Adonis Diaries

Posts Tagged ‘Alan Greenspan

Do you care to hear the story of the “Dollar Bill”?

Note: If you like to hear the story from the beginning https://adonis49.wordpress.com/2012/06/10/privately-owned-federal-reserve-bank-how-the-rothschild-family-controlled-the-printing-of-the-dollars/

First, the name “Federal Reserve Bank” is not federal, nor is it owned by the government. It is privately owned.

Its employees are not in the civil service. Its physical property is held under private deeds, and is subject to local taxation.

It is an engine that has created private wealth that is unimaginable, even to the most financially sophisticated.

It has enabled an imperial elite to manipulate US economy for its own agenda and enlisted the US government itself as its enforcer.

The US Federal Reserve Bank controls the times, dictates business, affects Americans’ homes and practically everything in which Americans are interested.

It takes a powerful force to maintain an empire, and this one is no different.

The concerns of the leadership of the “Federal Reserve” and its secretive international benefactors appear to go well beyond currency and interest rates.

Alan Greenspan, served as Chairman of the Federal Reserve from 1987 to 2006, stated at the annual Dinner of Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research on December 5, 1996:

“Augmenting concerns about the Federal Reserve is the perception that we are a secretive organization, operating behind closed doors, not always in the interests of the nation as a whole. This is regrettable, and we continuously strive to alter this misperception.”

The privately owned Federal Reserve has confused the public, lied to them and stole their gold and silver.

All the perplexities, confusion and distress in America arise, not from defects in the Constitution, and not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation.

Of all the contrivances devised for cheating the laboring classes of mankind, none has been more effective than that which deludes him with paper money.

After many years of blundering toward it, and only a few months before the beginning of the World War 1, Rothschild found the formula for the most efficient credit machine that was ever invented. This was the Federal Reserve System.

Most people are unsure of the meanings of words such as money, dollar, wealth, inflation and credit. The average person would be very surprised if they knew how the money system used to work compared to how it operates now.

The essence of psychological warfare is to confuse the meaning of words, and infiltrate the mind with conflicting concepts.

The use of the word Federal in the name federal Reserve leads the public to believe that the Federal Reserve is a government institution, when it is really a private corporation owned by foreign and domestic banks and operated for profit.

The Federal Reserve controls America’s money supply and interest rates, and there by manipulates the entire economy, in violation of

1. Article 1, Section 8 of the United States Constitution that expressly charges Congress with power to coin money and regulate the value thereof, and.

2. Article 1, Section 10 of the constitution says “No State shall make any thing but gold and silver Coin a Tender in payment of Debts.”

Over time, gold and silver coins were removed from American money supply and removed as backing for American paper currency and replaced with debt (or credit).

The definition of dollar has changed to hide the fact that a dollar is not money, but a unit of measurement for gold and silver coin. For example:

1. Title 12 United States Code Section 152 says: “The terms lawful money or lawful money of the United States shall be construed to mean gold or silver coin of the United States.”

2. Title 31 United States Code, Section 5101 says: “The money of account of the United States shall be expressed in dollars.”

The recent equivalent to the goldsmith’s receipt for gold is the Federal Reserve Note. The word “Federal” implies Federal government, but the Federal Reserve is a privately owned corporation. The word “Reserve” implies that something gives the paper receipt value, but no gold or silver backs this paper.

The word “Note” implies a contract, because legally a note must state who is paying, what is being paid, to whom and when.

Most people say something like, “I have a dollar bill”. But what is a bill?

A bill is a receipt of a debt owed by one person or company to another. Therefore, a “dollar bill” is a receipt (or bill) of debt of one dollar that is owed.

From 1914 to 1963, Federal Reserve Notes never claimed to be money, nor did they claim to be dollars. A note for five dollars read: “The United States of America will pay to the bearer on demand five dollars.”

How can a promise to pay five dollars be five dollars?

To the left of the President’s picture and above the bank seal, it said: “This note is legal tender for all debts public and private, and is redeemable in lawful money at the United States Treasury or at any Federal Reserve Bank.”

In 1963, the Federal Reserve began to issue its first series of notes without the promise, while taking notes with the promise out of circulation. How can paper become what it promises by removing the promise?

To the left of the President’s picture and above the bank seal, it now read: “This note is legal tender for all debts public and private.”

A note is a proof of debt. It is not possible to pay off a debt with a debt. No debt can be paid in full unless paid in gold or silver, coined and regulated in value by Congress. The name “Federal Reserve Note” is a fraudulent label since each word claims to be something that in reality it is not.

By removing the promise to redeem the note in lawful money, the Federal Government in cooperation with the Federal Reserve, eliminated the monetary system of the United States as established by the Constitution and replaced it with something totally different.

If you are holding a one dollar Federal Reserve Note, the question is: “what is one dollar?

The answer is absolutely nothing. The number measures no substance.

The only thing that give paper money value is the confidence people have in it as is stated in chapter 30 of our textbook.

Federal Reserve Notes are only accepted because people believe they have value.

Note 1: https://adonis49.wordpress.com/2012/06/12/how-the-dollar-faired-since-1913/

Note 2:  The article was from Nalliah Thayabharan in response to my post: https://adonis49.wordpress.com/2012/05/15/super-nationalist-zionism-contributed-to-the-rise-of-the-third-reich/

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How the Federal Reserve Bank behaved since early 20th century?

The US Federal Reserve Bank, an owned private institution, was created on December 23, 1913. It was planned at a secret meeting in 1910 on Jekyll Island, Georgia, by a group of Zionist bankers and politicians.

The power to print money was transferred from the US Government to a private group of Zionist bankers.

The Federal Reserve Act was hastily passed just before the 1913 Christmas break. Congressman Charles A. Lindbergh Sr. warned: “This act establishes the most gigantic trust on earth. When the President signs this act the invisible government by the money power, proven to exist by the Money Trust Investigation, will be legalized. The new law will create inflation whenever the trust wants inflation….From now on, depression will be scientifically created.”

Three years after signing the Federal Reserve Act into law, US President Woodrow Wilson made the following statement:

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 small groups of dominant men.”

During the Great Depression people who had gold in the banks wanted the banks to honor their contract to redeem the paper currency for gold…

The fraudulent nature of fractional reserve banking was at risk of being exposed because there was not enough gold on deposit in the banks to redeem all Federal Reserve Notes issued promising payment in gold.

That was when US President Roosevelt declared a national emergency and closed the banking system for two days as recommended by the Board of Directors of the Federal Reserve Bank of New York.

Congress passed the Emergency Banking Act declaring it illegal for US citizens to own gold under penalty of up to a $10,000 fine and/or up to 10 years in prison.

The people exchanged their gold and gold certificates for Federal Reserve Notes of created dollars based on debt, which stated a promise of redemption in lawful money.

Gold was now removed from the system, leaving silver dollars as the only lawful money available. Silver was eventually eliminated from the money system in 1965, leaving the public with a totally scam money system of irredeemable paper currency and copper-nickel clad tokens.

This money system represents a debt owed to the owners of the Federal Reserve Banking System, the payment of which is guaranteed by the collateral of all property and income of all US citizens.

When banks cannot honor their contract to redeem their notes for gold or silver coins, they are bankrupt. The contract between the people and the Federal Reserve printed on each bank-note promising to pay in lawful money was invalidated because:

1. the system went bankrupt and

2.  the amended version of the “Trading with the Enemy Act of 1917” placed all US citizens in the category of enemy, and no contract is considered valid between enemies.

American citizens were declared to be the enemy by their own government.  Indeed they would be the enemy if the people ever discovered what had happened to their money.

Being unable to trade in wealth such as gold and silver coin enslaves the people to those who create and control what is being called money. All it took to rob the public was to convince the people that “paper and credi”t are money.

The Federal Government and the Federal Reserve have the power to create unlimited amounts of credit because credit does not exist. Credit is not a tangible substance, but an idea represented by bookkeeping entries and computer symbols.

To pay means to deliver a tangible substance as money like gold and silver coin. Where there is no substance, there is no payment. There is only pretend payment.

Banks do not really lend money, they only pretend to lend money. They put no money in a borrower’s account. They only make bookkeeping entries that are reduced as the borrower writes checks against imagined deposits.

When the banks charge interest on a loan they do not make then banks impart psychological value to numbers of nothing. Charging interest sustains the illusion that banks loan something of value, when all they do is rent the appearance of money.

The Secretary of the Treasury is not the US Secretary of the Treasury because:

1. the US Treasury was bankrupted in 1933.

2. The Secretary of the Treasury is not paid by the United States Government. The Secretary serves as US Governor of the International Monetary Fund as receiver of the bankrupt United States, collecting the debt from US citizens.

The Federal Reserve Bank has provided the needed sleight-of-hand credit financing to involve America in every foreign war during the twentieth century. The net result of America getting involved in one foreign war after another has been a consequent steady decline in personal freedom; the growth of a highly centralized, bureaucratic and fascistic government.

A horrendous rise in taxation and the planned destruction of the gold standard, which used to give some degree of protection to American citizens against an out-of-control, profligate, high-spending government in Washington.  

The value of the US$ in 1940 was worth 17 times more than the value of the US$ now as a result of the Federal Reserve’s long-term monetary policy, which has quietly cooperated with the federal government to finance government deficits with Federal Reserve credit.

The Federal Reserve made extensive usage of the misleading words “Federal” and “Reserve” and has over time replaced our system of real money of gold and silver coin with worthless paper, which is against the law according to the US Constitution.

Alan Greenspan, served as Chairman of the Federal Reserve from 1987 to 2006, stated at the annual Dinner and Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research on December 5, 1996:

 “Augmenting concerns about the Federal Reserve is the perception that we are a secretive organization, operating behind closed doors, not always in the interests of the nation as a whole. This is regrettable, and we continuously strive to alter this misperception.”

The only solution to this problem is to do away with the Federal Reserve and go back to the way it used to be and have American money system based on gold and silver coin.  The only solution to the problem is honest money.

Thomas Jefferson saw it coming more than 150 years ago and wrote:

“If the America people ever allow private banks to control the issuance of their currencies, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered.

The Ninth Circuit Court adjudicated in 1982:

“Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Reserve Banks are not federal instrumentalities for purposes of the FTCA, but are independent, privately owned and locally controlled corporations.”
– Lewis vs. U.S., 680 F. 2d 1239, 1241]

Congressman Louis T. McFadden, Chairman of the House Banking and Currency Committee, delivered a speech on the floor of the House of Representatives, June 10, 1932:

“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.  

Some people think the Federal Reserve Banks are U.S. government institutions.  They are not government institutions.  They are private credit monopolies; domestic swindlers, rich and predatory money lenders which prey upon the people of the united States for the benefit of themselves and their foreign customers.  

The Federal Reserve Banks are the agents of the foreign central banks.  

The truth is the Federal Reserve Board has usurped the Government of the United States by the arrogant credit monopoly which operates the Federal Reserve Board.” End of quote

Congressman Wright Patman, Chairman of the House Banking & Currency Committee, speech on the House floor, 1967:

“In the united States we have, in effect, two governments….We have the duly constituted Government….Then we have an independent, uncontrolled and uncoordinated government in the Federal Reserve System, operating the money powers which are reserved to Congress by the Constitution.”

Teddy Roosevelt said:

“These international bankers and Rockefeller-Standard Oil interests control the majority of newspapers and the columns of these papers to club into submission or drive out of public office officials who refuse to do the bidding of the powerful corrupt cliques which compose the invisible government.”

Americans have to ask themselves why they were not taught the truth about the Federal Reserve in school.

The US Congress initially defined a lawful money “dollar” as being and consisting of (at least) 371.25 grains of pure silver.  Before 1965, anyone could exchange one paper dollar for one real silver dollar.  

However, in 1965 the united States’ mint stopped minting silver dollars.  When this occurred inflation began to skyrocket.  Now it takes an entire fist full of paper dollars (i.e., “Federal Reserve Notes”) to buy one real silver dollar.  

It now takes two working parents to support a family and the national debt is shooting over 12 trillion dollars!  And this is not even counting the private debt by individuals and corporations, which is somewhere over 50 trillion dollars.

The paper and digital currency that bankers create out of thin air is backed by nothing. The more paper “dollars” they roll off the printing presses or digital “dollars” created by computers, the less each one is worth.  Therefore, it takes more of ’em to buy the things people need, so the price of everything has to go up and up and up in endless inflation.  

Wages for most people will not increase fast enough to stay ahead of the game.  But not to worry, the international bankers have created plastic credit cards – VISA, MasterCard, American Express etc., to help the people out.  Of course, they don’t bother to tell us that they do not create enough paper/digital currency to pay off the debt plus interest so mathematically the economy will eventually collapse as has always occurred in history with paper currencies.

The Federal Reserve system was created by international banking families such as the Rothschild, Wartburg and Rockefeller.  This international banking cartel creates “money” out of thin air.  It only costs them a few cents to print each Federal Reserve Note “dollar bill”, and then they “bill” the American people for the full face value of the note.  

To add insult to injury, they charge Americans interest to borrow their so-called “money”.  If you or I did this, we would be arrested for counterfeiting and fraud.  This system was instituted gradually, starting with the Civil War and culminating with the fraudulent passage of the Federal Reserve Act in 1913.

The passage of the Federal Reserve Act was unconstitutional because:

1) the US Constitution prohibited “bills of credit” (i.e., paper notes) and

2) the US Constitution would have to be amended to go off the silver and gold coin standard for money.  The US Constitution, the supreme Law of the Land, can only be amended pursuant to Article V.  The US Constitution cannot be amended by statute.  These unlawful actions by a criminal Congress remind me of a quote by Alfred E. Neumann of Mad Magazine fame: “America is that land which fought for freedom and then passed laws to get rid of it.”

The Federal Reserve is also a monopoly– in a country where monopolies are supposed to be illegal.  

The US income tax department – Internal Revenue Service (IRS) – deposits people’s income tax payments directly in the Federal Reserve Bank (not in the United States Treasury).  Therefore, the Internal Revenue Service (IRS), an unconstitutional entity, is merely the collection agency for the international bankers.  

Over the years the IRS has become a tool of the elite banking families to financially attack and/or imprison people who expose the Federal Reserve.

If you take out a paper dollar and look at it, you will notice that it states at the top of the “bill”:  “FEDERAL RESERVE NOTE”.  A “note” is, by definition, an “instrument of debt” and “evidence of debt”.  

According to BLACK’S LAW DICTIONARY (Sixth Ed.) “MONEY” is defined:  

“In usual and ordinary acceptation it means coins and paper currency used as circulating medium of exchange, and does not embrace notes, bonds, evidences of debt, or other personal or real estate.”  

Now this may come as a shock to some people, but those paper “Federal Reserve Notes” are not money and they are not dollars.  Federal Reserve Notes are merely an informal document acknowledging debt.   There is nothing backing these “bills” except debt.  However, people voluntarily use them as instead of money and as dollars.  The key word is “as” – The smallest words can have the biggest meanings.

Banks can create this phony “currency” out of thin air.  Banks can loan out “currency” that they don’t even have.  When you apply for a loan from a bank, the bank does not have anything to back up that loan because they are allowed to loan out about 7 to 10 times more “currency” than they have on deposit.  

This is not mere speculation; this is a matter of court record, testimony under Oath, by a former lawyer for the Federal Reserve.  In other words bankers create “currency” with just the stroke of a pen or the keystroke of a computer.  These bankers then charge you “interest” to borrow this “currency”, which is nothing more than some numbers typed on a piece of paper!  If American People ever did this they would be spending many years in an US federal prison.  

Unfortunately, they do not print enough currency to pay the interest so more pseudo-dollars must be borrowed to pay off the interest, resulting in ever-increasing debt that cannot be paid.” End of quote

Countless preemptive wars were waged, and many political and physical assassinations of leaders and Presidents in the USA were direct results of preserving this privately owned Federal Reserve Bank.

Seek knowledge and get engaged to change mankind’s lot.

Note 1: The article is a section of a lengthy reply by Nalliah Thayabharan in response to my post: https://adonis49.wordpress.com/2012/05/15/super-nationalist-zionism-contributed-to-the-rise-of-the-third-reich/

Privately owned Federal Reserve Bank: How the Rothschild family controlled the printing of the Dollars?

The US British colonies had the right to print their own currencies before they snatched their independence. Benjamin Franklin was ambassador in France and delivered a speech in London. He explained how the colonies developed and prospered by issuing money as the internal market expanded to facilitate transactions.

The Rothschild family got the message clear and set about to acquiring the monopoly of printing the US money.

In 1804, Alexander Hamilton, US finance minister and aristocrat during President Thomas Jefferson, coerced Congress to sign a charter with the Rothschild financier family to print US currencies.

This decision came as a price for England loaning Jefferson the necessary money to purchase the Louisiana Territory (all the States bordering the Mississippi River) from Napoleon Bonaparte in 1803.

In 1811, the charter for the Ashkenazi Rothschild family owned the first Bank of the United States and managed to be in control of the US money supply. This control expired and the US Congress voted against the renewal of the charter.

Andrew Jackson, later the 7th President of the US from 1829 to 1837, said:

If the US Congress has a right under the US Constitution to issue paper money, it was given them to use by themselves, not to be delegated to individuals or corporations.”

Nathan Mayer Rothschild was not amused and he stated: “Either the application for renewal of the charter for the bank is granted, or the United States will find itself involved in a most disastrous war.”

Andrew Jackson’s response to this was “You are a den of thieves vipers, and I intend to rout you out, and by the Eternal God, I will rout you out.”

Nathan Mayer Rothschild replied:  “Teach those impudent Americans a lesson. Bring them back to colonial status.”

In 1812, backed by the Rothschild’s money, the British declared war on the United States, entered the Capital Washington and set fire on it.

The Rothschild’s plan was to cause the United States to build up such a debt in fighting this war that they would have to surrender to the Rothschild family and allow the charter to be renewed.

In 1816, during President James Monroe, the charter for the Bank of the United States was renewed for another 20 years and the  Rothschild recovered the Control of the US money supply again.

The British war against the USA therefore ended with the deaths of thousands of British and US soldiers, but the Rothschild’s got their bank.

In 1819, the Bank cut-off all credits to the settlers in Ohio and the North-West territory and generated the first big financial crisis.

In 1861, President Abraham Lincoln (16th President of the US from 1860 till his assassination in 1865) approached the Rothschild’s to try to obtain loans to support the ongoing American civil war. The Rothschild’s agreed, provided President Abraham Lincoln allows them a Charter for another US central bank, at interest of 24% to 36% on all monies loaned.

President Abraham Lincoln was very angry about this high interest rate and so his government printed its own debt free money and informed the public that this was now legal tender for both public and private debts.

By April 1862, $450 million worth of President Abraham Lincoln’s debt free money had been printed by the US government and distributed. Lincoln stated:

We gave the people of this republic the greatest blessing they ever had, their own paper money to pay their own debts.”

That same year, The Times of London publishes a story containing the following statement:

“If that mischievous financial policy, which had its origin in the North American Republic, should be become indurated down (be rooted) to a fixture North-West territory, then that government will furnish its own money without cost. It will pay off debts and be without a debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the history of civilized governments of the world.

The brains and the wealth of all countries will go to North America. That US government must be destroyed or it will destroy every monarchy on the globe.”

In 1863, The Rothschild’s used John D. Rockefeller, one of their agents in America, to form an oil business called “Standard Oil“, which eventually took over all of its competition.

In 1864, President Abraham Lincoln discovered that the Tsar of Russia, Alexander II (1855 – 1881), was having problems with the Rothschild’s for refusing their continual attempts to set up a central bank in Russia. President Lincoln asked the Tsar for help in the Civil War and the Tsar sent part of his fleet to anchor off New York and the other part off California.

The Tsar made it clear to the British, French and Spanish that if they attacked either side, Russia would take the side of President Lincoln. Lincoln subsequently won the Civil War.

In 1865, in an a statement to Congress, President Abraham Lincoln stated,  “I have two great enemies, the Southern Army in front of me, and the financial institution in the rear. Of the two, the one in my rear is my greatest foe.” Later that year, President Lincoln is assassinated.

The US Federal Reserve, an owned private institution, was created on December 23, 1913.

It was planned at a secret meeting in 1910 on Jekyll Island, Georgia, by a group of Zionist bankers and politicians. The power to print money was transferred from the US Government to a private group of Zionist bankers.

The Federal Reserve Act is hastily passed just before the 1913 Christmas break.

Congressman Charles A. Lindbergh Sr. warned: “This act establishes the most gigantic trust on earth. When the President signs this act the invisible government by the money power, proven to exist by the Money Trust Investigation, will be legalized.”

US President John F. Kennedy planned to terminate the privately owned Federal Reserve System. In 1963, he signed Executive Orders EO-11 and EO-110, returning to the government the responsibility to print money, taking that privilege away from the Rothschild.

Shortly thereafter, President John F. Kennedy was assassinated.

Another myth that all Americans live with is the charade known as the “Federal Reserve.” It comes as a shock to many to discover that it is not an agency of the United States Government.

The name “Federal Reserve Bank” is not federal, nor is it owned by the government. It is privately owned.  Its employees are not in civil service. Its physical property is held under private deeds, and is subject to local taxation.

It is an engine that has created private wealth that is unimaginable, even to the most financially sophisticated.

It has enabled an imperial elite to manipulate US economy for its own agenda and enlisted the US government itself as its enforcer.

Federal Reserve Bank controls the times, dictates business, affects Americans’ homes and practically everything in which Americans are interested.

It takes powerful force to maintain an empire, and this one is no different.

The concerns of the leadership of the “Federal Reserve” and its secretive international benefactors appear to go well beyond currency and interest rates.

Alan Greenspan, served as Chairman of the Federal Reserve from 1987 to 2006, stated at the annual Dinner and Francis Boyer Lecture of The American Enterprise Institute for Public Policy Research on December 5, 1996:

“Augmenting concerns about the Federal Reserve is the perception that we are a secretive organization, operating behind closed doors, not always in the interests of the nation as a whole. This is regrettable, and we continuously strive to alter this misperception.”

The privately owned Federal Reserve has confused the public, lied to them and stole their gold and silver.

All the perplexities, confusion and distress in America arise, not from defects of the Constitution, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation.

Of all the contrivances devised for cheating the laboring classes of mankind, none has been more effective than that which deludes him with paper money.

After many years of blundering toward it, and only a few months before the beginning of the World War 1, Rothschild found the formula for the most efficient credit machine that was ever invented. This was the Federal Reserve System.

Most people are unsure of the meanings of words such as money, dollar, wealth, inflation and credit. The average person would be very surprised if they knew how the money system used to work compared to how it operates now.

The essence of psychological warfare is to confuse the meaning of words, and infiltrate the mind with conflicting concepts. The use of the word Federal in the name federal Reserve leads the public to believe that the Federal Reserve is a government institution, when it is really a private corporation owned by foreign and domestic banks and operated for profit.

The Federal Reserve controls America’s money supply and interest rates, and there by manipulates the entire economy, in violation of

1. Article 1, Section 8 of the United States Constitution that expressly charges Congress with power to coin money and regulate the value thereof, and.

2. Article 1, Section 10 of the constitution says “No State shall make any thing but gold and silver Coin a Tender in payment of Debts.”

Over time, gold and silver coins were removed from American money supply and removed as backing for American paper currency and replaced with debt (or credit).

The definition of dollar has changed to hide the fact that a dollar is not money, but a unit of measurement for gold and silver coin. For example:

1. Title 12 United States Code Section 152 says: “The terms lawful money or lawful money of the United States shall be construed to mean gold or silver coin of the United Sates.”

2. Title 31 United States Code, Section 5101 says: “The money of account of the United States shall be expressed in dollars.”

The recent equivalent to the goldsmith’s receipt for gold is the Federal Reserve Note. The word “Federal” implies Federal government, but the Federal Reserve is a privately owned corporation. The word “Reserve” implies that something gives the paper receipt value, but no gold or silver backs this paper.

The word “Note” implies a contract, because legally a note must state who is paying, what is being paid, to whom and when.

Most people say something like, “I have a dollar bill”. But what is a bill?

A bill is a receipt of a debt owed by one person or company to another. Therefore, a “dollar bill” is a receipt (or bill) of debt of one dollar that is owed.

From 1914 to 1963, Federal Reserve Notes never claimed to be money, nor did they claim to be dollars. A note for five dollars read: “The United States of America will pay to the bearer on demand five dollars.”

How can a promise to pay five dollars be five dollars?

To the left of the President’s picture and above the bank seal, it said: “This note is legal tender for all debts public and private, and is redeemable in lawful money at the United States Treasury or at any Federal Reserve Bank.”

In 1963, the Federal Reserve began to issue its first series of notes without the promise, while taking notes with the promise out of circulation. How can paper become what it promises by removing the promise?

To the left of the President’s picture and above the bank seal, it now read: “This note is legal tender for all debts public and private.”

A note is a proof of debt. It is not possible to pay off a debt with a debt. No debt can be paid in full unless paid in gold or silver, coined and regulated in value by Congress. The name “Federal Reserve Note” is a fraudulent label since each word claims to be something that in reality it is not.

By removing the promise to redeem the note in lawful money, the Federal Government in cooperation with the Federal Reserve, eliminated the monetary system of the United States as established by the Constitution and replaced it with something totally different.

If you are holding a one dollar Federal Reserve Note, the question is: “what is it one dollar of?

The answer is absolutely nothing. The number one measures no substance.

The only thing that give paper money value is the confidence people have in it as is stated in chapter 30 of our textbook.

Federal Reserve Notes are only accepted because people believe they have value.

Note:  The article was from Nalliah Thayabharan in response to my post: https://adonis49.wordpress.com/2012/05/15/super-nationalist-zionism-contributed-to-the-rise-of-the-third-reich/

Black Swan model: Can rare catastrophic events in complex man-made systems be controlled?

Note:  The application of the Black Swan model to the “Arab” Spring revolts and in southern Europe, and the financial crisis will be explained in the follow-up article.

Warning! Pay closer attention to the “predictable” but unexpected rare calamitous events!

Black Swan is a term coined after discovering a black swan a couple of years ago.  People firmly believed that all swans were white:  A few might have observed a black swan but refused to identify it as a swan; or black swans are common sight in particular regions and people had no idea that black swans are considered rarity all over the world and might be purchased for their weight in gold to be raised in zoos!

You know the adage: “If an event can occur, it will happen“, meaning, it does not matter how low the predicted probability of occurrence of the rare events, it will strike “unexpectedly”.  If there is a chance in a million for an asteroid to smash onto earth, an asteroid will fall on our head: Asteroid did fall and transform earth several times in the last four billion years.

Just think on the even lower probability of “being who we are, as an individual”.  You could naturally have been an inanimate object, a plant, another animal species, born somewhere else, lived after birth, survived to be 5 year-old…

The Black Swan theory states: “In complex systems, especially man-made complex systems, it is not feasible to comprehend all the interactions among the hundred of variables affecting outcomes. In man-made systems, we have to allow natural fluctuations that are at work.  The rare predicted calamitous events  will strike unexpectedly, and we will fail to react accordingly and adequately if we consciously avoid to consistently take them into consideration in our analysis and reports.”

The unexpected events cannot be analyzed as odds in card games or casino games:  Human behavior with thousands of variability in moods, emotions, conventions, conviction, personal experiences… cannot be predicted as games are.

Natural sciences such as engineering, physics, chemistry, architecture, astronomy, planet explorations…are within the linear domain of thinking life and the universe.  Social and human sciences, epidemics, economics… are within far more complex domains, and the linear methods that mankind was trained to resolving problems and fluctuations are not adequate to be transposed to complex systems.

We are better equipped to predicting lunar eclipses, but not stock evolution, or foreign political upheavals.  It is NOT the “last grain of sand that crashed the structure or the bridge…”  The last grain was the catalyst for the failure but not the cause.  The fault is in the designed system, and not in its components.

For example, the “subprime” was not the cause of the financial crisis in 2008: It was just the latest among the catalysts of hazardous financial tools.  The cause was a faulty financial system that the political decision-makers failed to redesign in due time, requiring courageous and determined positions to ironing-out the serious problems growing out of proportions in risky behaviors, in an unregulated system, and in instantaneous pouring of massive liquidity to “stabilizing” a fragile outmoded designed and faulty system.

There is this trend of confusing catalysts with causes:  The designers of a system do not necessarily have this confusion, but the political decision-makers and owners of the systems that purposely confuse the general public as catastrophes strike.  Two psychological biases are at the sources of confusing catalysts with causes:

The first bias is our illusion in our capacity to control volatility in man-made complex systems. For example, we focus on the “normal working” of a system and we delete from our analysis and reports the minor fluctuations or rare events that are occasionally occurring.  In a sense, if there are no variations, there are no information worth controlling.  This tendency of feeling very comfortable dealing with only a “stable” system leads to forgetting the consequences of calamitous rare events.

The second psychological bias is the illusion that acting on a factor is better than doing nothing and letting the system work-out its fluctuations.  For example, authorities think or are pressured to think that they were elected or appointed to act and react on any variations, instead of doing nothing when fluctuations are within the norm.  Consequently, it is these actions that usually exacerbate a system going bad and out of proportion.  For example, Alan Greenspan and later Ben Bernanke lowering the central bank interest rates to almost negative rates in order to “stabilize” a fragile faulty financial system that needed major redesign.

The Fukushima disaster of the melting down of three nuclear reactors is a typical example.  It is NOT the earthquake and the tsunami that are the causes of the meltdown:  They were the catalysts.  The cause is a faulty designed system for generating electricity that is highly dangerous and built in a region frequently exposed to high levels of earthquakes and tsunami.  The economic risk trade-off was meant for normal functioning of a nuclear plant, and the consequences of  a serious event striking was swept under the carpet for three decades.

The owner of the power nuclear plant and the government blamed natural phenomena as the causes and toned down the lethal exposure to radiation for over a month.  Why?  It is better not scare the people! What?  It is better to let people die peacefully than give them the proper information to decide on their own plan of actions?

It is normal for mankind to be wary of the volatile aspects in life.  In the past, mankind managed to block-out drastic fluctuations from their consciousness in order to survive:  Mankind figured out the major trends in hazard in order to foresee and adopt simple models they could control for administering and managing their lives and the survival of the community.

The behavioral model should allow normal fluctuations in behavior to react within normal realities.

Simple models have been replaced by complex models, but within the past linear mentality and comprehension.  You may understand a few interactions among three main variables, but when man-made design inserted hundreds of volatile factors in a system, we should no longer expect to have total control on the complex system.

If we are not ready to design reasonable fluctuations in a system, and be ready to take seriously the problems of rare occurrences, and be trained to react to calamitous rare events, then it is wise to stick to simple systems that individual operators can understand and can control.

A man-made system should not be designed to eliminate all the faults, ill-behavior, and limitations of mankind, but to factor them in, and be trained to react adequately to these variations:  The operator has to be constantly motivated to learn and be vigilant to minor fluctuations and comprehend the main interactions.

Note 1: Nassim Taleb, a mathematician, was a trader and worked for 20 years as consultant to large investment banks in New York and London. He created Empirica LLC for trading.  He is engineering professor at the polytechnic institute at the University of New York.  Taleb published “Savage hazard” and “The Black Swan:  The power of the unpredictable.”

Note 2: Mark Blyth is a Scottish professor of international political economy at the university of Brown (Rhode Island).  He published “Great Transformation: Economic ideas and institutional change in the 20th century”.  A new book is to be released “Austerity: The history of a dangerous idea


adonis49

adonis49

adonis49

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