Underground Knowledge — A discussion group discussion

What do y'all think of the theories which say there is no real money, only fiat money, and that the money supply is essentially being plucked out of thin air?

Are major bankers all basically Bernie Madoffs?

Also what about those who predict that our entire monetary system will eventually implode?

I would go one step further and say that modern civilization is a giant Ponzi scheme. The world economy is a big part of it, but that itself is underwritten by the planet.

I think it's a step too far to say that money is plucked out of thin air. Money has a value as long as the population at large accepts the fact that it is worth something. If this collective goodwill is lost, though, it has the potential to become worthless rapidly. In order to maintain the goodwill of the financial markets, a currency (via bonds), or any other investment, has to demonstrate a potential for growth or returns. So the whole system is built around a premise that there must be indefinite growth. Without growth, there is no reason to invest, and without investment, there is no growth and the system unwinds.

The problem is, the initial premise is flawed. Growth cannot be indefinite as there are limits, which are ultimately determined by the planet. Just as the Ponzi scheme unravels as it runs short of new investors to pay the debts incurred to existing investors, so our Ponzi-esque civilization unwinds as it begins to run short of arable land, fresh water and other essentials to pay the planetary-level debts incurred to a growing population (currently running at a budget of 2-3 planets to sustain our present way of living). As soon as growth is no longer possible, the house of cards comes down, because, as the saying goes, if you are not growing, you are shrinking.

The question is, when do we hit those limits? In some places, such as in Sao Paolo right now (http://peakoil.com/forums/s-america-s...), they are already being hit.

The term "fiat money" comes to mind

I had to look up that term, but I think most modern currencies are representative money - the currency markets see to that. Any currency that isn't backed up by assets and the prospect of economic growth in its zone of influence will not be invested in (via the bond markets). Investors are pretty ruthless - if there's no real value they'll shy away.

Maybe if there's the perception of value, that is good enough
Apart from the odd guy like George Soros, Most investors don't have an inside look

Agreed - if the majority have the same perception, false or otherwise, that becomes the investment reality. It was mass irrational exuberance (fomented by a few in the know) that led to the subprime boom/bust. Or there may be informed investors just looking for short-term value in the hope of a quick buck before getting out again. It's over the long term that the Ponzi parallels apply.

I have some particular experience with this as I was involved with a group who successfully created our own 'private credit' (money) but it was actually backed with assets. Assets seized with liens of corrupt public officials.

Money of Account has never been legally defined. It can't be because it would then be easily discernible that it is not lawful. However, money is not plucked from thin air. People, you and me, actually create money. We are sponsors of the credit. Since the current medium of exchange is 'credit' and represented by negotiable instruments (notes as in Federal Reserve Notes) we are exchanging promises to pay which never get paid. Therefore, when 'credit' is created it starts with a 'promise to pay'. It is now well known that when you apply for a mortgage or any type of loan, the bank does "NOT" have money on account which they 'loan' to you. You create the money first when you make the 'Promise' and sign the note. The bank then takes your note (money) and deposits that on their books and turns it into checkbook money (demand deposit accounts). So you create the money, give it to them, they take your collateral knowing that they will take a % of all collateral pledged, plus they get you to pay points, fees and interest for loaning you your own money. This is documented fact by expert CPAs and bankers and I get into it in my book.

Now, in the big picture, the Fed does print a % of the money in circulation plus they create digital credit (money), for the cost of physical creation (pennies on the face value of the dollar). They put it into circulation via the banks taking your credit and backing up the banks with the cash to exchange for your 'promise to pay'. When it comes to the government, The Fed buys (with the face value of their newly printed money) collateral from the government in the form of bonds. The government's collateral for the bonds, via the 16th Amendment is your labor. So the government is pledging your labor (which it can reach via taxation and seizure) as collateral to back the bonds it sells for cash to the Fed, which created that cash for pennies on the dollar. Thus, the Fed controls the government and this bankrupt system is what allows The Law Merchant to apply to everyone whereby you HAVE NO RIGHTS! You only have contractual obligations and temporal privileges by virtue of the fact that you exercise the 'franchise' corporate benefit of 'limited liability' to discharge the obligations of debts (using credit not 'money'). In other words, you never 'pay' for anything because real money by legal definition does not exist. You only 'discharge the debt' which is a corporate franchise in the Law Merchant and thus we are all governed by the bankers of the Fed.

Watch the trailer to my book and let me know what you think:

https://youtu.be/9SuON-G6tYg

Thanks in advance.

One Freeman's War: In the Second American Revolution

Lance Morcan wrote: "What do y'all think of the theories which say there is no real money, only fiat money, and that the money supply is essentially being plucked out of thin air?

Are major bankers all basically Berni..."

Regarding the system imploding: Yes it is inevitable and very close. Jim Rickards is reporting that China and Russia are already dumping Treasuries to hedge against losses when the inevitable occurs. In order to prop up the market he says that the Fed is using a straw buyer in Belgium to buy billions of US Treasuries just to keep the market stable. But they can't do this forever. And when the world stops buying US debt, the money spigot gets turned off and guess what happens to all the government contractors, the welfare mothers, the beneficiaries of government largess and EBT card users? They panic. The world is lining up against the USA. They are tired of the bullying, the domination, the controlling the manipulations and exploitations of the cabal which runs the USA. Look at the new Asian Development Bank and the BRICS alliance. USA's allies like U.K. France and Italy have joined the Asian Development Bank as 'charter members' and guess what? The USA was not invited!! Obama is pissed! This is being formed as an alternative, or in direct competition to the USA, The Fed, the IMF and related organisations which have dominated the world since WWII. The world is turning its back on the USA and when demand for US debt dries up, so does the US economy. Get ready!

One Freeman's War: In the Second American Revolution

Excerpt from INTERNATIONAL BANKSTER$: The Global Banking Elite Exposed and the Case for Restructuring Capitalism:

Many veterans of the banking and financial sectors have either stated or heavily implied that the world’s money supply is essentially being created out of thin air and has no real value.

Those who subscribe to this school of thought say the shaky foundations of financial systems in the 21st Century is mainly down to the fact that all countries use Fiat Money, or inconvertible paper money made legal tender by government decree.

Throughout history, at various times and as recently as only several decades ago, other monetary systems were traditionally used such as Commodity Money or Representative Money. This meant the value of the money was either in the currency itself (e.g. real gold and real silver coins) or else the currency was a direct representative of a real commodity in physical storage (e.g. gold and silver certificates).

However, other financial whistleblowers argue the monetary and inflationary problems undermining the world at present have more to do with the fraudulent activities within elite banking circles than they do with the Fiat Money system.

The Bankster



Babylon's Banksters: The Alchemy of Deep Physics, High Finance and Ancient Religion

The Money Deception - What Banks & Governments Don't Want You to Know

Financial Vipers of Venice: Alchemical Money, Magical Physics, and Banking in the Middle Ages and Renaissance