jake towne - monetary policy to cc-upper perk small govt (jan 2010)

8/14/2019 Jake Towne - Monetary Policy to CC-Upper Perk Small Govt (Jan 2010)

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TowneForCongress.com
http://towneforcongress.com/http://towneforcongress.com/


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Dishonest Money: The Fall of the Dollar

The purchasing power of the dollar has lost >94% since FDR took America offthe classical gold standard in 1933 through monetary inflation.

The monetary inflation was caused by the FED. They debased the dollar bycreating more and more irredeemable paper dollars.


3/26


The Inflation Tax

1965 - A loaf of bread cost about 35

2010 - A loaf of bread per the BLS costs $1.80 *- A 1965 quarter and dime can be exchanged for $4.75

*Source: http://www.bls.gov/cpi/cpid0907.pdfpage 108/119

+ = ?
http://towneforcongress.com/http://www.bls.gov/cpi/cpid0907.pdfhttp://www.bls.gov/cpi/cpid0907.pdfhttp://towneforcongress.com/


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Source: http://towneforcongress.com/economy/unlocking-the-money-matrix-the-real-interest-rate-part-1215http://towneforcongress.com/platform-issues/sound-money-and-jobs
http://towneforcongress.com/http://towneforcongress.com/economy/unlocking-the-money-matrix-the-real-interest-rate-part-1215http://towneforcongress.com/platform-issues/sound-money-and-jobshttp://towneforcongress.com/platform-issues/sound-money-and-jobshttp://towneforcongress.com/economy/unlocking-the-money-matrix-the-real-interest-rate-part-1215http://towneforcongress.com/


5/26


The National Debt

Source: http://www.nolanchart.com/article6512.html

below
http://towneforcongress.com/http://www.nolanchart.com/article6512.htmlhttp://www.nolanchart.com/article6512.htmlhttp://towneforcongress.com/


6/26


Dishonest MoneyHow to Create $900 from $100

The banking system creates dishonest money eachtime you deposit money. Here's how it is done, using thecurrent approximate fractional reserve ratio of 10%.

Step 1)A depositor deposits $100 at a bank.

Total Reserves: $100Total Loans: $0Total Money Supply: $100

Total Deposits Total Loans Total Money Supply0

200

400

600

800

1000

"Give me control of a nation's moneyand I care not who makes its laws."

- Mayer Amschel Rothschild, 1744 -1812,Leader of the Rothschild Banking Cartel ofEurope


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Step 2)The bank holds $10 for its reserves and loans out the other $90 to others.

Total Reserves: $10Total Loans: $90

Total Money Supply: $100

"It is well enough that people of the nation donot understand our banking and monetarysystem, for if they did, I believe there wouldbe a revolution before tomorrow morning."

- Henry Ford

Total DepositsTotal Loans

Total Money Supply

0

200

400

600

800

1000


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Step 3)This $90 is deposited elsewhere. Next, this second bank takes the $90 indeposits, holds $9 for its reserves, and loans out the other $81.



"When an assembly undertakes to issuepaper as money, the whole system of safetyand certainty is overturned, and property setafloat. Paper notes given and taken betweenindividuals as a promise of payment is one

thing, but paper issued by an assembly asmoney is another thing. It is like putting anapparition in the place of a man; it vanisheswith looking at it, and nothing remains but theair."- Thomas Paine, Dissertations on Gov't

Total Deposits Total Loans Total Money Supply0

200

400

600

800

1000


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Step 4)Step 3 repeats. The third bank takes the $81 as a deposit, holds $8.10 for itsreserves, and then loans out $72.90.

Total Reserves: $27.10Total Loans: $243.90


The few who understand the system, willeither be so interested in its profits, or sodependent on its favors, that there will be noopposition from that class. The great body of

people, mentally incapable of comprehendingthe tremendous advantages, will bear itsburden without complaint."

- Lord Rothschild


Total Money Supply

0.00

200.00

400.00

600.00

800.00

1000.00


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Step 5)The process keeps repeating. The bulk of the money creation is done after 15repeats, but what is eventually left after 40 or 50 repeats is pretty much:



So within a short period of time, bankstransferring to other banks within thesystem can CREATE $900 from the initial$100 deposit.

For those hearing the above for the firsttime, this process is such NONSENSE thatit is a little hard to grasp.

Source: Federal Reserve Bank of Chicago, ModernMoney Mechanics (1994)


Total Money Supply

0

200

400

600

800

1000


11/26


Dishonest MoneyFED Open Market Operations

The FED itself also creates or destroys dollars, but theydo not even require deposits.

The Federal Reserve conducts open market operationsby purchasing or selling any type of asset.

In the past the FED mostly bought Treasuries. In thepast several years, the FED has mostly bought companyassets or bad debt, such as AIG's.

"Bankers own the earth. Take it away from

them, but leave them the power to createmoney and control credit, and with a flick of apen they will create enough to buy it back."

- Josiah Stamp, former President of the Bankof England


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Dishonest MoneyFED Open Market Operations

Heres what happens when the FED buys Treasuries or other assets

1) The FEDs Open Market Committee (FOMC) decides to expand the nationsmoney supply. They purchase, for example, $100 billion in Treasury bonds.

2) The FED writes a check on itself for $100 billion. [Where did it get the money?

The answer is -- FROM NOWHERE!]Monetary Supply Expansion: $100 billion

3) This $100 billion FED check then goes to one of the select government bonddealers (such as JP Morgan Chase or Goldman Sachs) in exchange for the $100billion in Treasuries.

Monetary Supply Expansion: $100 billion

4) Then the dealer deposits its $100 billion FED check at a commercial bank.Monetary Supply Expansion: $100 billion

5) Enter the fractional reserve loop. This deposit is very quickly loaned outrepeatedly and grows to $100 billion in deposits and $900 billion in loans.

Monetary Supply Expansion: $1 Trillion


13/26


The FED Causes Depressions (1/4)

"On account of [the Federal Reserve],we ourselves are in the midst of thegreatest depression we have everknown. From the Atlantic to the Pacific,

our Country has been ravaged and laidwaste by the evil practices of the Fed andthe interests which control them. At notime in our history, has the general welfareof the people been at a lower level or theminds of the people so full of despair...They are the victims of the Fed. Their

children are the new slaves of theauction blocks in the revival of theinstitution of human slavery."

- Congressman Louis T. McFadden, Pennsylvania's 15th District- From the 1934 Congressional Record


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Interest rates represent the present time-value of money.

They serve as a check-valve between the deployment ofcapital (and the amount of mal-investments!) for economicgrowth and the savings deferred to the future to pay for the

goods and services resulting from the growth.

Interest is the difference in thevaluation of present goods and

future goods; it is the discount in thevaluation of future goods as against

that of present goods.

- Ludwig von MisesAmerican Economist and

Founder of the modern Austrian School


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The FED decides on and sets the interest rate. Unlike most of the 19th Century (without the FED) and the early 20th

Century where the different FED regions varied interest rates toaccount for regional differences (agricultural Midwest, industrial EastCoast), the modern FED constrains the economy to the same interestrate.

This is similar to the EU's central bank; not only do they all use theEuro, but far more importantly, highly industrialized states likeGermany now share the same interest rates as states with verydifferent economies like Greece and Spain.

"Let me end my talk by abusing slightly my status as

an official representative of the Federal Reserve...Regarding the Great Depression: You're right, we didit. We're very sorry.

- current FED Chairman Ben BernankeFrom his 8 November 2002 remarks


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The FED's interest rate control combined with the money supplychanges result in the Boom-Bust cycle. Booms are periods of credit expansion that central bankersmostly created themselves, while busts are credit contractions. Each Boom plants the seeds of the next Bust by creating amultitude of wasteful mal-investments.

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0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Federal Reserve Interest Rate 1995-Apr 2009

FederalFundsRate%

(MonthlyWeighted)

9/11

BoomHousing

Bust

Bust

DepressionTreasury &Dollar Crisis

BoomDot.com's

Tech stocks Fall 2007:FinancialSystemBreakdownBegins

Source: http://www.federalreserve.gov/releases/h15/data/Monthly/H15_FF_O.txt


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THE STATUS QUO

The Money Power is held by theGovernment & Bankers

Government 'Commands' the EconomyRenown for Deficit Spending and

Stealing via Currency DebasementRedistributes Wealth to the Military-

Industrial Complex, Banking Cartels,Special Interest Groups & Corporations

Allows and Rationalizes Government

Takeovers of Private BusinessesMay promote capitalism and the free

market in word, but in deed functions asCrony Capitalism, Vulture Capitalism, theCorporatocracy or Disaster Capitalism

Keynesian Economics

In the long run, we are alldead.

- Lord John Maynard KeynesBritish Economist and

Central Planner


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Hope for the Future

"...if anything will be done, common Americans themselvesmust do it, they can count on no one else."

-Dr. Edwin Vieira

"If there must be trouble, let it be in my day, that my childmay have peace.

Thomas Paine, The American Crisis, 1776


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Replace the Socialistic Keynesian GovernmentStatus Quo with the Austrian Free Market

The People own the Money PowerGovernment Plays No Role in

Economic PlanningPromotes Honest Money & BalancedBudgets

Highly Rewards those who CreateWealth and Shares it with All

Government Does Not Takeover

Private BusinessesPromotes Free Market Capitalismand laissez faire, or let them be!economics

Austrian Economics

All those intent uponsabotaging the evolutiontowards welfare, peace,

freedom and democracy,loathe gold.

- Ludwig von MisesFounder of the modern

Austrian School


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Game Plan

CONTAIN NEW SPENDING AND NEW TAXATIONNo health care tax, energy tax, etc.No stimulus or bailouts

ATTACK ROOT CAUSE- CUT SPENDING AND TAXES

CORRECTIVE ACTION RESTORE SOUND MONEYRemoves the hidden tax of inflationHalts redistribution of wealth from the peopleProvides stable unit of account, store of value, andexchange medium

Imposes fiscal discipline on government


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Cut Spending and Taxes

$1,200 billion in income taxes in '08Just $67 billion to run core federal gov't

3-step plan1) Slash Military Spending2) Eliminate Redundant/Useless Dept.3) Gradual phase out Welfare State

See http://towneforcongress.com/platform-issues/income-tax
http://towneforcongress.com/http://towneforcongress.com/platform-issues/income-taxhttp://towneforcongress.com/platform-issues/income-taxhttp://towneforcongress.com/


22/26


See http://towneforcongress.com/economy/guns-or-health-care-1
http://towneforcongress.com/http://towneforcongress.com/economy/guns-or-health-care-1http://towneforcongress.com/economy/guns-or-health-care-1http://towneforcongress.com/


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Departments to Cut$101 billion Dept. of Education$106 billion Dept. of Labor$ 46 billion Dept. of Energy$ 91 billion Dept. of Transportation$ 55 billion for HUD$ 11 billion each for EPA, IRS$ 13 billion for Dept. of Interior$ 16 billion for Dept. of Commerce$ 22 billion International Assistance ProgramsMost of $ 29 billion State Dept.Phase out $133 billion Dept. of AgricultureSlash $ 26 billion for NASA/NSF

All figures FY 2010 http://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdf
http://towneforcongress.com/http://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdfhttp://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdfhttp://towneforcongress.com/


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Restore Sound Money

Open the Mint to free Coinage of Gold & SilverRemove all taxes on the exchange of Gold & Silver

Revoke and Forbid Legal Tender LawsAbolish the Central BankHelp drive the debate on a new Monetary System Prefer gradual transition from the current FRN to gold and/or silver.

Note: I do not advocate a return to the 1930s era classicalgold standard, which was based on fractional reserves.

The Congress shall have Power to coin Money, regulate the Value thereof, andof foreign Coin, and fix the Standard of Weights and Measures... No Stateshall... coin Money; emit Bills of Credit; make any Thing but gold and silver Coina Tender in Payment of Debts. - The United States Constitution, 1787 - present

Also see http://towneforcongress.com/economy/end-the-fed-then-what-the-transition-to-sound-money-1
http://towneforcongress.com/http://towneforcongress.com/economy/end-the-fed-then-what-the-transition-to-sound-money-1http://towneforcongress.com/economy/end-the-fed-then-what-the-transition-to-sound-money-1http://towneforcongress.com/


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GOLD and SILVERFace it your country is broke.


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Document CopyrightCopyright Jake Towne, 2009. Any portion of this presentation that could be

copyrighted is owned by myself and I hereby released it to the public domain. Igrant full permission to use any of the ideas or material within. You may republishthis work. Attribution to myself is appreciated but not required.

jake towne - monetary policy to cc-upper perk small govt (jan 2010)

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