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[–]Jesus 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (2 children)

Thanks for the explanation. I'll be sure to read the link you've provided and get back to you if I have questions.

Now it is clear to me why anti-bank progressive fell for the "elastic currency" bollocks.

But the notes they issue and the credit they extend was never suppose to be equivalent in value to the reserves they had. Is this the simplest understanding of this scheme. They dish out their bank notes in the hundreds of millions; simultaneously lie about the amount of tangibles, whether Gold or Silver, they have in reserve, and once the notes are fully issued and being used they demonetize gold and silver and make their notes non-transferable for the equivalent amount of silver or gold they lied about holding?

Both United States Notes and Federal Reserve Notes have been legal tender since the gold recall of 1933. So, originally the US note was a fiat currency in that the government had never guaranteed to redeem them foe precious metals such as silver. This note was thus a bill of credit and was inserted free of interest into circulation. And Federal reserve notes are slightly different in that a commercial bank can call upon these notes whenever but must pay back the 12 FED banks.

So, all of these notes are basically unallocated, unlike an allocated silver or gold certificate that can be redeemed for the tangible precious metal at the equivalent value.

[–][deleted]  (1 child)

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    [–]Jesus 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

    United States notes (greenbacks of Lincoln fame) were promises to pay (at the pleasure of the government, and after 20-or-so years it was the government's pleasure to pay). b) they came in a package which included $500 million 6% (coin interest) bonds for their support.

    So, public debt had to be paid back in coin? The 6% interest; these bonds would be paid back in coin to the incorporated banks that issued these notes to government at interest. Is this correct? Why even do something like this, and why have congress sign off on it, when an independent treasury, as fiscal agent to the government, could do everything an incorporated bank could do? Reading a few pdf books on your site, I noticed that William Gouge, who've you sourced in a past post, stated that the 1830's private banking in Switzerland should be erected in the US. In what way was Switzerland's private banking different than the banking of the US during Gouge's time? Clearly, Biddle did not think too highly of Gouge's book.

    ...what the holder of public securities wants, is to be sure that his interest will be paid, especially if it is on long time. 

    And this, evidently, is not unlike today. Interest has to be paid, in today's case, cash, during Spaulding's time, coin, and the treasury only has so much cash.

    Spaulding's speech seems to be a filled with non-sequitur and contradicting statements.

    He espouses:

    Who asks to have one class of creditors placed on a better footing than another class ?

    I'm slightly confused with his reasoning but his contentions were thus used to push the central bank concept. He goes into all this mumbo-jumbo about how wealthy people saved up their money and now want to freely lend it to the government at interest, and that this is a good thing.

    He thus states that:

    [The legal tender bill is a] shield in the hands of the patriotic people of the country against all forced sales of bonds, and all extravagant rates of interest.

    But isn't this legal tender bill just the centralization of money lent at a fixed interest? Why even mix patriotism into the equation? And was the bill really against forced sales of bonds?

    All are obliged to receive and pass it as money, and all are obliged to submit to heavy taxation to provide for its ultimate redemption in gold or silver.

    What does, concerning associations falling below 25 the per centum proportion:

    ...wind up the business association...

    ...in section 41 of the National Currency Bank Act mean?

    The Secretary shall not be required to reissue United States currency notes upon redemption.

    Does that not allow them the power to basically create boom and bust cycles by messing with the money supply at will?

    And why do say in other posts that Lincoln, although a whig was the last hope for white citizens?

    And if U.S. Congress, say, nationalizes all debt held by the Federal Reserve.  Would that work to curtail interest accrued?

    Unless I misunderstand sub-section 2, it had to be modified by act of Congress in order for the Fed to continue its existence. It has to be in the Record somewhere, but I don't know where. Similarly, some time in the 20th century a law had to be passed which discontinued 25.8 grains of gold as the unit of account; and discontinued gold coin as legal tender.

    So, the record would be legislated? Possibly, in a presidential policy directive?

    What banks (printing-press money corporations) always do, they issue and circulate their notes and exchange them for real property.

    In this case tangibles such as gold and silver or property such as homes?

    And why after seven years? Is this what happened during the 2008 financial collapse?

    Certainly somebody was buying up fire-sale prices in what real value was left.

    Is this also what happened in Germany during the inflationary crisis? I understood it that foreign banks bought up German assets and property by the pennies whilst German people were left to take the heavy blow.