countries that maintained their peg to the dollar, easy money in the United States meant inflation at home. However, to the degree they were willing to use debt, they could mollify the effects of monetary inflation. Over time, the United States has used easy monetary policy in part to foster economic growth and in part to finance yawning federal budget deficits. The consequence of all this has been an ever-increasing debt load relative to GDP, standing at about 358% total debt to GDP today. Of that, government debt is now greater than GDP at over $16 trillion.
Nevertheless, until recently, each additional dollar of government debt could at least grow aggregate GDP — even if the ROI was weak. This is no longer true as incremental debt is proving to displace other forms of spending. Interest rates can not get much lower and the debt burden can not get much higher without unleashing the kinetic energy of the latent inflation stored within.
Ever since the fateful day that Nixon announced he was closing the gold window, the United States and the rest of the world have been operating on a fiat monetary system (meaning money is not backed by gold or anything else). Consequently, trade deficits and surpluses are persistent, and gold no longer stands between the politicians and the value of a currency.
As with credit markets, trust is at the core of a fiat monetary system. Should that trust deteriorate, the value of a currency can change rapidly. If and when that trust deteriorates, it happens quickly. The current system has made the value of the dollar a hostage to politicians, not to the currency markets or “international speculators,” as Nixon wanted the public to believe.
Over the years, whole countries (typically in developing economies) have built much of their economies around exports back to the developed world, including countries like the United States, who in turn are net importers — naturally creating vested interests in the status quo. Excluding services, which currently run an annual surplus, and focusing only on goods, the United States runs an approximately $700 billion trade deficit annually.
Assuming that US businesses on average could produce these goods — which they would under a gold standard — for about $200,000 in revenue per employee, the United States would create about 3.5 mm new jobs. But rather than fix the monetary system, today’s Federal Reserve is pursuing very aggressive monetary policy by which they have more than tripled the monetary base in just the last four and half years and pushed interest rates down to near zero.
Today’s massive trade imbalances, ongoing trillion dollar budget deficits, and the escalation of debt and money printing only makes the system more and more unstable. That’s a harsh and lasting legacy of a slick salesman — all so that he could get reelected. Of course, no system is perfect, and certainly the Bretton Woods system as well as a classical gold standard are imperfect too. However, we can protect the value of our currencies, improve the balance of payments worldwide, and increase jobs and real economic growth. Just like Tricky Dick said. Only this time, with a gold standard. It’s not too late.
'The remaining 95 percent of U.S. Treasury gold ($10.4 billion in book value) is held in custody for the Treasury by the U.S. Mint'.
13 October 2009
How Much Gold Does the US Have In Its Reserves?
Looking around the web, and considering some recent questions regarding gold and SDRs on the Fed's and Treasury's balance sheets and reserve statements, I came across quite a bit more confusion and misinformation than one might have expected to find on what should be a fairly straightfoward question, ranging from completely incorrect but precise numbers to 'shitloads' at Yahoo!Answers.
So, I spent some time reading the relevant source documents, and have decided to publish this little fact sheet here, so that one might at least be able to find some of the basic facts about the US gold holdings on the books of the Treasury and the Fed in one place, with references.
There is also a little detail about the SDRs. It should be noted that because SDRs may be added to the Treasury's books, as in the recent allocation from the IMF, it does not mean necessarily that they are monetized by the Fed and placed on their own balance sheet.
Not getting into issues of where the gold is, what claims there may be on it, and what fineness it may actually be, according to the US Treasury:
The US currently holds 261,499,000 fine troy ounces in its reserves. US International Reserve Position, US Treasury
The gold is valued on the books at $42.2222 per fine troy ounce.
This represents a total value of $11,041,063,078.
This value appears on the Treasury's International Reserve Position US Treasury on Line 4.
Since there are 32150.7466 troy ounces in a tonne, the US Treasury is holding 8,133.528072 tonnes of fine gold.
Federal Reserve Gold Certificates
The Federal Reserve holds $11,037,000,000 in gold certificates as assets on its Balance Sheet as shown in their weekly H.41 report. The Fed has no physical gold of its own. According to my reading of the relevant law, the Fed is not able to place claims upon or issue those gold certificates to any other entity other than the 12 federal reserve banks.
With regard to the Fed's Gold Certificates here is some history by way of explanation:
Acting under this authority [the Emergency Banking Act of March 9, 1933], the secretary of the Treasury issued orders dated December 28, 1933, and January 15, 1934, the latter requiring all gold coin, gold bullion, and gold certificates to be delivered to the Treasurer of the United States on or before January 17, 1934.
A new type of gold certificate, series of 1934, in denominations of $100, $1,000, $10,000, and $100,000, was issued only to Federal Reserve banks against certain credits established with the Treasurer of the United States. These certificates are not paid out by Federal Reserve banks and do not appear in circulation. They bear on their face the wording: "This is to certify that there is on deposit in the Treasury of the United States of America dollars in gold, payable to bearer on demand as authorized by law."
Gold certificates, however, have not been printed since January, 1935. Under the Gold Reserve Act of January 30, 1934, all gold held by the Federal Reserve banks was transferred to the U.S. Treasury, in accordance with Presidential Proclamation of January 31, 1934, the former receiving the gold certificate credits on the books of the Treasury at the former statutory price for gold $20.67 per ounce.
Gold assets were valued at $35 per fine troy ounce, giving effect to the devaluation January 31, 1934, until May 8, 1972, when they were revalued at $38 pursuant to the Par Value Modification Act, P.L. 92-268, approved March 31, 1972. The increment amounted to $822 million.
Gold assets were subsequently revalued at $42.22 pursuant to the amendment of Section 2 of the Par Value Modification Act, P.L. 93-110, approved September 21, 1973. This increment amounted to $1,157 million. All of the U.S. Treasury's monetary gold stock valuation, including the preceding revaluation increments, has been monetized by the U.S. Treasury by the issuance to the Federal Reserve banks of $11,160,104,000 for their gold certificate account (total as of close of 1980). In addition, the U.S. Treasury monetized $2,518 million (as of close of 1980) of the U.S. special drawing rights by issuance to the Federal Reserve banks for their special drawing rights certificate account.
On the books of the Federal Reserve banks, neither the gold certificate account nor the special drawing rights certificate account plays any restrictive role in Federal Reserve banks' operations. With the U.S. losing monetary gold in recent years of balance-of-payments deficits, causing decline in gold certificates (credits), two restraints were eliminated: P.L. 89-3, March 3, 1965, eliminated the requirement contained in Section 16 of the Federal Reserve Act for the maintenance of reserves in gold certificates by Federal Reserve banks of not less than 25% against Federal Reserve bank deposit liabilities; and P.L. 90-269, March 18, 1968, eliminated the remaining provision in Section 16 of the Federal Reserve Act under which the Federal Reserve banks were required to maintain reserves in gold certificates of not less than 25% against Federal Reserve notes.
Gold certificates (credits) held by the individual 12 Federal Reserve banks, therefore, merely reflect the total of monetary gold held by the U.S. and also the individual Federal Reserve bank holdings of gold certificates (credits) to their credit on the books of the INTER-DISTRICT SETTLEMENT ACCOUNT. Nevertheless, both the gold certificate account and special drawing rights account at Federal Reserve banks were utilized as eligible assets to serve as part of the 100% collateral pledged with the Federal Reserve agent at each Federal Reserve bank for issues of Federal Reserve notes. (The Depository Institutions Deregulation And Monetary Control Act Of 1980 removed the collateral requirements for Federal Reserve notes held in the vaults of Federal Reserve banks.)
Encyclopedia of Banking & Finance (9th Edition) by Charles J Woelfel
Does any of this amount to a hill of beans? Perhaps, but probably not. At least the next time I need to look up some of these facts and history to explain or correct a question or misunderstanding, I will not have to look all around the web for it again, and wade through many links of incorrect misinformation and rubbish to find it.
This is in no way meant to imply that the Treasury actually possesses the gold it says it has, the fineness of the gold, and the nature of any claims that might be on that gold. This is not a trivial issue as the estimates of the fineness of the gold have shown that a meaningful portin of it may be 'coin melt' and not of deliverable quality unless it has been further refined. It is said that the Bank of England recently discovered that some of their own gold stocks were not suitable for a delivery to the London Bullion Market Association (LBMA) for example.
By the way, and just as a point of curiosity, I calculated that if the Fed wished to back its balance sheet with all the gold in the US Treasury, the amount today would be approximately $8,000 per troy ounce. Don't hold your breath. LOL
Some of this may become an issue IF the SDR does become the international reserve currency, and IF gold is added to the mix of its basket of currencies as some countries like China and Russia have requested.
And in a new Google search, How Much Gold Does the US Have In Its Reserves, this little blog pops right up on page one, so its 'mission accomplished.'
And in case you were wondering, here is a recent lineup of official gold reserves from the major countries around the world.