It's finals week, and though I have not found the time or energy throughout this entire semester to post anything onto my blog, I now find my self in desperate need to quantify my sanity for educational purposes - and I seem to do that through analyzing my train of thought as it relates to academia.
Out of my five courses this semester, I only have one final exam and one term paper; I opted out of two optional final exams for already earning A's in both of them, and turned in my last term paper for another class, leaving with me the comparatively light load for this coming week. Yet, I cannot help but stress and criticize my study habits harshly, often foreseeing my future as an academic crumble. To be completely honest with myself, I cannot focus on one task for more than an hour, and taking breaks, though helpful, will most of the time lead me to a complete loss of focus: I will find the most minuscule of things to be distracting, I will be uncomfortable with my seating arrangements and surrounding environment, and I will always try to find somewhere else to sit and refocus (which, for all who seem to have the same problem, actually does help). Despite finding small changes I can make to "fix" my problem, the thought of academic failure and poor study habits still runs in the back of my head, and the more I ignore it, the worse it gets.
At times I ask myself why I want to graduate and immediately get into grad school? Or what good will a doctorates do me, and why do I want to know so much? My ultimate goal besides earning a doctorates in economic theory or analysis is to backpack across every continent and hike every mountain I can, living off of the most basic necessities, and simply camping my way through every possible experience. Still, I feel as if I cannot begin that journey without having a degree, and why? I want to selfishly understand the greatest knowledge behind the world mechanism, try proposing theories for bettering economic conditions, and then simply disappear to live within myself and nature. I wonder if I just up and leave on a bike and a backpack across the world, how care free will I be, and what kind of life will I lead? But I know that I could never be care free without feeling complete, and academic wisdom and knowledge is what I feel completes me. Still, I struggle to focus all my energy into it, and I have yet to understand why, besides the awareness of an anxious-ridden mind. I have obviously sidetracked off of my initial worry as I started this post, and now I am at a loss figuring out how to make sense of all this.
Saturday, December 5, 2009
Wednesday, November 4, 2009
Withe
I suggest we join the words “with” and “the” into “withe”. In every essay exam I take, I end up writing “withe” when I mean to write “with the”. It would just save so much time, you know?
Sunday, August 30, 2009
Greenspan's Hypocricay
This is a response to a class discussion on the role of the Federal Reserve. I sent the following response to my professor and, hopefully, I will hear back.
...............................
For starters, I wish to comment on the study of Socialism as a market structure versus an ideological framework. It seems to me that Socialism is a mere ideological, or Utopian, perspective of how markets should work with the equality and ethical treatment of the people in mind; it sets out to believe that all are equal under a well structured economy and all achieve the same aspect of happiness (for equality in the sense of socialism comes with not just the equality of economical variables, but also that of personal and emotional needs). What I like to think of Socialism is the ideology behind Communism, whereas Communism is the application of the idea of a socialist state without ethical/philosophical considerations. To define my idea here, I could say that Socialism is the quintessence of Communism, while Communism as an application tries to reach its ideological framework.
Alan Greenspan's Hypocrisy:
Though I do contend to some conspiracy theories, I am not one to believe in that of the Federal Reserve as a plan on attacking the United States of America. What I do maintain is that there exist aspirations towards a one World Government; a planned socialist state foreseeing the future of our economy. Such a world would be subject to one currency, one central bank, one army, one constitution, and one centralized power; that, I am not opposed to, and would in certainty advocate its revolution. What I do disagree with, though, is the mannerism in which such an objective is conducted. A quick history on the formation of the Federal Reserve here would be much needed, but I am under the assumption that you are well aware of the historical facts. Referring to my comment in class about the unethical standards of Alan Greenspan, allow me to note that such a judgment stems from the foundation of the Fed, not from a preconceived notion on the values Mr. Greenspan takes upon himself. When Mr. Greenspan talks about each being responsible for his/her own actions, I assume that such a belief applies to himself as well, as he has assumed the role of the Federal Reserve Chairman. Upon accepting responsibility as Chairman, Mr. Greenspan must keep in mind the role of advocating the economic interests of all the people, and not just his Wall Street “bees”. Greenspan has made it clear that he is an advocate of the free market and quotes in his book The Age of Turbulence, “Why do we wish to inhibit the pollinating bees of Wall Street?” In response, then, one must ask why we need a central bank to begin with. The policies of the Federal Reserve not only affect the lives of Americans, but also of all people of the world, as the Dollar is the dominant currency in circulation, and the US holds the majority of votes in the World Bank and the IMF. It is true that central banks across the globe affect economic policies in most countries, but the Federal Reserve is the Queen of central banks, and her policies reach into every household in the world, and thus should take into account the ethical consequences. So, when I judge Alan Greenspan as an unethical person, I refer to his policies, for they only bear in mind the economy on a macro scale. I agree that an economist’s job is to study and control the market, but that does not give leeway to completely ignore the consequences set upon the people.
...............................
For starters, I wish to comment on the study of Socialism as a market structure versus an ideological framework. It seems to me that Socialism is a mere ideological, or Utopian, perspective of how markets should work with the equality and ethical treatment of the people in mind; it sets out to believe that all are equal under a well structured economy and all achieve the same aspect of happiness (for equality in the sense of socialism comes with not just the equality of economical variables, but also that of personal and emotional needs). What I like to think of Socialism is the ideology behind Communism, whereas Communism is the application of the idea of a socialist state without ethical/philosophical considerations. To define my idea here, I could say that Socialism is the quintessence of Communism, while Communism as an application tries to reach its ideological framework.
Alan Greenspan's Hypocrisy:
Though I do contend to some conspiracy theories, I am not one to believe in that of the Federal Reserve as a plan on attacking the United States of America. What I do maintain is that there exist aspirations towards a one World Government; a planned socialist state foreseeing the future of our economy. Such a world would be subject to one currency, one central bank, one army, one constitution, and one centralized power; that, I am not opposed to, and would in certainty advocate its revolution. What I do disagree with, though, is the mannerism in which such an objective is conducted. A quick history on the formation of the Federal Reserve here would be much needed, but I am under the assumption that you are well aware of the historical facts. Referring to my comment in class about the unethical standards of Alan Greenspan, allow me to note that such a judgment stems from the foundation of the Fed, not from a preconceived notion on the values Mr. Greenspan takes upon himself. When Mr. Greenspan talks about each being responsible for his/her own actions, I assume that such a belief applies to himself as well, as he has assumed the role of the Federal Reserve Chairman. Upon accepting responsibility as Chairman, Mr. Greenspan must keep in mind the role of advocating the economic interests of all the people, and not just his Wall Street “bees”. Greenspan has made it clear that he is an advocate of the free market and quotes in his book The Age of Turbulence, “Why do we wish to inhibit the pollinating bees of Wall Street?” In response, then, one must ask why we need a central bank to begin with. The policies of the Federal Reserve not only affect the lives of Americans, but also of all people of the world, as the Dollar is the dominant currency in circulation, and the US holds the majority of votes in the World Bank and the IMF. It is true that central banks across the globe affect economic policies in most countries, but the Federal Reserve is the Queen of central banks, and her policies reach into every household in the world, and thus should take into account the ethical consequences. So, when I judge Alan Greenspan as an unethical person, I refer to his policies, for they only bear in mind the economy on a macro scale. I agree that an economist’s job is to study and control the market, but that does not give leeway to completely ignore the consequences set upon the people.
Tuesday, August 18, 2009
A Personal Reflection on Willingly Living Outside One's Boundaries
My expeditions this summer have been beyond phenomenal, and the adaptations experienced mentally and spiritually, independent from the materialism of our supersonic societies, have shone new light on the identity I wish to take upon myself. It is with the state of affairs in living within the boundaries of human necessaries that one can take upon himself the question of what makes him human, and evidently, what it means to be human. Contemporary philosophers often discuss the aforementioned question in light of technology and the rapid changing of lifestyles, but that is no approximation to the actuality of living the ideology; sustaining oneself on no more than the essentials and no less, with no motive in superseding those in your community, but living accordingly to the requirements of socially accepted ethical views. My term with the Utah Conservation Corps has been my initial exposure to the world of camping and manual labour, and it has changed me for the better. I have come to realize my teleological mind frame of achieving happiness within my own conscious desires, as one with the earth and its natural capacities. This realization, though structurally formed by the circumstances I have found myself in throughout the past three months, is largely owed to my willingness in living out my ideology.
Thursday, April 9, 2009
My Economics Term Paper
This paper is not professional, nor is it heavily researched, due to time constraints. My goal, though, is to spend most of my academic career researching this topic in hopes of one day being a credited author on the subject.
Also, if anyone interested would like a list of the resources, I can mail them upon request.
-------------------------------------
The following paper is the onset of a research I intend on conducting within my career; I hope on one day publishing a layout of the reality behind the framework of modern institutions to inform people of what freedom they possess in face of a constitution that deceives their (the people’s) liberty into a masking of nationalism. Underlying my skepticism towards the administration of our system is the belief of equality among all people and the licensed liberty to one’s own existence as an inhabitant of the earth. I do not intend on a socialist or utopian ideal that should be followed through, for I do not have the means or the ideas on which I can build upon such a society; I simply aim to study the techniques of our modern system, and prove a better alternative had it not been for the greed of mankind. I mainly owe the research to Peter Joseph, founder of the Zeitgeist Movement, and who, I can confidently say, speaks my mind as to the theories I credited prior to coming upon his work. Unfortunately, for the sake of length and time, I will keep this paper to a minimum, as there is lots of information that could be discussed, but goes beyond the scope of this assignment and should be left to a more extensive research.
Conspiracy theories have existed since the commencement of political organizations, and most such theories, if not all, share a consistency in targeting the greed and profits of self-interested individuals. Hence, ethical and moral philosophy form the base reason for the existence of such beliefs. Some theories may cross as extreme, and others appear too vain considering the reality and dependency of our system, but nonetheless, it must be attended to as an opinion, whether believed in or not, for the risk in ignoring the possibility of any idea being false is costly. One of the most widely held conspiracy theories is that of a New World Order. Granted that I do believe such an end is in the eyes of a few powerful men, my aim isn’t discussing the consequences and reasons of a world order, rather, I am interested in the monetary system, and how it has spiraled out of control, intentionally, that it has enslaved us as a people to a few corporations. I intend on talking about the history of central banking, mainly targeting the Federal Reserve, and the vices inherent in policies they have set upon this nation to reap benefits, not only of money (for they essentially are in control of the money supply and can get as “rich” as they please), but reap the benefits of being a powerful clan, one that completely and indirectly controls our every thought and lifestyle. I would like to note that I am not against money being used as medium of exchange; I am against the policies, the economics that have come to use money as ammunition.
The most prominent argument for advocating the monetary system is incentive. One may question that in the absence of money, in the absence of gaining power through reaping profits, the incentive to create, compete, or promote economic growth will be absent. This argument presents truth, an absolute truth actually, in that incentives aspire creation. Profit, though, is only one of various causes that enable us to create. My belief is that greed for power sits at the heart of our economic system. In the words of Amschel Rothschild - founder of the Rothschild Banking Dynasty, and later a member on the Federal Reserve board - “Give me control of a nation’s money supply, and I care not who makes it laws”.
The controversy of money and centralized banking dates back to the times of our fore fathers, and has been heavily ingrained in American politics. James Monroe, the fifth president of the United States of America received a letter from Thomas Jefferson on January 1, 1985, in which he famously quoted in reference to the borrowing of money among citizens and merchants:
“All these doubts and fears prove only the extent of the dominion which the banking institutions have obtained over the minds of our citizens, and especially of those inhabiting cities or other banking places; and this dominion must be broken, or it will break us. But here, as in the other case, we must make up our minds to suffer yet longer before we can get right. The misfortune is, that in the meantime we shall plunge ourselves in unextinguishable debt, and entail on our posterity an inheritance of eternal taxes…”
January 1, 1835, under Andrew Jackson’s democracy, has been the one time in history the United States of America has been completely free of debt, and ever since, we have been diseased by a cyclical growth of debt that has perpetually ailed the freedom of mankind. During the second year of Jackson’s term, the Recharter of the Second Bank of the United States was being issued, and Andrew Jackson, opposed to the Recharter, sent out a veto message which stated: “The bold efforts the present bank has made to control the government are but premonitions of the fate that awaits the American people should they be deluded into a perpetuation of this institution, or the establishment of another like it”. Low and behold, with the existence of the Federal Reserve in 1913, we have been exploited by the system, in which control by the use of interest has enslaved man into his own equal. It should be understood that the Federal Reserve is not an American institution, it does not belong to the United States of America, and it is not constrained by American policy. Rather, it is the United States of America; it has full control over this country and knows no geographical boundaries. It is a country within its own, where the decisions made are independent of congress or the president, but by international bankers. It is also crucial to consider the structural design of the Federal Reserve System, which was built in reflection of the aims and understandings of the Bank of England; one of the prime reasons why our founding fathers traveled to newfound land. During Abraham Lincoln’s presidency, when the civil war took place, European banks offered high-interest loans to the states, though President Lincoln refused their offer and advocated the creation of a debt-free currency, the Greenback; this, of course, never lived to see the light of day.
As goes with any institution built, the Federal Reserve served as a resolution; it was designed to evade the financial crises among state banks, as well as facilitate a better economical approach to trade among all states. Economically speaking, the Federal Reserve Act’s purpose was to “provide an elastic currency”; bank notes that could be borrowed by rediscounting commercial paper – on interest of course. Concerns of one central bank controlling the money supply arose among the public, and in response, to avoid the appearance of a central monetary authority, the Federal Reserve in Washington opened up twelve regional Federal Reserve Banks: Boston, New York, Philadelphia, Richmond, Cleveland, Chicago, Atlanta, St. Louis, Kansas City, Minneapolis, Dallas, and San Francisco. The founders of the Federal Reserve were not economists or policy makers, but bankers, and hence the purpose of the system catered to the interests of the bankers who created it; the families of Rockefeller, Rothschild, Morgan, and Walburg; they met on Jekyll Island, Georgia in November 1910, and designed the framework of what we now know as the Federal Reserve. It was systematically modeled on the logic of credit: lending money on interest (the ideology of interest has been debated by many economists and philosophers, some believing it is a vice, others perceiving it as the salary of working capital – for the purpose of this paper, I write under the assumption of interest as a vice). The Federal Reserve Act was written when Woodrow Wilson ran for president. In exchange for funding towards his campaign, Wilson signed and advocated the Act. After the Federal Reserve was setup and began operations, Woodrow Wilson wrote:
“A [our] great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world - no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."
Let us illustrate of the model of this fractional reserve system: The US government contacts the Fed requesting money - assume $10,000 (the example given in Modern Money Mechanics – a booklet printed by the Federal Reserve informing the public on money and the Federal Reserve System). The Fed loans the government that amount in exchange for Treasury Bonds - pieces of paper (instruments of debt) given face value by the exchange of Federal Notes, also paper (i.e. Dollars) with no real value as they are “legal tender”. As stated in Modern Money Mechanics, the value of money is characterized as such: “Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries. What then, makes these instruments acceptable at face value in payments of all debts and for other monetary uses? Mainly, it is the confidence people have…Money, like anything else, derives its value from scarcity”. The $10,000 received by the government is deposited in commercial banks. According to the Federal Reserve Act, and as stated in Modern Money Mechanics as well, “It [a bank] must maintain legally required reserves, in the form of vault cash and/or balances at its Federal Reserve Bank, equal to a prescribed percentage of its deposits” – assume 10%. This means that $1,000 must be held in reserves, leaving $9,000 available to loan out to the public, who in turn will deposit that amount in their bank on interest, and that amount again becomes part of the bank’s reserves, adding on top of the original $10,000. This would seem unrealistic seeing how the bank already loaned out $9,000, but the fact is that actual money is not being loaned out.
“Of course, they [the banks] don’t really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers’ transaction accounts. Loans (assets) and deposits (liabilities) both rise by $9,000. Reserves are unchanged by the loan transactions. But the deposit credits constitute new additions to the total deposits of the banking system”. (Modern Money Mechanics)
In plain English, money is created out of nothing because there is a demand, and a supply (reserves). It is a notional financial obligation that exists only in theory, and in debt, for money in reality is debt. Money would not exist without debt, for there is no means of paying back interest - it doesn’t exist! The Federal Reserve has loaned out every dollar in circulation, and so where do we get money to pay the interest? Taking out another loan of course! It is a perpetual system of theoretical debt – a modern system of slavery, if you may. Marriner Eccles, 7th chairman of the Federal Reserve serving from November 1934 till February 1948 famously quoted on September 30, 1941 during the hearings of the House Committee of Banking and Currency (now known as the United States House Committee on Financial Services): “If there were no debts in our monetary system, there wouldn’t be any money”.
As stated earlier, money is a value of perception and quantity. The quantity theory of money, first noticed by David Hume and later developed by John Stuart Mill, assumes an inverse relationship between the supply of money and its buying power. This theory was later formulated into the Equation of Exchange, which – in modern terms- states that MV=PQ; where M denotes the total amount of money in circulation; V denotes the velocity, or average frequency, at which money is being circulated; P denotes the price level; and Q denotes the real value of final expenditures. Manipulating the equation, we obtain P=(MV)/Q. Assuming that V and Q are held constant, as M increases, P will have to increase, thus devaluating the value of one dollar – inflation. This means that if V and Q were constant, the inflation rate would exactly equal the money supply growth rate. With additional money injected in the market as the government takes out loans to pay its interest, the supply of money is increased, and thus the purchasing power of each additional dollar is decreased. This fractional reserve banking practice, in which the supply of money is theoretically increased, is inflationary, as more units of dollars are needed to meet the demands of consumers and the liabilities of banks.
With tight control over the nation’s money supply, the Federal Reserve was able to control the market as it pleased, and as most conspiracy theorists believe, all financial crises were staged events meant to induce fear in the people so that they remain slaves to the system. It is believed that the Great Depression of the 1930’s was a staged event, as the Federal Reserve demanded a huge credit shortage that sunk the nation into bankruptcy. From 1921 – 1929, the Federal Reserve increased the money supply, and introduced the Margin Loan. This loan stated that the buyer pays 10% of the stock price, while the other 90% is paid through the loan broker. The conditionality of this loan was that it could be called at anytime and has to be paid in full within twenty-four hours. On October 24, 1929, the bankers who issued the margin loan called them in, and few had the means of paying of the debt. In reference to this occurrence, On June 10, 1932, while delivering a speech before the House of Representatives, Louis McFadden - a republican member of the US House of Representatives – stated:
“Mr. Chairman, 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. The Federal Reserve Board, a Government board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and iniquities of the Federal Reserve Board has cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it…It [the panic of 1929] was a carefully contrived occurrence. International bankers sought to bring about a condition of despair, so that they might emerge the rulers of us all”.
There are other held beliefs concerning the profit seeking behavior of the Federal Reserve, such as the accusations of intentionally getting involved in WWI and WWII, while funding both sides of the war, so that monetary benefits can be reaped. Other claims target the Fed for deliberately staging wars with other nations to gain economic power. The grounds behind such claims have been researched, but the details would require an entire paper on their own.
Many believe that the purpose of such control is to facilitate a free enterprise market within the world, in where one economic power has control of the world’s currency. Such a world seems far-fetched within our lifetime, but the steps towards such an order can be seen in play. The European Union and NAFTA, along with other organizations and agreements conducted to simplify trade, have been accused of the deed, leading to the emergence of the term “Economic Slavery” among those who understand the monetary system and its interest based structure. The evidence in much of what has been presented is open to skepticism, as I have yet much more researching to do, but I do contend to this belief: the monetary system is a corrupt ploy used as a means of sovereignty to administer humanity, it is a fraudulent man-made network with no palpable value besides the confidence of the people. It is an amenity that one could populate without, but has been enslaved to.
Also, if anyone interested would like a list of the resources, I can mail them upon request.
-------------------------------------
The following paper is the onset of a research I intend on conducting within my career; I hope on one day publishing a layout of the reality behind the framework of modern institutions to inform people of what freedom they possess in face of a constitution that deceives their (the people’s) liberty into a masking of nationalism. Underlying my skepticism towards the administration of our system is the belief of equality among all people and the licensed liberty to one’s own existence as an inhabitant of the earth. I do not intend on a socialist or utopian ideal that should be followed through, for I do not have the means or the ideas on which I can build upon such a society; I simply aim to study the techniques of our modern system, and prove a better alternative had it not been for the greed of mankind. I mainly owe the research to Peter Joseph, founder of the Zeitgeist Movement, and who, I can confidently say, speaks my mind as to the theories I credited prior to coming upon his work. Unfortunately, for the sake of length and time, I will keep this paper to a minimum, as there is lots of information that could be discussed, but goes beyond the scope of this assignment and should be left to a more extensive research.
Conspiracy theories have existed since the commencement of political organizations, and most such theories, if not all, share a consistency in targeting the greed and profits of self-interested individuals. Hence, ethical and moral philosophy form the base reason for the existence of such beliefs. Some theories may cross as extreme, and others appear too vain considering the reality and dependency of our system, but nonetheless, it must be attended to as an opinion, whether believed in or not, for the risk in ignoring the possibility of any idea being false is costly. One of the most widely held conspiracy theories is that of a New World Order. Granted that I do believe such an end is in the eyes of a few powerful men, my aim isn’t discussing the consequences and reasons of a world order, rather, I am interested in the monetary system, and how it has spiraled out of control, intentionally, that it has enslaved us as a people to a few corporations. I intend on talking about the history of central banking, mainly targeting the Federal Reserve, and the vices inherent in policies they have set upon this nation to reap benefits, not only of money (for they essentially are in control of the money supply and can get as “rich” as they please), but reap the benefits of being a powerful clan, one that completely and indirectly controls our every thought and lifestyle. I would like to note that I am not against money being used as medium of exchange; I am against the policies, the economics that have come to use money as ammunition.
The most prominent argument for advocating the monetary system is incentive. One may question that in the absence of money, in the absence of gaining power through reaping profits, the incentive to create, compete, or promote economic growth will be absent. This argument presents truth, an absolute truth actually, in that incentives aspire creation. Profit, though, is only one of various causes that enable us to create. My belief is that greed for power sits at the heart of our economic system. In the words of Amschel Rothschild - founder of the Rothschild Banking Dynasty, and later a member on the Federal Reserve board - “Give me control of a nation’s money supply, and I care not who makes it laws”.
The controversy of money and centralized banking dates back to the times of our fore fathers, and has been heavily ingrained in American politics. James Monroe, the fifth president of the United States of America received a letter from Thomas Jefferson on January 1, 1985, in which he famously quoted in reference to the borrowing of money among citizens and merchants:
“All these doubts and fears prove only the extent of the dominion which the banking institutions have obtained over the minds of our citizens, and especially of those inhabiting cities or other banking places; and this dominion must be broken, or it will break us. But here, as in the other case, we must make up our minds to suffer yet longer before we can get right. The misfortune is, that in the meantime we shall plunge ourselves in unextinguishable debt, and entail on our posterity an inheritance of eternal taxes…”
January 1, 1835, under Andrew Jackson’s democracy, has been the one time in history the United States of America has been completely free of debt, and ever since, we have been diseased by a cyclical growth of debt that has perpetually ailed the freedom of mankind. During the second year of Jackson’s term, the Recharter of the Second Bank of the United States was being issued, and Andrew Jackson, opposed to the Recharter, sent out a veto message which stated: “The bold efforts the present bank has made to control the government are but premonitions of the fate that awaits the American people should they be deluded into a perpetuation of this institution, or the establishment of another like it”. Low and behold, with the existence of the Federal Reserve in 1913, we have been exploited by the system, in which control by the use of interest has enslaved man into his own equal. It should be understood that the Federal Reserve is not an American institution, it does not belong to the United States of America, and it is not constrained by American policy. Rather, it is the United States of America; it has full control over this country and knows no geographical boundaries. It is a country within its own, where the decisions made are independent of congress or the president, but by international bankers. It is also crucial to consider the structural design of the Federal Reserve System, which was built in reflection of the aims and understandings of the Bank of England; one of the prime reasons why our founding fathers traveled to newfound land. During Abraham Lincoln’s presidency, when the civil war took place, European banks offered high-interest loans to the states, though President Lincoln refused their offer and advocated the creation of a debt-free currency, the Greenback; this, of course, never lived to see the light of day.
As goes with any institution built, the Federal Reserve served as a resolution; it was designed to evade the financial crises among state banks, as well as facilitate a better economical approach to trade among all states. Economically speaking, the Federal Reserve Act’s purpose was to “provide an elastic currency”; bank notes that could be borrowed by rediscounting commercial paper – on interest of course. Concerns of one central bank controlling the money supply arose among the public, and in response, to avoid the appearance of a central monetary authority, the Federal Reserve in Washington opened up twelve regional Federal Reserve Banks: Boston, New York, Philadelphia, Richmond, Cleveland, Chicago, Atlanta, St. Louis, Kansas City, Minneapolis, Dallas, and San Francisco. The founders of the Federal Reserve were not economists or policy makers, but bankers, and hence the purpose of the system catered to the interests of the bankers who created it; the families of Rockefeller, Rothschild, Morgan, and Walburg; they met on Jekyll Island, Georgia in November 1910, and designed the framework of what we now know as the Federal Reserve. It was systematically modeled on the logic of credit: lending money on interest (the ideology of interest has been debated by many economists and philosophers, some believing it is a vice, others perceiving it as the salary of working capital – for the purpose of this paper, I write under the assumption of interest as a vice). The Federal Reserve Act was written when Woodrow Wilson ran for president. In exchange for funding towards his campaign, Wilson signed and advocated the Act. After the Federal Reserve was setup and began operations, Woodrow Wilson wrote:
“A [our] great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world - no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."
Let us illustrate of the model of this fractional reserve system: The US government contacts the Fed requesting money - assume $10,000 (the example given in Modern Money Mechanics – a booklet printed by the Federal Reserve informing the public on money and the Federal Reserve System). The Fed loans the government that amount in exchange for Treasury Bonds - pieces of paper (instruments of debt) given face value by the exchange of Federal Notes, also paper (i.e. Dollars) with no real value as they are “legal tender”. As stated in Modern Money Mechanics, the value of money is characterized as such: “Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries. What then, makes these instruments acceptable at face value in payments of all debts and for other monetary uses? Mainly, it is the confidence people have…Money, like anything else, derives its value from scarcity”. The $10,000 received by the government is deposited in commercial banks. According to the Federal Reserve Act, and as stated in Modern Money Mechanics as well, “It [a bank] must maintain legally required reserves, in the form of vault cash and/or balances at its Federal Reserve Bank, equal to a prescribed percentage of its deposits” – assume 10%. This means that $1,000 must be held in reserves, leaving $9,000 available to loan out to the public, who in turn will deposit that amount in their bank on interest, and that amount again becomes part of the bank’s reserves, adding on top of the original $10,000. This would seem unrealistic seeing how the bank already loaned out $9,000, but the fact is that actual money is not being loaned out.
“Of course, they [the banks] don’t really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrowers’ transaction accounts. Loans (assets) and deposits (liabilities) both rise by $9,000. Reserves are unchanged by the loan transactions. But the deposit credits constitute new additions to the total deposits of the banking system”. (Modern Money Mechanics)
In plain English, money is created out of nothing because there is a demand, and a supply (reserves). It is a notional financial obligation that exists only in theory, and in debt, for money in reality is debt. Money would not exist without debt, for there is no means of paying back interest - it doesn’t exist! The Federal Reserve has loaned out every dollar in circulation, and so where do we get money to pay the interest? Taking out another loan of course! It is a perpetual system of theoretical debt – a modern system of slavery, if you may. Marriner Eccles, 7th chairman of the Federal Reserve serving from November 1934 till February 1948 famously quoted on September 30, 1941 during the hearings of the House Committee of Banking and Currency (now known as the United States House Committee on Financial Services): “If there were no debts in our monetary system, there wouldn’t be any money”.
As stated earlier, money is a value of perception and quantity. The quantity theory of money, first noticed by David Hume and later developed by John Stuart Mill, assumes an inverse relationship between the supply of money and its buying power. This theory was later formulated into the Equation of Exchange, which – in modern terms- states that MV=PQ; where M denotes the total amount of money in circulation; V denotes the velocity, or average frequency, at which money is being circulated; P denotes the price level; and Q denotes the real value of final expenditures. Manipulating the equation, we obtain P=(MV)/Q. Assuming that V and Q are held constant, as M increases, P will have to increase, thus devaluating the value of one dollar – inflation. This means that if V and Q were constant, the inflation rate would exactly equal the money supply growth rate. With additional money injected in the market as the government takes out loans to pay its interest, the supply of money is increased, and thus the purchasing power of each additional dollar is decreased. This fractional reserve banking practice, in which the supply of money is theoretically increased, is inflationary, as more units of dollars are needed to meet the demands of consumers and the liabilities of banks.
With tight control over the nation’s money supply, the Federal Reserve was able to control the market as it pleased, and as most conspiracy theorists believe, all financial crises were staged events meant to induce fear in the people so that they remain slaves to the system. It is believed that the Great Depression of the 1930’s was a staged event, as the Federal Reserve demanded a huge credit shortage that sunk the nation into bankruptcy. From 1921 – 1929, the Federal Reserve increased the money supply, and introduced the Margin Loan. This loan stated that the buyer pays 10% of the stock price, while the other 90% is paid through the loan broker. The conditionality of this loan was that it could be called at anytime and has to be paid in full within twenty-four hours. On October 24, 1929, the bankers who issued the margin loan called them in, and few had the means of paying of the debt. In reference to this occurrence, On June 10, 1932, while delivering a speech before the House of Representatives, Louis McFadden - a republican member of the US House of Representatives – stated:
“Mr. Chairman, 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. The Federal Reserve Board, a Government board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and iniquities of the Federal Reserve Board has cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it…It [the panic of 1929] was a carefully contrived occurrence. International bankers sought to bring about a condition of despair, so that they might emerge the rulers of us all”.
There are other held beliefs concerning the profit seeking behavior of the Federal Reserve, such as the accusations of intentionally getting involved in WWI and WWII, while funding both sides of the war, so that monetary benefits can be reaped. Other claims target the Fed for deliberately staging wars with other nations to gain economic power. The grounds behind such claims have been researched, but the details would require an entire paper on their own.
Many believe that the purpose of such control is to facilitate a free enterprise market within the world, in where one economic power has control of the world’s currency. Such a world seems far-fetched within our lifetime, but the steps towards such an order can be seen in play. The European Union and NAFTA, along with other organizations and agreements conducted to simplify trade, have been accused of the deed, leading to the emergence of the term “Economic Slavery” among those who understand the monetary system and its interest based structure. The evidence in much of what has been presented is open to skepticism, as I have yet much more researching to do, but I do contend to this belief: the monetary system is a corrupt ploy used as a means of sovereignty to administer humanity, it is a fraudulent man-made network with no palpable value besides the confidence of the people. It is an amenity that one could populate without, but has been enslaved to.
Saturday, March 28, 2009
A Quick Thought on Freedom
This has been discussed and debated a multiple of times, but I felt the need to write it, for my own purposes.
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I think myself and others to be free in desire and thought, to the extent of one’s wisdom, but captive in the definition of physical being. Sustenance of one’s corporeal reality is unfamiliar with the exoticism of one’s mastery in imaginative existence, but even then our formative years have influenced what is most treasured in conscious freedom. On that note, I suspect that every individual is free to behave in desired responses to set circumstances, given sane rationality, but beyond that we have no substitute: All we have is choice, but that stands in the face of consequences and thus counters what is genuinely meant by freedom.
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I think myself and others to be free in desire and thought, to the extent of one’s wisdom, but captive in the definition of physical being. Sustenance of one’s corporeal reality is unfamiliar with the exoticism of one’s mastery in imaginative existence, but even then our formative years have influenced what is most treasured in conscious freedom. On that note, I suspect that every individual is free to behave in desired responses to set circumstances, given sane rationality, but beyond that we have no substitute: All we have is choice, but that stands in the face of consequences and thus counters what is genuinely meant by freedom.
Wednesday, March 18, 2009
Springtime for Hitler...and Moudi?
I suppose people should not be very uncompromising towards themselves when actually enjoying their time, but I cannot help the distressed voice plaguing me to read or study in lieu of being social. This is attributed to my anxiety-based fear that I won't be worthy of securing notable grades without devoting the bulk of my time to academic work. Also, spring and its magnificent aptitude to elicit the secretion of endorphins is of no help, as I am unabatedly distracted; I notice that when depressed, I am more productive, as I forcefully direct my attention towards my responsibilities.
There is a sense of guilt eating at me for not doing much homework this past week; instead, I met up with friends, attended parties, drank, and laid around - that gives me the presentiment of being useless, hence my overwrought reflection of not being a good college student. Oddly enough though, I do not like this system based on quantifiable intelligence. The best course of action for me is to confine myself again to the covers of my books.
Interestingly enough, I was chatting with a good friend of mine about success and studies, and here is what he said:
"...but, i think in the way that i imagine you will define success and happiness, you will find them both (unless you are too hard on yourself)...I imagine you can/will define success in terms of the "simple things in life" (at the risk of sounding cliche)...i think, unless you're too hard on yourself, you'll have a husband, and maybe a family, and a reasonable place to live, and comfort and contentment; also a stable job that makes you feel like you do good, meaningful work; friends who care about you and about whom you care; and the feeling that you're living a good life, helping others, which allows you to sleep at night without guilt or regret"
There is a sense of guilt eating at me for not doing much homework this past week; instead, I met up with friends, attended parties, drank, and laid around - that gives me the presentiment of being useless, hence my overwrought reflection of not being a good college student. Oddly enough though, I do not like this system based on quantifiable intelligence. The best course of action for me is to confine myself again to the covers of my books.
Interestingly enough, I was chatting with a good friend of mine about success and studies, and here is what he said:
"...but, i think in the way that i imagine you will define success and happiness, you will find them both (unless you are too hard on yourself)...I imagine you can/will define success in terms of the "simple things in life" (at the risk of sounding cliche)...i think, unless you're too hard on yourself, you'll have a husband, and maybe a family, and a reasonable place to live, and comfort and contentment; also a stable job that makes you feel like you do good, meaningful work; friends who care about you and about whom you care; and the feeling that you're living a good life, helping others, which allows you to sleep at night without guilt or regret"
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