Skip to content

A Primer for Recovering Austrians: the many systems behind ‘violent statist fiat’ currencies!

by on August 9, 2012
currencies

One of the nasty tricks the Austrian Mind Controllers spring on their unwitting followers is the notion that fiat money is fiat money. It’s all paper, so it’s all bad, it all requires heavy handed state violence. Not unlike several other propositions of Austrian Economics: nothing could be further from the truth.
So here’s a short introduction to the main systems.

1. Fed Notes, Euro, Yen
The current system. This fiat money is created through fractional reserve banking by private banks. Every dollar in circulation, except for actual paper notes and coins, were created by somebody going into debt with a bank. The bank creates the new money the minute it is lent out. Mind you: the entire loan is created when taken out: a bank needs deposits, but it does not lend the deposit! It creates new money next to the deposit.

They then rape their customers by slapping interest on this freshly printed money. This is the system everybody hates and of which all in their right mind want to get rid of.

2. The Greenback
The Greenback was neither debt free, nor interest free. However, that is what most people mean when they use the term Greenback: paper printed debt free by Government and spent into circulation by Government.

It would be better to call it the Continental, George Washington’s money. Or Colonial Scrip, because the colonies also printed their own units in this way.

3. Public Banking, Hamiltonian Banking
This would continue the same way of creating money we have today: interest bearing, fractional reserve banking. But the banks would be owned by the Government and not by the private banking cartel. The Government would get the interest. Of course, one would have to assume Government is a different entity than the Money Power, which is not a foregone conclusion, although not entirely irrational either.

4. Social Credit
Social Credit is a debt free unit printed by the Government, but handed over to the populace, the same amount for every individual, to have them spend it into circulation. It would amount to a basic income. While printed by Government, it clearly does not empower Government but the individual. Such a scheme also would not require heavy handed laws, simply because the populace would have a great incentive to accept this unit: they would get paid to do so!

5. Regional Currencies
Most Regional Currencies in Germany (e.g. the Chiemgauer), England (e.g. the Brixton Pound) or the US (e.g. the Berkshare) are simple euro/pound/dollar backed units. Usually 1 Regional Unit = 1 euro.

But when buying them, one usually gets one for maybe 95 cents (providing an incentive to pay with them) and when converting them back to euro, one gets only 95 cents (providing an incentive to spend them, instead of converting back and taking them out of circulation).

Regional currencies on this basis are always provided by private market players. Participants simply agree to use them, based on the value they add. No coercion necessary.

6. Mutual Credit
Mutual Credit comes in many guises. Well known are Mathematically Perfected Economy (MPE) and BIBO units.

Also the famous Swiss WIR is based on Mutual Credit, as are most ‘barter’ (a misnomer, they use their own Mutual Credit based units to pay, just not national currencies. So it’s not really barter) networks worldwide.

Mutual Credit is used to create non-state (MPE is a proposal to implement it as a Government unit)  interest free credit based units. As with Regional Currencies no coercion is necessary, all participants join of their own choice.

Mutual Credit is just simple bookkeeping. When opening an account one gets a credit line and can start spending by going into debt. When doing so, the unit is created. It is so mindblowingly simple it boggles the mind how the banks have gotten away with their silly antics for so long.

Mutual Credit is undoubtedly the unit of the not so distant future, although Social Credit may be a good alternative for Government units.

Conclusion
These are the basic architectures that hold sway today. As can be seen they are very different beasts altogether. Hamiltonian banking and the Greenback empower Government. Social Credit, Regional Currencies and Mutual Credit empower the commonwealth and the people.

Private banking, either based on gold or fractional reserve banking favors the Money Power and the ultra wealthy.

Related:
Mutual Credit, the Astonishingly Simple Truth about Money Creation
The Swiss WIR, or: How to Defeat the Money Power
Social Credit
Bitcoin, Impressive, but Flawed
Regional Currencies in Germany: the Chiemgauer
Ellen Brown’s Public Banking

68 Comments
  1. >>>>Why has Thaddeus Stevens voted for the National Currency Bank bill ?

    who was Thaddeus Stevens before he became the ‘grand old commoner’? how did he occupy himself prior to 1861 ? what did he do ‘for’ or ‘against’ the money power before Lincoln’s War ?

    From 1833, Thaddeus Stevens was the able leader of the Pennsylvania Legislature where he organized the Whigs and the Anti-Masons to vote together; in 1835 these two parties elected Joseph Ritner as Governor of the State.

    The years between 1832 and 1836 were the years of Andrew Jackson’s war against the Bank of the United States. Followed by 4 years of agitation against banks and for an Independent Treasury……
    In April 1836, the Charter of the Bank of the United States expired. What did Mr. Biddle, the president of that bank, do ? In January 1836, in the Legislature of Pennsylvania, a bill “to continue the improvement of the State by railroads and canals” was introduced, and in short order, passed both houses. This bill included a clause for “other purposes,” which “contained the entire draught of a charter for the Bank of the United States, adopting it as a Pennsylvania State bank.” The whole entire membership of the Pennsylvania Legislature –under the able leadership of Thaddeus Stevens– managed NOT to notice this more then one page long charter of the Bank of the United States of Pennsylvania !?! and Governor Ritner signed the act into law.

    Some years later the Whigs and Anti-Masons were voted out of the Pennsylvania Legislature, and in January 1842 a committee opened an investigation into the affairs of this bank, relating to the charge of bribery. This committee ascertained that $479,000 was advanced as bribes by the Biddle bank to obtain the State charter in 1836….. Very good reason and explanation why those Whigs and Anti-Masons, and the future ‘grand old commoner’ himself managed NOT to notice that bank charter in a canal bill.

    So in 1863 Thaddeus wasn’t ignorant of what he was doing when he not only voted for, but didn’t even object to the National Currency Bank bill which established a banking system and national currency following the blue-print that was outlined by Nicholas Biddle; Thaddeus Stevens knew full well what he was doing, he had already done it once before; and the concept of sneaking bills through the Legislature was not alien or objectionable to him……. Even if (big if) he did not take any money, he had to have known what was going on and what was in that canal bill……

  2. By the way, I didn’t follow the latest developments, but did you already manage, using your Gelre money system, to provide “Alexander and Linda and the children” (http://www.facebook.com/pages/Brief-naar-de-Bank/102141323266056) with an interest-free mortgage loan to replace the one they have from ING Bank?

    They probably need only about 200,000 euros, seeing the pictures of their house at funda.nl .

    • The Gelre does not circulate in Assen.

  3. Anthony Migchels wrote:

    You beliee our bosses are kind people working for our benefit, I’m a little skeptical about that proposition. Neither position can be ‘proven’. So let’s be realistic about that and do us the courtesy of accepting that we view the world in the way that we do, without wasting our time with insisting on the 99% view, of which all readers of Real Currencies are very much aware, but in which they don’t find peace any longer.

    You totally misrepresent my position. I never said anything about “our bosses”. I don’t work with beliefs. To me it , I work with definitions, balance sheets, calculations, ‘what if’-scenarios, possible alternative, what are their pros and cons, etc.

    […] without wasting our time with insisting on the 99% view […]

    You see counter-arguements and facts as “wasting our time”? That seems like an extreme case of http://en.wikipedia.org/wiki/Cognitive_dissonance .

    Of course I too can fall into that trap, and I’m aware of it.

    • I do not misrepresent your position. You have made about 70 comments on this site already. All have been defending the system as is.

      The problem is not counter arguments: the problem is ignoring key issues I bring to bear (like the wealth transfer of interest, Mutual Credit as a viable alternative). The problem is just driving the point home endlessly with clinchers like: that’s just not true. The problem is commenting and commenting, getting kicked off every site you go because you don’t actually add to the discussion, you’re just trying to push your own point home. The problem is not allowing comments on your own site, so people can return the favor.

      Now if you don’t mind: I’d like to agree to disagree. We will never agree. I have no desire to convince you. I have offered enough information for further study and contemplation and thus I feel I have done more than my bit. Ok?

  4. A genuine quote, taken somewhat out of context, and given a meaning which the paper may not have meant to convey: that the London Times was pleased with Greenbacks and considered the issuing of legal-tender Treasury notes a benefit.

    “the difficulties of the Government have compelled it to issue a paper that will pass current in any part of the territory. Through the evil of war the people will at least gain that deliverance from the previous confusion of their currency which to Europeans appeared a barbarism. If the social storm sweeps away the ‘wild cat’ and ‘bogus’ banks of the Union, it will have left some small compensation for the wreck of better things.” London Times January(?) 1863

  5. ==
    Mutual Credit is just simple bookkeeping. When opening an account one gets a credit line and can start spending by going into debt. When doing so, the unit is created. It is so mindblowingly simple it boggles the mind how the banks have gotten away with their silly antics for so long.
    /==

    That is exactly what I describe in http://rudhar.com/economi/monydebt/en/008slfnd.htm . That IS the existing system of money creation and fractional reserve banking!

    So you are criticising a system that you don’t properly understand, and the solution you propose is EXACTLY the system that you hate so much.

    How can this make sense?!?

    • it is not the same, because fractional resere banking requires the deposit. As a result a bank needs to pay interest to the depositer. As a result also, these banks go bust routinely, coming begging for bail outs.

      In Mutual credit no deposit is necessary

      • That the deposit is required, is not the result of the fractional nature of lending, but of what lending (= credit) essentially is: I don’t need it now, you can use it.

        Credit without a deposit isn’t real money: that will end up like the Zimbabwean dollar.

        That the deposit is needed is exactly the paradox: the IS money creation, yet the money the borrower gets, comes from a depositor, not from thin air.

        • You keep falling for their sleight of hand: after they have lent out the deposit, the money supply has doubled. All the money in existence, excl notes and coins are loans generated by the bank. The deposit is somebody elses loan.

          However, teh same amount of money is lent out time and again, (by pensionfunds and the like) so while all the money is debt, not all the debt is new money.

          • ===
            You keep falling for their sleight of hand: after they have lent out the deposit, the money supply has doubled.
            /===

            (I had to look up “sleight of hand”. Dutch: goocheltruc, vingervlugheid. Your English is better than mine. Thanks for giving me this opportunity to learn.)

            I’m not falling for that, instead that is exactly what I described in my article #1. http://rudhar.com/economi/monydebt/nl/001creat.htm .

            And it is not “their sleight of hand”, but the inevitable and logical consequence of what lending is:

            The owner of the money doesn’t need it for a while, lends it out (with or without an intermediary, like a bank), which creates a claim (Dutch: vordering). This claim is also money (details depend on defintions and periods/maturity etc.).

            The lender is still the owner (= claim = money), and the borrower has the money available for spending. Twice the same money, so as you say: “the money supply has doubled”.

            That’s not a vile trick of banks, it the logical consequence of credit. So it will happen in any lending scheme that you can devise, with or without banking. It is inevitable, and not bad at all. On the contrary, it is beneficial for us all.

            ===
            All the money in existence, excl notes and coins are loans generated by the bank.
            /===

            True. So what? Why is that a problem? (Serious question!)

            • “\”True. So what? Why is that a problem? (Serious question!) \”

              The problem is that we are paying trillions per year in interest over this money, while it costs next to nothing to create it. By a banking system that is a monopoly, because all the banks own each other and thus there is only the idea of competition, not actual fact.

              While with mutual credit, we would create it at costprice, which would be a fraction of wat society now loses to interest.

              Meanwhile, because they produce it with fractional reserve banking they can make us believe they go bust once in a while and claim they need even more trillions in bailouts.

              Adding insult to injury, politicians who give them these trillions in bailouts then go through the revolving to get cushy \’adisory\’ jobs after they leave office. Wim Kok to ING, Tony Blair making 2 million per year at JP Morgan. Gerhard Schroeder going to Rothschild Bank. Gerrit Zalm first to Scheeringa Bank, then to ABN Amro, etc.

              They\’re just a bunch of crooks. That\’s the problem in short.”

              • “By a banking system that is a monopoly, because all the banks own each other and thus there is only the idea of competition, not actual fact.”

                So why are interest rates so low these days? My variable mortgage rate has been just below 4% (four percent!) for several years now. If they’re a monopoly, why don’t they make it 12%, and make a huge profit against the 0,75% they pay to the central bank to get extra money?

                In 1981, saving accounts existed with 11% interest. Luckily, I didn’t have a mortgage then. Perhaps the money supply was tighter then than it is today? Statistics exist, I haven’t studied them yet.

                • No, The Central Bank, which is the executive of the banking cartel, just manipulates rates to create the boom bust cycle, while suggesting it is doing to limit it. Another nice con trick by them…….. When the economy starts to grow, they raise rates. When it tanks, as it must because of the rising rates, they bring it back down, after which the economy starts to grow again. Normally speaking anyway, but this time they have created such a massive debt bubble it will take decades to recover.

                  The goal is to create pressures forcing the European nations to accept fiscal union (and thus surrendering their core sovereignty). Another goal seems to be to create the pressures necessary for another big conflict.

                  Just like WW1 and 2 were major catalysts for ‘international cooperation’ (read: globalism and world government), WW3 is intended to finally create the global governance they have been working towards for centuries.

                  • I don’t believe in such conspiracies.

                    And yes, if the economy grows faster again, central banks might increase interest rates. To avoid overheating. That’s their job, because what a central bank is there for is to promote stability.

                    http://en.wikipedia.org/wiki/Central_bank#Goals_of_monetary_policy
                    ===
                    Price stability
                    […]
                    Interest rate stability
                    Financial market stability
                    Foreign exchange market stability
                    /===

                    • I don’t believe in such conspiracies.

                      That’s fine. That’s your right. 99% of people don’t.

                      But 99% of people have 99% of websites available for their discussions

                      Please allow us nutty conspiracy idiots our little niche in cyberspace!

                      And it is a beliefsystem. You beliee our bosses are kind people working for our benefit, I’m a little skeptical about that proposition. Neither position can be ‘proven’.

                      So let’s be realistic about that and do us the courtesy of accepting that we view the world in the way that we do, without wasting our time with insisting on the 99% view, of which all readers of Real Currencies are very much aware, but in which they don’t find peace any longer.

      • “In Mutual credit no deposit is necessary”

        Yeah, right. Zero reserve requirement, meaning an infinite multiplication factor and a huge, uncontrollable, volume of money creation. Eventually, that means deflation => Zimbabwe.

        And: zero capital requirement. NO solvability, no recovery against bad loans. This new kind of bank is practically bankrupt even before it begins operations.

        You are really proposing what you fight, but then worse.

        Just like with the Gelre, where in fact you are playing “Central Bank”, because you think the real Central Banks are doing it all wrong. You want to do exactly the same yourself, and then it is suddenly OK.

        • Of course not: without interest money creation is not a problem, nobody is enslaved. So I dont do the same as the CBs

          The inflation thing is just a ruse. Look at the Swiss WIR, they’ve been doing it for 80 years, you can read up on teh WIR in the Interest Free Economics page.

          • “The inflation thing is just a ruse.”

            (“Ruse”, nice word, I didn’t know it, now do.)

            If the inflation risk is just a trick, how do you explain historic periods of hyperinflaction, e.g. inbellum Germany, Turkey, Russia, Zimbabwe? Wasn’t all of that caused by bringing too much money into circulation?

            That’s why we need central banks, that operate indepently of governments, to guard against inflation. You probably know http://www.rayservers.com/images/ModernMoneyMechanics.pdf . (Modern Money Mechanics, Federal Reseve Bank of Chicago, 1961, last revised 1992). It’s described there.

        • Yeah, right. Zero reserve requirement, meaning an infinite multiplication factor and a huge, uncontrollable, volume of money creation. Eventually, that means deflation => Zimbabwe.

          — You probably mean inflation.

          And: zero capital requirement. NO solvability, no recovery against bad loans. This new kind of bank is practically bankrupt even before it begins operations.

          The bad loans are covered with a small one off percentage. Typically 2%. However, if done correctly, even this is not necessary, because teh credit is backed by assets. The ‘bank’ (Mutual Credit Facility) is not in risk. For instance, a mortgage is backed by a house.

          • “The bad loans are covered with a small one off percentage. Typically 2%.”

            So you re-introduce interest, but one that is independent of the period.

            So someone taking out 10.000 euro for 2 years for (part of) a car, pays the same fee as someone taking out 300.000 euro for 30 years for a house.

            Why? Why is that better, why is that just?

            If I rent a house for two months, I pay less than if I live in it for five years. Do you want to change that too? Flat fee for everyone in all situations?

            • a one off percentage is clearly not interest, which by its very nature is a per annum percentage.

              200 euros over 2 years for a 10k loan is very, very cheap. I don’t think many people will complain.

  6. ===
    They then rape their customers by slapping interest on this freshly printed money. This is the system everybody hates and of which all in their right mind want to get rid of.
    /===

    A. You can chose between:
    1) a lot of money available for credits, at low interest rates, or:
    2) very little money available for credits, at very high interest rates.

    In both cases, banks earn about as much.
    http://rudhar.com/economi/monydebt/en/004intrs.htm

    ==

    B. Getting rid of “this system” means abandoning any form of credit. That’s because the real engine of money creation is credit, not fractional reserve banking. Full reserve lending also causes money creation, depending on the definition of money (part 6 of my series).

    And: I can show money creation in part 1 (which is NOT about fractional reserve banking), and the LIMITING of money creation in part 2 (which IS about fractional reserve banking). So: FRB is not the engine, only a brake.

    • you’re regurgitating what I already dispelled.

      We can have interest free credit through mutual credit. So: no interest, while having credit. Read: https://realcurrencies.wordpress.com/2012/01/03/mutual-credit-the-astonishingly-simple-truth-about-money-creation/

      Please actually react to the feedback, instead of repeating already stated opinions that have already falsified.

      • “We can have interest free credit through mutual credit.”

        Of course. Charity exists in the real world too.

        • silly skepticism without studying the proposals is just filibustering and does not support learning. I’d rather not have too much of it on these pages Ruud: it takes energy.

          • I’m not silly at all, I’m very serious. And you know it.

            While I read the documents you recommended (but I must first study MMM and debunk http://bibocurrency.org/English/Formal%20Stability%20Analysis%20and%20experiment%20%28final%29%20rev%203.4.pdf ) , perhaps you should reread my articles, because I doubt if you really understood them.

            • You are not silly, ““We can have interest free credit through mutual credit.”

              Of course. Charity exists in the real world too.” is silly filibustering. It does not make me grow, nor you.

              Meanwhile, I’d be most interested in your ‘debunking’ of Gauvin’s analysis. should you manage, I’d post for discussion purposes.

              I wish you good luck though.

              Keep in mind that we are devising solutions to end the wealth transfer of trillions from the many to the ultra rich. You seem to aim at ‘debunking’ that, instead of joining this cause. Could you explain that? What would be the goal of that?

              • “to end the wealth transfer of trillions from the many to the ultra rich.”

                Not to the ultra rich, but to millions of people with small pensions, and to billions with moderate savings accounts, to thousands of small companies with a temporary money surplus, etc.

                The economy is circular.

                One man’s expense is another man’s proceeds.

              • No, as I’ve explained in many articles and also to you directly, the poorest 80% pay more interest than they receive to the richest 10%. And also within the richest ten 10% the, poorest 8% pay more interest to the richest 1% than they receive from them. This has all been quantified by Helmut Creutz and Margrit Kennedy.

                If you have no debt at all, you lose 45% of your money to interest in prices.

                So the little pensions, which are a rip off anyway, far too expensive for what people get in return, are just a drop in an ocean. Most of the pensioners pay far more interest than they receive.
                In Holland alone the total transfer from the poorest 80% to the richest 10 is 50 billion euro’s per year. Every year.

                Worldwide we are talking anywhere between 5 and 10 trillion per year that goes to the richest ten, of which most ultimately ends up with the ultra rich.

                • “So the little pensions, which are a rip off anyway, far too expensive for what people get in return, are just a drop in an ocean.”

                  You really are a “rekenwonder”! (You can we translate that for our American readers? Miracle of calculus? Math prodigy? Van Dale: mathemaical genius, walking computer).

                  Pay 300 euros a month for 40 years, and receive 900 for 20 years. It seems to be possible, but only thanks to interest and dividend. Without interest, contribution would have be doubled or tripled, if not worse.

                  • lol! Had they not payed 300k interest on their 200k mortgage things would have looked very different, wouldn’t you agree? And of course with that we disregard the 45 % interest in prices………………

                    no, my friend, my calculations are indeed a lot better than yours.

                    • Please show which calculations in my article series are wrong and how.

                    • I already showed this: the 300k on the mortgage and the 45% through prices far outweigh the modest gain in their pensions through interest.

                    • Modest gain?

                      Some real data from a pension fund, of a company I happen to have worked for between 1982 and 1985. Investment yields (beleggingsresultaat) 2004-2011: 8.5%, 16.5, 8.8, 3.8, -13.3 (2008!), 8.0, 10.0, 5.8%.

                      46.1 of their investments is in fixed-interest stocks (vastrentende waarden), that is, bonds (obligaties). Average yield on those: 6.8%.

                      Let’s be pessimistic and say that long-term it is only 4%. 30 years 4% means 224% or a factor 3.24.

                      So if your proposals were followed, i.e. banning all interest, pension contributions would have to be tripled, or pensions reduced to a third.

                      Assuming those 6.8%, the figures are: 620% or a factor 7.2.

                      Will that make people happier?

                    • Could you please explain how you can make a such a calculation completely ignoring the two major figures I just gave you?

                      Don’t you agree that most people would benefit immensely if they could exchange their pension gains in return for interest free mortgages and prices almost halved?

                      You like to explain cognitive dissonance? This is it!

              • That you think I’m filibustering [that word I did know!] can only mean you do not fully understand what I’m explaning all the time.

                I am really 100% serious and I mean every word I say. Including that about charity.

                If you can find people who are willing to put their money in a bank and receive 0% interest AND accept a two year maturity or three month notice period (’cause that’s the only way to avoid M1 money creation), then it’s allright with me. I call that charity, but if people are happy with that, why not?

                It’s just that I expect that very few people will be willing to deposit their money under such conditions.

                • LIke I said about a trillion times by now: mutual credit requires zero reserves.

              • Keep in mind that we are devising solutions to end the wealth transfer of trillions from the many to the ultra rich. You seem to aim at ‘debunking’ that, instead of joining this cause. Could you explain that? What would be the goal of that?

                My only goal is truth.

              • I totally debunked it, in three parts (the third of which I yet have to write, but it’s all there in my head already). The second part is here http://rudhar.com/economi/monydebt/en/011rstab.htm .

                There is really a lot wrong what that Analysis by Gauvin and Domínguez.

                • Well, I don’t know whether you did ruud, I’ll leave that to Marc, he’s the mathematician.

                  But look:
                  1. we pay 300k for a 200k mortgage.
                  2. 45% of prices are capital costs, so even if we don’t have any debt outstanding, we lose 45% of our disposable income to interest.
                  3. all the interest ends up with the richest 10%, and eventually it all ends up with the ultra rich.
                  4. the total sum of the wealth transfer from poor to rich is anywhere between 5 to 10 trillion per year globally.
                  %. We could easily have interest free credit, even through fractional reserve lending (which would inefficient) but Mutual credit would ideal.

                  These are the facts that are under discussion at Real Currencies. You did nothing to dispell these. They cannot be dispelled.

                  These are very serious matters, but all you are doing is trying to ‘debunk’, instead of understand. It is not because you are stupid, you are far from stupid.

                  It is because a brain that is not guided by the heart and the spirit does not know the meaning of what it is thinking about. It is in fact a loose cannon.

                  The economics is clear, as shown in these five points, although you continue to dance around them.

                  But you need to bring your heart, your morality in your thinking processes. Otherwise you will continue to stagger through the mazes of reality like a drunk, without any guidance, without ever understanding what really is going on. Debunking this, arguing about that. Annoying everybody, because you mix up data with facts and are unable to fathom, to interpret, to sense the real meaning of it all.

                  Get rid of the ads for sluts and banks on your site, go out dancing, do some meditation. Try to understand what we are really saying here, ok?

  7. The Webmaster wrote (or did he quote someone?)
    ===
    Every dollar in circulation, except for actual paper notes and coins, were created by somebody going into debt with a bank. The bank creates the new money the minute it is lent out. Mind you: the entire loan is created when taken out: a bank needs deposits, but it does not lend the deposit! It creates new money next to the deposit.
    /===

    This is a very misleading representation of what actually happens. The real story is this: http://rudhar.com/economi/monydebt/en/008slfnd.htm , and please compare that to parts 1 and 2 of my series.

  8. did i ever mention http:emergentbydesign.com
    lady with eastern european roots upstate NY someplace, … travels and collects networking links … she’s not too squeamish to go adress the Darpa inclined crowds; i’d have a little less leniency and fewer reformhopes, more abuse fears myself .. but that’s just me.

  9. Thankyou for helping out, great info .

  10. Rajesh permalink

    Truth stands alone on its own feet, bright and shining ! Thank you and Best Wishes.

  11. Mad Money
    07-30-2012 • by Daniel S. Comiskey
    From an Evansville strip mall, Bernard von NotHaus ran the most successful alternative currency in the country. Then the FBI raided his headquarters, arrested him, and seized eight tons of gold and silver backing the notes. http://www.indianapolismonthly.com/features/Story.aspx?ID=1725808
    ===
    Welcome to the Free Lakota Bank=

    About the Free Lakota Bank» A New Standard of value
    “Money is the barometer of a society’s virtue. When you see that trading is done, not by consent, but by compulsion…when you see that in order to produce, you need to obtain permission from men who produce nothing…when you see your laws don’t protect you against them, but protect them against you…when you see corruption being rewarded and honesty becoming a self-sacrifice…you may know that your society is doomed.”
    Ayn Rand, Atlas Shrugged

    At the Free Lakota Bank, we issue, circulate and accept for deposit only AOCS Approved Silver currencies and other .999 fine silver bullion. Silver is a store of value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Since we deal only in what we consider to be real money, we do not participate in any fractional reserve looting schemes.

    The Lakota Indian Nation considers paper money to be the root cause of most injustice in the world. Objective money, currency minted from gold, silver and copper, can’t be artificially created and loaned in to circulation. Its high acquisition, refinement and production cost limits the speed at which it enters the marketplace. The very nature of the work required to place it in to circulation helps establish its value in the marketplace. Over many generations, however, the true understanding of what money really is has degraded from “an equivalent of wealth produced” to our present-day “legal tender”. Governments today, subservient to international banking conglomerates, inflate paper money supplies, manipulate interest rates, and stimulate circulation of their currency through taxation and force. So long as merchants, business owners and traders are willing to accept and circulate the valueless currency, the world will continue to be plagued with our modern form of slavery. Servitude can only be ended by producers demanding payment for their goods and services in real money.

  12. Hallo Anthony

    Ik heb de energie serie gezien en je hebt daar bij mij voor een turningpoint gezorgd, erg goed en duidelijk uitgelegd. Ik heb gezien dat je met de Gelre bezig bent, hoe staat het hiermee?

    Daarnaast vind ik het jammer dat je een Engelstalige blog hebt en geen Nederlandse aangezien er in Nederland ook nog heel wat mensen wakkergeschud moeten worden.

    Ik ben opzoek naar andere mensen die geïnteresseerd zijn in alternatieve geldsystemen, weet jij misschien een plek waar ik gelijkgestemde kan vinden.

    Met vriendelijke groet,

    Huib

    • Ik ben bezig met alternatieve geld systemen. Burgerlijke ongehoorzaamheid op facebook.

      • Ik zal eens kijken,

    • Tof om te horen dat die film voor jou gewerkt heeft Huib!

      We zijn hard aan ‘t werk met de gelre en hoewel ik niet meer aan voorspellingen doe, ziet het er goed uit!

      En ik vrees dat er nog veel en veel meer engelstaligen zijn wat hebben aan basis economie🙂

    • Trouwens Huib, als je wil vertalen ben je welkom hoor!

      Ik heb trouwens wel een nederlands talig blog, alleen doe ik er niet heel veel mee, nog, maar als jij vertaalt, post ik daar.

      godenvaderland.wordpress.com

      • Hallo Anthony,

        Ik snap je punt. Ik wil opzich wel mijn steentje bijdragen, ik haak nu alleen al af omdat het in het engels is. Ik heb nog geen artikel echt door gelezen. Ik kan wel wat engels maar veel woorden moet ik dan opzoeken. Ik begrijp wel dat ook ik mijn verantwoordlijkheid moet nemen.

        Even een vraag wat betreft controle. Hoe lang mag jij op het internet nog jouw verhalen verspreidden denk je?

        Gr.

        • Geen punt, ik vraag het gewoon, voor hetzelfde geld had je het wel gekund tenslotte en ik zou het heel fijn vinden als meer van m’n artikelen in het Nederlands gelezen zouden kunnen worden.

          vooralsnog zie ik geen problemen eerlijk gezegd. De druk is vooral sociaal. Het zijn taboe onderwerpen, nog steeds.

          • Ok,

            Het zou inderdaad mooi zijn als je artikelen ook in het Nederlands zouden verschijnen. Vroeg of laat komt er vast iemand langs die ze wil vertalen.

            Ik bedoel dat het internet voor jou mogelijk in de toekomst moeilijker toegankelijker gemaakt wordt. Ik heb je filmpje gezien met het advies om over te gaan tot een b.nkr.n.
            Ik zou het jammer vinden als je nu al op 1 of andere manier de toegang tot internet wordt ontzegt, we hebben je kennis nog hard nodig.

            Wat bedoel je met de sociale druk, dat mensen tegen je ingaan?

            Gr

    • ===
      Daarnaast vind ik het jammer dat je een Engelstalige blog hebt en geen Nederlandse aangezien er in Nederland ook nog heel wat mensen wakkergeschud moeten worden.
      /===

      Ik heb wel info in het Nederlands:
      http://rudhar.com/economi/monydebt/nl/index.htm

      Maar dan echte, die niet misleidt en opstookt.

  13. marxbites permalink

    Jackson killed the Den of Vipers, paid OFF the nat’l debt, and returned surplus revenues back to the people.

    Funny you forgot to mention THAT era of sound specie money that banksters could not abide and ergo started the CW to get their nationalization monoply.

    Also under MPE just how do the poor with no credit worthiness borrow for free?

    • the poor would buy their house, use the house as collateral and would thus be free from loansharks and landlords.

      In fact: they would no longer be poor as a result.

    • marxbites, have you read the article on Mutual Credit by now?

  14. herzmeister permalink

    Well, now try to install a mutual credit system that can be used world-wide via the internet, and that works without a central ledger or authority.

    That’s because a central ledger or authority would be world-government-like instance and thus a single point of failure/control/corruption/infiltration.

    No central authority means no possibility to check real-life identities, hence pseudonymity or near-anonymity is required.

    So far, crypto-currencies simulating a tradeable commodity (like gold coins), like Bitcoin, is the only known solution. This is also because you cannot apply fiscal politics to Bitcoin, hence you have to make its supply limited and predictable (deflationary).

    Hence much of Austrian economics applies to Bitcoin, in case you’re wondering. It’s not really because of ideological reasons, it’s just because this school of thought has accumulated a lot of analytical methodology and knowledge over the decades that can be applied to a Bitcoin economy.

    This does not exclude the use of parallel and complementary trading systems on a regional level, where anonymity is not required. In fact, I still do believe such a dual approach would balance things out beautifully.

    • I agree, although I don’t believe in Bitcoin itself.

      However, the Freicoin variant has what it takes in terms of monetary architecture. Even a gold coin standard would work with a demurrage on it.

      But of course monetary architecture is just one thing.

      marketing is an entirely other story, but vital for free market currencies.

  15. My disagreement with you regarding #2 is primarily over historical account and not monetary theory, of which i am in total agreement with you. As a protest for the record i will repost my comment made in to your previous artilcle.

    The Greenbacks Lincoln’s treasury printed were interest and debt free. The war could not have been financed without leaving an astronomical debt otherwise.

    The bankers sabotaged the Greenbacks shortly after they were issued:

    “Seemingly unimportant limitations on the use of Greenbacks (printed on the green back), insisted on by the bankers, forbidding their use to pay import duties and interest on the public debt, were utilized by the banks to slap a surcharge on Greenbacks of up to 185%. This undermined the confidence of the people in Greenbacks and necessitated further concessions to the bankers to obtain more, discounted as the Greenbacks now were.” Still, Money Masters

    This lead to the bankers forcing Lincoln to passing the National Banking Act 1863 which gave the private banks monopoly on creation of money created from sale of interest bearing bonds. Greenbacks still circulated but their quanty was halted. The National bank was as “national” as the Fed is Federal. And you are right to criticize the usurous money issued from this national bank, but wrong to confuse Greenbacks with this money. It is my opinion that many do encourage this confusion in order to disparage the real history of interest free fiat and true national banks.

    Many critics have made similar false claims about colonial script. After a successful period of financing the war against the KIng George, the British sabotaged Colonial script by counterfeiting it and printing millions of them. The hyperinflation that ensued has been attributed by many modern critics to the inherent unsoundness of colonial script in particular and interest free fiat overall.

    • thanks Rex!

    • “Seemingly unimportant limitations on the use of Greenbacks……….”
      This is just Bill Still’s day dream, not reality

      “This lead to the bankers forcing Lincoln to passing……”
      In 1863 Lincoln signed into law what he proposed in 1839. What force was used? who twisted his arm?

      Could you offer something to support your contention? something other than copy/paste from the two peddlers who really know nothing about Greenbacks ?

      The bankers brought you Greenbacks.

      December 9th, 1861.
      “The second plan suggested remains for examination. Its principal features are, (1st) a circulation of notes bearing a common impression and authenticated by a common authority; (2d) the redemption of these notes by the associations and institutions to which they may be delivered for issue; and (3d) the security of that redemption by the pledge of United States stocks, and an adequate provision of specie.

      “In this plan the people, in their ordinary business, would find the advantages of uniformity in currency; of uniformity in security; of effectual safeguard, if effectual safeguard is possible, against depreciation; and of protection from losses in discounts and exchanges; while in the operations of the government the people would find the further advantage of a large demand for government securities, of increased facilities for obtaining the loans required by the war, and of some alleviation of the burdens on industry through a diminution in the rate of interest, or a participation in the profit of circulation, without risking the perils of a great money monopoly.

      “A further and important advantage to the people may be reasonably expected in the increased security of the Union, springing from the common interest in its preservation, created by the distribution of its stocks to associations throughout the country, as the basis of their circulation.

      “The Secretary entertains the opinion that if a credit circulation in any form be desirable, it is most desirable in this. The notes thus issued and secured would, in his judgment, form the safest currency which this country has ever enjoyed; while their receivability for all government dues, except customs, would make them, wherever payable, of equal value, as a currency, in every part of the Union. The large amount of specie now in the United States, reaching a total of not less than two hundred and seventy-five millions of dollars, will easily support payments of duties in coin, while these payments and ordinary demands will aid in retaining this specie in the country as a solid basis both of circulation and loans.”

      here is some tid-bit as to the origin of the exception clause (you won’t hear it from Still or Brown):–

      December 19, 1862.
      ” I procured to be inserted a provision making the duties on imports payable in gold. This was to enable the government to meet the payment of interest in coin.”

      Tuesday, January 28, 1862.
      “Mr. STEVENS. If I am allowed to answer that question, I will say that the committee have fixed no time; but that it is the determination of the committee to allow ample time for its full discussion and consideration. Without specifying any particular time, we will probably be governed a good deal by the number of gentlemen who desire to speak. Being a new measure, we thought it right to give ample time for those having a deep interest in it — ample time to express their sentiments.

      “While I am up, I will follow an example which has been set me, and give notice of an amendment which I shall offer to the bill. It is to make the semi-annual interest payable in coin. I shall make it when we reach the proper time and place.”

      Monday, February 24th, 1862.
      “Mr. Stevens. Of course, I hope the gentleman’s request will be granted. I want to say that I agree with the gentleman in some things, and one of those things is, that this bill has many uncouth features, dissimilar to each other. But it is no wonder that it is so, for it had a vast number of progenitors, and it must partake a little of the lineaments of all. I also agree with the gentleman, that another feature — I will not say absurd feature, because I believe the House has adopted it — of this bill is, that after we had made a currency for all, declaring it equal to gold, we made an exception, and declared that it was not equal to gold, and should be a currency only for some; thereby depreciating, by that very fact, our bonds.

      “But that is passed. I am not complaining of what was done before, but only justifying what has been done since. What has been done is but a corollary of what had previously been done. We provided that the Secretary of the Treasury, in order to raise gold to pay this interest, should throw into the market the bonds of the United States at whatever they would bring. That became necessary, and I think erroneously so. The committee of conference having to take the bill as they found it, so far as both branches of Congress had agreed upon it, looked about to see how they could prevent the sacrifice of these bonds, if possible. We saw no way but to raise the coin in some other mode than selling our own paper, thereby bringing our currency below par, which we declared was par. To prevent that further absurdity — and I appreciate the objection and the feelings of the gentleman from Kentucky, [Mr. Wickliffe] — we made the imports payable in coin. After that, if we have to sell any bonds, we shall have to sell but a very small amount.

      “Mr. Baker. I understand that the object of the nineteenth amendment of the Senate, making the duty on all imported goods payable in coin, is to obtain coin with which to pay the interest on our public debt.

      “Mr. Stevens. It is so pledged.

      “Mr. Baker. We are daily in receipt of duties on imported goods. Is it the purpose of the Secretary of the Treasury to retain the coin for the time being, until the payment of interest becomes due, which would run from one to six months, in the various sub-Treasuries of the country; or will he take it into the market and sell it, a thing which he has no authority to do ?

      “Mr. Stevens. I cannot say what the Secretary of the Treasury will do. If I were Secretary of the Treasury I could tell what I would do. I would issue these bonds payable every month in the year, one after another, so that the interest would fall due every month in the year. He would then have to retain the coin in the sub-Treasury only for less than a month. Whether or not the Secretary of the Treasury will do that, I cannot say, for I have had no intercourse with him upon the subject; but I say it seems to me that would be a wise course to pursue. I see the difficulty which the gentleman suggests; and a great burden it would be to have retain the coin as it accumulated for six months; hence I would make these bonds bear date at twelve different periods, and have the interest fall due at twelve different periods, so that the coin received in each month should pay the interest falling due that month.”

      ______________
      Senators who voted for the legal-tender clause (the Greenbackers in the Senate):–
      Zachariah Chandler, Daniel Clark, James Doolittle, James Harlan, Ira Harris, Jacob Howard, Timothy Howe, Lot Morrill, Samuel Pomeroy, John Sherman, Charles Sumner, John Ten Eyck, Benjamin Wade, Morton Wilkinson, Henry Wilson of Massachusetts
      (now, why would the most reviled John Sherman speak for an hour on behalf of the legal-tender clause? why would he vote for it? why no book-peddler would ever tell you that John Sherman was a greenbacker?)

      Senators who voted for the National Currency Bank bill:–
      Anthony, Arnold, Chandler, Clark, Doolittle, Fessenden, Foster, Harding, Harlan, Harris, Howard, Howe, Lane (of Kansas), Morrill, Nesmith, Pomeroy, Sherman, Sumner, Ten Eyck, Wade, Wilkinson, Wilmot, and Wilson (of Massachusetts)

      Senators who voted for reduction of currency:–
      Anthony (R), Brown (R), Buckalew, Clark (R), Conness (R), Cowan (R), Cragin (R), Davis, Doolittle (R), Edmunds (R), Fessenden (R), Foster (R), Grimes (R), Guthrie, Harris (R), Johnson, Kirkwood (R), Lane of Indiana (R), McDougall, Morgan (R), Morrill (R), Nesmith, Nye (R), Poland (R), Pomeroy, Riddle, Sumner (R), Trumbull (R), Van Winkle, Willey (R), Williams (R), and Wilson (R)

      Senators who voted for credit strenghtening:–
      Abbott, Anthony, Cameron, Cattell, Chandler, Conkling, Conness, Corbett, Cragin, Dixon, Drake, Edmunds, Ferry, Fessenden, Frelinghuysen, Harris, Howard, Morgan, Morrill of Maine, Morrill of Vermont, Nye, Patterson of New Hampshire, Ramsey, Sherman, Stewart, Sumner, Trumbull, Van Winkle, Warner, Willey, and Williams

      Senators who voted for credit strenghtening the second time:–
      Joseph C. Abbott (R), Henry B. Anthony (R), Arthur I. Boreman (R), William G. Brownlow (R), Cameron, Cattell, Zachariah Chandler (R), Roscoe Conkling (R), Corbett, Cragin, Drake, George F. Edmunds (R), Reuben Fenton (R), Orris S. Ferry (R), William Pitt Fessenden (R), Gilbert, Grimes, Harris, Howard, William Pitt Kellogg (R), McDonald, Justin S. Morrill (R), James W. Nye (R), Patterson, Pool, Pratt, Ramsey, Robertson, Sawyer, Schurz, Scott, John Sherman (R), Stewart, Charles Sumner (R), John M. Thayer (R), Thomas Tipton (R), Lyman Trumbull (R), Willard Warner (R), Witley, Williams, Henry Wilson (R), and Yates

    • Why has Thaddeus Stevens –grand old commoner and radical re-constructionist– voted for the National Currency Bank bill ? who twisted his arms?
      What was he thinking? that bank notes will peacefully co-exits with U.S. notes ?
      Perhaps he understood and went along with the plan outlined by Samuel Hooper, that greenbacks were a temporary measure, preceding a more permanent one:
      “In order more fully to understand and more easily to meet any objections which may be urged against the first of these measures [greenbacks], being the one now occupying the attention of the House, it will be desirable to notice the other two [taxation and national banks], which are designed to be more permanent in their character, and upon the expected results of which the present measure is in some degree based.”

      In 1862 greenbacker John Sherman spoke for an hour in favour of the legal-tender clause; a year later, he spoke for an hour in favour of National Currency Banks.

      Who opposed and voted against the National Currency Bank bill ? Gold-ites! Vallandigham, Pendleton, Roscoe, Collamer.
      My oh, my; what fine Polski Ogorki we have here: Greenbackers were FOR National Currency Banks, gold-ites opposed them.

      Roscoe was proven right in his 1862 suspicion that greenbacks were issued to pave the way for National Banks:

      The National Currency Bank Act stipulates:
      “Sec. 41. And be it further enacted, That every such association shall at all times have on hand, in lawful money [Greenbacks] of the United States, an amount equal to at least twenty-five per centum of the aggregate amount of its outstanding notes of circulation and its deposits;”

      Thus-therefore, and following upon this fact, Greenbacks survived because National Currency Banks needed them and kept them alive in their vaults. After the National Currency Banks became Federal Reserve Banks, greenbacks were redeemed in gold and retired. ……
      What was the National Currency circulation in 1914?

      http://www.americascaesar.com/ebook/index.html

  16. Reblogged this on Recovering Austrians.

Trackbacks & Pingbacks

  1. A Primer for Recovering Austrians: the many sys...
  2. The Daily Bell: Usurious Commercial Banking is Freedom, Interest-Free Government Money is Tyranny | Real Currencies
  3. Why Tom Woods is wrong about the Greenbackers | Real Currencies

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: