Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

Economic Crossroads Means Opportunities for Local Currencies

Currencies / Fiat Currency Dec 10, 2009 - 01:30 PM GMT

By: Richard_C_Cook

Currencies

  • The crisis of 2008-2009 exposed the U.S. financial system as being unstable, subject to abuse, and tending to favor the rich while putting everyone else deeper into debt.

  • The housing bubble was based on the biggest credit inflation in history. It raised the prices of homes to unprecedented levels but created the deepest recession in a generation when it collapsed. $6 trillion in wealth has now simply disappeared.
  • Meanwhile, unregulated global capitalism continues to concentrate wealth, outsource jobs to the cheapest possible labor markets, accelerate U.S. unemployment, and destroy local and regional economies.
  • Even if the recession results in a modest recovery, it is likely to be of the “jobless” variety, or else jobs at low wages, with the U.S. still the most wasteful, resource-intensive, debt-oriented economy in history. A budget for war expenditures of almost $1 trillion doesn’t help.
  • Steps toward recovery are being fueled by enormous increases in the national debt due to federal budget deficits now over $1.4 trillion a year, with the U.S. economy carrying a total debt load of $200,000 for every man, woman, and child in the nation.
  • The huge debts of government at all levels, combined with reliance on government employment as a Keynesian economic driver, have raised the total government tax and fee burden (federal/state/local) to up to 40-50% of an individual’s income.
  • The “elephant in the room” is the debt-based monetary system run by the Federal Reserve, which since its inception in 1913 has based the U.S. money supply almost entirely on bank lending, including lending to government for its deficits. The Federal Reserve Act gave the banking system the incredible privilege of creating money out of thin air and charging interest for its use. The federal government now pays the banking system, trust funds, and investors, including foreign governments, almost $400 billion a year just for interest.
  • When you add it up, interest and taxes today probably consume over half the entire U.S. gross domestic product.
  • Final elimination of the gold standard in 1971 removed any objective measure of the value of Federal Reserve currency. Since then, the dollar has lost 85 percent of its value. Despite the rhetoric, government and Fed policies inflate the currency in order to pay off debt with dollars of less value.
  • Some members of Congress are trying to rein in the Fed, but so far with little success. Numerous proposals for monetary reform are coming from all quarters, but the power of the Fed and banking system in favor of maintaining the status quo is enormous.
  • With the power wielded by the privileges of big banking, combined with big government and its Keynesian deficit-based financial system, we have completely forgotten that time in our history when money was viewed as a medium of exchange for producers of goods and services. Prior to 1913, the creation and use of money was much less centralized and mainly served the marketplace.
  • The true purpose and meaning of money was rediscovered during the Great Depression when many businesses and local jurisdictions produced their own money in the form of scrip. Scrip is actually a more stable form of currency than bank-created fiat money where people are forced to accept the fiat money as legal tender. Also stable is the use of self-generated “trading units” by trade exchanges acting as producer currency coops. This is how the commercial “bartering” networks work.
  • Today a similar movement to the scrip of the 1930s has begun through the creation and use of legal alternative currencies. Today, though, we have computerized databases to facilitate trading.  This movement may be our best immediate hope of achieving a semblance of real economic democracy and restoring local/regional economic sustainability.

By Richard C. Cook
http:// www.richardccook.com

Copyright 2009 by Richard C. Cook

Richard C. Cook is a former U.S Treasury analyst who also worked in the Carter White House and for NASA and writes on public policy issues. His new book is We Hold These Truths: The Hope of Monetary Reform (Tendril Press 2009). His website is http://www.richardccook.com He is a member of the U.S. Basic Income Guarantee Network and has been an adviser to Congressman Dennis Kucinich and the American Monetary Institute http://www.monetary.org

Richard C. Cook Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules