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breakingnews
Every week Max Keiser looks at all the scandal behind the financial news headlines.
This week Max Keiser and co-host, Stacy Herbert, report on haircuts on T-Bills and rebounds in silver. In the second half of the show, Max talks to James Howard Kunstler about dumping Treasuries and fracking gas.
August, 2011
1 19:33
I suppose if one wanted to be insidious about the whole thing, you could bring back gold and silver certificates. Since these items only say, "One Dollar in silver payable to the bearer on demand", The Treasury would give you 1/40th of an ounce at current market value. The same would apply to gold only your gold certificates would only be in $100.00 bills. If that thought follows, then only $20.00 bills and up would be silver certificates. Of course it is fraud to have on a 1 oz gold coin newly minted out of West Point, "$50.00" stamped on the coin when it is not possible to buy that coin for "$50.00". Paper was intended for convenience. Printing more of it does not change things. Divide $30,000 by $1,500.00 and it comes to $2,000.00. Think 30,000 dollar car divided by 1,500 price of gold and same car is worth 2,000 dollars. Same price as a car cost in 1963/1964. That alone will give you an idea as to how much paper is floating around. Round numbers used for convenience.
Thank you Max and Stacy
NO, it results in $20. NOT $2000.
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In another subject. Kunstler points out we're lacking enough capital, and unfortunately none is stating the obvious. If we use the Fractional Reserve Banking System where money is ONLY created as a loan, and MORE IMPORTANTLY this money ceases to exist once the loan is paid back, the result is a lack of capital to allow the Real Economy to function properly. Once the loan is paid back, the money is not left laying around in the bank's vault to be relent to someone else. It has DISAPPEARED and the only way we can have more money to grease the economy and create jobs is IF WE GET IN DEBT AGAIN and loan again money into existence. But because banks have tightened their lending policies, it has the effect of reducing the money supply.
IT IS NOT A COINCIDENCE THAT THE MORE WE APPLY AUSTERITY, THE LESS MONEY IS IN CIRCULATION!!! And the less money in circulation THE MORE WE STRANGLE THE ECONOMY and lose more jobs. It is a vicious circle.
When money was backed by gold, once the loan was paid back, the gold was still in the vault ready to be relent and create growth, more jobs, more taxes, no austerity.
But we don't need money created with gold backing to get the same effect. Fiat money under tight control created interest-free by the Treasury and injected into the economy as it was done by Lincoln, will suffice.