Just hang in there with silver and stop bellyaching. Patience, fella.

SEPTEMBER 21, 1964.

To Members of the Subcommittee on Domestic Finance:

Transmitted herewith for the use of the Subcommittee on Domestic Finance of the Banking and Currency Committee, and other members of the committee and the Congress as well as the general public, is a series of questions and answers on the basic workings of our monetary system. It is a supplement to “A Primer on Money” and is designed to highlight in question and answer form the basic points brought out in the “Primer.” It. has also been indexed so as to facilitate its use. It is hoped that “Money Facts” will prove useful to students and all others interested in further study of and improvement in our mone¬tary system and that it will stimulate serious thought, research and discussion of the critical issues involved.
WRIGHT PATMAN, Chairman.

MONEY FACTS
169 Questions and Answers on Money—A Supplement to A Primer on Money

CHAPTER I

PREFACE

1. Who has the right to create money in the United States?
Under the Constitution, it is the right and duty of Congress to create money. It is left entirely to Congress.

2. To whom has the Congress delegated this money-creating right?
To the banking system, that is, to the Federal Reserve System and to the commercial banks of the country.

3. Why is the money-creating power important?
Because, by creating money, banks provide the exchange media which the economy needs to prosper and grow. Since the growth and proper functioning of the U.S. economy require increasing amounts of money over the years, those who control the amount of money exer¬cise great power over business activity, the incomes people earn, and our economic strength.

4. Why was the banking system given the right to create money?
The reasons are mainly historical. Still the banks do perform a service in creating money. For once the money and credit is created someone must decide whom to give the money and for what purposes. This the banks do. And bank earnings are the return for wise and proper placing of the money supply.

5. What is the Federal Reserve System?
The Federal Reserve System is the “central bank” of the country, composed of 12 regional Reserve banks, and the Federal Reserve Board in Washington and controls the ability of our commercial banks to create money and credit. The Federal Reserve also controls the level of interest rates.

6. Does Congress supervise Federal Reserve policymaking?
No. In practice the Federal Reserve is “independent” in its policy making. The Federal Reserve neither requires nor seeks the ap¬proval of any branch of Government for its policies. The System it¬self decides what ends its policies are aimed at and then takes what¬ever action it sees fit to reach those ends.

7. What problems are raised by an “independent” Federal Reserve?
There are two major problems. One is the problem of political responsibility for the country’s economic policies. The other is the problem of final control over the Government’s actions in the economic sphere.

8. What is the problem of political responsibility?
Since the Federal Reserve is independent it is not accountable to anyone for the economic policies it chooses to pursue. But this runs counter to normally accepted democratic principles. The President and Congress are responsible to the people on election – day for their past economic decisions. But the Federal Reserve is responsible neither to the people directly nor indirectly through the people’s elected representatives. Yet the Federal Reserve exercises great power in controlling the money-creating activities of the commercial banks.

9. Why is final control of economic policy a problem?
Because with an “independent” Federal Reserve, Congress and the President can be moving in one direction while the Federal Reserve is moving in the other. ‘The result is sometimes no policy at all. At other times, it leads to the Federal Reserve’s neutralising the President’s economic policies. This very possibility caused President Johnson to request the Federal Reserve in his 1964 Annual Economic Report to Congress not to nullify his efforts to reduce unemployment and raise incomes. Should the President have to ask any Government agency to go along with his policy as approved by Congress? Obviously not.

On June 10th, 1932, Congressman Louis T. McFadden, Chairman of the House Banking and Currency Committee, addressed the House. Congressional Record 12595-12603.
“We have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks. Some people think the Federal Reserve Banks are U.S. government institutions. They are private credit monopolies; domestic swindlers, rich and predatory money lenders which prey upon the people of the United States for the benefit of themselves and their foreign customers. The Federal Reserve banks are the agents of the foreign central banks. The truth is the Federal Reserve Board has usurped the Government of the United States by the arrogant credit monopoly which operates the Federal Reserve Board.”

On May 23, 1933, Congressman, Louis T. McFadden, brought formal charges against the Board of Governors of the Federal Reserve Bank system, The Comptroller of the Currency and the Secretary of United States Treasury for numerous criminal acts, including but not limited to, conspiracy, fraud, unlawful conversion, and treason. The petition for Articles of Impeachment was thereafter referred to the Judiciary Committee and has yet to be acted on.

Though some dispute it, it is reported that, on September 1st 1894, the following memo was sent out by the American Bankers Association: “We will not renew our loans under any consideration. On September 1st we will demand our money. We will foreclose and become mortgagees in possession. We can take two-thirds of the farms west of the Mississippi, and thousands of them east of the Mississippi as well, at our own price…Then the farmers will become tenants as in England…”

Confirmed by Milton Friedman who said: “The Federal Reserve definitely caused The Great Depression by contracting the amount of currency in circulation by one-third from 1929 to 1933″ And Denis Healey, a former British Secretary of Defence and Chancellor of the Exchequer who said: “(Such) World events do not occur by accident: They are made to happen, whether it is to do with national issues or commerce; and most of them are staged and managed by those who hold the purse strings.”

The formula for Interest pushed Inflation is as follows:-
The Money Supply (M) is issued as a Debt (D).
Therefore M = D.
However, the debt has to be repaid with interest (i).
So the formula expands thus: M + (x) = D + i
The money supply M must remain in equilibrium with Debt plus interest (D + i), through the increase represented by (x).
The variable (x) is solved as (r) the Rate of Inflation (i.e. an increase in the money supply) Copyright @ Latticework Management Consultants 2008.

When you get right down to it, there are at least eight things wrong with the policy of trying to stop the price level from increasing by increasing the rate of interest.
(1) The Policy is immoral.
(2) The policy is illegal.
(3) The Policy is irrational.
(4) The Policy has surrendered North America’s leadership to the Japanese.
(5) The Policy has made all our problems worse.
(6) The – Policy has caused the large U.S., Canadian [and British] foreign trade deficits.
(7) The Policy has increased the [fractional reserve] banking systems natural propensity to self destruct. And
(8) The Policy has resulted in a world wide debt crisis where our only choices appear to be between, world wide debt repudiation, depression, and accelerating inflation. Except for these shortcomings, high interest rates are a pretty good policy.”

Article I, Section 10, Clause 1: No State shall…coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debt.

So, from that we have:

1. The federal government can coin money.

2. States cannot coin money.

3. States have the authority of determining what can be used as a tender in payment of debts by default, because the federal government does not have that specific constitutional authorization.

4. States are then prohibited by the Constitution from making any Thing but gold or silver coin a tender in payment of debts. (Which also additionally proves that #3 is correct.)

.. in order for the Federal Reserve to be legal, as per the highest law of our land, it MUST be specifically authorized by the Constitution. It is not, therefore it is forbidden by default.

By the way, in case you weren’t aware – the Federal Reserve is our nation’s THIRD incarnation of a central bank.

Furthermore on you’re whole argument is wrong, and I direct you to money as debt or the money masters. Or rather to an economics 101 course and you will learn gold is currency, and that is economic law. P.S. your graph is not even relevant to the argument and your entire argument is ‘poppy cock’.

A fiat, debt free, currency in a system absent fractional reserve banking needs to be tried. A nation paying interest to a private banking cartel on sovereign, fiat currency is a nation of fools.