The problem with a fiat currency…

The problem with a fiat currency…


John in New York City watching us on
Manhattan neighborhood network cable TV hey John what’s up a young lady the down it I a few quick things that only a lot
a college at the core we have a problem in America and the
world we have something called money yet currency that we don’t have
control over so as many discussion you know we have as long as someone else’s controlling
money are problems still exist with the Federal
Reserve and the concept and I want to mention regarding
nationalism the danger with the is that when we go out and acquire
resources in pop star ways with someone in a poor
region their for but yet their resources here once we talk about wall street and the
empowerment have well how do we fix Wall Street we forget the concept that Wall Street
jimmy is basically a clearinghouse for many resources data taken from around the
world so at our core we have to look at money but also we have to we address are
system itself otherwise we continue trying to add
politicians to sign legislation way they don’t have a contract that they
say to promise I’ll that they’re going to do what they say regular Sony netbook why do and and and
and let me address both your points I would say that the second thing that you
raised was was a a fairly reasonable lehman’s
description of what is traditionally called imperialism and you know the Imperial State reaches out
and seizes control whether it’s political or economic or both other states for military and and does that simply to strip them of
their natural resources and or even their human resources and it’s not a way it’s not sustainable
imperialism is not sustainable to eventually the the dominated states
will either run outta resources or they will they will %uh if I back I mean that’s
what we did to the United Kingdom in 1776 so it’s an unsustainable for most love governance irv a the you know political
organizational structure national organizational structure agree with you on the first point I we
do have fiat currency and which means that the that the
government creates the money out of thin air and it defines the value for the
money and you are absolutely correct that it’s
not our government which is defining the value of our currency it is the Federal Reserve and the
Federal Reserve is a quasi private person the the public institution but it’s mostly
private it is a better for be it’s not it said not a for-profit
corporation but it is a corporation which is owned by for-profit
corporations the 12 Federal Reserve Banks and they in turn are owned by smaller
Federal Reserve Associated banks all over the United States and the I would say that having a fiat
currency in and of itself is actually a good thing for a nation it allows a
nation to very its money supply in the value of
its money relative to the value of its wealth you know you go through something like
the industrial revolution or the computer revolution are you discover some major new natural
resource and suddenly the country gets much much wealthier very very quickly if the money supply doesn’t expand
reflect that you end up with deflation you end up
with the crash is a consequence that growth and that’s the problem with the gold
standard is that all of a sudden you gotta get a lot more gold that’s why the United States was
stockpiling gold like crazy in the last part in the 19th and early part of the
20th century and we would only accept payment from
other countries in gold which is killed our ability did to engage in international trade and
and really hurt the United States been going off the gold standard was a good
thing the bad part about it as you correctly
identify is that it is this private corporation the Federal Reserve that
that is determining is too bad parts about it
a they’re the ones who are determining the value of the currency in our
monetary policy they were created by congress with to to dictates two purposes want to control
inflation the other to construct to keep unemployment low and they’ve done a
very good job controlling inflation they’ve done absolutely abysmal job of keeping
unemployment low and that’s what people like robert reich and
Paul Krugman are pointing out that the Fed has failed in its job since I am alan greenspan was made chairman at
the fed by Ronald Reagan back in the day that you know that’s that’s been the
problem with the fad and evolved in one problem with the fat
and then the second problem of course is that is that they loan money to us at interest and so our government is
continually in debt to the fed the Fed makes a profit on creating our money for
us and their profit then flows to the
federal reserve banking system to the bank’s and they’ve won money to the banks not
necessarily at a profit sometime right now it’s been remiss not to profits are much lower
rate than the loan money to the federal government they’re loaning money to our
federal government one 1 percent and change you know the
underline tier 8 bill T-bill rate and we have to buyer
Treasuries through the bank’s pile of rather than buying them directly from
the Fed which is another insane provision and then on top of that
they’re loaning money to the banks the and not just the US banks but unlike
don’t you back I mean there long enough money at point
you know one percent .2 percent interest all alone into the federal government 1
percent change it is it is wrong it makes no sense and it doesn’t work yet what does work
for the banksters doesn’t work for the average person your absolutely right

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About the Author: Maximilian Kuhn

53 Comments

  1. they would'nt show up if Thom did not get in their turf, if he starts talking bout the reptilians you better believe he will be hearing from the David Icke crowd

  2. Truthdig has an excellent article printed today, but written by the late Chalmers Johnson.
    It is called Three Good Reasons to Liquidate our Empire.
    Lots and lots of solid, thoughtful information in it.

  3. Check out the Truthdig article today by the late Chalmers Johnson, Adam. It's called Three Good Reasons to Liquidate our Empire.

  4. Gold is a fiat currency. It has no inherent value, other than the value assigned to it by people, and it's costly to extract. If we have to have fiat currency, we might as well just print it, rather than waste resources extracting it. Or you can just trade grain as currency. Good luck getting a dealership to accept it for a car.

  5. look at the growth of china the last 30 years. it raised 400 million pple out of poverty. It couldn't have been done without a fiat currency. But the Chinese central govt controls and have oversight over their central banking.

  6. So, where is the inherent value of US dollars today? Bernanke today prints $85 Billion a month. How do those newly printed dollars have value? What if one US citizens knew how to print (counterfeit) money perfectly, and printed a billion dollars a year and lived high on the hog?

    That "money" he printed has no inherent value as its simply ink on a piece of paper. Plus, now his newly printed dollars devalue everyone else's. And this is something you promote?

  7. Thom, I think you are incorrect on some of your Fed statements.

    First, the Fed by law may purchase treasuries, but only in a open market auction where they have to compete against other buyers of those treasuries. That law as put in place so that the Fed cannot "monetize" the national debt.

    As for profits… "Federal Reserve Sends Record $88.4 Billion Profit To Treasury In 2012" )per Reuters | Posted: 03/15/2013). The profits are not distributed to the 12 Federal Reserve banks.

  8. Thom, look at:

    "Myth #4: The Federal Reserve is a privately owned bank out to make a profit at the taxpayers' expense.

    This myth claims that the 12 Federal Reserve banks are privately owned and therefore want to earn a profit just like any other company. … Like many of the other Federal Reserve myths, this one has a small degree of truth to it, but also has a fair amount of misinterpretation and it leaves out a number of crucial details."
    publiceye . org/conspire/flaherty/flaherty4.html

  9. You are completely wrong. The reason it is NOT a fiat currency is because the government or any other entity cannot make more. The quantity is limited and controls itself.
    The other problem is the limited quantity of precious metals and the population being so large that the amount any one individual can own is also severely limited.
    Grain is unlimited as well as printed paper.
    I accidentally hit thumbs up. Disregard.

  10. Did the gold standard hold back the industrial revolution? Obviously not. Actually, that was the most productive period in US history, and just as importantly, it was a sustainable growth period, which is what fiat currencies don't enable…stability.

  11. exactly. the same american system of goal setting, leadership, protectionism, tariff setting, and state funded and protected domestic baby industries. Not some bullshit free trade nonsense.

  12. in the form of glass steagall and dodd frank and proper punishment for illegal activity.
    Federal legislative congress votes each time to whether or not to raise the debt ceiling. Which they do each time. So it's not like the govt can go spend like crazy like the conspiracy libertarians proclaim, they have to vote on it first.

  13. Thank you for talking about this issue. We need a national discussion about how we create our money and about the idea of public banking system. I am frustrated that the national media won't touch this issue and neither will NPR.

  14. It has been pointed out that our money is created through debt. If we extinguish debt we will not have any money because all of our money will go to paying off debt. Clinton was wrong. Yes there is too much power in the Fed. We need to create our own money debt free.

  15. The gold standard tends to concentrate money into hands of the few. We have to much of that problems already. Plus gold, as Thom says can't expand to meet an expanding economy, meaning deflation. We need a money that can be avai;able for everyone and remain stable. See Ellen Brown and Bill Still

  16. I do not think the FED is not required by law to buy toxic junk assets, they are just permitted to.

    Have you found a statute that makes the Fed buy those assets?

  17. Going off the gold standard means this…we can buy all we want from foreign countries and run up trade deficits till the cows come home. Problem is, we either have to print money to make up for the wealth in dollars that left the country, or we have to hope those foreign countries will recycle them back into the US through treasuries.

    Seems we have to count on BOTH of those now as we monetize the debt and count on foreigners to fund our lifestyles through Treasuries.

    At some point…game over

  18. There doesn't have to be enough gold. That's a myth. The gold price simply rises with the growth of the country. So, the dollars you hold become more valuable as the country prospers.

  19. All had to do with the Treasury, National and State banks issuing currency. As long as gov't has control of the money supply and interest rates, booms and busts will be inevitable.

  20. Thats a complete misunderstanding of how market efficiencies actually make prices fall on the whole. You don't need the money supply to grow when prices are dropping.

  21. Sure, but that doesn't mean that in a free market or anything close to it that prices would also rise. We had price deflation for most of the 19th century, even though the supply of gold was increasing. Of course if gold supply had remained stagnant prices would have dropped even more, all things being equal.

  22. I hate to be a putz… but loan is a noun and lend is a verb. The phrase "loaning money" makes you sound ignorant which I can clearly see you are not.

  23. I can always count on the libertarians crawling out of the woodwork on anything having to do with the fed or the gold standard. Why so obsessed with these two things? As if our problems can be summed up so simply? Come on.

  24. Maybe the question instead should be "why do you seem to dismiss the gold standard?"

    It's not that our problems can be summed up simply because we went off the gold standard. But many would argue that many of our problems today are the consequences of leaving the gold standard…problems that didn't occur overnight but rather compounded over time. It's the building up of layers of consequences that has us where we are today.

  25. Again, do you believe the FED performs a good for society? And if so, what is that good that it provides?

    Before you marginalize those (crawling out of the woodwork) who criticize the FED, you need to make the arguments in favor for the FED.

  26. So, you are at least admitting that a fiat currency not backed by anything is a "problem"? And that the FED has been a source of "problems"?

  27. And let's at least admit that corporate takeover of our government takes two to tango…the corporation and the politician. We need to put just as much pressure on our politicians as our corporations….even more so on politicians since they are the ones who are voted in by us and supposed to represent our interests.

  28. 1st, depends on which politicians you refer to, the weak Dems or completely bought, corporate brown nosing Tea bagger Republicans. I have more sympathy for the Democrats, since the main problem there is all the billionaire dollars spent to destroy political campaigns GET BILLIONAIRE DOLLARS OUT OF OUR POLITICAL SYSTEM! That is the problem. Roll back Citizens United for a start.

  29. So, why blame Republicans for a Supreme Court decision that makes Citizens United legal?

    I have a better idea. A Balanced Budget Amendment. If we have to balance our budgets, then we can't afford giving away subsidies and tax breaks for anyone as the revenues will be needed to pay for all the government we seem addicted to. And that will force us to reform our entitlement programs that are bankrupting us, as well as draw down our Military Industrial Complex.

  30. And is it necessary to turn EVERY debate into a political one? You know, there are PLENTY of problems that are created where both parties are complicit…and corporatism is one of them.

  31. Obama is actually paying down the debt right now. That's right, the debt is shrinking (now under a trillion). Could have something to do with rich people paying a little more of what they owe in taxes and the two wars ending, but this railing over the debt is a distraction from the real problems, such as Wallstreet takeover of our government. Citizens United was implemented by the conservatives on the Supreme Court who do the bidding of corporate America. Please wake up.

  32. Sorry, but you're the one who needs to wake up. You talk about Washington being captured by Wall Street. Well, you seem captured by the Democratic party.

    I'm not a Republican, so I don't speak for them…I speak for myself. My independence allows me to see things clearly without bias.

    I agree that Wall Street has way too much power, but for you to marginalize the importance of our debt issue simply shows that you're towing the party line mantra. Maybe you should remove the rose colored glasses

  33. Oh yea…our deficit is now only $600 Billion! Break out the champagne!

    Much of the deficit reduction has to do with investors selling stocks last year knowing that capital gains taxes were going to be raised the following year, so they sold to avoid higher taxes. That meant more revenue for this year. Let's see what happens next year.

    So, do you believe our fiat currency system is working? If so, please make that argument for me because then I could at least know where you're coming from.

  34. Judy! What`s wrong with you? The annual DEFICIT was $1.3 Trillion, and now is closer to 1 $trillion. This is a reduction in deficit, not PAYING DOWN THE DEBT! The vast stupidity you show boggles my mind. You are uneducated, incompetent, and your opinions have ZERO value. Why? They are based upon nonsense.

  35. Yes there were, but NONE was known as the GREAT Depression, the largest ever seen. In fact, the "Long Depression" was a brief period of a sharp depression, followed by declining prices AND about 5% growth! Today, we are in "recovery", with 2% or less? My, how definitions have changed! 5% GROWTH is a Long Depression, and 2% growth, a recovery?

  36. Oh, bullcrap. The debt /deficit is shrinking because the rich are paying more taxes they OWE and the Iraq Afghan wars are ending. More people are working and that means more revenue.

  37. I don't agree with everything Obama does, but he is a far site better than anything the conservatives have to offer, people who are actually trying to destroy the middle class and the economy of this country!

  38. Actually, Obama ramped up to double the amount of forces in Afghanistan when he entered office. Remember, that was in the beginning of 2009. And he gave an exit plan for the end of 2014. So, that's basically 6 more years of being in Afghanistan…and for what? Please tell me.

  39. Once again, rose colored glasses.

    And please make the case that conservatives are TRYING to destroy the middle class.

  40. Yes, I listened to Thom. Not sure what your point is. I'm interested in your opinion.

    And for the future, it's easier to know who you're talking to by "Replying" to a specific post, not leaving a general comment.

  41. You asked why I think conservatives are trying to destroy the middle class. If you bothered to listen to Hartmann YOU WOULD KNOW.

  42. Once again…I want you to think for yourself, not someone else or whatever your political party thinks that you hold allegiance to.

    Same goes for a fiat currency…if you support it, why is that the case? Same goes for Obama's Afghan policy…why do you support it?

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