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Blondie's Freegold Summary Kindle Version

Blondie's Freegold Summary Kindle Version

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Published by rmullis

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Published by: rmullis on Jan 15, 2012
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01/15/2012

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Freegold 
The essays listed below are all about the concept of Freegold, and are best read in the order in which they were published (ie. numericalorder) for ease of comprehension. I would like to emphasize thatthese essays reflect my personal understanding of the topic, andrepresent my best attempt to convey my understanding at that time.
 
Freegold 1: An Introduction
 
Freegold 2: The Basic Mechanism
 
Freegold 3: The Price of Gold is Arbitrary 
 
Freegold 4: The Consolidation
 
Freegold 5: Gold Is Not Money 
 
Freegold 6: Individual Sovereignty Analogy 
 
Freegold 7: It's the Value, Stupid
 Freegold 8: A Freegold Standard Freegold 9: Gold as Pure Equity Freegold 10: Paper, Pyramids & Paradigms 
For more extensive coverage of this topic, a visit toFOFOA andThe Flow Of Valueis recommended.
 
 All Thoughts on Freegold as linked above originate from ways in which to perceive the monetary system as originally posted by  AnotherandFriend Of Another, which are obviously also
 
recommended reading.
 
 At all times in the contemplation of this topic it would be helpful to bear in mind that the Freegold paradigm is actually deceptively simple. The difficulty in comprehension lies in the existing paradigmfrom which one is attempting to view Freegold. Existing beliefsregarding the nature of value and money and their influence uponpeople and their behavior may need to be re-evaluated, and perhapssuspended either temporarily or permanently.
 
Freegold 1: An Introduction 
On Why America's 234th Birthday May Not Have Many More ToFollow
 
byMatthew Hinde, July 4th 2010
 
 I'm sure you know that the primary reason for the American War of  Independence was to break from the English banking system of the time. The English Banks wanted the US government and corporations to borrowmoney from them in order to trade. This is really what the founding fathersof America fought against and won independence from. And so after the warhad been won the US financial system was controlled, and all US Dollarswere issued, by the US Government. The value of each Dollar was fixed (i.e.there was no inflation) and ALL the banks operated within the financial system. The most significant aspects were that the value of a dollar was
 
FIXED and that the commercial banks were not empowered to createmoney. This is really what the English banks wanted to be in control of - the power to create money and lend it to the US entities at interest. After the establishment of the Federal Reserve in 1913, however, the bankers finally got their way in the US. They took control of the US financial systemand Fractional Reserve Banking became a reality in the US. What thismeans is that the financial system was essentially privatized and thecommercial banks started to create money “out of thin air” by taking indeposits and then using these deposits to empower them to make loanssignificantly in excess of those deposits. I'm sure you can see how, throughthis scheme, the banks had shifted themselves out of a situation where theyhad primarily been an intermediary between savers and borrowers in theeconomy, to a situation where they had the authority to create and lend money into the economy.Practically what this has meant to the American people is that as the bankshave created additional units of currency, the value of their savings has beenconsistently undermined and devalued over time. One could argue that thishas been compensated for by interest being paid on peoples’ savings,however the fact of the matter is that this rate has been manipulated downby the Federal Reserve over time, resulting in significant asset priceinflation. In addition to this qualitative devaluation of money, as the capital and interest repayments of existing loans has been made, liquidity has beendrained out of the economy thereby creating monetary shortages on "mainstreet". So I’m sure you can see from this that the American people havebeen hit on two sides, firstly the value of their money has been consistentlydevalued, and secondly the quantity of money in the real economy has alsodecreased relative to existing debt levels.From a banking perspective the only real concern for them was the second issue highlighted above (i.e. the fact that the quantity of money in the real economy was decreasing relative to the existing debt levels). This had theeffect of reducing the probability that their loans would be repaid. In dealingwith this issue the US Government and the Federal Reserve de-linked money from gold in 1971 and since the early 1980s they have also consistentlyreduced interest rates. The intention behind these efforts was to ensure that  firstly, there would be nothing to limit the growth in the money supply and secondly, to reduce the monetary withdrawals (via interest repayments) out of the system. These two steps have both prolonged the functioning of the

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