Wouldn't It Be Nice To Have An Honest Free Press?

What does this tell you about our leading news sources?

Headline The Independant (London): The Demise of the Dollar

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies...

Headline Breitbart: UN calls for new reserve currency

The United Nations called on Tuesday for a new global reserve currency to end dollar supremacy which has allowed the United States the "privilege" of building a huge trade deficit.

Headline USA Today: Letterman gets ratings bump from apology

David Letterman's apology to his wife and staff members means another big night in the Nielsen ratings for the late-night talk-show host, the Associated Press reports. ...

Headline USA Today Money: How to rebuild an investment portfolio after recession's hit

One year after the collapse of Lehman Bros., the average stock mutual fund is virtually unchanged. ...

Headline New York Times (online): Obama Says He Won’t Slash Troops in Afghanistan

President Obama told Congressional leaders he would not substantially reduce U.S. forces in Afghanistan, but he remains undecided about a troop buildup.

Headline CNN.com: Harsh outposts pose serious challenge for U.S.

A base in Afghanistan where eight U.S. troops died in a battle over the weekend was scheduled to be closed in the next few days, CNN has learned.

Headline Time Magazine (Online): The Orangutans of Sumatra Under Threat*

The cultivation of palm oil damages the habitat of the apes of Sumatra.

* To Be fair, I am only dealing with the leading headlines. Time Magazine online did have a link to an editorial What if oil weren't priced in dollars? It stated:"Such a change wouldn't be unmitigated bad news for Americans."

Why do creditors continue loaning to the fedgov?

[From a comment I left on Tuscany Circle blog]

Kind of simple actually. The creditors have more to lose than gain in the collapse. The creditors, mainly China, have a huge stake in American debt. Like any other bankruptcy, the creditors lose too. So the creditors must get out without causing a stampede that wipes their position out. There are several ways really. One they can reduce what they loan and extract tighter concessions on the loan. The Chinese have reduced the term of their treasuries purchase from 30 year notes to seven year notes and interest is up. Second, they can increase their imports and pay for them with US Dollars reducing their cash holdings. Note that this does not have to be with us, it can be any other country, and can be at a discount off par value - that is they can pay generous prices to keep up the illusion. This spending can be petroleum, land, food, or virtually anything. It could be the Panama Canal. Oh wait, they've done that.

Or they could surreptitiously dump the money so as not to start a panic that would render their dollar holdings worthless just like yours will be when the government goes default. Several weeks ago, $134B in bearer bonds were caught being smuggled through Italy by two "Japanese" men. The story died a quiet death. The news didn't find it an interesting story. The US Government declined comment. It meant nothing. Someone is exiting holding our money in favor of G. Gordon Liddy and Gold. They just don't want anyone else to know about it. Only one problem with all this. It is a game of musical chairs. Someone (many?) will be left standing when the music stops. But you don't want it to collapse until you are clear of the carnage.

Omerta

What Is A Dollar?

From The Coinage Act of April 2, 1792 (1 Stat. 246) comes the answer to my long standing question " What is a dollar?

DOLLARS OR UNITS--each to be of the value of a Spanish milled dollar as the same is now current, and to contain three hundred and seventy-one grains and four sixteenth parts of a grain of pure, or four hundred and sixteen grains of standard silver.

What is a dollar not?

A dollar is not a rectangular piece of green paper 6.14 inches long and 2.61 inches wide. You may call that a dollar bill if you like or a note, but it is not a dollar. What is this banknote we call a dollar bill? It is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand in dollars. A dollar has a specific absolute definition. It is not self-referential.

The dollar and its fortunes, and the United States of America and its fortunes are inextricably tied together for all time. luxomni

More Inflation

Remember that 100 Billion Dollar Zimbabwe bill that I posted 10 days ago?
Well, too late. Now you need 100 Trillion to make the same purchase.

The Fed - Lender of Last Resort. Are We Really There Already?

Today the Federal Reserve Bank began buying Treasury Bills to underwrite the currency of the United States. Since the Fed is also the one who circulates the debt funded currency, what we really have here is paying for our National Mastercard with our National Visa card.

It really reminds me of the old Cheech and Chong movie where one of them was going to make some money selling pot. He had done very well ... selling it, on credit, to himself.

Secret News on the Dollar?

You will not see this on your evening news, but it is starting to unravel! Secretary of the treasury Geithner announced today at the Council of Foreign Relations that we are open to replacing the dollar with a new international currency as proposed by the Chinese.
The DOW over the next three hours fell 350 points, and GOLD rose $12 an ounce.

You will not see this on CBS, ABC, NBC, or CNN.

As Constant As the Dollar

As Constant As the Dollar
Original photograph by luxomni

These are five of the six kinds of currency in circulation prior to FDR*. Although readily interchangeable for each other, each one really was different. Two of them were anchored in value, because they backed by a coin or block of metal of similar value. In truth, they were a receipt for ownership of that coin or hunk of metal. Therefore it was a "Certificate" of ownership. It was easier to carry and readily transfer the receipt than it was the metal itself. The other bills were promises. "We don't have it right now, it is tied up in other things - i.e. loans or property, but we can get you some metal. Hence it was a promissory note - a United States Note, or a Federal Reserve Note. The last is National Currency. This is a place-holder -- i.e. "We not only don't have it in metal right now, but we don't even have it on loan right now. We will get you some eventually". The purpose is to keep commerce moving. Since "A" will work for "B" and "B" will sell to "C" who will sell to "A" all we need is a barter ticket to keep track of the motion.It self-proclaims that it is exchangeable for "Lawful Money". Ipso Ergo, it is "Unlawful Money".

They were all interchangeable, as was the silver dollar that was really a measured amount of silver (until C. Douglas Dillon, President Lyndon B. Johnson's Secretary of the Treasury ceased redemption in March 1964). Gradually, these bills all have been removed from use, leaving only the Federal Reserve Note in circulation.

To quote the U.S. Department of the Treasury web site, "the [Federal Reserve] notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are "backed" by all the goods and services in the economy." Because that is neither a fixed amount nor relationship, the value is free-wheeling.

But do note that that full faith and credit never seem to work in the public's favor. That 10 cent Pepsi, now a dollar-thirty-nine
-- it wasn't the Pepsi that changed.


*The sixth was the National Bank note or "hometown note" issued by national banks (First National Bank of [Your-town here]) under authority of the Federal Reserve system.

I surprised myself

I have been saying this for a while, but it caught me again. Can it be anything but a conspiracy to keep us stupid?
Ask everyone you know. "Why is gas so expensive?" I have heard the usual litany - "Speculators". "Big oil". "The Arabs".
The answer is , of course, gasoline is cheaper than it was in 1964. Huh?

In nineteen-sixty-four, the Dollar was an instrument called a silver certificate. It equaled and was exchangeable for one silver dollar at any bank. It was also in nineteen-sixty-four that either dollar equaled and was also exchangeable for four gallons of gasoline.

A mere 100 days after the death of President John F. Kennedy President Lyndon Johnson accomplished a goal he had since he was an assistant to Senator Sam Rayburn in the early days of FDR. He demonitized silver and removed the requirement that there be an actual "dollar" for each certificate in circulation. In essence he made the bill the dollar.

Little-by-little, the currency inflated. Now, in 2008, we take those two dollars and see what they buy. The paper one now buys one quart of gasoline - one sixteenth the amount of gas that it bought in 1964. But what of the silver dollar? At today's spot fix for silver and the price I paid for gasoline this very afternoon, one silver dollar would have bought not four gallons of gas as in 1964, but five full gallons of gasoline.

So as you listen to people blame everyone in sight for the so-called high price of gasoline, remember, they are not blaming the groups really responsible for the slipping of our savings and decline of our real salaries, the bureaucracy of the Federal Government and our own Representatives. They are misdirecting us to see the dollar as a constant and gasoline as a variable. But seal up a jar with one gallon of gasoline, and one with a one dollar bill. Come back in ten years and see which one has lost its value.