A Modest Enquiry Into The Nature And Neccesity Of A Paper Currency
Ben Franklin, 1729. Lots of good stuff here that 's controversal. Check out number 3 where he slams lawyers and objectivist concepts. Ultimately his goal was to secure the major contract for currency printing in Penn. Which he did. The contraversy over less than 100% reserve ratio continues. Anyway, rainy day reading
Franklin wasn't the best economist.
This is a positive argument for fractional reserve banking...
http://hallingblog.com/did-midas-mulliga...
So the bank now has $3394.65 earned from the original depositor's $100.
Assuming any of those loans fault and the collateral is seized, the value of that seized collateral will typically exceed the value of the loan outstanding, therefor allowing the bank to make even more. All from a depositor's $100.
Gold and silver are:
1) Widely traded commodities whose current value is easily ascertainable
2) Portable
3) Almost infinitely divisible. You can buy 1/10 oz.gold coins.
Land exhibits none of these conditions.
A portion of a letter written by Jefferson to son-in-law expresses his thoughts on paper money...
"If the debt which the banking companies owe be a blessing to anybody, it is to themselves alone, who are realizing a solid interest of eight or ten per cent on it. As to the public, these companies have banished all our gold and silver medium, which, before their institution, we had without interest, which never could have perished in our hands, and would have been our salvation now in the hour of war; instead of which they have given us two hundred million of froth and bubble, on which we are to pay them heavy interest, until it shall vanish into air... We are warranted, then, in affirming that this parody on the principle of 'a public debt being a public blessing,' and its mutation into the blessing of private instead of public debts, is as ridiculous as the original principle itself. In both cases, the truth is, that capital may be produced by industry, and accumulated by economy; but jugglers only will propose to create it by legerdemain tricks with paper."
- Thomas Jefferson to John W. Eppes, 1813. ME 13:423
Regards j
http://hallingblog.com/did-midas-mulliga...
The Fed is a privately owned bank
http://www.apfn.org/apfn/fed_reserve.htm...
"Give me control of a nation's money
and I care not who makes the laws."
Mayer Amschel Rothschild
The Creature From Jekyll Island P. 218
G. Edward Griffin , Peter Klimon 1994
2) The non-delegation case has been overturned. While it is probably correct Constitutional interpretation to say Congress cannot delegate its powers, this has not been the prevailing attitude of the courts for a long time. If it were, almost all the regulatory state (FCC, EPA, SEC, IRS, etc) would have to go away or be significantly modified.
3) I certainly agree that most people do not understand the Fed or what it does and they like it that way
4) I have no idea about the ownership of the FED. Many of the comments about the FED contain economic fallacies also.
5) This statement " By 1790 Hamilton and his bankers had created a privately owned central bank and converted the public debt (interest-free) into interest bearing bonds, payable to the bankers." Makes no sense. Money at the time was not generally issued by the government and there was no legal tender laws in the US. So the scripts that were circulating were for services rendered in the Revolutionary War. The US government had a debt, so these scripts were partly backed by that debt and therefore not interest free.
Hamilton's Bank of America was not a Central Bank. Hamilton's scheme to nationalize all the states war debts and then tie them to a revenue source was brilliant in general (although not fair to some states such as Virginia) and brought great prosperity. The US went from a third world dead beat, who no one would lend to at any interest rate, to having one of the highest bond ratings in Europe and everyone wanted to lend to at low interest rates.
- In modern times when we have loose monetary policy (as Franklin advocates) we see more borrowing b/c rates are lower. I don't understand his comment about this in #3.
- In his time land accounted for much of the means of production. So he relates value to land and human labor on land. The main means of production was in the process of changing to factories and human labor there. In our time, automation is replacing much labor, creating increasing GDP w/o increased labor costs.
This is interesting stuff.
http://www.bing.com/videos/search?q=mone...
Thought you'd like it.