Thursday, October 28, 2010

A Cross of Gold

Dr. Edwin Vieira, Jr., constitutional lawyer, historian, scholar, GATA consultant, and author of the magisterial history of the monetary system of the United States, Pieces of Eight, presented his justification for a gold-based monetary system at the October dinner meeting of the Committee for Monetary Research and Education in New York.

Vieira's address was drawn from his paper, "A Cross of Gold", and you can find it at GATA's Internet site here:

Vieira elegantly states:
"The present domestic and international monetary and banking systems have slipped into the initial stages of terminal dissolution. In their present forms, they cannot long survive."
"The weaknesses of this system became apparent only forty-three (43) years after the initiation of the scheme, when the great panic of 1907 proved that the National Banking System needed a major overhaul. The fundamental flaws pointed out at the time were that the system provided no single 'lender of last resort' to pump up the pyramid of currency and credit in times of crisis, and set up no central regulator to discipline the bankers in order, if possible, to forefend crises altogether. To overcome these deficiencies, the locus of economic power needed to be translated to a still higher level."
"So full national cartelization and central regulation of the banks was set up in the Federal Reserve System through the Federal Reserve Act of 1913. Indeed, the Federal Reserve System went beyond mere national cartelization to national Ponzification. The Federal Reserve regional banks promised their depositors to redeem Federal Reserve Notes on demand, which promises were 'guaranteed' by the United States Treasury’s ability to extract payments from taxpayers. So, just as in a classical Ponzi scheme present payments to the first tier of 'investors' are 'guaranteed' by revenues to be derived from subsequent tiers of duped 'investors', under the Federal Reserve System promises of present redemption of Federal Reserve Notes were 'guaranteed' by anticipated tax revenues—except that, far better than the classical Ponzi scheme, these revenues could be coerced from unwilling 'investors'."

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