The next evolutionary steps in our system of money.
- Money Masters
- The Secret of Oz
- Money as Debt I II III
- Bank of Dave
- 97% Owned - Positive Money Cut
- What is Money?
To pay for the Civil War a bill was introduced "to permit the U.S. Treasury to issue $150 million in notes as legal tender. This caused tremendous controversy in Congress, as hitherto the Constitution had been interpreted as not granting the government the power to issue a paper currency."—
The "50 State" series of quarters was launched in the U.S. in 1999. The U.S. government planned on a large number of people collecting each new quarter as it rolled out of the U.S. Mint, thus taking the pieces out of circulation. Each set of quarters is worth $14.00. Since it costs the Mint about five cents for each 25-cent piece it produces, the government made a profit whenever someone "bought" a coin and chose not to spend it. The U.S. Treasury estimates that it has earned about US$6.3 billion in seigniorage from the quarters over the course of the entire program.
The government has an incentive to under estimate inflation because it impacts returns on treasury bonds and social security payments. If they reported the actual inflation rate the government would bankrupt itself.—
English system of finance
It will not be from the inability of procuring loans that the system will break up. On the contrary, it is the facility with which loans can be procured, that hastens the event. The loans are altogether paper transactions; and it is the excess of them that brings on, with accelerating speed, that progressive deprecation.—
When therefore government, by engaging in a new war, required a new loan, it was obliged to make a higher loan than the former loan, to balance the increased price to which things had risen; and as that new loan increased the quantity of paper in proportion to the new quantity of interest, it carried the price of things still higher than before—
...for the progress of all such systems appears to be, that the paper will take the command in the beginning, and gold and silver in the end.—
One of the amusements that has kept up the farce of the funding system is, that the interest is regularly paid. But as the interest is always paid in bank notes, and as bank notes can always be coined for the purpose, this mode of payment proves nothing.—
It is worthy of observation, that every case of a failure in finances, since the system of paper began, has produced a revolution in governments, either total or partial.—
The funding system is a system of anticipation. Those who established it a hundred years ago, anticipated the resources of those who were to live an hundred years after; for the people of the present day have to pay the interest of the debts contracted at that time, and all debts contracted since.—
The English funding system will remain a monument of wonder, not so much on account of the extent to which it has been carried, as of the folly of believing in it.—
A government can ward off bankruptcy longer than an individual; but insolvency will inevitably produce bankruptcy, whether in an individual or in a government.—
There has always existed, and still exists, a mysterious, suspicious connection, between the minister and the directors of the bank, and which explains itself no otherways than by a continual increase of bank notes.—
However disposed governments may be to wring money by taxes from the people, there is a limit to the practice established in the nature of things. That limit is the proportion between the quantity of money in a nation, be that quantity what it may, and the greatest quantity of taxes that can be raised upon it. People have other uses for money besides paying taxes; and it is only a proportional part of that money they can spare for taxes, as it is only a proportional part they can spare for house-rent, for clothing, or for any other particular use. These proportions find out and establish themselves; and that with such exactness, that if any one part exceeds its proportion, all the other parts feel it.—
There is something curious in the movements of this modern complicated machine, the funding system; and it is only now that it is beginning to unfold the full extent of its movements. In the first part of its movements it gives great powers into the hands of government, and in the last part it takes them completely away.—
“The bank,” says Smith, (book ii. ch. 2.) “is a great engine of the state.” And in the same paragraph he says, “The stability of the bank is equal to that of the British government;” which is the same as to say that the stability of the government is equal to that of the bank, and no more.—