Monthly Archives: August 2012

Bank of England inflating the pound; admits manipulating share prices and interest returns

Yesterday,  August 23, the BBC published a report titled, Bank of England defends QE but admits rich benefit most. In the British version of “Quantitative Easing,” the report says that since March 2009, the Bank of England has purchased “£375bn of government bonds, known as gilts.” Of course, like every other central bank, the BoE has no money with which to buy the bonds, it simply creates it, thus injecting counterfeit money into the economy under color of law.

According to the BBC story, “The policy of QE means that the Bank [of England] now holds more than a third of all government bonds in issue.” That means the BoE has created massive amounts of counterfeit British pounds. But that is just the beginning. Commercial banks create more counterfeit money as they buy more government bonds under the fractional reserve banking system. Ordinary people end up paying the cost.

See my previous posts on QE.–t.h.g.

Ecuadoran President defies British threats over Wikileaks founder’s asylum

The British government seems willing to go to extreme lengths to get its hands on Wikileaks founder Julian Assange who has taken refuge in the Ecuadoran embassy in London. Last week, it threatened to suspend the embassy’s immunity and to mount an armed raid to seize Assange, who has not been charged with any crime in any country.

On Sunday, August 19, Assange issued a statement thanking those who turned out to witness events as they unfolded, and crediting their presence with forestalling completion of the raid.  Assange said: “If the UK did not throw away the Vienna Conventions the other night, it is because the world was watching. And the world was watching because you were watching.”

Former Assistant Secretary of the Treasury, Paul Craig Roberts provides an insightful analysis of the situation in his article: Ecuador President Rafael “We Are Not A Colony” Correa Stands Up To The Jackbooted British Gestapo.

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Competing currencies essential to freedom

This appeal by Congressman Ron Paul is perhaps the most important proposal by an American politician in the last 100 years.
I’m glad to know that Congressman Paul is not limiting his proposal to gold and silver currencies.

The most liberating means of payment is “mutual credit clearing” through independent non-bank associations of businesses and individuals.

Of course, the credit in such accounts needs to be denominated in some objective units, which could be specified weights of gold or silver, but better still, would be an “index unit” based on a “market basket” of basic commodities that are widely and freely traded.

My four books on the subject, and my websites, provide coverage of pertinent concepts and history, and full details on my prescriptions for businesses, communities, and governments.–t.h.g. 

Legalize Competing Currencies

I recently held a hearing in my congressional subcommittee on the subject of competing currencies.  This is an issue of enormous importance, but unfortunately few Americans understand how the Federal Reserve and Treasury Department impose a strict monopoly on money in America.

This monopoly is maintained using federal counterfeiting laws, which is a bit rich.  If any organization is guilty of counterfeiting dollars, it is our own Treasury.  But those who dare to challenge federal legal tender laws by circulating competing currencies– at least physical currencies– risk going to prison.

Like all government created monopolies, the federal monopoly on money results in substandard product in the form of our ever-depreciating dollars.

Yet governments have always sought to monopolize the issuance of money, either directly or through the creation of central banks. The expanding role of the Federal Reserve in the 20th century enabled our federal government to grow wildly larger than would have been possible otherwise.  Our Fed, like all central banks, encourages deficits by effectively monetizing Treasury debt.  But the price we pay is the terrible and ongoing debasement of our money.

Allowing individuals and business to use alternate currencies, especially currencies backed by gold and silver, would expose the whole rotten system because the marketplace would prefer such alternate currencies unless and until the Fed suddenly imposed radical discipline on its dollar inflation.

Sadly, Americans are far less free than many others around the world when it comes to protecting themselves against the rapidly depreciating US dollar.  Mexican workers can set up accounts denominated in ounces of silver and take tax-free delivery of that silver whenever they want.  In Singapore and other Asian countries, individuals can set up bank accounts denominated in gold and silver.  Debit cards can be linked to gold and silver accounts so that customers can use gold and silver to make point of sale transactions, a service which is only available to non-Americans.

The obvious solution is to legalize monetary freedom and allow the circulation of parallel and competing currencies.  There is no reason why Americans should not be able to transact, save, and invest using the currency of their choosing.  They should be free to use gold, silver, or other currencies with no legal restrictions or punitive taxation standing in the way.  Restoring the monetary system envisioned by the Constitution is the only way to ensure the economic security of the American people.

After all, if our monetary system is fundamentally sound– and the Federal Reserve indeed stabilizes the dollar as its apologists claim–then why fear competition?  Why do we accept that centralized, monopoly control over our money is compatible with a supposedly free-market economy?  In a free market, the government’s fiat dollar should compete with alternate currencies for the benefit of American consumers, savers, and investors.

As Austrian economist Ludwig von Mises explained, sound money is an instrument that protects our civil liberties against despotic government. Our current monetary system is indeed despotic, and the surest way to correct things simply is to legalize competing currencies.

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Neighborhoods and social capital, key features of a convivial society

The following appears in the August edition of On The Commons newsletter. Jay Walljasper suggests 25 Tips for Making Your Neighborhood Better.–t.h.g.

The neighborhood is the basic building block of human civilization, whether in a big city, small town or suburban community. It’s also the place where you can have the most influence in making a better world. Jay Walljasper, Senior Fellow at OTC and Project for Public Spaces and author of The Great Neighborhood Book, has studied neighborhoods around the world and come up with this list of how to make your community more livable and lovable.

These suggestions are focused on strengthening the sense of community and spirit of the commons by providing people with ways to come together as friends, neighbors and citizens. That creates a firm foundation that enables a neighborhood to solve problems and seize opportunities.

This is drawn from a presentation he gives regularly to community, civic, academic, professional and business groups. For more information, see Jay

1. Give people a place to hang-out

2. Give people something to see

3. Give people something to do

4. Give people a place to sit down

5. Give people a safe, comfortable place to walk

6. Give people a safe, comfortable place to bike

7. Give people reliable, comfortable public transportation

8. Make the streets safe

9. Make the streets safe—not just from crime but from traffic

10. Remember the streets belong to everyone—not just motorists

11. Don’t forget about the needs of older neighbors

12. Don’t forget about the needs of kids

13. Let your community go to the dogs

14. Reclaim front yards as social spaces

15. Remember the best neighborhoods, even in big cities, feel like villages

16. Plan for winter weather as well as sunny, warm days

17. Don’t fear density—people enjoy being around other people

18. Don’t give up hope—great changes are possible when neighbors get together

19. Build on what’s good in your community to make things even better

20. Remember the power of the commons: people working together for the benefit of everyone

21. Never underestimate the power of a shared meal to move people into action

22. Start with small steps—like planting flowers

23. Become a community booster, watchdog, patriot

24. Learn from other neighborhoods in your town and around the world

25. Take the time to have fun and enjoy what’s already great about your neighborhood

Debunking economic growth

Herman Daly is one of the few academic economists who talks sense. He has been a staunch advocate of sustainable development and steady-state economics. Here is an excerpt from his recent article. –t.h.g  

Eight Fallacies about Growth

by Herman Daly

One thing the Democrats and Republicans will agree on in the current U.S. presidential campaign is that economic growth is our number one goal and is the basic solution to all problems. The idea that growth could conceivably cost more than it is worth at the margin, and therefore become uneconomic in the literal sense, will not be considered. But, aside from political denial, why do people (frequently economists) not understand that continuous growth of the economy (measured by either real GDP or resource throughput) could in theory, and probably has in fact, become uneconomic? What is it that confuses them?

Read the full article here.

Counting the Cost – Money for nothing

Tarek El Diwany and Jem Bendell have done a great job in this Al Jazeera interview program explaining the dysfunctional features that are built into the corrupt global system of money and banking. They also cover Islamic banking and mutual credit clearing. This is a “must watch” video.—t.h.g.

A History of Usury, Interest, and the “Great Con-job”

Here is a well done video by Islamic scholar Tarek El Diwany, in which he outlines the history of usury and interest and explains difference between them. He goes on in parts 2, 3, and 4 to describe the evolution of the present destructive debt-money system and the choice before us. Well worth viewing.–t.h.g.