"Authority serves authority." hey! I said that. This post was provoked by two previous posts. They follow: Blanc Weber says

Patrick Henry warned everyone that once they had surrendered to it the power of the purse & the power of the sword, there would be no power left to them with which to save themselves from it[the State] So who would be respecting those limits?

Black Unicorn says

...the President can interfere when & where he likes in the private sector with relative ease. How did he get here? 50 years of accretion of power by the State.

Black Unicorn was off by 31 years. The first great power grab by the State occurred in 1913. Blanc Weber makes a good point & I'll add to it. The American economy was captured in 1913. Following is text from the book THE COMING CURRENCY COLLAPSE (subtitled) and what you can do about it. The publisher is Bantam Books & the author is Jerome F. Smith, among other things, a follower of the Austrian school of economics. The following is a brief description of the banking fraud in America. start of text for THE COMING CURRENCY COLLAPSE ----------------------------------------------------------------------- AFTER 1913 Beginning with 1913, in the United States in particular, two entirely different concepts came to the fore & resulted subsequently in the de- struction of the soundness of official paper money. The two different concepts I am referring to are the Federal Reserve System & the Income Tax. The Federal Reserve System came in, in the United States, through legislation that was introduced on December 23 just as the Congressmen were preparing to go home for the holiday. It was passed, not because anyone understood what they were voting on or had examined it care- fully, but simply because they wanted to go home for Christmas. During that same year, the Constitutional Amendment to establish the Income Tax was voted in, by default; mostly people accepted it & brought it through Constitutional Amendment process on the basis of the assurances of the promoters that the tax rate would never go over one percent of most people's income, so why worry about it? Those two political changes laid the cornerstones for the rise of the warfare/welfare state & for the destruction of the soundness of the United States currency. In the present century, so far at least, population, technology, production & government have grown at highly disparate rates. --------------- BREAK ------------------------------------------ ---------------- BREAK ------------------------------------------- ---------------- BREAK ------------------------------------------ FRACTIONAL RESERVE BANKING TODAY In former times, profligate states (especially those lacking a central bank) often simply printed additional currency notes to make up the deficit between their current tax revenues & their current spend- ing programs. In today's bookkeeping economy, with modern well-dev- loped financial markets (and a central bank), however, the creation of fiat money is done in a much subtler & simpler manner (from the stand- point of the state). It simply borrows the money it needs. The deficit between revenues & expenditures is "monetized." In the United states, this means that the Federal Reserve Bank buys U.S. Treasury bonds for its own account & "pays" for them by simply crediting the Treasury's account - a bookkeeping technique well known to embezzlers When the Treasury writes a check on its account at one of the 12 Federal Reserve Banks & pays a supplier or welfare recipient, the "money" enters the commercial banking system. Let's trace it through the system; not one person in a thousand knows this technical process, & eve fewer understand its significance. The recipient can do basically on of two things with the government check: he can simply cash the check, take the cash & not spend it. In this case, the money supply (narrowly defined, M1) is defined as curr- ency in circulation outside banks plus demand deposits, it simply increases by the amount of the government check. Or, he can cash the check & spend the cash, or he can deposit the check in his deposit account. Suppose he does the latter. A new deposit is created in the commercial banking system & since demand deposits are part of M1, the money supply increases by the amount of the check. BUT in this case it doesn't stop there. The deposit now becomes part of the bank's reserves & because of the fractional-reserve banking system, the bank only has to keep on hand a small fraction of the deposit - currently(October, 1981) around 12 per- cent for deposit accounts. What the bank does then is lend out the equi- valent of 88 percent of the demand deposit to, say, another customer of the bank whose deposit account is credited. Now we have the original deposit addition to the money supply plus the new credit in the second deposit account. When a check is written on one of these accounts & deposited in another bank, it then becomes another addition to the money supply & an addition to that bank's reserves & continues until, after the process repeats five or six times, the money supply is in- creased by a multiple of the original government check. Recently the multiplier has been around 2.5 the initial injection. For example, assume the Federal Reserve Bank takes on $50 billion of new federal deficit in a given year. The increase in money supply (M1) should turn out to be around $125 billion (50 x 2.5). This explanation only elaborates the effect on M1, the narrowly defined money supply; M2, a broader definition including time deposits, through a similar process more highly leveraged (because of lower reserve re- quirements) has a multiplier of 6. Under the Monetary Control Act of 1980 the Fed is empowered to reduce reserve requirements still further &, for the first time, is further empowered to purchase & monetize debt securities issued by private cor- porations, banks, municipalities, states, etc. In other words this act authorizes the Fed to buy any IOUs it chooses in unlimited amounts, & to create Federal-Reserve dollars & dollar credits in unlimited amounts to "pay" for them! PAPER MONEY BACKED BY PAPER There is only one cause of inflation; it is officially - but not constitutionally - authorized counterfeiting of money, the official issue of paper money substitutes that are not fully backed by & redeemable in the real lawful money they purport to represent. Redeemable money substitutes backed by actual money (e.g., gold or silver) are the only form of genuine official paper money. Such paper money derives its ability to function as a money substitute from the fact that it is backed by real money assets & is a valid claim on them. This is the key characteristic that distinguishes genuine paper money from counterfeit paper money. Genuine paper money is fully redeemable. Official counterfeit paper money, originally at least, carries the promise of redeemability WHICH THE ISSUER KNOWNS TO BE FRAUDULENT. Official paper money which is not redeemable & which does not carry even the (false) promise of redeem- ability is worse than common counterfeit paper money - it is fait money; fake, worthless paper which your government orders you to accept as though it were genuine. Briefly defined, fiat money is simply fractional-reserve banking carried to its logical extreme. It is money-substitute paper with no money backing whatever. It is not even a promise to pay money; it is only a paper promise to pay paper(which is patent nonsense). Fait money is what is left when the redeemable fractional-reserve money becomes so fractionalized that the central bank issuer defaults on its redemption promise because, for actual or anticipated lack of specie(gold or silver), it is no longer able or willing to make specie payments. Through the long series of perverse modifications to the rules & practices of monetary institutions since 1913, the currencies of the Western nations, once fully backed by gold, were rendered first partially counterfeit &, since 1971, completely fraudulent fiat paper. ------------------------------------------------------------------- end of text of THE COMING CURRENCY COLLAPSE The author & conspiracy buff Robert Anton Wilson also has something of significance to say on banking conspiracies. According to Wilson, it is exceedingly difficult to discuss or debate banking conspiracies due to the myth of the Jewish banking conspiracy. To broach the subject brings suspicion that you are anti-Semiitic. Wilson states that the American banking industry seems to be controlled by old line New England, Protestant families. This is a very useful myth in suppressing dissent. For those of you who are still doubtful of the banking conspiracy, consider this analogy: Pretend that the U.S. Constitution has granted you & your family the exclusive right to coin money. You print it by the billions, its fait money(meaning you back it with nothing), it is "legal tender for all debts public & private", most Americans deal exclusively in your currency, & the world enthusiastically accepts it. It is also debt money & must be paid back with interest. The question is: is there any way you can go bankrupt or go into deep debt? Barring a huge fraud, there is no way that you & your family can go into serious debt. So why is it that non-government hotshot economists are predict- ing that there is no way for the U.S. government to pay off its debts & that within a few years, the American economy goes into the toilet. Why does the U.S. government have huge debt if it has its own popular fiat money printing machine? BECAUSE IN 1913 THE TRAITORS GAVE IT AWAY TO THE PRIVATE ORGANIZATION - THE FEDERAL RESERVE! The U.S. Congress wen from a "money maker" to a "money renter"? The American economy was surrendered to a private elite &, largely, so were the American people. Every dollar that the Federal Reserve puts into the economy is a debt dollar & must be paid back with interest - a mathematical impossi- bility! Instead of debt free government, we get a giant yearly Federal deficit. OTHER NOTABLE FACTS The Federal Reserve is a private entity that has never had an exter- nal audit! For years there has been a determined political effort with the backing of some Congressmen to force the Federal Reserve to submit to an external audit. The Federal Reserve has so far fought it off. The mass media has determinedly ignored this political fight. Who owns the Federal debt? Who owns America? It is also notable & not coincidental that the tax gestapo, the Internal Revenue Service, was established in 1913. I understand that the other industrial & post industrial nations are under similar arrangements with their central banks. Ok, what does all this have to do with Cypherpunks & its bandwith? - flamers want to know. Much of Cypherpunks is made up of people who like technological & scientific challenges. But that is not the only reason they take an interest in electronic privacy. Much of the drive is political; fueled by events such as the successful economic capture of the American economy in 1913 & by what these events imply about the nature of the ruling elites. I would guess that this is what largely motivates Chaum & associates & other electronic privacy fighters. Yours Truly, Gary Jeffers Cypherpunk PUSH EM BACK! PUSH EM BACK! WWWAAAYYY BBBAAACCCKKK! BBBEEEAAATTTT STATE ! P.S. The national debt & the Federal Reserve were both created with the stroke of a pen. They can both be eliminated with the stroke of a pen! Our predicaments are largely the illusions we have of our lack of Power! :-) :-) :-) :-) :-) :-) :-) :-) :-) :-) :-) :-) :-) :-) :-)