Future Banking Fears in US and Canada

[calmissile]

These acticles crossed my desk today.  I have no idea if it is conspiracy mongers or valid warnings.
In any case, it's worth reading.

http://www.globalresearch.ca/the-confiscation-of-savings-in-canada-cyprus-style-bail-ins-proposed-by-ottawa-government/5329263

http://www.infowars.com/department-of-homeland-security-can-seize-gold-silver-guns-in-safety-deposit-boxes/

[Slumba]

If you don't hold it, you don't own it.

During the first gold confiscation, by FDR, only gold in safety deposit boxes and gold certificates were taken. There was not 1 case of someone holding a gold coin, having to turn it in or being prosecuted.

Canada is in far more precarious shape than most Canadians think, they had to bail out their banks in a stealth way through CMHC and other ways.

[Shadow]

You can always put your money offshore in Cyprus, they give great interest rates.

I was reading an interesting discussion where it was stated that due to fractional reserve banking, the moment you put your money in the bank it has mostly disappeared in to a loan.
Time to go back to cash economy although..... ever checked how much cash money is actually covered by gold as it is supposed to be ?

[Faux Pas]

You can always put your money offshore in Cyprus, they give great interest rates.

I was reading an interesting discussion where it was stated that due to fractional reserve banking, the moment you put your money in the bank it has mostly disappeared in to a loan.
Time to go back to cash economy although..... ever checked how much cash money is actually covered by gold as it is supposed to be ?

Fractional Reserve banking is just a smaller part of the bigger problem. That being a central banking system that is in place all over the world. It is the strength of these entities that dictate events all over the place and Cyprus a small burp, was just another one.

[Shadow]

Fractional Reserve banking is just a smaller part of the bigger problem. That being a central banking system that is in place all over the world. It is the strength of these entities that dictate events all over the place and Cyprus a small burp, was just another one.

The central banking system by itself is not a problem, nor is fractional reserve banking. The actual problem is the greed and willingness to take risks based on expecting perpetual growth.
Instead of spending/investing the money they have, people have grown accustomed to spend the money they presume to receive in the future. When this goes wrong on a personal scale it is just a personal drama, but when this goes wrong in corporate banking it creates a pretty big mess.

[SANDRO43]

ever checked how much cash money is actually covered by gold as it is supposed to be ?

The Gold Standard was ended by Nixon in 1971, IIRC.

[Faux Pas]

The central banking system by itself is not a problem, nor is fractional reserve banking. The actual problem is the greed and willingness to take risks based on expecting perpetual growth.
Instead of spending/investing the money they have, people have grown accustomed to spend the money they presume to receive in the future. When this goes wrong on a personal scale it is just a personal drama, but when this goes wrong in corporate banking it creates a pretty big mess.

Central banking such as the Federal Reserve in the U.S. which is privately owned, not government btw, controls the flow of cash worldwide. They do increase or restrict it's flow where they see fit and in their own interest. Every dollar, pound, ruble or shekel they put into the system has debt attached to it

[Faux Pas]

The Gold Standard was ended by Nixon in 1971, IIRC.

That is correct but, currency is the U.S. ceased to be backed buy gold or silver in the 1920's.  It was the Wilson Administration and some midnight legislation that stopped that. This permitted the Fed Reserve to print as much or as little money as they wanted.

[Shadow]

Central banking such as the Federal Reserve in the U.S. which is privately owned, not government btw, controls the flow of cash worldwide. They do increase or restrict it's flow where they see fit and in their own interest. Every dollar, pound, ruble or shekel they put into the system has debt attached to it

A central banking system by itself should not be the culprit as it has been around long enough.

The trouble lies in the 'bubble' model where people count on future growth to spend money today. This model has been used to sell mortgages and other financial products on dubious ground, as well as in many products within the financial market.

The US has already (partially) taken care of the 'bad debts' that emerged due to this, the EU is still in 'lets save them' mode. The operation in Cyprus where the two worst banks were forced in to liquidation, but with a partial recovery of the insured funds, might not be a stand-alone case.
 

[calmissile]

It was perhaps my naive understanding that the Federal Reserve or the US Government must sell bonds or other debt insturments in equal amounts to every dollar they print.  Is this not correct?

If I remember correctly, I recently read that for QE, they only had to cover a small percentage in debt intsruments.

Is there really anthing that backs the currency?

[Gylden]

Well does is it still printed "In god we trust"?
Or did that go out the window in the interest of PC?
 
LOL

[Gylden]

Gold isn't safe either.....Executive Order 6102
 
 

[calmissile]

Yes it still says In God We Trust.   I suspect soon it will be replaced with Mohamad We Trust.

[Chicagoguy]

See if you can find what Davis Stockton said a few days ago. He is either a genius or crazy.

[Gator]

It was perhaps my naive understanding that the Federal Reserve or the US Government must sell bonds or other debt insturments in equal amounts to every dollar they print.  Is this not correct?

If I remember correctly, I recently read that for QE, they only had to cover a small percentage in debt intsruments.

Is there really anthing that backs the currency?

The Fed has many arrows in its quiver.  And it can be done via a computer.

[Slumba]

Is there really anthing that backs the currency?

That is really the key question isn't it?

Louis McFadden was a banker and PA congressman who died under strange circumstances.  He made many speeches  on the evils of the Federal Reserve.

You can read some of it here:  http://modernhistoryproject.org/mhp?Article=McFadden1932

AT the bottom of the linked page you will find this quote:

The wealth of the United States and the working capital of the United States has been taken away from them and has either been locked in the vaults of certain banks and the great corporations or exported to foreign countries for the benefit of the foreign customers of those banks and corporations. So far as the people of the United States are concerned, the cupboard is bare. It is true that the warehouses and coal yards and grain elevators are full, but the warehouses and coal yards and grain elevators are padlocked and the great banks and corporations hold the keys. The sack of the United States by the Federal Reserve Board and the Federal Reserve banks is the greatest crime in history.

[Gator]

If the Fed had done nothing over the past 5 years, our economy would be in the tank.  Nevertheless, one day we must pay the piper.   The recent employment data reveal the piper will keep playing for a long time.
 
A key problem is that our monetary and fiscal policies are not aligned.   Rather than focusing on job creation, our government has made government bigger.   What's that?  Oh, it is Bush's fault.   How many years before somebody else is to blame.   
 
The business of America is business.  We are in the beginning stages of a major  energy revolution, headed towards self-reliance, with American factories eventually paying 1/3 to 1/2 the cost for energy compared to Europe.  This will start kicking in around 2015-2017, sooner if the government had been supportive rather than confounding.
 

[ML]

Is there really anything that backs the currency?

Doug, there needn't be anything backing a currency.
Before gold, silver and paper money, some societies used shells as currency.

A currency has and retains it's value . . . if people believe that other people will accept this currency for future purchase of goods and services.

The key is always trust.  And there are probabilities attached to trust, even as common folk do not know how to talk in terms of probabilities. 

But all persons have gut feelings about the likelihood that one currency will be relatively more acceptable in the future (to purchase goods and services) as compared to another currency or any other currency.

Backing by gold or anything else is not necessary at all.

[Slumba]

Doug, there needn't be anything backing a currency.
Before gold, silver and paper money, some societies used shells as currency.

A currency has and retains it's value . . . if people believe that other people will accept this currency for future purchase of goods and services.

The key is always trust.  And there are probabilities attached to trust, even as common folk do not know how to talk in terms of probabilities. 

But all persons have gut feelings about the likelihood that one currency will be relatively more acceptable in the future (to purchase goods and services) as compared to another currency or any other currency.

Backing by gold or anything else is not necessary at all.

My view is that FRNs have value because it is a requirement to pay taxes in FRNs.  It is no accident that the creation of the Fed and the passage of the income tax happened shortly after each other - you need to create the demand, and forcing people to pay taxes does that.  In fact, I cannot find in my reading of monetrary history, even one case where a fiat currency was set up by any government, without taxes being imposed and payment required in that same currency. 

And, the value of an FRN "dollar" has dropped 95-98% from 1913 to now. 

Whenever you see a natural limit on something in a society, that something can be used as currency ... thus shells, in some societies certain large rocks which were rare (you can't make a big rock, only nature can). 

Gold and silver have a lot going for them, in that they are limited by their composition in the Earth's crust, require real work to get out of the ground, etc. and most importantly - no government can conjure them up out of thin air.

I am much more on the side of the "hard money" guys because savers, not spenders, should be rewarded in a society, from my view. 

As was Thomas Jefferson and most of the other Founding Fathers, who viewed paper currency as evil.
 

[SANDRO43]

Before gold, silver and paper money, some societies used shells as currency.

Beautiful cowrie shell (Cypraea mappa) money from Timor:

Can be fashioned as part of a necklace for easy portability , a solution also adopted by the ancient Chinese with their holed coins:

They didn't need the hassle of owning a Ferrari to show off their wealth, only a strong neck .