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Old 12-05-2012, 03:04 AM
Danny B Danny B is online now
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Join Date: Oct 2012
Location: L.A. Ca.
Posts: 4,270
Central Banks and alternative systems

There was a system called "Real Bills"Doctrine" RBD. It worked perfectly but, did NOT allow banks to make much at all. Of course, the banks worked tirelessly to destroy it. Central banking started about 300 years ago. It has been a curse ever since then.

T: "The land value tax exclusivity concedes implicity that government owns all of the land."

B: It does no such thing. You are not familiar with the Anglo-Saxon principles which Sir Thomas Dale made part of his rules and regulations to save the Jamestown colony from demise.

The land value tax has nothing to do with ownership of land. Unimproved land cannot be "owned" in the first place. There have been dozens of lawsuits brought against states by individual "simple fee" title holders. No plaintiff has ever prevailed.

Because you do not understand the Anglo-Saxon principles embodied in the Constitutions of the fifty states, you fall prey to the propaganda put out by the real estate speculators which claims that ownership of land is protected by the U.S. Constitution. Such propaganda is total crock, and every court in the country will tell you so.

The land value tax is a natural phenomenon. It applies at the local level. It is nature's way of paying for the necessity to have government, while putting people in charge of how much government they want. The land value tax protects the earnings of labor and the return to capital. Depending on the states, California being the worst, the present system of collecting taxes shields real estate speculators from paying the land value tax. Instead, the payments of the costs of government are squarely socked to the individual income earner and to the investor in capital assets, leaving the real estate speculator walk away unscathed with the rent collected.

The present game of speculating in real estate is the same old game 150 years ago, only in a different disguise. However, you cannot see ...

It isn't difficult to undo the propaganda about "land ownership". Actually, if you study the history of settlement in North America, the current propaganda simply falls apart on the basis of the facts. Yet, ever generation has to learn these facts anew. The generation to which you belong has no idea about the history of this country nor of the U.S. Constitution when it comes to taxation.

I believe that they soon will develop and ardent interest... .

Ah... Excellent question. The reason why it is possible today, and why RBD currency was undermined before, is the fact that today we have computers and digital currency which we didn't have a 150 years ago.

The vast body of academic knowledge about Real Bills and RBD banking exists in the archives of the old line universities. The universities and business schools would have to teach Adam Smith and expose the theories of Keynes and Friedman to be unworkable.

There is no doubt that human nature will always drive people to "plunder" the wealth created by others. Bankers can be suspected to do so more than others. However, RBD currency is solid and viable in the long run, particularly when tied to the gold standard.

There is no doubt in my mind, that the creation of RBD currency under the gold standard would immediately eliminate the unemployment problem, provided all taxes are collected with the land value tax only.

Then paper currency under RBD is created at the local level and the taxes to run government at all levels is collected at the local level. Then, the saying that, "all politics is local", will again prove its truthfulness.

What banks were supposed to keep out of circulation was "idle" currency, which is currency over and above the value of Real Bills in their portfolio. Since Real Bills mature in 90 days, the currency created against them exspires in 90 days as well. Banks have to constantly discount Real Bills to keep currency in circulation. So, if there is currency, previously created when the volume of Real Bills was larger, the bankers were required to keep "excess" currency to the value of Real Bills out of circulation until value of Real Bills in their inventory again matched the overall amount of currency created.

Many banks violated their bank charters by using "idle" currency for real estate speculation. Real estate investments don't create inflation in the consumer products market. The influx of "idle" RBD currency into real estate amounted to "double drawing" Real Bills. It created a bubble in the real estate market over time.

These rogue acts by bankers were never really discovered until the real estate bubbles burst after a 18 to 20 year cycle. When that happend, people were anxious to exchange paper currency for gold. Bankers had to pay out their required gold reserves and had to rediscount their Real Bills for additional gold. However, they could not get enough gold because they actually had "double drawn" Real Bills when they put the RBD currency in real estate investments. Then the politics set when bankers were asked to explain why they didn't have enough gold after they rediscounted all their Real Bills.

J.P. Morgan was fully aware of what was going on with these banks using "idle" currency for real estate speculation. He tried to use his influence to curtail the worst excesses, but trying to reign in rogue bankers is like herding cats.

Unless there were manufactured bank runs to drive out competition, banks were never called upon to redeem large amount of paper currency. Only when the real estate speculation bubble burst did people become suspicious and demanded gold for their paper currency. It was then that bankers were exposed of having inflated the RBD currency, and they became liable to prosecution for fraud.

J.P. Morgan, more than any other American banker, understood the function of gold with regard to RBD currency creation. It was he who uttered, "Gold is money, and nothing else." By always keeping that in mind, Morgan was always situated in such a way as to whether the real estate speculation cycles. He gained control and influence by bailing out bankers who got themselves into trouble with speculating in real estate or natural resources.

DB: "This seems to have been a trigger for a massive rise in equity trading that turned railroads into the first big equity bubble. JP Morgan was one of the catalysts for this evolution, and the advent of the Federal Reserve in 1913 provided the fiat money fuel that rocketed the market into the Roaring 20s."

B: It "seems"... .??? Let me clue you in on a secret, so you won't have to "surmise".

1. The bubble in railroad equities had to do with "land speculation". It had nothing to do with an equity bubble in ownership of capital. Bankers used "idle", redeemable RBD currency, which they were required to keep in bank vault, to "invest" in real estate needed to build railroad tracks. The inflation of the RBD currency thus created could not be detected for several decades.

2. To stop this sort of RBD currency inflation, the states insisted that the federal government supervise the creation of RBD currency. That was the reason for the passage of the Federal Reserve Act in 1913. Every other explanation is outright bovine excrement (BS). Were the rogue bankers happy about the states putting a leash om them with a national currency franchise... ??? Absolutely not. While the rogue bankers couldn't stop the Federal Reserve Act to come into existence, they had no trouble to soon find enough federal politicians ready to undermine "congressional oversight" of RBD currency creation. With help of those federal politicians by neglecting their oversight function, the rogue bankers soon felt no compunction to brazenly violate the FRA. None of the penalties provided in the FRA for violation of the act were ever applied against the rogue bankers.

3. As soon as federal politicians climbed into bed with rogue bankers, it was only a matter of time before the RBD redeemable currency system would be destroyed and exiled. The year in which it did happend was 1933. In 1935, federal politicians took over currency creation with the Banking Act by creating the "FED" as an "independent" agency of the federal government. With the National Banking Act of 1935, the federal politicians invited the banker to climb back into the bed with them again. That's where we are today. We have a monetary system with demonetized currency created against debt voted by federal politicians who through the FED use "prime dealers" in government bonds to sell this debt in secondary markets and use the big banks to distribute the proceeds according to "ear marks". The rest is just an attempt by the big banks to bamboozle the public in thinking that they are dealing with real banking. Real banking means "positive value" currency. What banks perpetrate is circulation of "negative value" currency.
As Lincold once said, "You can fool some of the people all of the time, and all of the people some of the time, but you cannot fool all of the people all of the time." I hope federal politicians and big bankers keep this wisdom of Lincoln in mind as the embark on TARP, QE1, QE2, QE3... ..

4. There is a world of difference in investing RBD currency under the gold standard, and investing a de-monetized currency created against sovereign debt. You cannot properly show the financial condition of a corporation, unless the accounting unit you use has a standard. Using a de-monetized, debt based currency, which has no standard, to account for the assets on your balance sheet must sooner or later destort equity values. It is inevitable that equity markets will catch on. That's exactly what led to the 1987 stock market crash. Enter Sir Alan Greespan as newly appointed chairman of the Fed in 1987. Instead of letting the investors absorb the equity (currency value) losses, he monetized them. An executive order by Ronald Reagan ex-post-facto legalized the intervention. It made it legal to intervene in the future without being guilty of collusion by instituting the Working Group on Markets. The Plunge Protection Team (Working Group on Markets) has been at it ever since.

5. The market goes down today, and tomorrow it is back up. Why... ??? PPT intervention. There is no trading, but the Dow stays up. How... ??? It's the PPT intervention in the equity markets through the options market to keep up equity prices. However, by monetizing the losses on the Dow, the PPT actually decreases the equity values. Thousands of pension funds, IRAs and 401Ks must invest de-monetized, debt based currency in equities to try an beat inflation. To let equity markets reveal the actual value of equities would cause a revolt among the savers. Therefore, all the equity losses are monetized by intervention of the PPT. The dirty little secret is that without a gold standard, "price" and "value" have no relationship to each other.

DB: "Conclusion: People have certainly lost faith in stocks - but this must be seen within the context of the larger bull market in money metals. This is what the paper money crowd is fighting against and why stocks are resistant to re-stimulation."

Your conclusion is somewhat contorted, but you have your finger on the problem.
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