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eco.ind.9.186: (mirmir) Fri 11 May 0 7 16:46 i'm reading this slowly and carefully, more later. http://www.foreignaffairs.

org/20070501faessay86308/benn-steil/the-end-of-nation al-currency.html?mode=print eco.ind.9.187: (mirmir) Sat 12 May 0 7 10:04 the article in Foreign Affairs magazine, is based on many unstated assumptions. the chief of which is the belief that a money based scheme of *geographical* go vernance and well-being can be sustained indefinitely, or even over centuries. when obviously, history shows us that it cannot. the second important unstated assumption is that growth of population, growth o f natural resource-depleting activity, and growth of money is a desireable princ iple for human societies. a third categorical error is the unstated assumption that ever more centralized and globalized flows of *money* (of whatever construction) are inevitable and s ustainable without catastrophic failures, and at some point, terminal failure. the unexamined and i believe, false, assumptions arise out of the unexamined co nsequences of mammon worship which has explicitly arisen in the west with the en d of status/class based economies, whose economic activities were controlled by traditional duties and obligations and concepts of honor and status and reciproc al relationships. and with the advent of technological artifacts which required vast systems of s pecialized labor in specialized factories producing vast quantities of goods, fa r more than could be absorbed by the local population, and whose entire purpose was export to distant lands and nations through monetized trade regimes. these schemes only seems to exist in the context of empire. and in earlier emp ires (i.e., rome with, india under the moghuls, russia and eastern euro pe under the romanov dynasties, china during its many dynastic periods) these ki nds of specialized export towns and farming areas were mediated primarily throug h status relationships such as slavery or serfdom. eco.ind.9.188: (mirmir) Sat 12 May 07 10:06 <scribbled by mirmir Sat 12 May 07 10:08> eco.ind.9.189: (mirmir) Sat 12 May 0 7 10:08 you know the way that Dune -- frank herbert's book series -- took as its model the spread of desert islam by the sword, this same kind of human convulsion is g oing to arise to repudiate money based rulership, which is the current global re gime of banks and money-based corporations and shadowy plutocrats and their dyna stic foundations. a system of money-based debt relationships at *all* levels. go down. and within a very few years. this is going to

eco.ind.9.190: (mirmir) Sat 12 May 0 7 10:12

the only force that seems to stand against the current global money-based debt system, is the currency of suicide and willingness to scorch one's own earth in order to retain the primacy of the status relationships and duties founded in is lam. i dont like the status relationships of islam, nor its definition of god, but w e should give them credit for their courage to stand against mammon. eco.ind.9.191: katie. (mirmir) Wed 20 Jun 07 11:44 i know how to tame mammon without exiling him. mammon must always wear the yoke of chance, and can never take her off. Lady Luck must always ride on mammon, and jerk his reins and pull his bit at regular and fateful rituals. this is how to tame mammon and keep civilization where m ammon is our fleet beast of all burden. eco.ind.9.192: katie. (mirmir) Mon 25 Jun 07 13:03 here's a scholarly, exhaustive and fascinating article on the first "official" coins as "official" money. and it makes clear that the purpose was not free market trade (as oft claimed) but rather to solidify the state's economic business, prestige and loyalty. the lydian king (father of croesus) who started the practice had a genius insight i nto the natural tools of the crown (not just the sword, but also the coin) and t he easy marriage of the crown with the marked coin as the only legal tender allo wed for all government payments and receipts. so i think we have to recognize, that whatever money has become, it was born as the first and most lasting symbol of sovereignty that passed among the people. hand to hand it passed as a ritual of obedience, cohesion and willing taxation , a peaceful symbol of the central authority. and the fact that it was made from electrum, rather than gold or silver, made t he lydian lions even more a power and tool of the state rather than of private c ommerce. eco.ind.9.193: katie. (mirmir) Mon 25 Jun 07 13:11 i think you'd have to consider the 150 years between 620 bc and 470 bc as the m ost fateful and important era in the evolution of civilization because of the or igination and founding of the political formats, legal systems, intact philosoph ical/religious institutions, and economic practices which informed all that came after. ---------------621 BC Draco institutes code of law in Athens, its first written constitution 610 BC Lydians of Asia Minor invent coinage; shortly afterward it spreads to Gr eek cities in Asia Minor, then Greek islands, then Greek mainland, then rest of world 600 BC Thales of Miletos, Ionia, Asia Minor, first philosopher in the Greek tra dition and "father of science"; offers naturalistic explanations of world 550 BC First coinage minted in mainland Greece, in Athens and Corinth

546 BC Cyrus the Great, founder of Persian Empire, conquers Lydia as well as Gr eek territories in Asia Minor 509 BC Monarchy in Rome is replaced by aristocratic republic 507 BC Kleisthenes ushers in the world's first democracy in Athens, with power shared by male citizens (excluded women, slaves, freedmen, and non-Athenians) 500 BC Buddha teaching in India, emphasizing non-craving for relief of sufferin g; Confucius and Lao-tzu teaching in China, the former emphasizing morality, the latter harmonious action [also zoroaster lived as contemp with buddha confuciu s and lao tzu] eco.ind.9.194: katie. (mirmir) Mon 25 Jun 07 13:13 and we see that the state has lived by its money, and now is in the process of dying by its money. eco.ind.9.195: katie. (mirmir) Sun 8 Jul 07 12:27 i'm reading a splendid book about money. i've had it on the shelf for over 8 years, and actually scanned the entire thing. so it will be easy to post excerp ts. it's really thrilling and satisfying to read. little nuggets. i quibble about some of his facts, but we are on the same hunt. " FROZEN DESIRE The Meaning of Money by James Buchan Also by James Buchan A PARISH OF RICH WOMEN DAVY CHADWICK SLIDE THE HOUSE OF SAUD (WITH DAVID HOLDEN AND RICHARD JOHNS) THE GOLDEN PLOUGH HIGH LATITUDES -----------------------------------------------------Frozen Desire the meaning of money James Buchan Farrar Straus Giroux/New York ============================================================ Farrar, Straus and Giroux 19 Union Square West, New York 10003 Copyright 1997 by James Buchan All rights reserved Printed in the United States of America Published in the United Kingdom by Macmillan Ltd, London, 1997 First American edition, 1997 Library of Congress Cataloging-in-Publication Data Buchan, James.

Frozen desire the meaning of money / James Buchan. p. cm. ISBN 0-374-15909-2 (cloth alk. paper) 1. Money ;History--;Miscellanea. I. Title. HG231.B79 1997 332.4;DC2 1 97-16 107 -------------------------------------------IN MEMORIAM CONRADI JOSTEN NOVESIENSIS 1912;1994 page i ======================================================= page ii Contents Introduction 3 1. Mineral Stones 17 2. Thirty Pieces of Silver 36 3. An Idea of Order in Borgo Sansepolcro 50 4. A Disease of the Heart 73 5. The Floating World 96 6. Mississippi Dreaming: On the Fame of John Law 127 7. Coined Liberty: His and Hers 152 8. Death in Dean St. 184 9. The Sheet of Glass 208 10. Mississippi Dreaming: Reprise 220 11. The Sinews of War 244 12. Money: A Valediction 268 Notes 283 Index 311 page ii ========================================================= page iii Tis of great use to the sailor to know the length of his line, tho he cannot wi th it fathom all the depths of the ocean. Tis well he knows that it is long enou gh to reach the bottom, at such places as are necessary to direct his voyage, an d caution him against running upon shoals that may ruin him. Our business here i s not to know all things, but those which concern our conduct. If we can find ou t those measures, whereby a rational creature, put in that state which man is in

the world, may and ought to govern his opinions and actions depending thereon, we need not be troubled that some other things escape our knowledge. Locke, An Essay Concerning Human Understanding page iii ============================================================= eco.ind.9.196: katie. (mirmir) Sun 8 Jul 07 12:41 but more and more i am convinced that money as the original creature of the cen tral authority, has never broken that leash. money, as we know it and as we use it, compels our obedience to the ideology of the central authority, even if it is only as near as city hall, or as far as Wa shington, D.C. trade is a by product; the essential relationship is money and central authorit y which competes against other authorities and uses money as its superior trump. remember money was invented for the purpose of paying required taxes to the cen tral authority, and for the central authority to pay for services and goods. it was a lighter and more flexible yoke than liege based services/goods, and fa r far less burdensome and more flexible than gift economies. so here we are with money from a central authority which has become invisible t o us, namely the central bank and the ultra-rich, and which is shielded from us. this is not democracy, this is a plutocracy in a sham of democracy. eco.ind.9.197: katie. (mirmir) Sun 8 Jul 07 12:46 (shekels btw, in the oldest en invented by in what is now zed and gone.) in the very oldest hebrew texts are not yet coins. rather shekels texts, are quantities, weights, of silver. coinage had not yet be the Lydian kings of phoenician & greek descent, where they lived Turkey, on top of the ruins of the goddess cultures, millennia ra

eco.ind.9.198: katie. (mirmir) Sun 8 Jul 07 15:14 buchan believes that the essential attribute of money is that it enables inchoa te desire to be reified. That is, that the best and most fundamental goodness o f money is that it can be used to purchase desires which we may already have, or which we have not yet imagined. now i grant his premise, because i have not fully examined it, however, he is m issing the constant, in the physics of money. and that constant is time. money's most essential attribute and sine qua non is that it permits time to pass. Money is based on freedom of delay, the abi lity to wait, to wait and see, to wait for opportunity and fortune, to wait for a better deal, to wait until you really need it. money is a device for skipping the passage of time. it is sort of a wormhole through time. eco.ind.9.199: katie. (mirmir) Sun 8 Jul 07 15:25 now we know that bankers understand this, the great bankers, the ones still in

business after 500 years-- a long time. a long wormhole. and we also know that interest based on the old formula Interest equals princip al times percentage interest rate times TIME, is a mug's game. a game that only creditors and bankers can win in the long wormhole, a game devised to eat up th ose who sell their labor and their productively (goods and intellectual property ) during the passage of the long wormhole. at the other end, the banker's have title to it all. they have acquired the "o wnership" of those good things, those valuable necessaries and those exquisite l uxuries, but they have created none of them. this does not seem to me to be a game that we should play--we, that is, we the people. eco.ind.9.200: katie. (mirmir) Sun 8 Jul 07 15:38 so let's consider how to harness the essential constant of money, which is the passage of time, into a game which is good for us. and we can do this by turning the bankers game on its head. instead of making a kind of money which retains its face value, and then intere st during the passage of the wormhole, must be paid to use it, for it to circula te as the blood of the society; instead of this convention of money--here is a new rule, which has been tried with very good results in the past. the new rule is demurrage money. this is money which depreciates its face valu e during the passage through the wormhole. so the only way to keep its *value* is to spend it quickly. it cannot be hoard ed, and it cannot be rented. now, consider if the sovereign government/the authority which can tax, and taxa tion is the essence of the human social group, where those who acquire through t heir own efforts, skill, labor, creativity, or through the institutions set up t o produce, are required to *share* or give to those who have less. and this do native relationship exists starting with the parent-child, all the way to the br ead and circuses of the roman empire, to our own imperfect social security and m edicare and unemployment, and all the other support and social safety net redist ributive programs, including religious and secular charity. these all have the nature of a tax from the haves to the have nots (or in many cases from the have-nots to the haves--but that is a corruption of purpose and m orality) so the government (in whatever format) always has the power to tax or redistrib ute. and it has the power to pay for goods and services, to requisition them i n exchange for the coin/currency/money of its own making. that we saw was the very first, the very first human use of money in the entire history of humankind. and the right of seigniorage is a principle perquisite of sovereignity. eco.ind.9.201: katie. (mirmir) Sun 8 Jul 07 15:46 so this power of sovereignty, namely seigniorage which has been in use in most money using societies since approximately 500bce, has two parts. 1. the sovereign issues money which carries the mark of the sovereign and whic

h must be accepted by those under the authority of the sovereign for needed good s and services. 2. often, but not always, the taxes/fees/duties levied by the sovereign must b e paid in the coin of the realm, which is its own currency. but those two powers constitute the bases of all modern national economies, and all modern domestic transactions. and this is where we are now, and these are our customs and usage and practices. eco.ind.9.202: katie. (mirmir) Sun 8 Jul 07 16:04 so here is the basic play of this game--the government issues a new money, some kind of new money which is like the face of a watch, and it tells you how much "value" or quantity of worth it contains, depending on how long it has been sinc e it was created & spent by the government into circulation. let's say it depreciates 1/4 percent per month, which is equivalent to 3% per y ear-- which is in line with long term growth rates in stable societies over the thousands of years. so this money-chip tells its value at all times, and the value decreases by reg ular and known amounts, since the rate and the creation date and the full expira tion date are displayed on the money chip, along with its current quantity value . now it passes in the usual course hand to hand throughout the economy with much greater velocity than does our current false corrupt money, whose value is a ro tten joke, and an illusion just waiting to blow away. and the money-chip does have a face value, which was the original full value at the first moment of its creation and spending by the government. and that face value, is the number, the full number which will be counted when the money-chip is used to pay taxes to the sovereign. so the money may circulate in the general economy for about 400 months and then its depreciated value would be zero, but then it may be used to pay the taxes o f the last holder at the rate of the full face value on the day it was first spe nt by the government, 400 months before. (i think i have that right, at .25% depreciation per month, that means it depre ciates 1% in 4 months, and to depreciate 100% would be 100 times 4 months, or 40 0 months.) please check my math!!! [[[k- this last idea is worth thinking about further, it may lead to the poolin g and capturing of zero-value/expired demurrage money by a new sort of bankers-thence to be "lent" to those who must immediately pay taxes. that may not be a desirable side-effect. it may be better to design a demurrage currency which ca n be used to pay taxes only at its current time-depreciated value, and then at t he expiration date it evaporates entirely as a store of value. of course new kin ds of long-term value storage would have to be devised, something like annuities or social security systems--but these would not be based in "money," nor should they be gameable.]]] eco.ind.9.203: katie. (mirmir) Sun 8 Jul 07 16:08 i think this kind of a system could work out very well as a domestic currency, just as we have the $dollar inside the USA.

now we would have to consider how it would work in multinational/multisovereign trade exchanges. although the issue of whether the individual would be able to buy goods or serv ices direct from extra-national sellers, is a first consideration. the federal reserve as we know it now, would cease to exist. we might still have a monetary policy but it would be based on the rate of demu rrage/depreciation of the value of the money-chips issued daily/monthly by the s overeign, and number of money-chips which could and should be issues in any give n year. eco.ind.9.204: katie. (mirmir) Sun 8 Jul 07 16:19 let's use a different word instead of "face" value, let's use "tax" value, and then its current value at any given time would be its depreciated or current-fac e value which is always less than its tax value. so rephrasing this: and the money-chip does have a tax value, which was the ori ginal full value at the first moment of its creation and spending by the governm ent. and that tax value, is the number, the full number which will be counted when t he money-chip is used to pay taxes to the sovereign. so the money may circulate in the general economy for about 400 months, devalui ng itself slowly and steadily according to the depreciation/demurrage rate print ed on it, and then after 400 months its depreciated value would be zero, but the n it may be used to pay the taxes of the last holder at the rate of the full tax value on the day it was first spent by the government, 400 months before. [[[kas above discussed--this idea may have undesirable side effects, and needs furth er consideration and design.]]] eco.ind.9.205: katie. (mirmir) Sun 8 Jul 07 16:19 the bankers would not like this. eco.ind.9.206: katie. (mirmir) Sun 8 Jul 07 16:22 i think it is elegant. eco.ind.9.207: katie. (mirmir) Sun 15 Jul 07 10:02 this little essay has some wonderful facts i'd not seen before. more and more as i read money history, i realize how we have been cheated in our education reg arding the reasons the colonists went to war against england, and what were the specifics of the fights between the federalists and the anti-feds. the econo mic oppression by england against the colonies was far and away the main reason for the revolution, and the oppression was carried on by laws about money and tr ade which were designed to keep the colonies without a self-sustaining and indep endent economy, and rather as a mine for riches to be shipped to england. how little we learn about that, and the famous boston tea party, was not at all what we were taught, some kind of showboat act of defiance. no, it was a calcul ated and focused attack on one of the earliest corporations (british east india) which had been given monopoly power by the crown and was undercutting the domes tic tradesmen. it was *strictly* a populist attack on economic privilege. freedom was not some nebulous philosophical utopia. the american revolution was very largely a class war against the money power of england. as this following

essay makes clear, our colonist bankers wanted only to set up the same class war here, installing themselves as the american money power. and they succeeded i n this. eco.ind.9.208: katie. (mirmir) Sun 15 Jul 07 10:07 ---------------------------------------Sunday 15. July 2007 AMERICAN MONETARY INSTITUTE PO BOX 601, VALATIE, NY 12184 Stephen Zarlenga, Director Dedicated to the independent study of monetary history, theory, and reform An Abbreviated Monetary History of the US: Part 1 (C) 2002, American Monetary I nstitute This brief essay is excerpted from The Lost Science of Money by Stephen Zarleng a. See THE MONEY POWER VS THE CONSTITUTION Driving up McCagg Road on my way to the Martin Van Buren birthday memorial, I p assed Kinderhook Creek, and a blue metal plaque appeared, marking his birth site . The original house is gone, but, even in the light rain, the site is beautiful , as it must have been when the young Van Buren was growing up in these natural and harmonious surroundings. Just a bit further up the road, his final resting p lace in Kinderhook Cemetery is marked by a granite obelisk. Only a mile separate s these points, but the course his life took between them had a powerful effect on our new nation, and even upon the world. During the grave site ceremony, a presidential honor guard presents arms, and w reathes are laid. Students from the Van Buren Elementary School tell us that his political genius earned him the nickname of "the little magician"; that his red hair gained him the title of "the red fox of Kinderhook" - and that after servi ng as Secretary of State and Vice President, Andrew Jackson's support helped him to become the 8th president of the United States. The students are clearly proud of Van Buren, and have every reason to be. For h e played a big role in the formative years of our nation, and was a conscious wa rrior in the battle over a Grand Theme of humanity which those early years focus ed on - and which continues to this day. A battle which he waged as a friend of Thomas Jefferson, James Madison, and Andrew Jackson, against what he called "THE MONEY POWER" (he always capitalized it). THE GRAND THEME - OVER MANS NATURE That theme is a struggle over the very nature of man. Broadly and simply stated , DOES MANKIND NEED TO BE RULED BY AUTHORITY OR ARE MEN CAPABLE OF SELF GOVERNME NT? The outcome of the fight would not only determine our form of government, but c ould influence the way humanity would develop. For if authoritarianism were appl ied, distrusting men to make the correct choices, many might tend to act that wa y, and their spirits would be damaged. If on the other hand, self government was expected, many men could rise to it, and set an example to the world. Van Buren gives us a compelling "blow by blow" of this battle in his book THE O RIGIN OF POLITICAL PARTIES IN THE US.

After the revolution was won in 1781, "It became at once evident that great dif ferences of opinion existed... in respect to the character of the government tha t should be substituted for that which had been overthrown." One viewpoint held that the British system "was the best that could be devised to promote the welfare and secure the happiness of Mankind". Although they had b een "prompt to resist tyranny" and were "stung by the oppressions practiced upon the colonies by the British Government", IN THEORY they "tolerated its forms an d constitution". This was the view of the Federalist Party, which included most of the merchants and was led by the banker Alexander Hamilton. It was the Federalists who had pushed for the Constitutional Convention in 1787 , to re-make the Confederation of states into a stronger national government. Re acting to the Federalist thrust, the opposing popular viewpoint grouped into the Anti Federalists. In their drive for a more powerful central government, Van Buren admits that th e Federalists (who he generally opposed) were right. As to their opponents, "... they were too much in the habit of regarding (the federal government) at that ea rly period, as a foreign government only remotely responsible to them." "Their minds had become thoroughly impressed with a conviction that the disposi tion to abuse power by those who were entrusted with it was not only inherent an d invariable, but incurable, and that it was therefore unwise to grant more than was actually indispensable to the management of public affairs." These Anti Fed eralists included most of the landowning farmers. The Americans were familiar with various forms of government, mostly what we no w call "command" societies. From Feudal "might makes right" orders, to monarchs sanctioned by "Divine Right", to "constitutional" monarchies. For more self regu lating societies they had the distant examples of Democracy in Athens and the Re publican period of Rome. This antagonism between the two ideologies was compromi sed in the Constitution. While Hamilton's open desire for a British style Monarc hy had no chance of acceptance, the Constitution which was hammered out did stre ngthen the national government, but also put clever checks and balances into pla ce, which when combined with Madison's Bill Of Rights APPEARED to block authorit arian rule. MONETARY POWER LEFT UNDEFINED Well then, the Constitution gave the Federalists a stronger government, and the anti federalists had their checks and balances. Everyone would live happily eve r after right? Wrong! The Constitution left open a back door through which a form of authoritarian ru le could enter; a form more insidious than monarchy. More dangerous because it w as less visible, and not understood, and more threatening still because its cent er of power was outside the nation, to the east. It would take Jefferson almost twenty years to understand what had been ignored in the Constitution, and he would spend the rest of his life doing battle again st the MONEY POWER. Jackson's Presidency became literally a life and death strug gle with the bankers. Van Buren thought he finally finished them off, in 1840, b ut he was overly optimistic. What was the source of so much trouble? The constitution had failed to adequate ly define the monetary power in the new nation! Authoritarianism had been kept out politically, and religiously, but was allowe d to sneak in monetarily.

Van Buren recognized this years later when he wrote "The MONEY POWER ... was it self ... destined, when firmly established, to become whatever of Aristocracy co uld co-exist with our political system." But why did the framers of a document s o far advanced in its day regarding the balance between legislative. judicial an d executive power, not realize that the monetary power if left unchecked, could endanger and ultimately overwhelm the whole edifice? CONFUSION OVER THE NATURE OF MONEY The main explanation is that as a group, the founding fathers didn't have a goo d understanding of the nature of money! Sound far-fetched? Well, even today the various schools of economics have not accurately defined, or even agreed on a co ncept of money. This may be the greatest failure of economics, since money is at the heart of every aspect of it. Economists are still squabbling over the most basic question about money: THE 2nd GRAND THEME - OVER MONEY'S NATURE The battle has raged for centuries over this 2nd theme - the nature of money! S imply and broadly stated, is money a concrete power, embodied in a commodity suc h as gold; or is it an abstract social invention - an institution of the law? Do es it obtain its value from the material of which it is made, or from its accept ability in exchanges, due to the sponsorship or even legal requirements of the g overnment? Or is it a hybrid - a combination of these f actors? The supreme importance of the definition of money will now become evident, for if money is primarily a commodity, convenient for making trades, which obtains i ts value out of "intrinsic" qualities, then it could be viewed more as a creatur e of merchants and bankers than of governments. However if the true nature of money is an abstract social institution embodied in law - that is, a legal institution, then it is more a creature of governments , and the Constitution had better deal with it adequately. Describing how a unif orm currency is to be provided, controlled and kept reasonably stable, in a just manner. So the stakes involved in understanding this "money game" are enormous - whethe r a nation's rule book, will promote justice, or allow a form of slavery! You ma y already have an opinion about the "answer" but lets look at some facts first; and remember the saying - "Its not what we don't know that gets us into trouble, but what we think we know, that isn't so!" If the answer to this 2nd grand them e were obvious, the world would be facing far fewer difficulties. HOW TO ANSWER THE MONEY QUESTION? There are two basic approaches to this questi on. A logical, or theoretical approach; and a practical approach based on experi ence- on the facts- what is called an empirical approach. This last was Van Bure n's favored method: "...experience, the only unerring test...", he wrote. In the field of money this factual approach relies on history, since that's whe re mankind's experience with money is found! We also have memories of our own ex periences, but the effects of monetary systems often require several generations to become apparent. Keeping in mind that logic can become too divorced from rea lity, and that experience can be misinterpreted, lets take a look at: THE COLONIAL EXPERIENCE WITH MONEY English laws forbade sending coinage to America. She didn't want the colonies t

o trade with each other, but to send raw materials back home. The scant coinage in the colonies came mainly from pirates or trade with the Spanish West Indies. The colonists were in dire need of a money system and England refused to provid e it, continually placing them in distress. For 10 to 20 years after 1640, more people were going back to England, than were coming here. Out of necessity, the colonies became a kind of monetary laboratory, devising several different moneta ry solutions. In the"Country pay period" (1632-1692) many agricultural products were legally declared to be money, at values fixed from time to time. But this wasn't any mor e efficient than barter everyone wanted to pay with the least desirable commodit ies, in the worst condition. In 1652 Massachusetts allowed a mint for gold coinage, but the coins quickly fo und their way back to England, hardly circulating in the colonies. Guarding its monetary prerogative, the Crown called the mint treason, and it was closed. From 1675 to 1739 several privately owned land banks were formed, issuing paper money backed by land. But the colonists shunned this privately issued money, co nsidering that currency should be a function of government, as it was in England until 1694. MASSACHUSETTS PAPER MONEY EXPERIMENT Then in 1690 Massachusetts embarked an a radical experiment, and began to issue "Bills of Credit"; a form of paper money not backed by any physical thing. Rath er than a promise to pay any thing, it was a promise to accept the paper bills f or all monies due to Massachusetts. At first, this paper was not made a legal tender - that is the people were not forced to accept them, but everyone did and the bills immediately began circulat ing as money, ending the colony's distress. This money didn't flow back to Engla nd like the coinage. This worked exceptionally well for two decades, so long as they were not issued in too great a quantity. Other colonies copied Massachusetts, emitting similar bills of credit. Invariab ly they transformed life in the colonies, improving industry and commerce; build ing real infrastructure. When the colonial governments authorized the issuance of too many bills - and t his sometimes occurred - their value dropped. But when the paper issues were mod erate - and there was no exact science to this - they kept their value well. Of great importance is that the colonies did not issue more bills-than-their legisl atures authorized. They were learning one of the basic laws governing the value of money; that if too much money is circulating, in relation to the work it has to do, its value w ill start to decline. PENNSYLVANIA'S PAPER MONEY Pennsylvania, thanks partly to the support of Benjamin Franklin, [[[ k-we must remember that B.Franklin was a corrupt member of the Hellfire Clu b, practicing satanists, mammon worshippers, and a very high level FreeMason. w e must always remember that money is an alchemical device and a technology of mi nd control the idea of legal-tender money creation through loaning at interest is the ancient and crucial error in the structure of any government. legal-tende r (can be used to pay taxes) money must either be in a demurrage form or in a no

n-interest bearing form, and both with strict public transparency as to quantity and distribution, and strict public transparency in chain of passage through tr ansfers and payment. ]]] created a different form of paper money, which was loaned into circulation. In 1723, Pennsylvania was petitioned by a group of merchants to alleviate "the evid ent decay of the province ... for want of a medium to buy and sell with, and pra ying that a paper currency be established." A state loan office was created, aut horized to loan L15,000 of paper money at 5% interest for 8 years. L250 was the maximum loan and the borrower had to pledge collateral - mostly land, and annual ly pay the interest and 1/8 of the principal. The results of this circulating medium were so good that more were authorized, and as the loans were repaid, they were loaned out again to others. Pennsylvania used the interest it earned on this paper money, which it created out of thin a ir, for colonial expenses, thereby reducing taxes. The LORDS OF TRADE AND PLANTATIONS, the British group charged with overseeing t he colonies, had sporadically attacked the colonists paper money systems, but in 1763 they passed a general law against all of them, and in so doing, provided o ne of the main causes of the revolution. CONTINENTAL CURRENCY - LIFEBLOOD OF THE REVOLUTION The skirmishes at Lexington and Concord are considered the start of the Revolt, but the point of no return was probably May 10, 1775 when the Continental Congre ss assumed the power of sovereignty by issuing its own money. Congress authorized a total of $200 million; and though at first, they had no l egal power to do so, had no courts or police, or power to levy taxes; the Contin ental currency functioned well in the early years and became a crucial part of t he revolution. In 1776, it was only at a 5% discount to coinage, when General Ho we took over New York city and made it a center for British counterfeiting. News paper ads openly offered the forgeries: "Persons going into other colonies may be supplied with any number of counterfe it Congress notes for the price of the paper per ream. They are so neatly execut ed that there is no risque in getting them off. ... Enquire for Q.E.D. at the Co ffee House from 11 PM to 4 AM." Congress did not exceed its authorized issue of worn out notes), but the British certainly did' nterfeited, but it could have been billions; and ntinued to function! In March 1778 after 3 years ntal for $1 of coinage. $200 million (except to replace We don't know how much they cou yet the Continental currency co of war, it was at $2.01 Contine

General Henry Clinton complained to Lord George Germaine that "The experiments suggested by your lordships have been tried, no assistance that could be drawn f rom the power of gold or the arts of counterfeiting have been left untried but s till the currency ... has not failed." Finally it did fail, but not before providing the foundation for delivering the nation, carrying the revolution over 5 years to within 6 months of its victory. Thomas Paine wrote: "Every stone in the bridge that has carried us over, seems to have a claim upon our esteem. But this was a corner stone, and its usefulness cannot be forgotten ." (p.116) CONSTITUTIONAL CONVENTION DOWNPLAYED US EXPERIENCE

Yet by the time of the Convention, the great benefits early ignored; along with much of the rest of our hard Many wanted to emphasize that the Continentals became tract money under that cloud, and rejected the idea of

of the Continentals was n won monetary experiences. worthless; placed all abs paper money altogether.

They ignored the fact that paper money was crucial in giving us a nation; that abstract money usually requires an advanced legal system in place; that the norm al method of assuring its acceptability is to allow the taxes to be paid in it. And then there was the little matter of a War against the world's strongest powe r! Tom Paine would say it best: "But to suppose as some did, that, at the end of the war, it was to grow into g old or silver or become equal thereto was to suppose that we were to get $200 mi llions of dollars by going to war, instead of paying the cost of carrying it on. " (p.117) CONVENTION SKIRTS THE MONEY ISSUE The Convention met from May to September, 1787, but the money question was not taken up in earnest until August 16! When we think of the "Founders" at the Conv ention, we should remember that Jefferson and Paine were not there; and Franklin was so advanced in age that someone else had to deliver his closing speech for him. Van Buren was 6 years old. In addition to ignoring the nations rich practical experience with money, the c onvention paid little heed to the brilliant writings of John Locke and Benjamin Franklin on money. The delegates didn't bother to find out why Locke in 1718 wro te: "Observe well these rules: It is a very common mistake to say that money is a c ommodity ... Bullion is valued by its weight ... money is valued by its stamp." Locke viewed money as a pledge for wealth, rather than wealth itself: "For mankind having consented to put an imaginary value upon gold and silver by reason of their durableness, scarcity and not being liable to be counterfeited; have made them by general consent, the common pledges ... they having as money, no other value, but as pledges ... and they procure what we want or desire only by their quantity, it is evident that the intrinsic value of silver and gold, u sed in commerce is nothing but their quantity." They didn't consider the reasons Ben Franklin gave in his 1729 "Modest Inquiry Into The Nature And Necessity Of A Paper Currency, for agreeing with Locke's vie w: "Silver and gold...(are) of no certain permanent value..." and "We must dist inguish between money as it is bullion, which is merchandise, and as by being co ined it is made a currency; for its value as merchandize and its value as a curr ency are two distinct things ..." THE ABUSE OF MONETARY THEORY Unfortunately the delegates were more influenced by a crude and primitive theor y which heavily supported the Bank of England, and contained several crucial mon etary errors, which tended to "legitimize" the Bank's system of finance. This th eory of money was part of Adam Smith's WEALTH OF NATIONS, published in 1776, and quoted by delegates to the Convention. Smith wrote very little about money, but his monetary mistakes and inconsistencies have had such a bad effect an mankind 's money systems, that we'll devote a full chapter to him later.

His book promoted the idea that only gold and silver are money, and never menti ons the legal concept of money, as put forward by the philosophers and jurists B ishop Berkeley, John Locke, Julius Paulus, Plato, Aristotle, and others. In 1786, anticipating the Convention, a very curious book, "ESSAYS ON MONEY" wa s published anonymously in the US Its entire thrust was to "theoretically" attac k the idea of government paper money: "State bills are an absurd form of money and not money at all." Why? - no answe r. It turned out to be written by the Clergyman, John Witherspoon. Referring to Locke and Franklin's views, he misrepresented their point on money, saying: "They seem to deny the intrinsic value of gold and silver." Discussion? - none. Then, using a rhetorical device, he stated some arguments for government paper money, and stonewalled them, pretending they didn't matter. Concerning those with personal knowledge of some of the colonies paper money sy stems: "We are told by persons of good understanding that (paper money) contributed to (the colonies) growth and improvement." Rebuttal ? - none. Concerning the fall of the Continental Currency: "(Some say it was due to the) Counterfeiting ... of our enemies". Disagreement? No germane discussion. THE BANKERS UNDERSTOOD Those delegates who understood money were mainly the bankers, Hamilton, and Rob ert Morris. Both had attempted to set up private banks to issue money, since 177 9, even before the revolution was won. They didn't want the Nation to have the m oney power because their intention was to assume that power themselves - to take it from the nation, as had been done in England. This would soon be demonstrated, when as Van Buren tells us Hamilton and his as sociates put forward "a funding system, upon the English plan, ... as the first great measure of the new government..." "TO EMIT BILLS OF CREDIT" The coveted monetary power was contained in those 5 "magic" words. They were al ready in the Articles of Confederation which was being supplanted. They were the authority under which the Continental Currency came to be issued. "To emit bill s of credit" is what the various colonies had done when they created their paper moneys. Madison recorded the arguments over this provision: Gov. Morris (Pa.) "The moneyed interest will oppose the plan of government if p aper emissions be not prohibited." Mr.-Mason (Va.) "The late war could not have been carried on had such a prohibi tion existed." Mr. Ellsworth (CT.) "By withholding the power from the new government, more fri ends of influence would be gained to it than by almost anything else." Madison thought the power was needed for emergencies, but wanted to make its ac ceptability voluntary, not a legal tender.

The power to create money, long regarded as a key element of sovereignty, was w ithheld from the new government by the "Moneyed interest", while they proclaimed the need to strengthen the national government! They tried to get a clause forb idding it, but failed. the Constitution is silent on the power, neither conferri ng or forbidding it. What would be the effect of ignoring this power? Delegate Gorham of Massachuset ts sluffed it off-. "The power so far as it is necessary or safe, is involved in that of borrowing." Really? In other words the government would be forced into borrowing "money' in stead of creating it. The honest patriots would assume that the government would be borrowing physica l assets - gold and silver commodities - and paying interest on it. The bankers however, knew that they would soon have the government borrowing paper bills of credit emitted out of thin air by their private bank, and paying interest on it to the bankers, as was being done in England at the time. Their bank would be allowed to do what they had blocked the government from doi ng - to create paper money - their own bank notes, pretending to back them with gold and silver. The bank would be issuing paper money notes not really backed b y metal, but pretending to be redeemable in coinage, on the condition that not a lot of people ask for redemption! So the real question in practice was not whether money was a legal power or a c ommodity, but whether private banks or the government would be allowed to create paper money. Will the immense power and profit of issuing currency go to the be nefit of the whole nation, or to the private bankers? That's always been the rea l monetary question in this country. LIMITED US MONEY "POWERS" Having been sold the idea of money as a commodity, in particular gold and silve r, the Convention took minimal monetary actions. The entire Federal monetary pow ers in the Constitution are: " Art.1, sec. 8. The Congress ... shall have power ... to borrow money on the c redit of the United States ... to coin money, regulate the value thereof, and of foreign coin ... to provide for the punishment of counterfeiting." Regarding the individual States, the Constitution declared: "Art.1, sec.10. No State shall coin money nor emit bills of credit, nor make anything but gold and silver coin a tender in payment of debts..." That's it folks. Note that the monetary power was explicitly denied to the indi vidual states. Alexander Del Mar, the great monetary historian and once head of the US Bureau of Statistics, described this result in his 1899 book THE HISTORY OF MONEY IN AMERICA: "Never was a great historical event followed by a more feeble sequel. A nation arises to claim for itself liberty and sovereignty. It gains both of these ends by an immense sacrifice of blood and treasure. Then when victory is gained and s ecured it hands the national credit - that is to say a national treasure over to private individuals, to do as they please with it! ... Americans of the revolut ion had before them ... the historical examples of Greece and Rome. In all these states the main contention from first to last between the aristocratic and popu lar factions arose out of and centered in the monetary system; that greatest of all dispensers of equity or inequity. ...

They had only to take care that the seed they planted was genuine and uncontami nated. Nature was certain to do the rest. Well they planted; and now look at the fruit and see what it is that they planted! They planted financial corporations ... they planted private money ... they planted financial exemptions from publi c burdens...In a word they planted another revolution." Very strong sentiments, but perhaps it was put better by Congressman Benjamin F . Butler in an 1869 speech to Congress on the money question: "We marvel that they saw so much but they saw not all things." Click here to see a descriptio n of The Lost Science of Money book ------------------ eco.ind.9.209: katie. (mirmir) Sat 4 Aug 07 12:45 more about greenbacks. this brilliant article by Ellen Brown is a keeper. she discusses not only the caribbean banks new hedge fund as a secret front for the FedReserve, but also th e process by which both the fed and the commercial banks create new "money," all of which is debt-money. it's a great article and look at this perfect cover illustration for her book, from which the article is an excerpt. the fed as a gigantic spider spinning a sticky web-shroud over the entire earth . eco.ind.9.210: katie. (mirmir) Sat 4 Aug 07 12:48 -----------------------------------------THE QUICK FIX: A NON-INFLATIONARY SOLUTION TO THE FEDERAL DEBT CRISIS By Ellen Brown, June 21st 2007 - WWW.WEBOFDEBT.COM THE QUICK FIX: A NON-INFLATIONARY SOLUTION TO THE FEDERAL DEBT CRISIS Ellen Brown, June 21st, 2007