The U.S. congress recently held a hearing on legislation that would change central banking and Federal Reserve.

Many congressional representatives object to removing the full employment mandate of Fed Reserve, as Brady’s bill requires, and want to keep that mandate along with price stability. First, just because Fed says it can generate full employment, doesn’t mean it’s true. Fed Reserve can only transfer jobs, not create them. When Fed Reserve creates dollars, it takes value from all dollars in existence. So dollars in someone’s savings account are worth less, and loans made with those dollars are worth less, leading to few jobs for businesses receiving these loans. Alice Rivlin, former Fed “governor” added that it would be a “misleading signal” to move away from full employment with so many people out of work. The only thing misleading is the idea that Federal Reserve can create new jobs without destroying other jobs.

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Hosted by America’s Future Foundation: 

There’s a fiat money pyramid, and you’re likely at the bottom. New Federal Reserve dollars reach you in the form of a higher salary about when prices are already higher, so you can’t buy any more than you used to. A four-minute video about fiat money explains this and other key points about our current monetary system, most importantly that banks and governments benefit at the expense of most everyone else.

Gas costing a dime? Yes, when dimes were made of silver. Congressman and presidential candidate Ron Paul says if we go back to using silver dimes (see video below), one of those dimes could be traded for about one gallon of gas.  It would actually take two silver dimes, but Ron made his point. This compares to needing about four or five Federal Reserve dollars for one gallon of gas today. Read the rest of this entry »

FOR IMMEDIATE RELEASE:

Proposed DC Metro fare 21% lower versus 2010, measured in three commodities

DC Metro’s proposed base fare of $1.70 is 21 percent lower in value than the $1.60 fare it instituted in 2010 when measured in three commodities, wheat, gold, and iron, according to the group Monetary Choice.

[Dave Doctor of Monetary Choice presented these findings at Metro’s public meeting about the fare increase on Monday, March 5, at Washington Lee High School Cafeteria in Arlington, VA, at 7 p.m. Listen to statement - MP3] Read the rest of this entry »

A news story about rising gas prices omitted the falling value of the dollar. Here’s my comment:

Prices are rising because the dollar has lost value. When the dollar falls by five percent, then merchants raise their prices just over five percent to get the **same value**. Iran, cold weather, refineries may worsen the problem, but the article does say demand has fallen.

The dollar has lost value because of deficit spending. The U.S. gov’t needs more money than it taxes. So Federal Reserve creates new money and lends it to the gov’t. That new money forces the value of your money to fall.

Eventually you are a seller of dollars and as any store owner will tell you if more people are selling what you are selling, then prices will fall. You start out selling your occupational service, such as graphic design or marketing or pottery. You sell your service or product for dollars. At that point, you are now a seller of dollars, and you don’t want there to be an increase in dollars, just as if you were selling blueberries and you don’t want there to be a glut of blueberries. You might sell dollars to get dinner. You might say the price of your ten dollars is one meal. Then a government contractor arrives, flush with new Federal Reserve money, and this contractor sells 10 dollars for 1/2 meal. So the restaurant owner can get 20 dollars for one meal from the contractor. So you must lower the price of your dollars to 20 dollars for one meal to compete. And that is how your money is devalued by the new money.

Though it gets worse. You now can buy only half as many meals. Where did the other half go? To the government. Your meals paid for the deficit spending.

A Federal Reserve advocate warned of financial fires and “trouble” from bankers if the central bank is disbanded. Dean Baker, an economist and World Bank consultant, recycled these and other central banking scare tactics from the past 250 years at an evening debate in Washington, DC. Jeffrey Tucker, an economist and executive editor of Laissez Faire Books, argued for a free market in banking. Read the rest of this entry »

Europe doesn’t need liquidity. Only some European banks, the mis-managed ones, need funds or they will fail. And if they did fail, the customers would simply go to other banks. Some customers might lose money, but not everyone, which is what happens when the European central bank issues new money. The value of the new money comes from the money already in circulation. If you hear the word liquidity, take action.

Related article.

The eighth largest bankruptcy occurred at the end of October. Did you notice? Did the economy crash? Nope. MF Global was a derivative dealer that invested in loans to European nations that lost value. Fortunately, the US central bank did not create new money to “bail out” this fraudulent, poorly managed firm. And fortunately the US Federal Government did not give tax receipts to the firm. The company failed and all its customers moved to new brokerages.

Many customers lost money, but those losses weren’t passed on to taxpayers via government bail-outs and weren’t passed on to people who own dollars via a central bank rescue.

A company failed. It happens every day. This time, only the company’s clients suffered, not people who couldn’t even explain a derivative, including this author.

Related wikipedia entry.