Banks are not intermediaries of loanable funds — and why this matters by marco saba
domenica 31 maggio 2015
venerdì 29 maggio 2015
Charges against Icelandic banks for money counterfeiting
The Homes Association of Iceland, announced the filing of a charge to local police against all executives of all banks in Iceland:
The motivation for this charge is a recent report about the monetary system by member of parliament Frosti Sigurjónsson, commissioned by the Prime Minister’s Office. The report states very clearly that banks have in fact been creating new money when they issue loans in the form of new deposits which add to the supply of money already in circulation.This kind of money creation is clearly in opposition to the sole right of the Central Bank of Iceland to issue bank notes and coins or any equivalent currency to be circulated as legal tender. Therefore it is inevitable to consider the electronic money creation of banks to effectively constitute money counterfeiting as defined by Article 150 of the General Penal Code No. 19/1940.The Homes Association would also like to welcome the report about the monetary system by MP Frosti Sigurjónsson, as it clearly shows how fractional reserve banking has done great harm to the Icelandic homes and the national economy. The Homes Association encourages everyone to read the report and support its proposals of monetary reform. In order for the monetary system to serve the public interest it is vitally important to make substantive reforms.
Article 150 of the General Penal Code No. 19/1940 reads:
That second paragraph is really remarkable. Banks cause inflation when they over-lend. And inflation reduces the value of legal tender.Anyone counterfeiting money for the purpose of putting it into circulation as legal tender and anyone acquiring counterfeit money for himself or others with the selfsame end in view shall be subject to imprisonment for up to 12 years.In case counterfeiting be performed in such a manner as to reduce the specific value of legal tender the penalty shall consist of imprisonment for up to 4 years.
mercoledì 27 maggio 2015
SEC Commissioner Furious Of "Recidivist Criminal Behavior" By Banks
SEC Commissioner Furious That SEC Has Made A Mockery Of "Recidivist Criminal Behavior" By Banks
http://www.zerohedge.com/news/2015-05-22/sec-commissioner-furious-sec-has-made-mockery-recidivist-criminal-behavior-banks
It appears the public is not the only one who is confused, or yawning, that yet again banks get away with just another penalty (to be paid by their shareholders) and zero jail time for the perpetrators despite what is supposedly "criminal" rigging: none other than a SEC regulator working for the same enforcer who "punished" the Too Big To Prosecute banks only to immediately grant them waivers to continue business as usual, is just as confused.
Here, two weeks after SEC commissioner Cara Stein raged that the SEC would turn a blind eye to Germany's Deutsche Bank for a "Decade Of Lying, Cheating, And Stealing", is her dissenting opinion with the SEC settlement, this time broadening her anger to include all the banks, not just the German one.
* * *
Dissenting Statement Regarding Certain Waivers Granted by the Commission for Certain Entities Pleading Guilty to Criminal Charges Involving Manipulation of Foreign Exchange Rates
Commissioner Kara M. Stein
May 21, 2015
I dissent from the Commission’s Orders, issued on May 20, 2015, that granted the following waivers from an array of disqualifications required by federal securities regulations:
- UBS AG, Barclays Plc, Citigroup Inc., JPMorgan Chase & Co. (“JPMC”), and the Royal Bank of Scotland Group Plc (“RBSG”), waivers from the provisions under Commission rules that automatically make them ineligible for well-known seasoned issuer (“WKSI”) status;
- UBS AG, Barclays, and JPMC waivers from automatic disqualification provisions related to the safe harbor for forward-looking statements under Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934; and
- UBS AG and three Barclays entities waivers from the automatic Bad Actor disqualification provided under Rule 506.
There are compelling reasons to reject these requests to waive the automatic disqualifications required by statute or rule. Chief among them, however, is the recidivism of these institutions. For example, in the face of the FX criminal action, a majority of the Commission has determined to grant Citigroup yet another WKSI waiver, its fourth since 2006. It is worth noting that Citigroup was automatically disqualified from WKSI status between 2010 and 2013 for unrelated misconduct, meaning that it has effectively now triggered WKSI disqualifications five times in roughly nine years. Further, through this latest round of Orders, the Commission has granted:
- Barclays its third WKSI waiver since 2007;
- UBS its seventh WKSI waiver since 2008;
- JPMC its sixth WKSI waiver since 2008; and
- RBSG its third WKSI waiver since 2013.
- The Commission has thus granted at least 23 WKSI waivers to these five institutions in the past nine years. The number climbs higher if you include Bad Actor and other waivers.
Allowing these institutions to continue business as usual, after multiple and serious regulatory and criminal violations, poses risks to investors and the American public that are being ignored. It is not sufficient to look at each waiver request in a vacuum.
And today the Commission heads further down this path. After the LIBOR guilty pleas, UBS was granted a WKSI waiver that was explicitly conditioned on compliance with the judgment in the LIBOR-related matter. That explicit condition has now been violated. Yet, the Commission has just issued UBS a new WKSI waiver.
It is troubling enough to consistently grant waivers for criminal misconduct. It is an order of magnitude more troubling to refuse to enforce our own explicit requirements for such waivers. This type of recidivism and repeated criminal misconduct should lead to revocations of prior waivers, not the granting of a whole new set of waivers. We have the tools, and with the tools the responsibility, to empower those at the top of these institutions to create meaningful cultural shifts, yet we refuse to use them.
In conclusion, I am troubled by repeated instances of noncompliance at these global financial institutions, which may be indicative of a continuing culture that does not adequately support legal and ethical behavior. Further, I am concerned that the latest series of actions has effectively rendered criminal convictions of financial institutions largely symbolic. Firms and institutions increasingly rely on the Commission’s repeated issuance of waivers to remove the consequences of a criminal conviction, consequences that may actually positively contribute to a firm’s compliance and conduct going forward.
* * *
Or to summarize, running a criminal cartel is expensive...
... but at least keep everyone out of prison. For, you know, crimes.
lunedì 25 maggio 2015
sabato 23 maggio 2015
Rally at Central Banks worldwide on June 20
David DeGraw
FREEDOM IN A TIME OF MENTAL SLAVERY
TRILLIONS STOLEN!! Get It Back!! Rally At Central Banks Worldwide, June 20 #WaveOfAction
We’ve had enough of the electoral charade and endless divide and conquer propaganda. Democrats vs Republicans, conservatives vs liberals, it is all a bullshit distraction and anyone who understands economics and how real power operates knows it. Elections are a spectacle for the mentally enslaved. Our “democracy” is an illusion for propagandized minds. We have an aristocratic class of global bankers who run this planet, and it is time for all aware people to step up and do something about it.
When you understand how much wealth there is, $100 trillion in the US alone, you realize that we are witnessing deliberate systemic economic genocide. The unnecessary suffering of the masses must stop. In a time of unprecedented abundance, we are not going to passively sit back while our families are buried in debt and struggle to afford basic necessities.
Economic policy makes it clear that the majority of the population has been sentenced to an impoverished future. The shortsighted greed of global bankers has put us on a fast track to societal chaos and rioting. They have thrown 75% of the population overboard. That is a mathematical fact!
If we want to change things through non-violent methods, the window of opportunity is closing fast. If love and compassion are going to prevail, now is the time to STAND UP.
As all aware people already know, we are at a critical crossroad. Are we going to let our society collapse, or will a critical mass of compassionate citizens courageously stand up and guide us toward a sustainable and prosperous future?
We need bold and courageous action now.
We can use this time of crisis to drastically change course and evolve society in an extremely positive direction. We live in a technologically advanced society that has all the necessary tools to usher in a new age of enlightenment. The only thing that stands between us and unprecedented global prosperity is the shortsighted greed of global bankers.
On June 20th, we will rally at US Federal Reserve banks, the Bank of England and central banks worldwide to focus mass consciousness on the crimes against humanity perpetrated by global bankers.
If you are tired of toiling in debt and fear, join us in this Worldwide #WaveOfAction here!
To help spread the word, please share this video and these graphics, more to come…
* Event Sign Up *
Guatemala arrests central bank chief
UPDATE 2-Guatemala arrests central bank chief, 14 others, in bribery probe
http://www.reuters.com/article/2015/05/20/guatemala-corruption-idUSL1N0YB21Q20150520
May 20 (Reuters) - Guatemala's central bank governor was arrested on Wednesday in a bribery probe that also targeted a former aide of President Otto Perez, who has faced mounting pressure since his vice president quit two weeks ago over a separate graft scandal.
The Guatemalan attorney general's office said it had arrested central bank chief Julio Suarez, and issued an arrest warrant for Juan de Dios Rodriguez, Perez's former personal secretary and head of the Guatemalan Social Security Institute.
The office said Suarez, who has a seat on the institute's board, had been arrested along with 14 others over a $14.5 million medical services contract awarded by the institute. The charges include fraud, influence trafficking and charging illegal commission, prosecutors said.
Ivan Velasquez of the International Commission against Impunity in Guatemala (CICIG), a United Nations-backed group working with prosecutor's on the case, said investigations that began last year found that the contract was rigged in favor of a pharmaceutical company.
"We have very coherent evidence to show that the members of the tendering board took illegal steps," Velasquez said.
According to the investigators, taped phone conversations showed that the company, identified by the prosecutor's office as the Guatemalan unit of Mexico's Pisa, paid bribes to officials from the institute to win a dialysis contract.
A Pisa spokesman declined to comment.
The central bank said in a statement that Suarez had its full support and that it would continue to operate as normal. The Social Security Institute was not available to comment.
It was unclear if the institute's head, Rodriguez, had already been arrested. The prosecutor's office said Rodriguez had been hospitalized since Tuesday night for undisclosed reasons and the building was put under police control.
President Perez said he welcomed the investigation.
"Nobody is above the law," Perez said in a televised address. "I'm the first one to regret that these situations are occurring and the first to demand that justice is served."
On May 8, vice president Roxana Baldetti stepped down after accusations that she had been linked to a ring accused of taking bribes to avoid customs taxes. The scandals have surfaced ahead of presidential elections scheduled for September. Perez is barred by Guatemalan law from seeking re-election. (Additional reporting by Gabriel Stargardter, Enrique Pretel; Editing by Dave Graham and Grant McCool)
venerdì 22 maggio 2015
THE Nature and Necessity OF A PAPER-CURRENCY
A MODEST ENQUIRY INTO THE
Nature and Necessity
OF A PAPER-CURRENCY
Quid asper
Utile Nummus habet; patriae, carisque propinquis
Quantum elargiri deceat. -- -- -
Persius
PHILADELPHIA.
Printed and Sold at the New PRINTING-
OFFICE, near the Market. 1729.
THERE
is no Science, the Study of which is more useful and commendable than
the Knowledge of the true Interest of one's Country; and perhaps there
is no Kind of Learning more abstruse and intricate, more difficult to
acquire in any Degree of Perfection than This, and therefore none more
generally neglected. Hence it is, that we every Day find Men in
Conversation contending warmly on some Point in Politicks, which, altho'
it may nearly concern them both, neither of them understand any more
than they do each other.
Thus much by way of Apology for this present Enquiry into the Nature and Necessity of a Paper Currency. And if any Thing I shall say, may be a Means of fixing a Subject that is now the chief Concern of my Countrymen, in a clearer Light, I shall have the Satisfaction of thinking my Time and Pains well employed.
To proceed, then,
There is a certain proportionate Quantity of Money requisite to carry on the Trade of a Country freely and currently; More than which would be of no Advantage in Trade, and Less, if much less, exceedingly detrimental to it.
This leads us to the following general Considerations.
First, A great Want of Money in any Trading Country, occasions Interest
to be at a very high Rate. And here it may be observed, that it is impossible by any Laws to restrain Men from giving and receiving exhorbitant Interest, where Money is suitably scarce: For he that wants Money will find out Ways to give 10 per Cent. when he cannot have it for less, altho' the Law forbids to take more than 6 per Cent. Now the Interest of Money being high is prejudicial to a Country several Ways: It makes Land bear a low Price, because few Men will lay out their Money in Land, when they can make a much greater Profit by lending it out upon Interest: And much less will Men be inclined to venture their Money at Sea, when they can, without Risque or Hazard, have a great and certain Profit by keeping it at home; thus Trade is discouraged. And if in two Neighbouring Countries the Traders of one, by Reason of a greater Plenty of Money, can borrow it to trade with at a lower Rate than the Traders of the other, they will infallibly have the Advantage, and get the greatest Part of that Trade into their own Hands; For he that trades with Money he hath borrowed at 8 or 10 per Cent. cannot hold Market with him that borrows his Money at 6 or 4. -- -- -On the contrary, A plentiful Currency will occasion Interest to be low: And this will be an Inducement to many to lay out their Money in Lands, rather than put it out to Use, by which means Land will begin to rise in Value and bear a better Price: And at the same Time it will tend to enliven Trade exceedingly, because People will find more Profit in employing their Money that Way than in Usury; and many that understand Business very well, but have not a Stock sufficient of their own, will be encouraged to borrow Money; to trade with, when they can have it at a moderate Interest.
Secondly, Want of Money in a Country reduces the Price of that Part of its Produce which is used in Trade: Because Trade being discouraged by it as above, there is a much less Demand for that Produce. And this is another Reason why Land in such a Case will be low, especially where the Staple Commodity of the Country is the immediate Produce of the Land, because that Produce being low, fewer People find an Advantage in Husbandry, or the Improvement of Land. -- -- -On the contrary, A Plentiful Currency will occasion the Trading Produce to bear a good Price: Because Trade being encouraged and advanced by it, there will be a much greater Demand for that Produce; which will be a great Encouragement of Husbandry, who probably might otherwise have Sought some more profitable Employment.
As we have already experienced how much the Increase of our Currency by what Paper Money has been made, has encouraged our Trade; particularly to instance only in one Article, Ship-Building; it may not be amiss to observe under this Head, what a great Advantage it must be to us as a Trading Country, that has Workmen and all the Materials proper for that Business within itself, to have Ship-Building as much as possible advanced: For every Ship that is built here for the English Merchants, gains the Province her clear Value in Gold and Silver, which must otherwise have been sent Home for Returns in her Stead; and likewise, every Ship built in and belonging to the Province, not only saves the Province her first Cost, but all the Freight, Wages and Provisions she ever makes or requires as long as she lasts; provided Care is taken to make This her Pay Port, and that she always takes Provisions with her for the whole Voyage, which may easily be done. And how considerable an Article this is yearly in our Favour, every one, the least acquainted with mercantile Affairs, must needs be sensible; for if we could not Build our selves, we must either purchase so many Vessels as we want from other Countries, or else Hire them to carry our Produce to Market, which would be more expensive than Purchasing, and on may other Accounts exceedingly to our Loss. Now as Trade in general will decline where there is not a plentiful Currency, so Ship-Building must certainly of Consequence decline where Trade is declining.
Thirdly, Want of Money in a Country discourages Labouring and Handicrafts Men (which are the chief Strength and Support of a People) from coming to settle in it, and induces many that were settled to leave the Country, and seek Entertainment and Employment in other Places, where they can be better paid. For what can be more disheartning to an industrious labouring Man, than this, that after he hath earned his Bread with the Sweat of his Brows, he must spend as much Time, and have near as much Fatigue in getting it, as he had to earn it. And nothing makes more bad Paymasters than a general Scarcity of Money. And here again is a Third Reason for Land's bearing a low Price in such a Country, because Land always increases in Value in Proportion with the Increase of the People settling on it, there being so many more Buyers; and its Value will infallibly be diminished, if the Number of its Inhabitants diminish. -- -- -On the contrary, A Plentiful Currency will encourage great Numbers of Labouring and Handicrafts Men to come and Settle in the Country, by the same Reason that a Want of it will discourage and drive them out. Now the more Inhabitants, the greater Demand for Land (as is said above) upon which it must necessarily rise in Value, and bear a better Price. The same may be said of the Value of House-Rent, which will be advanced for the same Reasons; and by the Increase of Trade and Riches People will be enabled to pay greater Rents. Now the Value of House-Rent rising, and Interest becoming low, many that in a Scarcity of Money practised Usury, will probably be more inclined to Building; which will likewise sensibly enliven Business in any Place; it being an Advantage not only to Brickmakers, Bricklayers, Masons, Carpenters, Joiners, Glaziers, and several other Trades immediately employed by Building, but likewise to Farmers, Brewers, Bakers, Taylors, Shoemakers, Shop-keepers, and in short to every one that they lay their Money out with.
Fourthly, Want of Money in such a Country as ours, occasions a greater Consumption of English and European Goods, in Proportion to the Number of the People, than there would otherwise be. Because Merchants and Traders by whom abundance of Artificers and labouring Men are employed, finding their other Affairs require what Money they can get into their hands, oblige those who work for them to take one half, or perhaps two thirds Goods in Pay. By this Means a greater Quantity of Goods are disposed of, and to a greater Value; because Working Men and their Families are thereby induced to be more profuse and extravagant in fine Apparel and the like, than they would if they were obliged to pay ready Money for such Things after they had earn'd and received it, or if such Goods were not imposed upon them, of which they can make no other Use: For such People cannot send the Goods they are paid with to a Foreign Market, without losing considerably by having them sold for less than they stand 'em in here; neither can they easily dispose of them at Home, because their Neighbours are generally supplied in the same Manner; But how unreasonable would it be, if some of those very Men who have been a Means of thus forcing People into unnecessary Expence, should be the first and most earnest in accusing them of Pride and Prodigalty. Now tho' this extraordinary Consumption of Foreign Commodities may be a Profit to particular Men, yet the Country in general grows poorer by it apace. -- -- -On the contrary, As A plentiful Currency will occasion a less Consumption of European Goods, in Proportion to the Number of the People, so it will be a means of making the Balance of our Trade more equal than it now is, if it does not give it in our Favour because our own Produce will be encouraged at the same Time. And it is to be observed, that tho' less Foreign Commodities are consumed in Proportion to the Number of People, yet this will be no Disadvantage to the Merchant, because the Number of People increasing, will occasion an increasing Demand of more Foreign Goods in the Whole.
Thus we have seen some of the many heavy Disadvantages a Country (especially such a Country as ours) must labour under, when it has not a sufficient Stock of running Cash to manage its Trade currently. And we have likewise seen some of the Advantages which accrue from having Money sufficient, or a Plentiful Currency.
The foregoing Paragraphs being well considered, we shall naturally be led to draw the following Conclusions with Regard to what Persons will probably be for or against Emitting a large Additional Sum of Paper Bills in this Province.
1. Since Men will always be powerfully influenced in their Opinions and Actions by what appears to be their particular Interest: Therefore all those, who wanting Courage to venture in Trade, now practise Lending Money on Security for exhorbitant Interest, which in a Scarcity of Money will be done notwithstanding the Law, I say all such will probably be against a large Addition to our present Stock of Paper Money; because a plentiful Currency will lower Interest, and make it common to lend on less Security.
2. All those who are Possessors of large Sums of Money, and are disposed to purchase Land, which is attended with a great and sure Advantage in a growing Country as this is; I say, the Interest of all such Men will encline them to oppose a large Addition to our Money. Because their Wealth is now continually increasing by the large Interest they receive, which will enable them (if they can keep Land from rising) to purchase More some time hence than they can at present; and in the mean time all Trade being discouraged, not only those who borrow of them, but the Common People in general will be impoverished, and consequently obliged to sell More Land for less Money than they will do at present. And yet, after such Men are possessed of as much Land as they can purchase, it will then be their Interest to have Money made Plentiful, because that will immediately make Land rise in Value in their Hands. Now it ought not to be wondered at, if People from the Knowledge of a Man's Interest do sometimes make a true Guess at his Designs; for, Interest, they say, will not Lie.
3. Lawyers, and others concerned in Court Business, will probably many of them be against a plentiful Currency; because People in that Case will have less Occasion to run in Debt, and consequently less Occasion to go to Law and Sue one another for their Debts. Tho' I know some even among these Gentlemen, that regard the Publick Good before their own apparent private Interest.
4. All those who are any way Dependants on such Persons as are above mentioned, whether as holding Offices, as Tenants, or as Debtors, must at least appear to be against a large Addition; because if they do not, they must sensibly feel their present Interest hurt. And besides these, there are, doubtless, many well-meaning Gentlemen and Others, who, without any immediate private Interest of their own in View, are against making such an Addition, thro' an Opinion they may have of the Honesty and sound Judgment of some of their Friends that oppose it (perhaps for the Ends aforesaid), without having given it any thorough Consideration themselves. And thus it is no Wonder if there is a powerful Party on that Side.
On the other Hand, Those who are Lovers of Trade, and delight to see Manufactures encouraged, will be for having a large Addition to our Currency: For they very well know, that People will have little Heart to advance Money in Trade, when what they can get is scarce sufficient to purchase Necessaries, and supply their Families with Provision. Much less will they lay it out in advancing new Manufactures; nor is it possible new Manufactures Should turn to any Account, where there is not Money to pay the Workmen, who are discouraged by being paid in Goods, because it is a great Disadvantage to them.
Again, Those who are truly for the Proprietor's Interest (and have no separate Views of their own that are predominant) will be heartily for a large Addition: Because, as I have shewn above, Plenty of Money will for several Reasons make Land rise in Value exceedingly: And I appeal to those immediately concerned for the Proprietor in the Sale of his Lands, whether Land has not risen very much since the first Emission of what Paper Currency we now have, and even by its Means. Now we all know the Proprietary has great Quantities to sell.
And since a Plentiful Currency will be so great a Cause of advancing this Province in Trade and Riches, and increasing the Number of its People; which, tho' it will not sensibly lessen the Inhabitants of Great Britain, will occasion a much greater Vent and Demand for their Commodities here; and allowing that the Crown is the more powerful for its Subjects increasing in Wealth and Number, I cannot think it the Interest of England to oppose us in making as great a Sum of Paper Money here, as we, who are the best Judges of our own Necessities, find convenient. And if I were not sensible that the Gentlemen of Trade in England, to whom we have already parted with our Silver and Gold, are misinformed of our Circumstances, and therefore endeavour to have our Currency stinted to what it now is, I should think the Government at Home had some Reasons for discouraging and impoverishing this Province, which we are not acquainted with.
It remains now that we enquire, Whether a large Addition to our Paper Currency will not make it sink in Value very much; And here it will be requisite that we first form just Notions of the Nature and Value of Money in general.
As Providence has so ordered it, that not only different Countries, but even different Parts of the same Country, have their peculiar most suitable Productions; and likewise that different Men have Genius's adapted to Variety of different Arts and Manufactures, Therefore Commerce, or the Exchange of one Commodity or Manufacture for another, is highly convenient and beneficial to Mankind. As for Instance A may be skilful in the Art of making Cloth, and B understand the raising of Corn; A wants Corn, and B Cloth; upon which they make an Exchange with each other for as much as each has Occasion, to the mutual Advantage and Satisfaction of both.
But as it would be very tedious, if there were no other Way of general Dealing, but by an immediate Exchange of Commodities; because a Man that had Corn to dispose of, and wanted Cloth for it, might perhaps in his Search for a Chapman to deal with, meet with twenty People that had Cloth to dispose of, but wanted no Corn; and with twenty others that wanted his Corn, but had no Cloth to suit him with. To remedy such Inconveniences, and facilitate Exchange, men have invented MONEY, properly called a Medium of Exchange, because through or by its Means Labour is exchanged for Labour, or one Commodity for another. And whatever particular Thing Men have agreed to make this Medium of, whether Gold, Silver, Copper, or Tobacco; it is, to those who possess it (if they want any Thing) that very Thing which they want, because it will immediately procure it for them. It is Cloth to him that wants Cloth, and Corn to those that want Corn; and so of all other Necessaries, it is whatsoever it will procure. Thus he who had Corn to dispose of, and wanted to purchase Cloth with it, might sell his Corn for its Value in this general Medium, to one who wanted Corn but had no Cloth; and with this Medium he might purchase Cloth of him that wanted no Corn, but perhaps some other Thing, as Iron it may be, which this Medium will immediately procure, and so he may be said to have exchanged his Cloth for Iron; and thus the general Exchange is soon performed, to the Satisfaction of all Parties, with abundance of Facility.
For many Ages, those Parts of the World which are engaged in Commerce, have fixed upon Gold and Silver as the chief and most proper Materials for this Medium; they being in themselves valuable Metals for their Fineness, Beauty, and Scarcity. By these, particularly by Silver, it has been usual to value all Things else: But as Silver it self is no certain permanent Value, being worth more or less according to its Scarcity or Plenty, therefore it seems requisite to fix upon Something else, more proper to be made a Measure of Values, and this I take to be Labour.
By Labour may the Value of Silver be measured as well as other Things. As, Suppose one Man employed to raise Corn, while another is digging and refining Silver; at the Year's End, or any other Period of Time, the compleat Produce of Corn, and that of Silver, are the natural Price of each other; and if one be twenty Bushels, and the other twenty Ounces, then an Ounce of that Silver is worth the Labour of raising a Bushel of that Corn. Now if by the Discovery of some nearer, more easy or plentiful Mines, a Man may get Forty Ounces of Silver as easily as formerly he did Twenty, and the same Labour is still required to raise Twenty Bushels of Corn, then Two Ounces of Silver will be worth no more than the same Labour of raising One Bushel of Corn, and that Bushel of Corn will be as cheap at two Ounces, as it was before at one; ceteris paribus.
Thus the Riches of a Country are to be valued by the Quantity of Labour its Inhabitants are able to purchase, and not by the Quantity of Silver and Gold they possess; which will purchase more or less Labour, and therefore is more or less valuable, as is said before, according to its Scarcity or Plenty. As those Metals have grown much more plentiful in Europe since the Discovery of America, so they have sunk in Value exceedingly; for, to instance in England, formerly one Penny of Silver was worth a Days Labour, but now it is hardly worth the sixth Part of a Days Labour; because not less than Six-pence will purchase the Labour of a Man for a Day in any Part of that Kingdom; which is wholly to be attributed to the much greater Plenty of Money now in England than formerly. And yet perhaps England is in Effect no richer now than at that Time; because as much Labour might be purchas'd or Work got done of almost any kind, for 100£ then, as will now require or is now worth 600£.
In the next Place let us consider the Nature of Banks emitting Bills of Credit, as they are at this Time used in Hamburgh, Amsterdam, London and Venice.
Those Places being Seats of vast Trade, and the Payment of great sums being for that Reason frequent, Bills of Credit are found very convenient in Business; because a great Sum is more easily counted in Them, lighter in Carriage, concealed in less Room, and therefore safer in Travelling or Laying up, and on many other Accounts they are very much valued. The Banks are the general Cashiers of all Gentlemen, Merchants, and great Traders in and about those Cities; there they deposit their Money, and may take out Bills to the Value, for which they can be certain to have Money again at the Bank at any Time: This gives the Bills a Credit; so that in England they are never less valuable than Money, and in Venice and Amsterdam they are generally worth more. And the Bankers always reserving Money in hand to answer more than the common Run of Demands (and some People constantly putting in while others are taking out) are able besides to lend large Sums, on good Security, to the Government or others, for a reasonable Interest, by which they are paid for their Care and Trouble; and the Money which otherwise would have lain dead in their Hands, is made to circulate again and thereby among the People: and thus the Running Cash of the Nation is as it were doubled; for all great Payments being made in Bills, Money in lower Trade becomes much more plentiful: And this is an exceeding great Advantage to a Trading Country, that is not over-stock'd with Gold and Silver.
As those who take Bills out of the Banks in Europe, put in Money for Security; so here, and in some of the neighbouring Provinces, we engage our Land. Which of these Methods will most effectually secure the Bills from actually sinking in Value, comes next to be considered.
Trade in general being nothing else but the Exchange of Labour for Labour, the Value of all Things is, as I have said before, most justly measured by Labour. Now suppose I put my Money into a Bank, and take out a Bill for the Value; if this Bill at the Time of my receiving it, would purchase me the Labour of one hundred Men for twenty Days; but some time after will only purchase the Labour of the same Number of Men for fifteen Days; it is plain the Bill has sunk in value one fourth Part. Now Silver and Gold being of no permanent Value; and as this Bill is founded on Money, and therefore to be esteemed as such, it may be that the Occasion of this Fall is the increasing Plenty of Gold and Silver, by which Money is one fourth Part less valuable than before, and therefore one fourth more is given of it for the same Quantity of Labour; and if Land is not become more plentiful by some proportionate Decrease of the People, one fourth Part more of Money is given for the same Quantity of Land, whereby it appears that it would have been more profitable to me to have laid that Money out in Land which I put into the Bank, than to place it there and take a Bill for it. And it is certain that the Value of Money has been continually sinking in England for several Ages past, because it has been continually increasing in Quantity. But if Bills could be taken out of a Bank in Europe on a Land Security, it is probable the Value of such Bills would be more certain and steady, because the Number of Inhabitants continue to be near the same in those Countries from Age to Age.
For as Bills issued upon Money Security are Money, so Bills issued upon Land, are in Effect Coined Land.
Therefore (to apply the Above to our own Circumstances) If Land in this Province was falling, or any way likely to fall, it would behove the Legislature most carefully to contrive how to prevent the Bills issued upon Land from falling with it. But as our People increase exceedingly, and will be further increased, as I have before shewn, by the Help of a large Addition to our Currency; and as Land in consequence is continually rising, So, in case no Bills are emitted but what are upon Land Security, the Money-Acts in every Part punctually enforced and executed, the Payments of Principal and Interest being duly and strictly required, and the Principal bona fide sunk according to Law, it is absolutely impossible such Bills should ever sink below their first Value, or below the Value of the Land on which they are founded. In short, there is so little Danger of their sinking that they would certainly rise as the Land rises, if they were not emitted in a proper Manner for preventing it; that is, by providing in the Act That Payment may be made, either in those Bills, or in any other Bills made current by any Act of the Legislature of this Province; and that the Interest, as it is received, may be again emitted in Discharge of Publick Debts; whereby circulating it returns again into the Hands of the Borrowers, and becomes Part of their future Payments; and thus as it is likely there will not be any Difficulty for want of Bills to pay the Office, they are hereby kept from rising above their first Value; For else, supposing there should be emitted upon mortgaged Land its full present Value in Bills; as in the Banks in Europe the full value of the Money deposited is given our in Bills; and supposing the Office would take nothing but the same Sum in those Bills in Discharge of the Land; as in the Banks aforesaid, the same Sum in their Bills must be brought in, in order to receive out the Money: In such Case the Bills would most surely rise in Value as the Land rises; as certain as the Bank Bills founded on Money would fall if that Money was falling. Thus if I were to mortgage to a Loan-Office, or Bank, a parcel of Land now valued at 100£ in Silver, and receive for it the like Sum in Bills, to be paid in again at the Expiration of a certain Term of Years; before which, my Land rising in Value becomes worth 150£ in Silver: 'Tis plain, that if I have not these Bills in Possession, and the Office will take nothing but these Bills, or else what it is now become worth in Silver, in Discharge of my Land; I say it appears plain, that those Bills will now be worth 150£ in Silver to the Possessor; and if I can purchase them for less, in order to redeem my Land, I shall by so much be a Gainer.
I need not say any Thing to convince the Judicious that our Bills have not yet sunk, tho' there is and has been some Difference between them and Silver; because it is evident that that Difference is occasioned by the Scarcity of the latter, which is now become a Merchandize, rising and falling, like other Commodities, as there is a greater or less Demand for it, or as it is more or less Plenty.
Yet farther, in order to make a true Estimate of the Value of Money, we must distinguish between Money as it is Bullion, which is Merchandize, and as by being coin'd it is made a Currency: For its Value as a Merchandize, and its Value as a Currency, are two distinct Things; and each may possibly rise and fall in some Degree independent of the other. Thus if the Quantity of Bullion increases in a Country, it will proportionably decrease in Value; but if at the same Time the Quantity of current Coin should decrease, (supposing Payments may not be made in Bullion) what Coin there is will rise in Value as a Currency, i.e. People will give more Labour in Manufactures for a certain Sum of ready Money.
In the same Manner must we consider a Paper Currency founded on Land; as it is Land, and as it is a Currency
Money as Bullion, or as Land, is valuable by so much Labour as it costs to procure that Bullion or Land.
Money, as a Currency, has an Additional Value by so much Time and Labour as it saves in the Exchange of Commodities.
If, as a Currency, it saves one Fourth Part of the Time and Labour of a Country; it has, on that Account, one Fourth added to its original Value.
When there is no Money in a Country, all Commerce must be by Exchange. Now if it takes one fourth Part of the Time and Labour of a Country, to exchange or get their Commodities exchanged; then, in computing their Value, that Labour of Exchanging must be added to the Labour of manufacturing those Commodities: But if that Time or Labour is saved by introducing Money sufficient, then the additional Value on Account of the Labour of Exchanging must be abated, and Things sold for only the Value of the Labour in making them; because the People may now in the same Time make one Fourth more in Quantity of Manufactures than they could before.
From these Considerations it may be gathered, that in all the Degrees between having no Money in a Country, and Money sufficient for the Trade, it will rise and fall in Value as a Currency, in Proportion to the Decrease or Increase of its Quantity: and if there may be at some Time more than enough, the Overplus will have no Effect towards making the Currency, as a Currency, of less value than when there was but enough; because such Overplus will not be used in Trade, but be some other way disposed of.
If we enquire, How much per Cent. Interest ought to be required upon the Loan of these Bills; we must consider what is the Natural Standard of Usury: And this appears to be, where the Security is undoubted, at least the Rent of so much Land as the Money lent will buy: For it cannot be expected that any Man will lend his Money for less than it would fetch him in as Rent if he laid it out in Land, which is the mose [most] secure Property in the World. But if the Security is casual, then a kind of Ensurance must be enterwoven with the simple natural Interest, which may advance the Usury very conscionably to any height below the Principal it self. Now among us, if the Value of Land is twenty Years Purchase, Five per Cent. is the just Rate of Interest for Money lent on undoubted Security. Yet if Money grows scarce in a Country, it becomes more difficult for People to make punctual Payments of what they borrow, Money being hard to be raised; likewise Trade being discouraged, and Business impeded for want of a Currency, abundance of People must be in declining Circumstances, and by these Means Security is more precarious than where Money is plenty. On such Accounts it is no wonder if People ask a greater Interest for their Money than the natural Interest; and what is above is to be look'd upon as a kind of Praemium for the Ensurance of those Uncertainties, as they are greater or less. Thus we always see, that where Money is scarce, Interest is high, and low where it is plenty. Now it is certainly the Advantage of a Country to make Interest as low as possible, as I have already shewn; and this can be done no other way than by making Money plentiful. And since, in Emitting Paper Money among us, the Office has the best of Security, the Titles to the Land being all skilfully and strictly examined and ascertained; and as it is only permitting the People by Law to coin their own Land, which costs the Government nothing, the Interest being more than enough to pay the charges of Printing, Officers Fees, &c. I cannot see any good Reason why Four per Cent. to the Loan-Office should not be thought fully sufficient. As a low Interest may incline more to take Money out, it will become more plentiful in Trade; and this may bring down the common Usury, in which Security is more dubious, to the Pitch it is determined at by Law.
If it should be objected, That the Emitting It at so low an Interest, and on such easy Terms, will occasion more to be taken out than the Trade of the Country really requires: It may be answered, That, as has already been shewn, there can never be so much of it emitted as to make it fall below the Land it is founded on; because no Man in his Senses will mortgage his Estate for what is of no more Value to him than That he has mortgaged, especially if the Possession of what he receives is more precarious than of what he mortgages, as that of Paper Money is when compared to Land: And if it should ever become so plenty by indiscreet Persons continuing to take out a large Overplus, above what is necessary in Trade, so as to make People imagine it would become by that Means of less Value than their mortgaged Lands, they would immediately of Course begin to pay it in again to the Office to redeem their Land, and continue to do so till there was no more left in Trade than was absolutely necessary. And thus the Proportion would find it self, (tho' there were a Million too much in the Office to be let out) without giving any one the Trouble of Calculation.
It may perhaps be objected to what I have written concerning the Advantages of a large Addition to our Currency, That if the People of this Province increase, and Husbandry is more followed, we shall overstock the Markets with our Produce of Flower, &c. To this it may be answered, that we can never have too many People (nor too much Money) For when one Branch of Trade or Business is overstocked with Hands, there are the more to spare to be employed in another. So if raising Wheat proves dull, more may (if there is Money to support and carry on new Manufactures) proceed to the raising and manufacturing of Hemp, Silk, Iron and many other Things the Country is very capable of, for which we only want People to work, and Money to pay them with.
Upon the Whole it may be observed, That it is the highest Interest of a Trading Country in general to make Money plentiful; and that it can be a Disadvantage to none that have honest Designs. It cannot hurt even the Usurers, tho' it should sink what they receive as Interest; because they will be proportionably more secure in what they lend; or they will have an Opportunity of employing their Money to greater Advantage, to themselves as well as to the Country. Neither can it hurt those Merchants who have great Sums out-standing in Debts in the Country, and seem on that Account to have the most plausible Reason to fear it; to wit, because a large Addition being made to our Currency, will increase the Demand of our Exporting Produce, and by that Means raise the Price of it, so that they will not be able to purchase so much Bread and Flower with 100£ when they shall receive it after such an Addition, as they now can, and may if there is no Addition: I say it cannot hurt even such, because they will get in their Debts just in exact Proportion so much the easier and sooner as the Money becomes plentier; and therefore, considering the Interest and Trouble saved, they will not be Losers; because it only sinks in Value as a Currency, proportionally as it becomes more plenty. It cannot hurt the Interest of Great Britain, as has been shewn; and it will greatly advance the Interest of the Proprietor. It will be an Advantage to every industrious Tradesman, &c. because his Business will be carried on more freely, and Trade be universally enlivened by it. And as more Business in all Manufactures will be done, by so much as the Labour and Time spent in Exchange is saved, the Country in general will grow so much the richer.
It is nothing to the Purpose to object the wretched Fall of the Bills in New-England and South-Carolina, unless it might be made evident that their Currency was emitted with the same Prudence, and on such good Security as ours is; and it certainly was not.
As this Essay is wrote and published in Haste, and the Subject in it self intricate, I hope I shall be censured with Candour, if, for want of Time carefully to revise what I have written, in some Places I should appear to have express'd my self too obscurely, and in others am liable to Objections I did not foresee. I sincerely desire to be acquainted with the Truth, and on that Account shall think my self obliged to any one, who will take the Pains to shew me, or the Publick, where I am mistaken in my Conclusions, And as we all know there are among us several Gentlemen of acute Parts and profound Learning, who are very much against any Addition to our Money, it were to be wished that they would favour the Country with their Sentiments on this Head in Print; which, supported with Truth and good Reasoning, may probably be very convincing. And this is to be desired the rather, because many People knowing the Abilities of those Gentlemen to manage a good Cause, are apt to construe their Silence in This, as an Argument of a bad One. Had any Thing of that Kind ever yet appeared, perhaps I should not have given the Publick this Trouble: But as those ingenious Gentlemen have not yet (and I doubt never will) think it worth their Concern to enlighten the Minds of their erring Countrymen in this Particular, I think it would be highly commendable in very one of us, more fully to bend our Minds to the Study of What is the true Interest of PENNSYLVANIA; whereby we may be enabled, not only to reason pertinently with one another; but, if Occasion requires, to transmit Home such clear Representations, as must inevitably convince our Superiors of the Reasonableness and Integrity of our Designs.
B. B.
Philadelphia, Arpil [sic] 3, 1729.
FINIS.
Nature and Necessity
OF A PAPER-CURRENCY
Quid asper
Utile Nummus habet; patriae, carisque propinquis
Quantum elargiri deceat. -- -- -
Persius
PHILADELPHIA.
Printed and Sold at the New PRINTING-
OFFICE, near the Market. 1729.
Thus much by way of Apology for this present Enquiry into the Nature and Necessity of a Paper Currency. And if any Thing I shall say, may be a Means of fixing a Subject that is now the chief Concern of my Countrymen, in a clearer Light, I shall have the Satisfaction of thinking my Time and Pains well employed.
To proceed, then,
There is a certain proportionate Quantity of Money requisite to carry on the Trade of a Country freely and currently; More than which would be of no Advantage in Trade, and Less, if much less, exceedingly detrimental to it.
This leads us to the following general Considerations.
First, A great Want of Money in any Trading Country, occasions Interest
to be at a very high Rate. And here it may be observed, that it is impossible by any Laws to restrain Men from giving and receiving exhorbitant Interest, where Money is suitably scarce: For he that wants Money will find out Ways to give 10 per Cent. when he cannot have it for less, altho' the Law forbids to take more than 6 per Cent. Now the Interest of Money being high is prejudicial to a Country several Ways: It makes Land bear a low Price, because few Men will lay out their Money in Land, when they can make a much greater Profit by lending it out upon Interest: And much less will Men be inclined to venture their Money at Sea, when they can, without Risque or Hazard, have a great and certain Profit by keeping it at home; thus Trade is discouraged. And if in two Neighbouring Countries the Traders of one, by Reason of a greater Plenty of Money, can borrow it to trade with at a lower Rate than the Traders of the other, they will infallibly have the Advantage, and get the greatest Part of that Trade into their own Hands; For he that trades with Money he hath borrowed at 8 or 10 per Cent. cannot hold Market with him that borrows his Money at 6 or 4. -- -- -On the contrary, A plentiful Currency will occasion Interest to be low: And this will be an Inducement to many to lay out their Money in Lands, rather than put it out to Use, by which means Land will begin to rise in Value and bear a better Price: And at the same Time it will tend to enliven Trade exceedingly, because People will find more Profit in employing their Money that Way than in Usury; and many that understand Business very well, but have not a Stock sufficient of their own, will be encouraged to borrow Money; to trade with, when they can have it at a moderate Interest.
Secondly, Want of Money in a Country reduces the Price of that Part of its Produce which is used in Trade: Because Trade being discouraged by it as above, there is a much less Demand for that Produce. And this is another Reason why Land in such a Case will be low, especially where the Staple Commodity of the Country is the immediate Produce of the Land, because that Produce being low, fewer People find an Advantage in Husbandry, or the Improvement of Land. -- -- -On the contrary, A Plentiful Currency will occasion the Trading Produce to bear a good Price: Because Trade being encouraged and advanced by it, there will be a much greater Demand for that Produce; which will be a great Encouragement of Husbandry, who probably might otherwise have Sought some more profitable Employment.
As we have already experienced how much the Increase of our Currency by what Paper Money has been made, has encouraged our Trade; particularly to instance only in one Article, Ship-Building; it may not be amiss to observe under this Head, what a great Advantage it must be to us as a Trading Country, that has Workmen and all the Materials proper for that Business within itself, to have Ship-Building as much as possible advanced: For every Ship that is built here for the English Merchants, gains the Province her clear Value in Gold and Silver, which must otherwise have been sent Home for Returns in her Stead; and likewise, every Ship built in and belonging to the Province, not only saves the Province her first Cost, but all the Freight, Wages and Provisions she ever makes or requires as long as she lasts; provided Care is taken to make This her Pay Port, and that she always takes Provisions with her for the whole Voyage, which may easily be done. And how considerable an Article this is yearly in our Favour, every one, the least acquainted with mercantile Affairs, must needs be sensible; for if we could not Build our selves, we must either purchase so many Vessels as we want from other Countries, or else Hire them to carry our Produce to Market, which would be more expensive than Purchasing, and on may other Accounts exceedingly to our Loss. Now as Trade in general will decline where there is not a plentiful Currency, so Ship-Building must certainly of Consequence decline where Trade is declining.
Thirdly, Want of Money in a Country discourages Labouring and Handicrafts Men (which are the chief Strength and Support of a People) from coming to settle in it, and induces many that were settled to leave the Country, and seek Entertainment and Employment in other Places, where they can be better paid. For what can be more disheartning to an industrious labouring Man, than this, that after he hath earned his Bread with the Sweat of his Brows, he must spend as much Time, and have near as much Fatigue in getting it, as he had to earn it. And nothing makes more bad Paymasters than a general Scarcity of Money. And here again is a Third Reason for Land's bearing a low Price in such a Country, because Land always increases in Value in Proportion with the Increase of the People settling on it, there being so many more Buyers; and its Value will infallibly be diminished, if the Number of its Inhabitants diminish. -- -- -On the contrary, A Plentiful Currency will encourage great Numbers of Labouring and Handicrafts Men to come and Settle in the Country, by the same Reason that a Want of it will discourage and drive them out. Now the more Inhabitants, the greater Demand for Land (as is said above) upon which it must necessarily rise in Value, and bear a better Price. The same may be said of the Value of House-Rent, which will be advanced for the same Reasons; and by the Increase of Trade and Riches People will be enabled to pay greater Rents. Now the Value of House-Rent rising, and Interest becoming low, many that in a Scarcity of Money practised Usury, will probably be more inclined to Building; which will likewise sensibly enliven Business in any Place; it being an Advantage not only to Brickmakers, Bricklayers, Masons, Carpenters, Joiners, Glaziers, and several other Trades immediately employed by Building, but likewise to Farmers, Brewers, Bakers, Taylors, Shoemakers, Shop-keepers, and in short to every one that they lay their Money out with.
Fourthly, Want of Money in such a Country as ours, occasions a greater Consumption of English and European Goods, in Proportion to the Number of the People, than there would otherwise be. Because Merchants and Traders by whom abundance of Artificers and labouring Men are employed, finding their other Affairs require what Money they can get into their hands, oblige those who work for them to take one half, or perhaps two thirds Goods in Pay. By this Means a greater Quantity of Goods are disposed of, and to a greater Value; because Working Men and their Families are thereby induced to be more profuse and extravagant in fine Apparel and the like, than they would if they were obliged to pay ready Money for such Things after they had earn'd and received it, or if such Goods were not imposed upon them, of which they can make no other Use: For such People cannot send the Goods they are paid with to a Foreign Market, without losing considerably by having them sold for less than they stand 'em in here; neither can they easily dispose of them at Home, because their Neighbours are generally supplied in the same Manner; But how unreasonable would it be, if some of those very Men who have been a Means of thus forcing People into unnecessary Expence, should be the first and most earnest in accusing them of Pride and Prodigalty. Now tho' this extraordinary Consumption of Foreign Commodities may be a Profit to particular Men, yet the Country in general grows poorer by it apace. -- -- -On the contrary, As A plentiful Currency will occasion a less Consumption of European Goods, in Proportion to the Number of the People, so it will be a means of making the Balance of our Trade more equal than it now is, if it does not give it in our Favour because our own Produce will be encouraged at the same Time. And it is to be observed, that tho' less Foreign Commodities are consumed in Proportion to the Number of People, yet this will be no Disadvantage to the Merchant, because the Number of People increasing, will occasion an increasing Demand of more Foreign Goods in the Whole.
Thus we have seen some of the many heavy Disadvantages a Country (especially such a Country as ours) must labour under, when it has not a sufficient Stock of running Cash to manage its Trade currently. And we have likewise seen some of the Advantages which accrue from having Money sufficient, or a Plentiful Currency.
The foregoing Paragraphs being well considered, we shall naturally be led to draw the following Conclusions with Regard to what Persons will probably be for or against Emitting a large Additional Sum of Paper Bills in this Province.
1. Since Men will always be powerfully influenced in their Opinions and Actions by what appears to be their particular Interest: Therefore all those, who wanting Courage to venture in Trade, now practise Lending Money on Security for exhorbitant Interest, which in a Scarcity of Money will be done notwithstanding the Law, I say all such will probably be against a large Addition to our present Stock of Paper Money; because a plentiful Currency will lower Interest, and make it common to lend on less Security.
2. All those who are Possessors of large Sums of Money, and are disposed to purchase Land, which is attended with a great and sure Advantage in a growing Country as this is; I say, the Interest of all such Men will encline them to oppose a large Addition to our Money. Because their Wealth is now continually increasing by the large Interest they receive, which will enable them (if they can keep Land from rising) to purchase More some time hence than they can at present; and in the mean time all Trade being discouraged, not only those who borrow of them, but the Common People in general will be impoverished, and consequently obliged to sell More Land for less Money than they will do at present. And yet, after such Men are possessed of as much Land as they can purchase, it will then be their Interest to have Money made Plentiful, because that will immediately make Land rise in Value in their Hands. Now it ought not to be wondered at, if People from the Knowledge of a Man's Interest do sometimes make a true Guess at his Designs; for, Interest, they say, will not Lie.
3. Lawyers, and others concerned in Court Business, will probably many of them be against a plentiful Currency; because People in that Case will have less Occasion to run in Debt, and consequently less Occasion to go to Law and Sue one another for their Debts. Tho' I know some even among these Gentlemen, that regard the Publick Good before their own apparent private Interest.
4. All those who are any way Dependants on such Persons as are above mentioned, whether as holding Offices, as Tenants, or as Debtors, must at least appear to be against a large Addition; because if they do not, they must sensibly feel their present Interest hurt. And besides these, there are, doubtless, many well-meaning Gentlemen and Others, who, without any immediate private Interest of their own in View, are against making such an Addition, thro' an Opinion they may have of the Honesty and sound Judgment of some of their Friends that oppose it (perhaps for the Ends aforesaid), without having given it any thorough Consideration themselves. And thus it is no Wonder if there is a powerful Party on that Side.
On the other Hand, Those who are Lovers of Trade, and delight to see Manufactures encouraged, will be for having a large Addition to our Currency: For they very well know, that People will have little Heart to advance Money in Trade, when what they can get is scarce sufficient to purchase Necessaries, and supply their Families with Provision. Much less will they lay it out in advancing new Manufactures; nor is it possible new Manufactures Should turn to any Account, where there is not Money to pay the Workmen, who are discouraged by being paid in Goods, because it is a great Disadvantage to them.
Again, Those who are truly for the Proprietor's Interest (and have no separate Views of their own that are predominant) will be heartily for a large Addition: Because, as I have shewn above, Plenty of Money will for several Reasons make Land rise in Value exceedingly: And I appeal to those immediately concerned for the Proprietor in the Sale of his Lands, whether Land has not risen very much since the first Emission of what Paper Currency we now have, and even by its Means. Now we all know the Proprietary has great Quantities to sell.
And since a Plentiful Currency will be so great a Cause of advancing this Province in Trade and Riches, and increasing the Number of its People; which, tho' it will not sensibly lessen the Inhabitants of Great Britain, will occasion a much greater Vent and Demand for their Commodities here; and allowing that the Crown is the more powerful for its Subjects increasing in Wealth and Number, I cannot think it the Interest of England to oppose us in making as great a Sum of Paper Money here, as we, who are the best Judges of our own Necessities, find convenient. And if I were not sensible that the Gentlemen of Trade in England, to whom we have already parted with our Silver and Gold, are misinformed of our Circumstances, and therefore endeavour to have our Currency stinted to what it now is, I should think the Government at Home had some Reasons for discouraging and impoverishing this Province, which we are not acquainted with.
It remains now that we enquire, Whether a large Addition to our Paper Currency will not make it sink in Value very much; And here it will be requisite that we first form just Notions of the Nature and Value of Money in general.
As Providence has so ordered it, that not only different Countries, but even different Parts of the same Country, have their peculiar most suitable Productions; and likewise that different Men have Genius's adapted to Variety of different Arts and Manufactures, Therefore Commerce, or the Exchange of one Commodity or Manufacture for another, is highly convenient and beneficial to Mankind. As for Instance A may be skilful in the Art of making Cloth, and B understand the raising of Corn; A wants Corn, and B Cloth; upon which they make an Exchange with each other for as much as each has Occasion, to the mutual Advantage and Satisfaction of both.
But as it would be very tedious, if there were no other Way of general Dealing, but by an immediate Exchange of Commodities; because a Man that had Corn to dispose of, and wanted Cloth for it, might perhaps in his Search for a Chapman to deal with, meet with twenty People that had Cloth to dispose of, but wanted no Corn; and with twenty others that wanted his Corn, but had no Cloth to suit him with. To remedy such Inconveniences, and facilitate Exchange, men have invented MONEY, properly called a Medium of Exchange, because through or by its Means Labour is exchanged for Labour, or one Commodity for another. And whatever particular Thing Men have agreed to make this Medium of, whether Gold, Silver, Copper, or Tobacco; it is, to those who possess it (if they want any Thing) that very Thing which they want, because it will immediately procure it for them. It is Cloth to him that wants Cloth, and Corn to those that want Corn; and so of all other Necessaries, it is whatsoever it will procure. Thus he who had Corn to dispose of, and wanted to purchase Cloth with it, might sell his Corn for its Value in this general Medium, to one who wanted Corn but had no Cloth; and with this Medium he might purchase Cloth of him that wanted no Corn, but perhaps some other Thing, as Iron it may be, which this Medium will immediately procure, and so he may be said to have exchanged his Cloth for Iron; and thus the general Exchange is soon performed, to the Satisfaction of all Parties, with abundance of Facility.
For many Ages, those Parts of the World which are engaged in Commerce, have fixed upon Gold and Silver as the chief and most proper Materials for this Medium; they being in themselves valuable Metals for their Fineness, Beauty, and Scarcity. By these, particularly by Silver, it has been usual to value all Things else: But as Silver it self is no certain permanent Value, being worth more or less according to its Scarcity or Plenty, therefore it seems requisite to fix upon Something else, more proper to be made a Measure of Values, and this I take to be Labour.
By Labour may the Value of Silver be measured as well as other Things. As, Suppose one Man employed to raise Corn, while another is digging and refining Silver; at the Year's End, or any other Period of Time, the compleat Produce of Corn, and that of Silver, are the natural Price of each other; and if one be twenty Bushels, and the other twenty Ounces, then an Ounce of that Silver is worth the Labour of raising a Bushel of that Corn. Now if by the Discovery of some nearer, more easy or plentiful Mines, a Man may get Forty Ounces of Silver as easily as formerly he did Twenty, and the same Labour is still required to raise Twenty Bushels of Corn, then Two Ounces of Silver will be worth no more than the same Labour of raising One Bushel of Corn, and that Bushel of Corn will be as cheap at two Ounces, as it was before at one; ceteris paribus.
Thus the Riches of a Country are to be valued by the Quantity of Labour its Inhabitants are able to purchase, and not by the Quantity of Silver and Gold they possess; which will purchase more or less Labour, and therefore is more or less valuable, as is said before, according to its Scarcity or Plenty. As those Metals have grown much more plentiful in Europe since the Discovery of America, so they have sunk in Value exceedingly; for, to instance in England, formerly one Penny of Silver was worth a Days Labour, but now it is hardly worth the sixth Part of a Days Labour; because not less than Six-pence will purchase the Labour of a Man for a Day in any Part of that Kingdom; which is wholly to be attributed to the much greater Plenty of Money now in England than formerly. And yet perhaps England is in Effect no richer now than at that Time; because as much Labour might be purchas'd or Work got done of almost any kind, for 100£ then, as will now require or is now worth 600£.
In the next Place let us consider the Nature of Banks emitting Bills of Credit, as they are at this Time used in Hamburgh, Amsterdam, London and Venice.
Those Places being Seats of vast Trade, and the Payment of great sums being for that Reason frequent, Bills of Credit are found very convenient in Business; because a great Sum is more easily counted in Them, lighter in Carriage, concealed in less Room, and therefore safer in Travelling or Laying up, and on many other Accounts they are very much valued. The Banks are the general Cashiers of all Gentlemen, Merchants, and great Traders in and about those Cities; there they deposit their Money, and may take out Bills to the Value, for which they can be certain to have Money again at the Bank at any Time: This gives the Bills a Credit; so that in England they are never less valuable than Money, and in Venice and Amsterdam they are generally worth more. And the Bankers always reserving Money in hand to answer more than the common Run of Demands (and some People constantly putting in while others are taking out) are able besides to lend large Sums, on good Security, to the Government or others, for a reasonable Interest, by which they are paid for their Care and Trouble; and the Money which otherwise would have lain dead in their Hands, is made to circulate again and thereby among the People: and thus the Running Cash of the Nation is as it were doubled; for all great Payments being made in Bills, Money in lower Trade becomes much more plentiful: And this is an exceeding great Advantage to a Trading Country, that is not over-stock'd with Gold and Silver.
As those who take Bills out of the Banks in Europe, put in Money for Security; so here, and in some of the neighbouring Provinces, we engage our Land. Which of these Methods will most effectually secure the Bills from actually sinking in Value, comes next to be considered.
Trade in general being nothing else but the Exchange of Labour for Labour, the Value of all Things is, as I have said before, most justly measured by Labour. Now suppose I put my Money into a Bank, and take out a Bill for the Value; if this Bill at the Time of my receiving it, would purchase me the Labour of one hundred Men for twenty Days; but some time after will only purchase the Labour of the same Number of Men for fifteen Days; it is plain the Bill has sunk in value one fourth Part. Now Silver and Gold being of no permanent Value; and as this Bill is founded on Money, and therefore to be esteemed as such, it may be that the Occasion of this Fall is the increasing Plenty of Gold and Silver, by which Money is one fourth Part less valuable than before, and therefore one fourth more is given of it for the same Quantity of Labour; and if Land is not become more plentiful by some proportionate Decrease of the People, one fourth Part more of Money is given for the same Quantity of Land, whereby it appears that it would have been more profitable to me to have laid that Money out in Land which I put into the Bank, than to place it there and take a Bill for it. And it is certain that the Value of Money has been continually sinking in England for several Ages past, because it has been continually increasing in Quantity. But if Bills could be taken out of a Bank in Europe on a Land Security, it is probable the Value of such Bills would be more certain and steady, because the Number of Inhabitants continue to be near the same in those Countries from Age to Age.
For as Bills issued upon Money Security are Money, so Bills issued upon Land, are in Effect Coined Land.
Therefore (to apply the Above to our own Circumstances) If Land in this Province was falling, or any way likely to fall, it would behove the Legislature most carefully to contrive how to prevent the Bills issued upon Land from falling with it. But as our People increase exceedingly, and will be further increased, as I have before shewn, by the Help of a large Addition to our Currency; and as Land in consequence is continually rising, So, in case no Bills are emitted but what are upon Land Security, the Money-Acts in every Part punctually enforced and executed, the Payments of Principal and Interest being duly and strictly required, and the Principal bona fide sunk according to Law, it is absolutely impossible such Bills should ever sink below their first Value, or below the Value of the Land on which they are founded. In short, there is so little Danger of their sinking that they would certainly rise as the Land rises, if they were not emitted in a proper Manner for preventing it; that is, by providing in the Act That Payment may be made, either in those Bills, or in any other Bills made current by any Act of the Legislature of this Province; and that the Interest, as it is received, may be again emitted in Discharge of Publick Debts; whereby circulating it returns again into the Hands of the Borrowers, and becomes Part of their future Payments; and thus as it is likely there will not be any Difficulty for want of Bills to pay the Office, they are hereby kept from rising above their first Value; For else, supposing there should be emitted upon mortgaged Land its full present Value in Bills; as in the Banks in Europe the full value of the Money deposited is given our in Bills; and supposing the Office would take nothing but the same Sum in those Bills in Discharge of the Land; as in the Banks aforesaid, the same Sum in their Bills must be brought in, in order to receive out the Money: In such Case the Bills would most surely rise in Value as the Land rises; as certain as the Bank Bills founded on Money would fall if that Money was falling. Thus if I were to mortgage to a Loan-Office, or Bank, a parcel of Land now valued at 100£ in Silver, and receive for it the like Sum in Bills, to be paid in again at the Expiration of a certain Term of Years; before which, my Land rising in Value becomes worth 150£ in Silver: 'Tis plain, that if I have not these Bills in Possession, and the Office will take nothing but these Bills, or else what it is now become worth in Silver, in Discharge of my Land; I say it appears plain, that those Bills will now be worth 150£ in Silver to the Possessor; and if I can purchase them for less, in order to redeem my Land, I shall by so much be a Gainer.
I need not say any Thing to convince the Judicious that our Bills have not yet sunk, tho' there is and has been some Difference between them and Silver; because it is evident that that Difference is occasioned by the Scarcity of the latter, which is now become a Merchandize, rising and falling, like other Commodities, as there is a greater or less Demand for it, or as it is more or less Plenty.
Yet farther, in order to make a true Estimate of the Value of Money, we must distinguish between Money as it is Bullion, which is Merchandize, and as by being coin'd it is made a Currency: For its Value as a Merchandize, and its Value as a Currency, are two distinct Things; and each may possibly rise and fall in some Degree independent of the other. Thus if the Quantity of Bullion increases in a Country, it will proportionably decrease in Value; but if at the same Time the Quantity of current Coin should decrease, (supposing Payments may not be made in Bullion) what Coin there is will rise in Value as a Currency, i.e. People will give more Labour in Manufactures for a certain Sum of ready Money.
In the same Manner must we consider a Paper Currency founded on Land; as it is Land, and as it is a Currency
Money as Bullion, or as Land, is valuable by so much Labour as it costs to procure that Bullion or Land.
Money, as a Currency, has an Additional Value by so much Time and Labour as it saves in the Exchange of Commodities.
If, as a Currency, it saves one Fourth Part of the Time and Labour of a Country; it has, on that Account, one Fourth added to its original Value.
When there is no Money in a Country, all Commerce must be by Exchange. Now if it takes one fourth Part of the Time and Labour of a Country, to exchange or get their Commodities exchanged; then, in computing their Value, that Labour of Exchanging must be added to the Labour of manufacturing those Commodities: But if that Time or Labour is saved by introducing Money sufficient, then the additional Value on Account of the Labour of Exchanging must be abated, and Things sold for only the Value of the Labour in making them; because the People may now in the same Time make one Fourth more in Quantity of Manufactures than they could before.
From these Considerations it may be gathered, that in all the Degrees between having no Money in a Country, and Money sufficient for the Trade, it will rise and fall in Value as a Currency, in Proportion to the Decrease or Increase of its Quantity: and if there may be at some Time more than enough, the Overplus will have no Effect towards making the Currency, as a Currency, of less value than when there was but enough; because such Overplus will not be used in Trade, but be some other way disposed of.
If we enquire, How much per Cent. Interest ought to be required upon the Loan of these Bills; we must consider what is the Natural Standard of Usury: And this appears to be, where the Security is undoubted, at least the Rent of so much Land as the Money lent will buy: For it cannot be expected that any Man will lend his Money for less than it would fetch him in as Rent if he laid it out in Land, which is the mose [most] secure Property in the World. But if the Security is casual, then a kind of Ensurance must be enterwoven with the simple natural Interest, which may advance the Usury very conscionably to any height below the Principal it self. Now among us, if the Value of Land is twenty Years Purchase, Five per Cent. is the just Rate of Interest for Money lent on undoubted Security. Yet if Money grows scarce in a Country, it becomes more difficult for People to make punctual Payments of what they borrow, Money being hard to be raised; likewise Trade being discouraged, and Business impeded for want of a Currency, abundance of People must be in declining Circumstances, and by these Means Security is more precarious than where Money is plenty. On such Accounts it is no wonder if People ask a greater Interest for their Money than the natural Interest; and what is above is to be look'd upon as a kind of Praemium for the Ensurance of those Uncertainties, as they are greater or less. Thus we always see, that where Money is scarce, Interest is high, and low where it is plenty. Now it is certainly the Advantage of a Country to make Interest as low as possible, as I have already shewn; and this can be done no other way than by making Money plentiful. And since, in Emitting Paper Money among us, the Office has the best of Security, the Titles to the Land being all skilfully and strictly examined and ascertained; and as it is only permitting the People by Law to coin their own Land, which costs the Government nothing, the Interest being more than enough to pay the charges of Printing, Officers Fees, &c. I cannot see any good Reason why Four per Cent. to the Loan-Office should not be thought fully sufficient. As a low Interest may incline more to take Money out, it will become more plentiful in Trade; and this may bring down the common Usury, in which Security is more dubious, to the Pitch it is determined at by Law.
If it should be objected, That the Emitting It at so low an Interest, and on such easy Terms, will occasion more to be taken out than the Trade of the Country really requires: It may be answered, That, as has already been shewn, there can never be so much of it emitted as to make it fall below the Land it is founded on; because no Man in his Senses will mortgage his Estate for what is of no more Value to him than That he has mortgaged, especially if the Possession of what he receives is more precarious than of what he mortgages, as that of Paper Money is when compared to Land: And if it should ever become so plenty by indiscreet Persons continuing to take out a large Overplus, above what is necessary in Trade, so as to make People imagine it would become by that Means of less Value than their mortgaged Lands, they would immediately of Course begin to pay it in again to the Office to redeem their Land, and continue to do so till there was no more left in Trade than was absolutely necessary. And thus the Proportion would find it self, (tho' there were a Million too much in the Office to be let out) without giving any one the Trouble of Calculation.
It may perhaps be objected to what I have written concerning the Advantages of a large Addition to our Currency, That if the People of this Province increase, and Husbandry is more followed, we shall overstock the Markets with our Produce of Flower, &c. To this it may be answered, that we can never have too many People (nor too much Money) For when one Branch of Trade or Business is overstocked with Hands, there are the more to spare to be employed in another. So if raising Wheat proves dull, more may (if there is Money to support and carry on new Manufactures) proceed to the raising and manufacturing of Hemp, Silk, Iron and many other Things the Country is very capable of, for which we only want People to work, and Money to pay them with.
Upon the Whole it may be observed, That it is the highest Interest of a Trading Country in general to make Money plentiful; and that it can be a Disadvantage to none that have honest Designs. It cannot hurt even the Usurers, tho' it should sink what they receive as Interest; because they will be proportionably more secure in what they lend; or they will have an Opportunity of employing their Money to greater Advantage, to themselves as well as to the Country. Neither can it hurt those Merchants who have great Sums out-standing in Debts in the Country, and seem on that Account to have the most plausible Reason to fear it; to wit, because a large Addition being made to our Currency, will increase the Demand of our Exporting Produce, and by that Means raise the Price of it, so that they will not be able to purchase so much Bread and Flower with 100£ when they shall receive it after such an Addition, as they now can, and may if there is no Addition: I say it cannot hurt even such, because they will get in their Debts just in exact Proportion so much the easier and sooner as the Money becomes plentier; and therefore, considering the Interest and Trouble saved, they will not be Losers; because it only sinks in Value as a Currency, proportionally as it becomes more plenty. It cannot hurt the Interest of Great Britain, as has been shewn; and it will greatly advance the Interest of the Proprietor. It will be an Advantage to every industrious Tradesman, &c. because his Business will be carried on more freely, and Trade be universally enlivened by it. And as more Business in all Manufactures will be done, by so much as the Labour and Time spent in Exchange is saved, the Country in general will grow so much the richer.
It is nothing to the Purpose to object the wretched Fall of the Bills in New-England and South-Carolina, unless it might be made evident that their Currency was emitted with the same Prudence, and on such good Security as ours is; and it certainly was not.
As this Essay is wrote and published in Haste, and the Subject in it self intricate, I hope I shall be censured with Candour, if, for want of Time carefully to revise what I have written, in some Places I should appear to have express'd my self too obscurely, and in others am liable to Objections I did not foresee. I sincerely desire to be acquainted with the Truth, and on that Account shall think my self obliged to any one, who will take the Pains to shew me, or the Publick, where I am mistaken in my Conclusions, And as we all know there are among us several Gentlemen of acute Parts and profound Learning, who are very much against any Addition to our Money, it were to be wished that they would favour the Country with their Sentiments on this Head in Print; which, supported with Truth and good Reasoning, may probably be very convincing. And this is to be desired the rather, because many People knowing the Abilities of those Gentlemen to manage a good Cause, are apt to construe their Silence in This, as an Argument of a bad One. Had any Thing of that Kind ever yet appeared, perhaps I should not have given the Publick this Trouble: But as those ingenious Gentlemen have not yet (and I doubt never will) think it worth their Concern to enlighten the Minds of their erring Countrymen in this Particular, I think it would be highly commendable in very one of us, more fully to bend our Minds to the Study of What is the true Interest of PENNSYLVANIA; whereby we may be enabled, not only to reason pertinently with one another; but, if Occasion requires, to transmit Home such clear Representations, as must inevitably convince our Superiors of the Reasonableness and Integrity of our Designs.
B. B.
Philadelphia, Arpil [sic] 3, 1729.
FINIS.
Big Banks Manipulating Every Market
Big Banks Busted Massively Manipulating Foreign Exchange … And Every Other Market
It has long been known that currency markets are massively rigged. And see this, this, and this. Indeed, not only do the banks share confidential information with each other … they also shared it with a giant oil company.
Today, a number of giant banks pleaded guilty to manipulating currency markets, and agreed to pay a $7.5 billion dollar fine. New York’s state financial regulator called it “a brazen ‘heads I win, tails you lose’ scheme to rip off their clients.”
The formal admissions by the banks include a trader saying, “We trying to manipulate it a bit more in ny now . . . a coupld buddies of mine and I.” And a vice president of a big bank said:
- “If you aint cheating, you aint trying.”
Runaway derivatives – especially credit default swaps (CDS) – were one of the main causes of the 2008 financial crisis. Congress never fixed the problem, and actually made it worse.
The big banks have long manipulated derivatives … a $1,200 Trillion Dollar market.
Indeed, many trillions of dollars of derivatives are being manipulated in the exact same same way that interest rates are fixed (see below) … through gamed self-reporting.
Reuters noted in September:
A Manhattan federal judge said on Thursday that investors may pursue a lawsuit accusing 12 major banks of violating antitrust law by fixing prices and restraining competition in the roughly $21 trillion market for credit default swaps.In other words, the big banks are continuing to fix prices for CDS in secret meetings … and have torpedoed the more open and transparent CDS exchanges that Congress mandated.
***
“The complaint provides a chronology of behavior that would probably not result from chance, coincidence, independent responses to common stimuli, or mere interdependence,” [Judge] Cote said.
The defendants include Bank of America Corp, Barclays Plc, BNP Paribas SA, Citigroup Inc , Credit Suisse Group AG, Deutsche Bank AG , Goldman Sachs Group Inc, HSBC Holdings Plc , JPMorgan Chase & Co, Morgan Stanley, Royal Bank of Scotland Group Plc and UBS AG.
Other defendants are the International Swaps and Derivatives Association and Markit Ltd, which provides credit derivative pricing services.
***
U.S. and European regulators have probed potential anticompetitive activity in CDS. In July 2013, the European Commission accused many of the defendants of colluding to block new CDS exchanges from entering the market.
***
“The financial crisis hardly explains the alleged secret meetings and coordinated actions,” the judge wrote. “Nor does it explain why ISDA and Markit simultaneously reversed course.”
The managing director at Graham Fisher & Co. (Joshua Rosner) recently said that the big banks are frontrunning CDS trades … and manipulating decisions on whether a the party “insured” by CDS has defaulted on its obligations, thus triggering an “event” requiring payment on the CDS.
By way of analogy, whether or not an insurance company pays to rebuild a house which has burned to the ground may turn on whether it finds the fire was arson or accidental.
This is a big deal … while hundreds of thousands of dollars might be at stake in the home fire example, many tens or even hundreds of billions of dollars ride on whether or not a country like Greece is determined to have suffered a CDS-triggering event.
Rosner notes:
The potential use of CDS to artificially manipulate corporate solvency, the imbalances in the amounts of CDS outstanding relative to referenced debt and ongoing allegations that ISDA’s Determinations Committee is deeply conflicted and “operates as a quasi-Star Chamber or cartel”, are finally being scrutinized.Energy Prices Manipulated
As one source recently suggested, “It would be a surprise if determinations of default, made by a committee of interested parties, don’t lead to findings of manipulation similar to those found in LIBOR and FOREX”.
***
The fact that Pimco’s Chief Investment Officer criticized the determination that Greece had not triggered its CDS, even though Pimco was part of the unanimous vote making that determination, is profoundly troubling to say the least.
***
The fact that the [ISDA’s Determinations Committees] has no obligation to “research, investigate, supplement or verify the accuracy of information on which a determination is based” and members “may have an inherent conflict of interest in the outcome of any determinations” only adds credence to suggestions that the “CDS market is being manipulated and gerrymandered by the all-powerful investment banks”.
Energy markets are manipulated as well …
For example, oil prices have been manipulated for many years.
And the U.S. Federal Energy Regulatory Commission says that JP Morgan has massively manipulated energy markets in California and the Midwest, obtaining tens of millions of dollars in overpayments from grid operators between September 2010 and June 2011.
And Pulitzer prize-winning reporter David Cay Johnston noted last year that Wall Street is trying to launch Enron 2.0.
Commodities Are Manipulated
The big banks and government agencies have been conspiring to manipulate commodities prices for decades.
The big banks are taking over important aspects of the physical economy – including uranium mining, petroleum products, aluminum, ownership and operation of airports, toll roads, ports, and electricity – to manipulate market prices.
And they are using these physical assets to massively manipulate commodities prices … scalping consumers of many billions of dollars each year. (More from Matt Taibbi, FDL and Elizabeth Warren.)
Gold and Silver Are Manipulated
Last November, Switzerland’s financial regulator (FINMA) found “serious misconduct” and a “clear attempt to manipulate precious metals benchmarks” by UBS employees in precious metals trading, particularly with silver.
Reuters reports:
Swiss regulator FINMA said on Wednesday that it found a “clear attempt” to manipulate precious metals benchmarks during its investigation into precious metals and foreign exchange trading at UBS …Gold and silver prices have been “fixed” in daily conference calls by the powers-that-be.
Bloomberg reported in 2013:
It is the participating banks themselves that administer the gold and silver benchmarks.Interest Rates Are Manipulated
So are prices being manipulated? Let’s take a look at the evidence. In his book “The Gold Cartel,” commodity analyst Dimitri Speck combines minute-by-minute data from most of 1993 through 2012 to show how gold prices move on an average day (see attached charts). He finds that the spot price of gold tends to drop sharply around the London evening fixing (10 a.m. New York time). A similar, if less pronounced, drop in price occurs around the London morning fixing. The same daily declines can be seen in silver prices from 1998 through 2012.
For both commodities there were, on average, no comparable price changes at any other time of the day. These patterns are consistent with manipulation in both markets.
Bloomberg reported last year:
Royal Bank of Scotland Group Plc was ordered to pay $50 million by a federal judge in Connecticut over claims that it rigged the London interbank offered rate.To put the Libor interest rate scandal in perspective:
RBS Securities Japan Ltd. in April pleaded guilty to wire frauda s part of a settlement of more than $600 million with U.S and U.K. regulators over Libor manipulation, according to court filings. U.S. District Judge Michael P. Shea in New Haventoday sentenced the Tokyo-based unit of RBS, Britain’s biggest publicly owned lender, to pay the agreed-upon fine, according to a Justice Department statement.
Global investigations into banks’ attempts to manipulate the benchmarks for profit have led to fines and settlements for lenders including RBS, Barclays Plc, UBS AG and Rabobank Groep.
RBS was among six companies fined a record 1.7 billion euros ($2.3 billion) by the European Union last month for rigging interest rates linked to Libor. The combined fines for manipulating yen Libor and Euribor, the benchmark money-market rate for the euro, are the largest-ever EU cartel penalties.
Global fines for rate-rigging have reached $6 billion since June 2012 as authorities around the world probe whether traders worked together to fix Libor, meant to reflect the interest rate at which banks lend to each other, to benefit their own trading positions.
- The big banks have conspired for years to rig interest rates … upon which $800 trillion in assets are pegged
- This was the largest insider trading scandal ever … and the largest financial scam in world history
- Local governments got ripped off bigtime by the Libor manipulation
- Even though RBS and a handful of other banks have been fined for interest rate manipulation, Libor is still being manipulated. No wonder … the fines are pocket change – the cost of doing business – for the big banks
Traders with high-tech computers can manipulate stocks, bonds, options, currencies and commodities. And see this.
Manipulating Numerous Markets In Myriad Ways
The big banks and other giants manipulate numerous markets in myriad ways, for example:
- Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here
- Charging “storage fees” to store gold bullion … without even buying or storing any gold . And raiding allocated gold accounts
- Committing massive and pervasive fraud both when they initiated mortgage loans and when they foreclosed on them (and see this)
- Pledging the same mortgage multiple times to different buyers. See this, this, this, this and this. This would be like selling your car, and collecting money from 10 different buyers for the same car
- Cheating homeowners by gaming laws meant to protect people from unfair foreclosure
- Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this
- Engaging in unlawful “frontrunning” to manipulate markets. See this, this, this, this, this and this
- Participating in various Ponzi schemes
- Charging veterans unlawful mortgage fees
- Cooking their books (and see this)
The experts say that big banks will keep manipulating markets unless and until their executives are thrown in jail for fraud.
Why? Because the system is rigged to allow the big banks to commit continuous and massive fraud, and then to pay small fines as the “cost of doing business”. As Nobel prize winning economist Joseph Stiglitz noted years ago:
“The system is set so that even if you’re caught, the penalty is just a small number relative to what you walk home with.Indeed, Reuters pointed out recently:
The fine is just a cost of doing business. It’s like a parking fine. Sometimes you make a decision to park knowing that you might get a fine because going around the corner to the parking lot takes you too much time.”
Capping bonuses at twice base salary? That’s not a punishment … it’s an incentive.Switzerland’s regulator FINMA ordered UBS, the country’s biggest bank, to pay 134 million francs ($139 million) after it found serious misconduct in both foreign exchange and precious metals trading. It also capped bonuses for dealers in both units at twice their basic salary for two years.
Experts say that we have to prosecute fraud or else the economy won’t ever really stabilize.
But the government is doing the exact opposite. Indeed, the Justice Department has announced it will go easy on big banks, and always settles prosecutions for pennies on the dollar (a form of stealth bailout. It is also arguably one of the main causes of the double dip in housing. And there is no change in the air.)
Indeed, the government doesn’t even force the banks to admit any guilt as part of their settlements. In fact:
“The banks have been allowed to investigate themselves,” one source familiar with the investigation told Reuters. “The investigated decide what they want to investigate, what they admit to, and how much they will pay.Wall Street has manipulated virtually every other market as well – both in the financial sector and the real economy – and broken virtually every law on the books.
And they will keep on doing so until the Department of Justice grows a pair.
The criminality and blatant manipulation will grow and spread and metastasize – taking over and killing off more and more of the economy – until Wall Street executives are finally thrown in jail.
It’s that simple …
Former IRS Special Agent Sounds Alarm To Stop The TPP
Former IRS Special Agent Sounds Alarm Regarding Last Chance To Stop The TPP
Dear Friends,
Like most of my friends, associates and supporters, I am skeptical that writing to our representatives does much good. But occasionally I believe it can make a difference. The volume of destructive legislation is really overwhelming and it is hard to determine where to focus one’s efforts.
Nevertheless, I believe this “TPP” “Fast-Track” treaty arrangement is the worst of the worst. The Congress has sold us down the river over and over again and don’t even get me started when it comes to U.S. Presidents. But this “TPP” is the boondoggle of all boondoggles. Can you imagine the audacity to formulate a treaty that will soon seek the approval of Congress but the only way Congress can review the treaty is to read it in a secret room after having promised not to disclose the contents to anyone and after being prohibited from bringing in a pen or even a piece of note paper?
We are fortunate to have organizations like the Electronic Frontier Foundation, who informs the American people about the dangers to our rights and privacy, dangers often proposed and implemented by the very people we send to Washington, D.C.
Here is just one paragraph from the Electronic Frontier Foundation’s analysis of the horror story known as “TPP”:
TPP raises significant concerns about citizens’ freedom of expression, due process, innovation, the future of the Internet’s global infrastructure, and the right of sovereign nations to develop policies and laws that best meet their domestic priorities. In sum, the TPP puts at risk some of the most fundamental rights that enable access to knowledge for the world’s citizens.
I urge you to read the Electronic Frontier Foundation’s entire analysis here:
https://www.eff.org/issues/tpp
And then take action by calling, faxing or emailing a letter to your U.S. Senator telling them to vote against the TPP or any legislation that even remotely supports or advances the TPP. Or go to this link to electronically and rapidly voice your opposition:
https://act.eff.org/action/
Thank you for reading and considering this request.
Don’t forget that I have a “Twitter” account for those who prefer that particular method of communicating. My twitter account concentrating primarily on current events and government corruption, tax matters and attacks on our Constitution and Bill of Rights is @josephbanister. My twitter account concentrating primarily on spiritual matters and miscellaneous topics is @joebanister.
Inviting others to join my email list on the right-hand side of my web page or follow me on “Twitter” is encouraged and appreciated. You can view a sample of prior newsletters here.
-For those who have received this message as a forward from someone else, you can sign up to receive these messages directly by entering your email address on the right hand side of the web page.
-I will continue to send a free Attorney Larry Becraft Research CD to any donor who donates at least $20 to me for my radio show effort - just make sure you mention that you want the CD gift. Don't forget that Attorney Becraft (and some unsung heroes) created an incredible researching tool all in one CD-ROM. He has compiled the most comprehensive, easy to access history of the federal income tax laws I have ever laid my eyes on. The CD-ROM includes more recent information such as a report from a 1975 investigation of the IRS, Title 26 of the Code of Federal Regulations from 1999, the entire Internal Revenue Code from January, 2002, Statutes At Large 111 through 121 (105th Congress through 110th Congress - roughly 1997 through 2007) and earlier information such as the Revenue Acts of 1919, 1921, 1924, 1926, 1928, 1932, 1934, 1936, 1938, tax regulations from some of the aforementioned years, a mind-blowing 31 page "secret" memorandum written in 1945 later declassified regarding the history of the "Bureau of Internal Revenue" (which is the earlier name of the agency we know today as the "IRS"), the entire 1939 Internal Revenue Code, the entire 1954 Internal Revenue Code (prepared by the Joint Committee on Taxation in 1992). Many of these documents were created in word-searchable format so you can search for any specific word you can think of. It would take hundreds of hours to create such a resource from scratch and Larry's hard work has saved us from doing so. As Larry told my listeners the last time he was on the show, it is critical for Americans to learn more about what the tax laws actually say - what the tax laws said in 1913 when the contemporary income tax came into being and what the tax laws have said ever since then, all the way up to the present day. Donations by check or money order are gratefully accepted and can be made payable to "Joseph Banister" and mailed to me at 1805 N. Carson Street, Suite C, Carson City, Nevada 89701. Keep in mind that money orders (with an anonymous payor) or cash may provide a greater degree of privacy to the donor than checks. Also, consider using 1805 N. Carson Street, Suite C, Carson City, Nevada 89701 as the return address on your envelope rather than your own address because any information on the outside of a mailed envelope is susceptible to observation/transcription by government agencies. See http://www.answers.com/topic/
-Listen to the Agent For Truth Show Saturday mornings beginning September 21st, 2013, mornings from 10:00 am to 11:00 am pacific time broadcasted on the Truth Frequency Radio Network. Visit http://hearliberty.com/
-Check out the "Joe Banister Channel" on "Youtube" at http://www.youtube.com/user/
-For those who are unfamiliar with what has transpired to date in my battle against the IRS and other agencies and groups trying to silence my message, especially the recent acquittal on all charges leveled against me, please visit http://www.ninehundred.net/
-Prayers in support of this effort are always welcomed and encouraged. May we all focus on giving glory to God and obeying His Commandments, especially the Commandment not to take His Name in vain. One “pet project” I have is to encourage film and television producers, directors, writers, actors and actresses to refrain from using God’s or Jesus’ Name in vain in their films and shows. I will use my “@joebanister” twitter account and the hashtag #LordsNameInVainWatch to ask for your help in making public requests to film and television personalities to stop using the Lord’s Name in vain while pursuing their profession. Let’s work together and speak up in defense of God’s Holy Name and let us shower God with our devotion so that He will more abundantly shower our nation with blessings.
-Contributions to my legal defense fund are also welcomed due to the significant costs of defending against multiple and continuing government attacks. I also spend a significant amount of my personal time fighting this battle and speaking out. Your contributions help me keep the fight alive. Checks or money orders are gratefully accepted and can be made payable to "Joseph Banister" to assist me with legal expenses and can be mailed to 1805 N. Carson Street, Carson City, Nevada 89701. Money orders or cash may provide a greater degree of privacy to the donor than checks so use your own discretion based on the degree of privacy you desire.
-Visit http://www.ninehundred.net/
-My sincere thanks to those who have prayed for the success of our efforts and/or contributed to my legal defense fund. Your continued support is enabling me to illustrate, in detail and in a very public manner, that the IRS does not prevail against citizens because the agency adheres to the rule of law, but that the IRS prevails against citizens because the agency ignores the law, twists the meaning of the law, and overwhelms the citizen with economic and legal burdens. In a school yard, such tactics are called "Bullying". In a government setting, such tactics are called "Tyranny". This effort is the equivalent of ganging up on the bully and sending him to reform school where he belongs.
******************************
Kind regards,
Joseph R. (Joe) Banister
Former IRS Criminal Investigation Division Special Agent
Standing Up To Government Bullies Since 1999
http://www.agentfortruth.com/ , http://freedomabovefortune.
II Chronicles 7:14:
And my people, upon whom my name is called, being converted, shall make supplication to me, and seek out my face, and do penance for their most wicked ways: then will I hear from heaven, and will forgive their sin and will heal their land.
Exodus 20:7:
Thou shalt not take the name of the Lord thy God in vain: for the Lord will not hold him guiltless that shall take the name of the Lord his God in vain.
Matthew 5:27-28:
You have heard that it was said to them of old: "Thou shalt not commit adultery". But I say to you that whosoever shall look on a woman to lust after her hath already committed adultery with her in his heart.
John 6:51-52:
I am the living bread which came down from heaven. If any man eat of this bread, he shall live forever; and the bread that I will give, is my flesh, for the life of the world.
George Orwell, 1984:
"You are a slow learner, Winston," said O'Brien gently.
"How can I help it?" he blubbered. "How can I help seeing what is in front of my eyes? Two and two are four."
"Sometimes, Winston. Sometimes they are five. Sometimes they are three.
Sometimes they are all of them at once. You must try harder. It is not easy to become sane."
Dear Friends,
Like most of my friends, associates and supporters, I am skeptical that writing to our representatives does much good. But occasionally I believe it can make a difference. The volume of destructive legislation is really overwhelming and it is hard to determine where to focus one’s efforts.
Nevertheless, I believe this “TPP” “Fast-Track” treaty arrangement is the worst of the worst. The Congress has sold us down the river over and over again and don’t even get me started when it comes to U.S. Presidents. But this “TPP” is the boondoggle of all boondoggles. Can you imagine the audacity to formulate a treaty that will soon seek the approval of Congress but the only way Congress can review the treaty is to read it in a secret room after having promised not to disclose the contents to anyone and after being prohibited from bringing in a pen or even a piece of note paper?
We are fortunate to have organizations like the Electronic Frontier Foundation, who informs the American people about the dangers to our rights and privacy, dangers often proposed and implemented by the very people we send to Washington, D.C.
Here is just one paragraph from the Electronic Frontier Foundation’s analysis of the horror story known as “TPP”:
TPP raises significant concerns about citizens’ freedom of expression, due process, innovation, the future of the Internet’s global infrastructure, and the right of sovereign nations to develop policies and laws that best meet their domestic priorities. In sum, the TPP puts at risk some of the most fundamental rights that enable access to knowledge for the world’s citizens.
I urge you to read the Electronic Frontier Foundation’s entire analysis here:
https://www.eff.org/issues/tpp
And then take action by calling, faxing or emailing a letter to your U.S. Senator telling them to vote against the TPP or any legislation that even remotely supports or advances the TPP. Or go to this link to electronically and rapidly voice your opposition:
https://act.eff.org/action/
Thank you for reading and considering this request.
Don’t forget that I have a “Twitter” account for those who prefer that particular method of communicating. My twitter account concentrating primarily on current events and government corruption, tax matters and attacks on our Constitution and Bill of Rights is @josephbanister. My twitter account concentrating primarily on spiritual matters and miscellaneous topics is @joebanister.
Inviting others to join my email list on the right-hand side of my web page or follow me on “Twitter” is encouraged and appreciated. You can view a sample of prior newsletters here.
-For those who have received this message as a forward from someone else, you can sign up to receive these messages directly by entering your email address on the right hand side of the web page.
-I will continue to send a free Attorney Larry Becraft Research CD to any donor who donates at least $20 to me for my radio show effort - just make sure you mention that you want the CD gift. Don't forget that Attorney Becraft (and some unsung heroes) created an incredible researching tool all in one CD-ROM. He has compiled the most comprehensive, easy to access history of the federal income tax laws I have ever laid my eyes on. The CD-ROM includes more recent information such as a report from a 1975 investigation of the IRS, Title 26 of the Code of Federal Regulations from 1999, the entire Internal Revenue Code from January, 2002, Statutes At Large 111 through 121 (105th Congress through 110th Congress - roughly 1997 through 2007) and earlier information such as the Revenue Acts of 1919, 1921, 1924, 1926, 1928, 1932, 1934, 1936, 1938, tax regulations from some of the aforementioned years, a mind-blowing 31 page "secret" memorandum written in 1945 later declassified regarding the history of the "Bureau of Internal Revenue" (which is the earlier name of the agency we know today as the "IRS"), the entire 1939 Internal Revenue Code, the entire 1954 Internal Revenue Code (prepared by the Joint Committee on Taxation in 1992). Many of these documents were created in word-searchable format so you can search for any specific word you can think of. It would take hundreds of hours to create such a resource from scratch and Larry's hard work has saved us from doing so. As Larry told my listeners the last time he was on the show, it is critical for Americans to learn more about what the tax laws actually say - what the tax laws said in 1913 when the contemporary income tax came into being and what the tax laws have said ever since then, all the way up to the present day. Donations by check or money order are gratefully accepted and can be made payable to "Joseph Banister" and mailed to me at 1805 N. Carson Street, Suite C, Carson City, Nevada 89701. Keep in mind that money orders (with an anonymous payor) or cash may provide a greater degree of privacy to the donor than checks. Also, consider using 1805 N. Carson Street, Suite C, Carson City, Nevada 89701 as the return address on your envelope rather than your own address because any information on the outside of a mailed envelope is susceptible to observation/transcription by government agencies. See http://www.answers.com/topic/
-Listen to the Agent For Truth Show Saturday mornings beginning September 21st, 2013, mornings from 10:00 am to 11:00 am pacific time broadcasted on the Truth Frequency Radio Network. Visit http://hearliberty.com/
-Check out the "Joe Banister Channel" on "Youtube" at http://www.youtube.com/user/
-For those who are unfamiliar with what has transpired to date in my battle against the IRS and other agencies and groups trying to silence my message, especially the recent acquittal on all charges leveled against me, please visit http://www.ninehundred.net/
-Prayers in support of this effort are always welcomed and encouraged. May we all focus on giving glory to God and obeying His Commandments, especially the Commandment not to take His Name in vain. One “pet project” I have is to encourage film and television producers, directors, writers, actors and actresses to refrain from using God’s or Jesus’ Name in vain in their films and shows. I will use my “@joebanister” twitter account and the hashtag #LordsNameInVainWatch to ask for your help in making public requests to film and television personalities to stop using the Lord’s Name in vain while pursuing their profession. Let’s work together and speak up in defense of God’s Holy Name and let us shower God with our devotion so that He will more abundantly shower our nation with blessings.
-Contributions to my legal defense fund are also welcomed due to the significant costs of defending against multiple and continuing government attacks. I also spend a significant amount of my personal time fighting this battle and speaking out. Your contributions help me keep the fight alive. Checks or money orders are gratefully accepted and can be made payable to "Joseph Banister" to assist me with legal expenses and can be mailed to 1805 N. Carson Street, Carson City, Nevada 89701. Money orders or cash may provide a greater degree of privacy to the donor than checks so use your own discretion based on the degree of privacy you desire.
-Visit http://www.ninehundred.net/
-My sincere thanks to those who have prayed for the success of our efforts and/or contributed to my legal defense fund. Your continued support is enabling me to illustrate, in detail and in a very public manner, that the IRS does not prevail against citizens because the agency adheres to the rule of law, but that the IRS prevails against citizens because the agency ignores the law, twists the meaning of the law, and overwhelms the citizen with economic and legal burdens. In a school yard, such tactics are called "Bullying". In a government setting, such tactics are called "Tyranny". This effort is the equivalent of ganging up on the bully and sending him to reform school where he belongs.
******************************
Kind regards,
Joseph R. (Joe) Banister
Former IRS Criminal Investigation Division Special Agent
Standing Up To Government Bullies Since 1999
http://www.agentfortruth.com/ , http://freedomabovefortune.
II Chronicles 7:14:
And my people, upon whom my name is called, being converted, shall make supplication to me, and seek out my face, and do penance for their most wicked ways: then will I hear from heaven, and will forgive their sin and will heal their land.
Exodus 20:7:
Thou shalt not take the name of the Lord thy God in vain: for the Lord will not hold him guiltless that shall take the name of the Lord his God in vain.
Matthew 5:27-28:
You have heard that it was said to them of old: "Thou shalt not commit adultery". But I say to you that whosoever shall look on a woman to lust after her hath already committed adultery with her in his heart.
John 6:51-52:
I am the living bread which came down from heaven. If any man eat of this bread, he shall live forever; and the bread that I will give, is my flesh, for the life of the world.
George Orwell, 1984:
"You are a slow learner, Winston," said O'Brien gently.
"How can I help it?" he blubbered. "How can I help seeing what is in front of my eyes? Two and two are four."
"Sometimes, Winston. Sometimes they are five. Sometimes they are three.
Sometimes they are all of them at once. You must try harder. It is not easy to become sane."
Iscriviti a:
Post (Atom)
Post in evidenza
The Great Taking - The Movie
David Webb exposes the system Central Bankers have in place to take everything from everyone Webb takes us on a 50-year journey of how the C...
-
Miscommunicated Monetary Theory T Sabri Öncü ( sabri.oncu@gmail.com ) is an econom...
-
Central banks in 46 countries are considering creating a central bank digital currency (CBDC) using a constrained form of distributed le...
-
Questo è Cefis. L’altra faccia dell’onorato presidente - di Giorgio Steimetz, Agenzia Milano Informazioni, 1972 01 Le due potenze occulte d...
