In Nothing We Trust: Part 3/5

by | Dec 21, 2008 | 6 comments

Part three in the on-going saga of posting a paper no one wants to read.

PART THREE: THE FEDERAL RESERVE SYSTEM – THE MAGICAL MONEY MAKING MACHINE

“The world is governed by very different personages from what is imagined by
those who are not behind the scenes.”   – Benjamin Disraeli, English Statesman 1844.

In the preceding pages, a quick sojourn through time has shown the many seemingly innocuous and worthless items that have been used as money.  We have also taken a brief jaunt alongside the continued attempts to build a centralized banking regime in America and the subsequent fall of each. In this section, that basic framework becomes the context with which the merits of the Federal Reserve System are called into question. The question was posed in the opening paragraphs of whether or not there should be an all-mighty arbiter that controls the creation and flow of money. That is precisely what the Federal Reserve is.

Llewellyn Rockwell, Dean of the Ludwig von Mises Institute, has a less flattering view: “It’s no different from a burglar in your home wanting to steal your money – that’s what the Federal Reserve does. It depreciates your savings, it takes away your economic security and it ought to be treated as an institution that does that rather than something of alleged benefit.”

(more…)

In Nothing We Trust: Part 2/5

by | Dec 15, 2008 | 7 comments

Here is part Two of the my piece on banking, gold standard, and the Fed.

PART TWO: THE UNITED STATES, THE GOLD STANDARD AND CENTRAL BANKS – A BITTER MENAGE A TROIS

The first coins to be struck in the New World, the Spanish dollar, were pressed at a Spanish mint in Mexico City in 1536. (MBFR) These silver coins eventually found their way up to the English colonies on the eastern coast of the North American continent.  The mercantilist policies of the British Crown deliberately tried to keep precious metals out of the colonies, fostering a dependence on Bank of England notes and the debt they inherently carried. In light of such policies, the Spanish dollar became the unofficial currency of colonial America.  For smaller transactions, the Spanish dollar was often divided into eight pieces termed bits, hence the term “pieces of eight.”

The American governments first foray in to the realm of paper money came with the Revolutionary War and the need to fund it. Continental dollars, with no standard of value to back them, were printed out of thin air and at such a rapid rate that the currency quickly depreciated to no value. In 1781, at the height of the Revolution, Philadelphia merchant tycoon Robert Morris was given a charter by Congress to establish a privately run central bank. That institution, the Bank of North America, was granted the monopoly privilege to print and issue paper notes, and was the depository of all congressional funds (Rothbard, “The Case Against the Fed” p.70).

(more…)

In Nothing We Trust: Part 1/5

by | Dec 12, 2008 | 2 comments

Part one of a paper I wrote this past semester on the nature of money, central banking, and the Fed. I’ve broken it up in several sections so that it will be able to be read and critiqued in installments, probably one every few days. Feedback is of course appreciated. Enjoy.

IN NOTHING WE TRUST: THE TRUTH ABOUT THE FEDERAL RESERVE

by Joshua R. Kern

“If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.”   — Thomas Jefferson
(more…)

Skip Starbuck’s for World AIDS Day

by | Nov 29, 2008 | 11 comments

Skip Starbuck\I discovered this wonderful corporate outreach by Starbuck’s on World AIDS Day through Facebook. It appears that Starbuck’s is going to oh-so-generously donate 5 cents when you buy one of their beverages. Well, not any beverage of course. It has to be one of three holiday specials, so they won’t be sacrificing 5 cents on their less exorbitantly-priced beverages. It’s not just people dying in Africa depending on them, after all. They have shareholders dependent on them as well.

I know that reads sarcastically, but I’m actually one of the last people to complain about someone making money by providing a product people like. In fact, kudos to them for some brilliant marketing. That’s what it is, after all. I’d be willing to bet they’ll spend more on the ad campaign promoting their “charity” than they will actually end up donating. Let’s be real. Starbuck’s is not a charity. It’s a business.

(Read on…)