Of The U.S. Monetary System
#1. Paper Money. Originally, a paper dollar was a paper promise,
a contract, to pay in gold or silver. The issuers of dollars
have defaulted on that promise numerous times in recent history,
at a rate of about once per generation. The issuers of paper
money defaulted on domestic gold redemption in 1934, defaulted
on silver redemption in 1968, and defaulted on international
gold redemption in 1971. Those who issue U.S. paper money (Federal
Reserve Notes) are in default. The creation of paper money is
fraud, and was used to steal away gold and silver from the hands
of the people.
#1 (A). Unchecked Borrowing and Printing of more Paper Money.
All paper money is borrowed into existence, and that does not
make the excessive creation of paper money right. This fraud
is an additional theft upon all people who are already deceived
by holding onto the fraudulent dollars, instead of gold and
silver. The total amount of money in the U.S. banking system
is known as M3, and is almost $9 Trillion as of Jan., 2004.
#2. The Debt of the U.S. Federal Government. Originally, this
debt was incurred to a large degree to fight and win World War
II, as the debt soared from under $50 billion to over $250 billion
by the war's end. This was fraud, however, because at the time,
the U.S. was on a gold standard at $35/oz., and the U.S. never
borrowed $250 billion worth of gold in the first place, we only
borrowed paper money that was created to excess. The debt is
primarily used as a means to hide the fact of the excessive
creation of paper money. By the end of Feb, 2004, the debt can
be rounded up to $7.1 Trillion, and is as fraudulent today as
it ever was.
#3. Fractional Reserve Banking. Banks don't even have the fraudulent
paper money they say you have in your account. They say you
have "on demand" deposits, but they loan deposits
out long term, which is fraud, because you cannot demand your
deposits when you want. You have to order cash in advance, which
your bank will have to order from the Fed, if you take out more
than a few thousand dollars, and sometimes they will not even
provide such a "service" of giving you your money,
but will only give you a cashier's check.
are the fractional reserve requirements? In June of 2001, it
was $37 billion for the entire U.S. banking system.
of 2001, M3 was $7605 billion.
in total, the reserve requirement was 37/7605, or .49%, or less
than half of 1%.
why it is so low is that for the first $6 million of deposits
at a depository (your local branch) the reserve requirement
is zero. Then, for the next $6 million to $45 million, the amount
is 3%. Then, for amounts larger than $45 million, it is 10%.
since the vast majority of deposits are small ones, the effective
reserve requirement is close to zero, or that 1/2 of 1%.
reserve banking is fraud, because those reserves cannot simultaneously
be used to pay out to depositors and be used to back up the
rest of the deposits at the same time. If more than 1/2 of 1%
of people took their money out of the banking system, the system
would collapse, unless the banks were willing to go to the Federal
Reserve (the lender of last resort) and borrow more paper money.
works fine in theory, but works only for paper money. (And in
practice, it has only worked for less than 20 years.) But there
is no "lender of last resort" for real gold and silver.
#3 (A). The FDIC, or Federal Deposit Insurance Corporation.
www.fdic.gov/ The FDIC, in theory, insures accounts up to $100,000.
As inflation continues, the value of this number grows smaller
every year. In theory, this insurance is in place in case the
bank is insolvent and fails due to a bank run, and insufficient
fractional reserve requirements. In practice, it is there to
back up banks that fail that the Federal Reserve refuses to
bail out. In practice, sometimes depositors have to wait months
to be paid this insurance money. In practice, the FDIC does
not have the money to back up the accounts, either, which is
need this insurance the most if there was runaway inflation.
If there was runaway inflation and a million dollars became
nearly worthless, then the effective insurance amount of the
FDIC would be close to zero.
view, insurance itself is collectivism, and fraud. Why should
one depositor in New England who makes a deposit in a small
town bank have to pay for the lack of fiscal responsibility
of an entirely different bank, in an entirely different company,
in an entirely different state such as New Mexico, and ultimately
pay to protect those depositors in New Mexico? This transference
of responsibility, through the FDIC, is fraud and a crime.
#4. Central bank gold-leasing. This is the fraud that GATA has
been working to expose. The central banks own gold in two forms,
real gold in their vaults, and paper promises. They report it
all as if it were one category, which is fraud. The official
estimates are that 30,000+ tonnes of "gold" are held
by the central banks, and of that, 5000 tonnes have been leased
out. The GATA research, by three different methods by three
different people, shows that the amount leased out is closer
to 15,000 tonnes. To say they have gold, when they do not have
gold because it has been leased out, is fraud. To lease out
the people's gold (that ostensibly backs up the people's currency)
without the people's knowledge or consent, is fraud.
gold is stated to be 261.5 million ounces. See www.fms.treas.gov/gold/index.html
(x 32152 oz/tonne, it's also 8407 tonnes.) The U.S. gold has
not been audited by any independent third party since the 1960's.
if the U.S. government really still has all this gold, and even
if they pledged it against all deposits in the U.S. via the
FDIC and backed the full $9 Trillion of money in the banks,
M3, (and it is purely a fantasy that they would be so honorable)
there would be only one ounce of gold for every $34,482. (That's
9,000,000 million (a trillion is a million million) dollars
/ 261 million oz.)
#5. Bonds. Bonds are a paper promise to pay more fraudulent
paper promises. It is fraud upon fraud. In theory, a bondholder
will always receive more paper money than they lent out when
they bought the bond in the first place. In practice, that does
not matter if inflation rises faster than the rate of return,
in which case the bondholder loses value. What does it matter
to be paid more money, if the money is worth much less? Or,
if bond interest rates rise as inflation increases happen, then
the current re-sale value of the bond drops tremendously.
#5. (A). Inflation indexed bonds. These bonds promise to pay
out a variable rate of return, indexed, or matched to the inflation
rate. This is fraud upon fraud because they lie about the inflation
rate, saying it is lower than it really is. Currently, the government
is claiming that the inflation rate is about 1%. In reality,
by mid 2003, the inflation rate was closer to 6%. Since mid
2003, many commodities are up about 20% or more, and by the
end of 2003, we may be experiencing an annualized inflation
rate of 40% in the U.S.! Furthermore, the dollar continues to
drop against other currencies, and is down to 85 from a high
of about 130, which is a drop of about 35%! Furthermore, what
use is it to be paid out in more and more paper money, if the
ultimate value of paper money will return to its intrinsic value,
which is zero? Also, inflation indexed bonds will help to cause
the very inflation that is feared. As more and more money will
be needed to pay off the bonds, inflation will be forced to
increase more and more!
if you own inflation-indexed bonds that are paying you anything
less than about 50% per year, then I suppose you have been deceived
by this fraud, too.
U.S.: The value of the World bond market yr end, '01:
Trillion, U.S.: The value of the U.S. bond market, yr end, '02:
are used to steal away gold and silver still in the hands of
the people who would not be deceived through paper money alone,
and who are tempted through the lure of the crime of usury,
or receiving an interest rate. If all the U.S. bonds, and M3,
were both backed by the U.S. gold hoard, it would mean that
there are about $29,000,000 million (a trillion is a million
million) / 261 million = $111,111/ per oz. of gold.
#6. Paper futures contracts, and derivatives, especially when
created to excess. The dollar is a derivative, and a paper contract,
but that's not the only one. There are also contracts at the
COMEX, and on the "over the counter" (OTC) market
to deliver gold and silver. At the COMEX, in silver, we regularly
see over 100,000 contracts for 5000 ounces, or 500 million ounces.
To see how many contracts there are for 5000 ounces.
have only 52 million ounces of silver in the registered category,
ready for delivery. To see how much silver they have now,
of 52 million oz. of silver, at $6.50/oz. = $338 million.
here are similar to the fraud of the dollar and the fraud of
fractional reserve banking, all in one. They have made too many
futures contracts to deliver gold and silver, just as they have
printed up too many dollars. And they only have a small portion
of real gold and silver to back up their promises to deliver.
($20 trillion) and bank account holders ($9 trillion) ever think
to prefer the safety of owning physical silver again, they should
know that buying silver is a "first come first served"
process. They should know that there is $29,000,000 million
(a trillion is a million million) dollars available for the
52 million oz. of silver available in the market, or $557,692/oz.
#6 (A). Options. As if paper futures contracts were not enough
to deceive people through the "magic" and "promise"
of leverage, they have options on paper futures contracts, where
a person puts down even less money to "control" the
silver and "profit" from its price rise. (It's as
if the lure of 100,000 fold gains are simply enough for these
greedy and deceived people.)
#7. Position limits on longs. At the COMEX, there are limits
upon how much one person or entity can buy. I believe it is
a false idea that longs can manipulate the market. It is impossible
for longs to manipulate a free market! In a free market, everyone
is free to buy and own whatever they wish, and own however much
silver they wish. Restrictions on longs or restrictions on ownership
is nothing less than communism, theft, and fraud! What good
is money if you cannot spend it on whatever you wish? If you
cannot buy what you wish, your money is no good! In other words,
the entire U.S. monetary system is no good, it's fraudulent
from top to bottom.
recent example, position limits were reduced for buyers of copper
futures in the spot month, from 5000 contracts to 3000 contracts
on December 22, 2003.
#8. Delivery delays for COMEX silver (also known as defaults).
A default occurs when there was fraud. It is also known as bankruptcy,
or a failure to deliver upon an obligation or promise. If a
bank cannot honor on-demand deposits, then the bank is insolvent,
or bankrupt. Similarly, if someone promises to deliver silver
by a certain date, and is unable to do so, they are bankrupt,
and in default, and have committed fraud. Since there have already
been delivery delays of silver, then the long awaited default
at the COMEX has already occurred. This is probably the best
explanation for why the price of silver is moving up at this
major silver defaults were the failure to pay out silver when
silver certificates (dollars) were presented for delivery, way
back in 1968.
numbered 6-8 are the frauds that Ted Butler has been working
#9. Banking hold times. Why are there such long hold times on
checks when you make a deposit in your bank, and hold times
on wire transfers? They say it is for my protection, but I think
it's for the bank's protection, or profit! A wire transfer can
take up to a week. Depositing a check can take from a week to
3-4 weeks before they let you withdraw your money! Outrageous!
As bulky and as heavy as silver bullion is, it is quicker and
easier to ship silver bullion than to deal with the so-called
"convenience" of U.S. paper dollars in the banking
#10. Legal tender laws. To add insult to injury, legal tender
laws are laws that treat these frauds as if they were the corner
stone of "The American Way". They force people to
accept the fraud, in place of real money, gold and silver. And
they prevent people from making and contracting for gold and
silver, even though the big banks are somehow exempt, and can
contract in gold and silver all they want through the "over
the counter" derivatives market.
of legal tender laws is the fraud that this site has been working
#11. Tax on gold and silver purchases. In the U.S., some states
collect a sales tax on the purchase of gold and silver coin.
It usually ranges from about 5-8%. In some states, such as California,
it is only applicable on transactions for less than $1000. In
Europe, they have what is called a VAT, or "value added
tax". It's also fraud. There can be no tax on a money exchange.
When you get two $5 bills for a $10 bill, do you pay tax? Of
course not. When you convert money from the Canadian dollar
to the U.S. dollar is there a tax? Of course not. Therefore,
there should be no tax on other money exchanges.
of the tax on bullion is a fraud that Franklin Sanders has been
working to expose.
#12, The Income Tax. Prior to 1913 when the Federal Reserve
was founded, there never was an income tax, and America got
along just fine without it for hundreds of years. Between 1913
and 1945, the income tax was paid only by the extremely wealthy,
and it started out as only a tiny percentage of income. The
income tax did not become widespread and was not paid by the
average person until after World War II, and it was supposed
to be "temporary". We've been paying this temporary
tax ever since, and with no end in sight. The income tax is
fraudulent because it is and unconstitutional on many grounds,
but the judges of the nation rule as if they do not care.
#13, The Social Security Number (SSN). Started by FDR in the
depression, the original cards are printed with the phrase,
"not to be used for identification purposes." Now,
due to the Patriot Act, you cannot get a bank account without
one. The social security system is a fraudulent ponzi scheme.
It is collectivism. Fortunately, I don't use a SSN, which is
a protection from most of the frauds of the entire system.
Fraud is not the American Way. Unfortunately, it is the way
of life today -- that we all must face. Anyone who uses paper
money is guilty of allowing these frauds to continue. Anyone
who saves in terms of paper money in the banks is guilty of
allowing themselves to be deceived by these multiple frauds.
wrong to participate in, or by deceived by fraud, just because
many other people also participate. Stop participating in fraud,
and stop allowing yourself to be deceived by fraud.
of the above frauds do you think is the greatest fraud of the
monetary system in the U.S. today? One of the above, or one
I may have left out? I'd like to read what you think. email
I may not have time to respond to each letter, but I really
do appreciate and read all the feedback.
that the best way to protect yourself from the frauds and excesses
of the U.S. monetary system is to own real silver bullion. I
also invest in silver stocks, which I think have the potential
to continue to provide a greater return on investment than silver
bullion. For example, silver is up about 50%, and silver stocks
are up about 350% since June of 2003. If you would like to receive
my free weekly silver stock report in email, sign up for the
free e-book at: http://www.goldismoney.com
of the internet is that it is helping knowledge to increase,
and it is a form of communication that those who commit these
crimes of monetary fraud upon us cannot control. Please make
the most of it, and please forward this on to others.