Wednesday, May 23, 2012

Problems with a Gold and Silver Only Money Supply

US Constitution, Article 1, Section 8: The Congress shall have Power .... To coin Money, regulate the Value thereof, .... To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;

US Constitution, Article 1, Section 10: "No State shall .... coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts."

While I am no fan of the Federal Reserve or Fractional Reserve Banking, some people are are passionate about returning to a purely gold and silver-backed currency. Ron Paul calls this "sound money". But the Constitution doesn't just say US Coinage should be gold-backed, it could be interpreted that only gold and silver be issued as money. While I have no absolute aversions to gold and silver, there still are many issues that make dealing with them difficult.

1. If we return to gold, do we only use 99.9999% pure gold and silver as coinage and money?
2. If we let there be impurities, how debased can we allow the currency to be? 99% pure? 50% pure?
3. Maybe the US could just use a cheeper metal like copper and add a microscopic amount of gold and silver to the coin to make up its value?
4. Do we mine enough silver and gold to meet the money supply demands of our nation?
5. What do banks do with the need to store all these coins?
6. All banks have operated on fractional reserves. This means the bank lends out 10x the money it has in the vault. This evil practice needs to stop as well. Fractional reserve money is virtual money creation which is the job of Congress and not the banks? Virtual money isn't gold.
7. For all large purchases, banks would have to arrange large shipments of bullion for every transaction. Can you imagine the drag on the economy (velocity) if physical coins had to be stored and shipped constantly?
8. The Point of the Safety Society System is that other things like land, real estate, and durable commodities have real value just like silver and gold. Therefore, while the Federal Government coins a certain amount of silver and gold coinage for circulation needs, I think the federal government could create digital money for local loans which is backed by the land, realestate, durable commodity that the money is being created to purchase.
9. So, in this case, in addition to circulating coinage, there would be digital money that is backed by land, realestate, certain durable commodities. If there were a default, the bank would repossess a real asset and not fail.
10. Also, if banks used only gold and silver 100%. No fractional reserve anything, then how could they make a loan? How is it just that a bank take your deposited gold and risk it by lending it to someone else? If there is a default, then the bank just lost your gold.
11. However, with SSS, the bank keeps all your money/gold in your account 100%. All loans are digital money that is backed by the land, realestate, durable commodity being purchased.
12. This SSS digital money system would perfectly provide the credit, velocity, and money supply needs of an advanced economy. SSS would operate along with circulated gold and silver coins.
13. Lastly, If only gold and silver can be used as money, how can the federal government pay to purchase gold? How do you buy gold with gold?

Thursday, May 17, 2012

Constitutional Money: Safety Society System

Many of our current problems in the US stem from our economic system. The surprising thing is that, in addition to repentance, our inspired Constitution may hold the answer to how to heal our countries economic difficulties. Most people don't know that neither the gold-based nor the Federal Reserve System are absolutely Constitutional. Both were based on fractional reserve banking which is a wicked tradition that goes back to the Templar Gold Houses in the Middle Ages, the DeMedici Banks in Florence, and the Rothchild Banks in Europe.

Constitution on Gold. Gold and Silver is not all bad. If fact, the Constitution specifically says that States shall only pay their debts using gold and silver specie (not Chucky Cheese Tokens). This suggests that federal "current coin" could be backed or made of something else (currency vs specie). Adam Smith in "Wealth of Nations" explains the limitations of a gold system. A country either has too much or too little to match economic output. If a country has too much, you have inflation, too little equals deflation. Over the millennia, Countries have gone to war to get more gold to save their economies.

This too much money supply = inflation, and not enough money supple = deflation is expressed in the Milton Freidman Monetarist equation on money. dM/dt (money supply) + dV/dt (velocity) = inflation rate + dRO/dt (economic growth). The secret in the Friedman equation is that preventing inflation requires a self-sufficent country to balance the money supply with the economic output for their country.

This allows banks to lends 10x the gold they have in the vault, or 10x the money that the megabank borrows from the FED. This means that the megabank and not the Federal government is creating the money. The Constitution Article 1, Section 8 says the Congress alone should create the "current coin" and prosecute counterfeits while states issue nothing but gold and silver.

The problem with Fractional Reserve Banking is that because of inflation, banks don't keep their 1/10 reserves in cash but invest in stocks and derivatives to keep up with inflation. If there is a stock market crash, then banks cannot lend. Also, if there is a run on the bank, banks dont have enough to pay everyone, the banks become insolvent, and the banks fail.

This is a major driver of inflation. Think about it. The point of banking money creation is the point of loan approval. Because amortized loans collect interest all up front, mortgage holders rarely build any equity in the property unless they sell the same asset (business, or home) to the next guy for more money. According to the Freidman equation, when Money Supply >> Real Output == Inflation. The Housing market is a perfect example that proves the Freidman equation. When each US citizen sells our starter house to the next young family for $20,000 more than we paid for it, that puts another $20,000 burden on that family that will have to be made up in terms of a cost of living increase. (inflation) More money supply for the same house.

US History seems to be one economic bust, and banking crisis after another. The Safety Society system proposes to set up a system of locally administrated lending and banking houses that are immune from failing. They are based on Constitutional money, they protect the depositors from the risks of the borrowers, and they are full reserve.

True Constitutional money would be created 100% by Congress via the US Treasury. A borrower (individual, coorporation, community) would go to their local Safety Society Bank, and request a loan. The borrower would prove their credit worthiness by providing evidence of employment and a steady paycheck, evidence of monthly sales and profits, or evidence of monthly government proceeds from the passage of a 1% sales tax. The local bank would then borrow money directly from the US Treasury, and pass the money on to the borrower. The US Treasury would charge a Simple Rate of Interest which would be used to control the money supply, and control inflation, control the value of money. The local bank would make its money by charging a loan origination fee and a monthly servicing change.

Safety Society System Banks would only ever lend and create money for real assets. SSS would not lend for stocks or bonds, or derivatives where there is not anything of value to be redeemed. SSS and the US Treasury would only create money for real output. This would include building houses, building buildings, but also could include loans based on how much it would cost to mine a certain mineral out of the ground and the value of the mineral deposit. All of this is real, all of this can be repossessed by the bank if the borrower defaults. This protects the depositors from the risk taking of the borrowers.

This Constitutional money is not without backing. But unlike gold which backs state money, federal money is backed by the real asset the money was created for.

When people deposit their money in a SSS Bank, that money stays 100% at the bank. SSS does not use that money to make new loans. In SSS, the US Treasury creates money "on-demand" as the economy requires and qualifies for it. In this way SSS is truely "Free Market" and "Free Enterprise". If you qualify for a loan, you can get the money you need. You don't need a "vulture capitalist" or a "socialist bureaucrat" who will only give you money if he can profit off your idea, or if your idea doesnt threaten his power. Because SSS creates money "on-demand" dM/dt never outpaces dRO/dt. Therefore, there is no inflation or deflation. The US Treasury charging Simple Interest adjusts for inefficiencies in the system by drawing extra money out of the system and generates revenue for the Federal Government on ALL THE MONEY created and not just a fraction of the money created in the system.

If a person loses their job and cannot repay their bank for several months, in SSS, the borrower already has equity in the real asset. So, the loan instantly becomes a reverse mortgage and the monthly payments are deducted from the equity (+/- a penalty). Repossession occurs only when an individual, corporation, or community has lost all equity in a property or asset. The Bank then has something of real value that they can manage or resell.

Although, SSS is influenced by Milton Friedman, it is not a "Monetarist System" where the government controls the amount of money in circulation. In SSS, the people control the amount of money in circulation by qualifying for it and asking for it (on demand, ask/qualify and receive economy).

In SSS there still is gold and silver issued by the states. You can still barter. But in addition, there is a federal paper/digital currency backed by whatever real durable asset/commodity you are borrowing the money to buy or create or farm or mine. With SSS you don't need the real durable asset/commodity in a wearhouse first. You can create the money and be approved for a loan to purchase land and build a house on that land. The prospective future house backs the paper/digital money.

Nuclear Disarmament

While I am no fan of nuclear missiles, the reality is that the US has long been adopting a policy of nuclear disarmament while Russia has been secretly violating the START 1 and New START treaties. "Countdown to Zero" was a carefully crafted price of propaganda documentary in Dec 2010 by the same producers that brought us Al Gore's "An Inconvenient Truth." The documentary's release date preceded the signing of the New Start Treaty in Feb 2011.

While the US unilaterally disarms, Russia has long been expanding and modernizing their nuclear stockpile at their underground megacomplex at Mount Yamantau. Russia has also been preparing for a nuclear conflict by building 5000 new nuclear shelters:

These 5000 new shelters are in addition to Moscow's subway system which was built to double as a nuclear shelter and an extensive shelter system built during the cold war:

World's biggest Atomic bunker - Russia cares for its own People - Britain lets Public DIE

Interesting detail in this video is how they acknowledge that gamma radiation has fallen to relatively safe levels after just 2 weeks and it can be safe to emerge from a bunker wearing a plastic suit needed for the remaining alpha and beta radiation.

This is in addition to the buildup of Chinese underground nuclear tunnel system. The basis of this discovery is that many of these tunnel systems collapsed during the 2008 Sichuan Earthquake. These collapsed tunnel systems were easily observable by Google Earth:

The US and British policy on the other hand is to absorb an initial first strike and provide no protection for it's citizens. "Firststike" is a 1979 documentary describing how the US would be unable to effectively retaliate after being attacked:

First Strike (Part 1)

LDS Political Scientist Joel Skousen, nephew of Cleon Skousen, shares the view that Russia and China will conduct a nuclear attack the US one day. He has written several books on the subject of preparation for this eventuality and publishes a weekly newsletter:

In addition to Joel Skousen's intel on the globalist/Gadianton's plans for America, while he doesnt discuss them publically, Bro. Skousen is well aware of the several recorded versions of the George Albert Smith Vision of WW3. The first is recorded by my neighbor David Horne and the second was recorded by a Bro. Fuchs from LaVerkin UT. I have all versions. While not official LDS doctrine, this vision gives the best clues as to the timing of this event.

Tuesday, May 01, 2012

Proper Use of Force

When I was in residency training. A medical student was assigned to be in the ER for a 4th-year medical clerkship. To verify that the students are present, they were required to give a brief and simple eval sheet to one of the attending physicians to fill out, sign and drop in a box that sits in a conspicuous place in the physician work area. Well, this particular medical student decided to have an extra month of vacation and never showed up for the entire month. When it came evaluation review and grade time, this student didn't have any evals in the box and none of the attending physician remembered having seen this student in the department. When this student was confronted on this issue, the student claimed he was there but that none of the attending physicians had fulfilled their responsibility of filling out the evaluation slip.

Now, I'm not sure what happened to this student. Somewhere along the way "making an example" of someone became a bad thing. However, instead of punishing the perpetrator of the crime, the department decided to punish everyone in the name of prevention. So, what the department did was institute a very tedious and painful, computerized, daily log. Now the attendings had to sign off on each student what procedures and what skills the students had learned that day. I'm not against measuring learning, but the increase in tedious red tape in the name of prevention, I agree was an abuse of force.

Instituting laws and regulation for the crimes of others in the name of "regulation" and keeping the public safe is a misuse of constitutional government force.

I agree with Libertarians and Alma 1:17-18 that the government should prevent its citicens from violating the rights of others only by punishing the criminal. The punishment should fit the crime. Prisons should be rehabilitation and skill training centers.

Today, it seems when people and business violate the liberties of others; in an attempt to prevent and protect the public, instead of investigating and punishing the perpetrators; draconian regulations are put in place. These draconian regulations dont really protect but are used to stifle small business because too-big-to-fail big business get waivers or own the patents and licensing on the more restricted production process and machinery.

Accordingly, I also believe that the government should only intervene with force when there is a victim. So, like I said before, marajuana possession should not be criminalized, but drug Distrubution can be prosecuted. Recreational drug abuse is a lie, a fraud, and a theft of a "high" the person did not earn. It is self abuse that makes people weak and steals their motivation. However, recreational drug distributors become an accomplice to the self-abuse and can be prosecuted via the Kevorkian principle.

Some say, "Satan's plan was to force us to obey". Then they use this belief to say that a free society should protect our right to freely sin. Yes, I believe government shouldn't institute regulations to prevent sin, but that doesn't mean sin should be legal. When a person violates the liberties of another, the perpetrator should be forcibly punished and the fear of punishment should be the deterrence.

Back to the saying, "Satan wanted to force us to be obedient". Is absolute involuntary obedience possible? It seems so easy to sin. The only was to force to be obedient would be 1. No veil? (didn't stop Satan) Or 2. No rules? (Korihor's plan) 3. Drug-induced stuppor + hypnotism (CIA MKUltra Program)? Even if I were a total slave, I suppose I could still think a bad thought unless I wasn't allowed to think (#3).

Moro 7:17 for after this manner doth the devil work, for he persuadeth no man to do good, no, not one; neither do his angels; neither do they who subject themselves unto him.

My point is the Book of Mormon in Moroni 7:17 says that Satan persuadeth none to do evil. Does this count for force as well?

2Ne10:23 Therefore, cheer up your hearts, and remember that ye are free to act for yourselves—to choose the way of everlasting death or the way of eternal life.

Jacob tells us to "Cheer up" because we are free to choose life death. Therefore, some say we should be as grateful for the opportunity to choose death as we are the opportunity to choose life.

If Satan was going to force us to be good. I guess we should be grateful for and protect the option to sin. However, the scriptures never specifically say Satan wanted to force obedience. What they say is: 1. Satan sought to destroy the agency of man (get rid of rules per Korihor?) 2. Satan claimed he wouldn't lose anyone (false claim?). 3. Satan never persuades to do good (what about force?)

I think it possible that Satan's plan of captivity may not have been to force to be obedient. Maybe Satans plan was throw out the rules and everyone live like savages. There is no sin for animals following their instincts. They are just doing what animals do.

Also, if Satan was to force us to be good, and Jacob says we should be equally "cheerful" about the choice of death as we are for life, shouldn't we be grateful for and protect the opportinity to sin?

I suppose, it all depends on what the default setting was. If good was the default setting, we should be grateful for sin. However, If death is the default setting, we should be grateful for the commandments and the atonement that allow us to escape death.

Which do you think was the default setting? Which new option should cause us to "cheer up".

Before the Fall, for Adam and Eve, Life in the garden was the default setting, and sin was the option that gave them a choice. So, I would say that Adam and Eve were thankful for the FALL. For us, after the Fall, death is the default choice. And commandments and the Atonement give us the choice and the "cheer".

I guess what I'm saying is. Is it correct to say "it was Satan's plan to force us to do good?"

When we properly exercise our agency and Satan is Forcibly bound in the Millennium, and our children grow up without sin unto salvation; will they be less free? Will they have less reason to be cheerful?

Someone balked when I said, " a free man doesn't exercise his agency by choosing sin". This person believed that choosing sin was still exercising agency. In my mind, exercise makes a muscle stronger. In my mind, you increase your agency by obedience and weaken it through sin.