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The Real Reason for NATO Attacking Libya EXPOSED

The American Dream By The Provocateur Network

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But the Fed is Not Safe For Life.

Virginia Legislature weighs gold and silver as currency in the event of a “major breakdown” in Fed notes

HOUSE JOINT RESOLUTION NO. 557

Offered January 12, 2011 Prefiled January 5, 2011 Establishing a joint subcommittee to study whether the Commonwealth should adopt a currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal Reserve System. Report.

———- Patron– Marshall, R.G. ———- Referred to Committee on Rules ———-

WHEREAS, the Supreme Court of the United States has ruled in In re Rahrer, 140 U.S. 545, 554 (1891), that “the police power” of a State “is a power originally and always belonging to the States, not surrendered by them to the general government, nor directly restrained by the Constitution of the United States, and essentially exclusive”; and

WHEREAS, the Supreme Court of the United States has ruled in Beer Company v. Massachusetts, 97 U.S. 25, 33 (1877), that the police power of the States “extend[s] to the protection of the lives, health, and property of the[ir] citizens, and to the preservation of good order”; and

WHEREAS, the protection of the lives, health, and property of Virginia’s citizens, and the preservation of good order in the Commonwealth, depend upon the maintenance of both an adequate system of governmental finance and a sound and robust private economy; and

WHEREAS, an adequate system of governmental finance and a sound and robust private economy cannot be maintained in the absence of a sound currency; and

WHEREAS, the present monetary and banking systems of the United States, centered around the Federal Reserve System, have come under ever-increasing strain during the last several years, and will be exposed to ever-increasing and predictably debilitating strain in the years to come; and

WHEREAS, many widely recognized experts predict the inevitable destruction of the Federal Reserve System’s currency through hyperinflation in the foreseeable future; and

WHEREAS, in the event of hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System, for which the Commonwealth is not prepared, the Commonwealth’s governmental finances and Virginia’s private economy will be thrown into chaos, with gravely detrimental effects upon the lives, health, and property of Virginia’s citizens, and with consequences fatal to the preservation of good order throughout the Commonwealth; and

WHEREAS, Virginia can avoid or at least mitigate many of the economic, social, and political shocks to be expected to arise from hyperinflation, depression, or other economic calamity related to the breakdown of the Federal Reserve System only through the timely adoption of an alternative sound currency that the Commonwealth’s government and citizens may employ without delay in the event of the destruction of the Federal Reserve System’s currency; and

WHEREAS, “legal tender” denotes a currency that must be accepted in payment of a debt denominated in United States “dollars” if the parties have not stipulated that some alternative currency is to be used as their medium of payment or are not otherwise required to use such alternative currency; and

WHEREAS, the Federal Reserve System’s currency has been designated “legal tender” under color of Title 31, United States Code, Section 5103; and

WHEREAS, under Title 12, United States Code, § 411 and Title 31, United States Code, § 5118(b) and (c), the Federal Reserve System’s currency is not redeemable in gold or silver coin or the equivalent in bullion; and

WHEREAS, that the Federal Reserve System’s currency is not redeemable in gold or silver coin or the equivalent in bullion is being identified by more and more experts as a, if not the, major reason for the ever-increasing instability of the Federal Reserve System; and

WHEREAS, all gold and silver coins of the United States are designated “legal tender” under the aegis of Title 31, United States Code, §§ 5103 and 5112(h), and must be so designated perforce of Article I, Section 8, Clause 5 and Article I, Section 10, Clause 1 of the Constitution of the United States; and

WHEREAS, pursuant to Article I, Section 10, Clause 1 of and the Tenth Amendment to the Constitution of the United States, each State must make gold and silver coin a Tender in Payment of Debts; and

WHEREAS, the Supreme Court of the United States in Lane County v. Oregon, 74 U.S. (7 Wallace) 71, 76-78 (1869), and Hagar v. Reclamation District No. 108, 111 U.S. 701, 706 (1884), has ruled that the States may adopt whatever currency they desire for the purposes of performing their sovereign governmental functions, even to the extent of adopting gold and silver coin for those purposes while refusing to employ a currency not redeemable in gold or silver coin that Congress has designated “legal tender”; and

WHEREAS, “the police power” being the primary sovereign governmental function of every State, under Lane County and Hagar every State may adopt its own currency, consisting of gold or silver, or both, whenever necessary and proper to facilitate exercises of that power in aid of the general welfare of the State and its citizens; and

WHEREAS, under the aegis of Title 31, United States Code, § 5118(d)(2), and perforce of Article I, Section 8, Clause 5 and Article I, Section 10, Clause 1 of, and the Ninth and Tenth Amendments to, the Constitution of the United States, Americans may employ whatever currency they choose to stipulate as the medium for payment of their private debts, including gold or silver, or both, to the exclusion of a currency not redeemable in gold or silver that Congress may have designated “legal tender”; and

WHEREAS, under the aegis of Title 31, United States Code, § 5118(d)(2), and perforce of Article I, Section 8, Clause 5 and Article I, Section 10, Clause 1 of, and the Ninth and Tenth Amendments to, the Constitution of the United States, the citizens of Virginia may choose to employ as the medium for payment of their private debts whatever alternative currency, consisting of gold or silver, or both, that the Commonwealth may adopt in the exercise of “the police power”; and

WHEREAS, in light of the possible instability of the Federal Reserve System, proposals for states and their citizens to adopt an alternative currency consisting of gold or silver, or both, are receiving increasing attention throughout the United States, as evidenced by bills that have been or are being introduced in the legislatures of the States of Georgia, Indiana, Montana, New Hampshire, and South Carolina; and

WHEREAS, various systems of alternative currency employing gold or silver, or both, in the form of coin or its equivalent in bullion have already proved themselves in the free market, and could either be employed by the Commonwealth directly or be used as models for a new system created by the Commonwealth to meet Virginia’s unique needs; and

WHEREAS, the adoption of an alternative currency consisting of gold or silver, or both, would not destabilize the present monetary and banking systems, the Commonwealth’s governmental finances, or Virginia’s private economy, because it would not compel or commit the Commonwealth or her citizens to employ such alternative currency to the exclusion of the Federal Reserve System’s currency immediately, but would merely make the alternative currency available, and enable it to be used in competition with and preference to the Federal Reserve System’s currency, to the degree that the need for such use became apparent; and

WHEREAS, the United States Congress, the U.S. Department of the Treasury, and the Federal Reserve System have taken and are preparing to take no action to provide the United States with an alternative to the Federal Reserve System’s currency, in the likely event that the latter would be destroyed through hyperinflation; and

WHEREAS, because legislators in Virginia know or should know all of these facts; and because the General Assembly has the authority, the ability, and the duty to take timely action to deal with this situation without first seeking the approval of or assistance from Congress or any other state; and because the Constitution of Virginia provides, “That all power is vested in, and consequently derived from, the people, that magistrates are their trustees and servants, and at all times amenable to them”—for these reasons, the citizens of the Commonwealth will properly conclude that the members of the General Assembly will be primarily responsible if the Commonwealth is found to be without an alternative currency when the Federal Reserve System’s currency collapses in hyperinflation, or some other related economic calamity supervenes; now, therefore, be it

RESOLVED by the House of Delegates, the Senate concurring, That a joint subcommittee be appointed to study whether the Commonwealth should adopt a currency to serve as an alternative to the currency distributed by the Federal Reserve System in the event of a major breakdown of the Federal Reserve System.

The joint subcommittee shall consist of eight legislative members who shall be appointed as follows: five members of the House of Delegates to be appointed by the Speaker of the House of Delegates in accordance with the principles of proportional representation contained in the Rules of the House of Delegates and three members of the Senate to be appointed by the Senate Committee on Rules. The joint subcommittee shall elect a chairman and vice-chairman from among its membership.

In conducting its study, the joint subcommittee shall call or hear from such witnesses and take such other evidence as it deems appropriate and shall consider recommendations for legislation, with respect to the need, means, and schedule for establishing such an alternative currency.

Administrative staff support shall be provided by the Office of the Clerk of the House of Delegates. Legal, research, policy analysis, and other services as requested by the joint subcommittee shall be provided by the Division of Legislative Services. Technical assistance shall be provided by the Treasurer of the Commonwealth of Virginia and the Bureau of Financial Institutions of the State Corporation Commission. All other agencies of the Commonwealth shall provide assistance to the joint subcommittee for this study, upon request.

The joint subcommittee shall be limited to six meetings for the 2011 interim, and the direct costs of this study shall not exceed $12,000 without approval as set out in this resolution. Approval for unbudgeted nonmember-related expenses shall require the written authorization of the chairman of the joint subcommittee and the respective Clerk. If a companion joint resolution of the other chamber is agreed to, written authorization of both Clerks shall be required.

No recommendation of the joint subcommittee shall be adopted if a majority of the House members or a majority of the Senate members appointed to the joint subcommittee (i) vote against the recommendation and (ii) vote for the recommendation to fail notwithstanding the majority vote of the joint subcommittee.

The joint subcommittee shall complete its meetings by November 30, 2011, and the chairman shall submit to the Division of Legislative Automated Systems an executive summary of its findings and recommendations no later than the first day of the 2012 Regular Session of the General Assembly. The executive summary shall state that the joint subcommittee intends to submit to the General Assembly and the Governor a report of its findings and recommendations for publication as a House or Senate document and shall specify the date by which the report shall be submitted. The executive summary and the report shall be submitted as provided in the procedures of the Division of Legislative Automated Systems for the processing of legislative documents and reports, and shall be posted on the General Assembly’s website.

Implementation of this resolution is subject to subsequent approval and certification by the Joint Rules Committee. The Committee may approve or disapprove expenditures for this study, extend or delay the period for the conduct of the study, or authorize additional meetings during the 2011 interim.

The Fractional Fraud: Seven Myths of Money

Revolution Not

After discussing fractional lending practices with all kinds of people, I am able to say that most people don’t know where money comes from or what it is. The people that should know the most are actually the least informed thinking they know the most about our fractional reserve system. That is to say, the bankers were the most confident in their ignorance of money.

The best example I have of this is here when Matt, the Supervisor of Wells Fargo Home Mortgage, continued to claim they weren’t a part of the fractional reserve system.

The most common myth about where our money comes from is that our money comes from the government. When the USA needs money, they print US Treasury Notes and exchange the debt with the Federal Reserve. The government can then spend the Federal Reserve Notes. This is approximately where 5% of the money comes from. This is not the preferred way of subsidizing the banks though. The government prefers to issue bonds which the banks (and others) buy, and then sell for a profit to the Federal Reserve private bank not but days or weeks later.

The second common myth is that our money comes from the Federal Reserve private bank. Again, they are involved in only 5% of the money creation when transacting with the government through the Treasury. This percentage has likely changed due Federal Reserve private bank creating trillions out of thin air for the bailouts, QE69 and POMO. How it has changed hasn’t yet been documented.

So, where does 95% of the money in the United States of America come from? That portion of money is loaned into existence, at interest, by the banks as the money for every mortgage and loan. This is the origination process.

Fannie and Freddie

The third myth is that Fannie Mae or Freddie Mac are involved with mortgage origination. They are institutions backed by the government that purchase mortgages on the secondary market. It specifically states on each of their websites that they are not involved with mortgage and loan origination.

The fourth myth is that Fannie Mae and Freddie Mac provide liquidity in the mortgage and loan market. Given that the money is loaned into existence for every mortgage and loan, there is no need for liquidity in the market as there is no market (because there is no product) before the loan is made. Why does money created out of thin air need a market then?

There is really something fishy with this. What happens on the balance sheets of the banks during the mortgage process? Let me show you…

The banks get the best of both worlds. An additional 100,000 is created out of thin air for the banking system, plus the liability can be claimed as an asset and sold to a government backed entity (to socialize the losses) thus pocketing the total sum of the loan on both sides. Then on top of that the banks act as the money collector for the mortgage holders thus gaining access to more money from the original loan.

In total, when a mortgage is originated, the banking system rips off the public both through inflation and claiming a liability as an asset to investors (like the government back entities).

You might be a little confused by this transaction table above. This leads to the fifth myth that the money in a bank is yours. When you make a deposit, you loan the money to the bank. To person B, the bank owes them that amount of money, but it’s not actually person B’s money. The bank uses this fact that your deposit isn’t yours any more by using it as reserve for more loans. That is to say, once a deposit is made, it’s their money, not yours.

What makes tender legal? Constitutionality

While laws exist proclaiming that Federal Reserve Notes are legal tender, it is the equality and convertibility to gold and silver that makes it Constitutional and thus legal tender.

US Constitution – Article One – Section Ten – Powers prohibited of States

No State shall… make any Thing but gold and silver Coin a Tender in Payment of Debts

Nixon Shock
The Nixon Shock

President Nixon imposed a 90-day wage and price freeze, a 10 percent import surcharge, and, most importantly, “closed the gold window”, ending convertibility between US dollars and gold

This last component is still with us today but President Nixon didn’t have the power to do this.

US Constitution – Article One – Section 8 – Powers of Congress

The Congress shall have Power To… To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

Currently Congress is not doing this but that is beside the point for this article. Nixon did not have the Constitutional power to change the value of money. Only Congress had and has that power.

What is so strange is that Nixon’s unconstitutional act of regulating the value of money has caused the states to act unconstitutionally in every debt case involving Federal Reserve Notes since then.

This leads to the sixth myth that Federal Reserve Notes are legal tender. There are laws defining the Federal Reserve Notes as legal tender for all debts. As the banks create money out of thin air, it is not gold or silver. Even our own government tells us that Federal Reserve Notes are legal tender. Yet not a single person has been able to tell me how this is consistent with our Constitution. Given my understanding of the fractional lending process, our debt-money is not legal tender.

The actual cash is printed by the Treasury because our Constitution states that only the government can coin money but this is a loophole used by the bankers. They issue the money, and the government prints it. This is not the intention of the Constitution. All those strict constructionist judges out there should have an easy time turning over our monetary system on Constitutional grounds, only my fear is that they aren’t really strict constructionists. My fear for this is valid: they have extremely spotty records as strict constructionists especially when you read their arguments. The conservative wing of our judicial system seems more like the corporatists wing of the judicial system.

This has huge implications though. As the mortgage and foreclosure fraud works its way through the system, the easiest and best argument to shut down the banks is that they didn’t have consideration in the loan process. That is to say, the banks never had any skin in the game for the mortgage or loan. The loan document assumes that something of value is exchanged but the money was loaned into existence. Such Judges are activist in unconstitutionally defending Corporate Personhood and so I have doubts about their interpretation of money as defined by the Constitution.

This was just fine in the fractional system when on the gold standard as when they created the money out of thin air, it was instantly backed by gold. The problem was that they didn’t add any more gold to their reserves. This forced Nixon to take unconstitutional actions to preserve the system. The banks caused the Nixon Shock. In fact, what financial crisis haven’t the banks had a hand in?

Fractional Lending

Those of us that understand how loaning money into existence works, we have seen this chart or a variant there of:

The seventh myth is that the reserve ratio defines a relationship between how much of a deposit can become reserves. This is factually false. The Reserve Ratio only has to do with how much can be loaned into existence based on the reserves. The whole deposit can be used as reserves.

Wikipedia – Money Multiplier

(The money multiplier) number is multiplied by the initial deposit to show the maximum amount of money it can be expanded to.

I have created a new table to diagram what happens when you put facts together:

We get 500 in step A as the theoretical maximum by taking the initial deposit of 100 and multiplying by the money multiplier, 5. All the following steps take the proceeding maximum and multiply by 5 each time.

Once again, there is no link between deposits and reserves. If the bank chooses, the entirety of the deposit can be reserves. The math they use in the above example is entirely misleading on the side of the banks as they imply there is a connection between deposits becoming reserves via some reserve ratio.

This is the banks intellectually misleading even the brightest economists and financial experts. The banks even encourage misleading concepts within their own bank! Thanks for showing me that Matt! I’ve had similar conversations of ignorance with JP Morgan investment bankers, Wells Fargo Advisors, Wells Fargo Home Mortgage, and 53rd. This does not bode well that our financial sector is so ignorant…. of simple financial concepts. Those of you who have gotten this far in the article. Are you still long on the financial sector?

Conclusion
With a $1 deposit, two banks can loan into existence an infinite amount of money. This also means, the banking system has the ability to loan money to itself to get out of any problem. With the kinds of reserve ratios that banks are now legally able to perform with, It has had the ability to create the money to get out of any problems which they create themselves. Now the Federal Reserve is taking on this role of printing money out of thin air so the banks can survive when it is the entire fractional reserve system that is the ponzi scheme.

Given that the only reason why Federal Reserve Notes have value is that they are limited in quantity, and inflation is all the Federal Reserve does in response to every problem regardless of whether there is too much money or too much inflation, we are in for a very hard landing of a type not experienced here in America for a long time: Hyper-inflation.

Lastly, all these arguments as to convertibility and tender can be turned around on the consumer. The banks don’t actually owe you your debt-money back because you loaned it to them and you don’t have any ability to claim that money was legal tender. If this is realized, a bank run would be inevitable and set in motion the hyper-inflationary collapse.

How loans and mortgages by banks are fraud

Revolution Not

Widespread Silver Bar Shortages

If everyone demanded physical delivery of silver, we’d be looking at $500/oz.  If hyper-inflation hits, the sky is the limit, $5,000, $10,000, who knows, but they will still buy the same amount of goods and services they buy now.  Saving metal coins is not a way to get rich. It will only preserve existing wealth while currency is devalued.

coinupdate.com

By Patrick A. Heller on November 18th, 2010
Categories: Featured Articles, Gold and Silver Commentary, Precious Metals

As of today, there are no longer any regular wholesale supplies of the 1 ounce through 100 ounce silver rounds and bars available for immediate delivery.  It may be possible to locate incidental quantities of some product, but most wholesalers are now promising two to four weeks delivery to allow time for the silver to be fabricated.

As a result of the shortages, premiums have started to rise.  So far, the increases have been modest, on the order of 0.5-2%.  However, if the shortage grows, expect to see further and larger premium increases in the coming weeks.  We could see a repeat of the late 2008 gold and silver buying frenzy, where product availability got as slow as 1-4 months after payment.

Read more…

The Secret of Oz

The Secret of Oz is a new documentary video from the creator of “The Money Masters.”   Basically one of the main premises of the film is that as long as the government or some other good guy controls the issuance of currency, and it’s issued debt-free, the money system will benefit the public and not just the elite.   I don’t entirely disagree with the idea that a fiat system *could* work for us, but in practice the power to issue currency has repeatedly fallen back into the hands of the bankers.  Even if we allow them to issue something as simple as gold or silver receipts, bankers will inevitably turn it into a fractional reserve system and defraud the depositors, concentrating wealth for themselves. So I’m surprised they are so quick to dismiss gold. 

Rich people do already hold most of the gold, yes.   But they also control the government printing presses, and it’s a lot easier to inflate paper (or numbers in a database) than it is to prevent people from digging more gold out of the ground.  Private companies can will continue to mine gold, somewhere.   Metals markets are international.  For thousands of years, humans have been able to spend a gold coin anywhere in the world.  Metals already are the world currency. Fiat currencies come and go but gold holds intrinsic value.

Now as for the rich hoarding it, I would argue that inflatable, easy-to-manipulate fiat money systems have enabled the bankers to obtain a disproportionate share of real assets, such as metals and property, using their 100:1 fractional reserve leverage and inflationary money creation thru loans. Are you aware that in the ’30s the US government actually confiscated gold in the name of saving everyone from the banker-engineered great depression?

If we went to a metal and barter economy, commerce could be less centralized yet more global. Even gold and silver certificates present the opportunity for fraudsters to create a fractional reserve system which is in essence a ponzi scheme. While metal bullion is not fraud-proof (recall recent tungsten bars plated with gold) it’s significantly more difficult to manipulate on a large scale.

• A big pile of gold doesn’t do you much good unless you spend it into the economy.
• It’s difficult for bankers and governments to maniuplate the worldwide flow of gold out of the ground, due to market competition.
• It can’t be counterfeited with current technology

We don’t actually need a currency “backed” by anything.  All we need are land, food, water, protection, and some metals and other raw materials to trade for goods and services. I want no part of this casino gambling.

The international banking elite control the issuance of currency. They are not going to give up that position without a bloody fight. BUT… gold and silver exist already in the free market. We can dig more of it out of the ground, while bankers, government, and whoever has control over the issuance of currency can “row” the fiat economy with ease. “Power corrupts, absolute power corrupts absolutely.” One thing corrupt officials can’t do, however is create gold or silver out of thin air. They can flood the market, but they’ll be losing their own wealth in the process. And no, the bankers don’t control all the gold. Actually I believe the Vatican is the single largest owner of gold in the world. Better brush up on your Hail Marys.

Maybe someday we’ll find a way to enforce strict control over a fiat paper currency, and permanently protect ourselves from corrupt hands massaging all the wealth out of the economy by means of inflation and deflation. Until this technology exists, metals are the next best thing.

“It’s not what backs our money, it’s who controls the quantity.” Makes sense.  And the quantity of gold is a lot harder to manipulate than the quantity of fiat paper or zeros in a database.
The new human rights movement

Although I honestly think in the current environment gold and silver are the most fraud-resistant form of money, there is one big problem with it – the environmental cost of mining. We need to find sustainable methods to mine gold that don’t involve cyanide. But when you weigh the downside of living in this banker-take-all system, it becomes apparent which the lesser of 2 evils is.

Thank you for reading, and may your chains rest lightly.