|
|
|
For PayPal payments, use editor@frontiersman.my3website.net. Back issues are available at http://frontiersman.my3website.net/. Also see Pharos at http://pharos.my3website.net.
|
loan to another, and not repay it.
Ultimately, fractional reserve loans can be repaid ONLY with cash dollars
not previously part of the fractional reserve deposit and loan cycles.1
The "money" in use today isn't very good money, if it's money at all. The banking system that exists today doesn't operate according to the principles of fractional reserve banking. Fractional reserve banking can exist only when deposits are cash deposits. Deposits by check are not cash deposits. In a fractional reserve banking system, it's impossible for a bank to loan anything except cash. Fractional reserve is a meaningless concept when transactions are not in cash. Fractional reserve banking removes cash from circulation, discourages cash transactions, creates a large number of dollars that can be used ONLY for non-cash transactions, and creates a strong incentive for the use of such non-cash transactions. Thus, even an ideal fractional reserve banking system will tend to destroy itself. Fractional reserve loans can be repaid only with dollars not previously part of the fractional reserve deposit and loan cycle. If the supply of new dollars is insufficient, then the loans cannot be repaid. Since the Federal Reserve System is in control of the supply of new dollars, it might have the power to force defaults on loans and mortgages. The growing predominance of checkbook transactions and electronic transactions, and the fear of using cash, verify the tendency toward a cashless economy. That economy will, I believe, be inherently more vulnerable to instability than a cash economy.2 However, to understand the implications of a cashless economy requires more than arithmetic. Its undesirability derives not only from economic considerations, but from political ones. Cash accepted from another party is good regardless of his character. However, the integrity of a cashless transaction depends upon the integrity of the parties to the transaction. Therefore, a cashless economy mandates an identity requirement whereby the parties to a transaction must prove their identities prior to the transaction. That principle is already in force. Government ID is a prerequisite for participation in today's banking system and in most of the rest of the economy. In a cashless economy, the identities and activities of all participants are visible to the government. There can't be any privacy.3 That
For PayPal payments, use editor@frontiersman.my3website.net. Back issues are available at http://frontiersman.my3website.net/. Also see Pharos at http://pharos.my3website.net.
|
principle of a cashless economy is in force today.
Banks will reveal any financial record to a government agency upon request,
without any need for the consent of the customer. In fact, the customer
might not even be informed.
In a cashless economy, the banking system doesn't serve its customers. It serves its master. Today, the banking system routinely reports to government agencies, enforces government policies, and complies with government regulations. The system's response to a customer objection can best be summarized as "love it or leave it". Someone who thinks that he has little to hide might belittle the importance of a loss of privacy. That's a naive attitude. Whether or not a person has something to hide will have less to do with that person's activities than it does with other people's attitudes toward those activities. We don't have any control over the attitudes of other people. We can't even guess what those attitudes will be tomorrow but we can speculate that they'll be more repressive than they are today. Even so, it might still seem innocent enough if we suppose that everyone is honest, that the institutions are there for our benefit, and that the business of government is to protect us. However, I can't ignore the long history of tyranny, the present state of the world, the vulnerability of the people, and the persecutions to which they have usually been subjected. Information is power and the cashless economy makes all of the details of our lives available to the government. The ironic part is that nobody is (yet) required by legislation to use the banks. It's theoretically voluntary, yet people keep doing it. The present political system claims to derive its just powers from the consent of the governed.4 The most noteworthy result of that claim is to place upon the governed a responsibility for the actions of government. There's just enough truth to the theory to make it barely plausible. In this particular case, the banks can't make loans unless people borrow dollars from the banks. Checkbook transactions won't happen unless people write checks. If enough people demand their dollars in cash then they'll get them that way, at least until the banks are bankrupt.5 The point is that the banks couldn't function AT ALL if the people would refuse to use the banks. The entire banking system, as it exists today, rests squarely upon the solid support of the people. No one has yet determined if it's possible to fool all of the people all of the time but the Federal Reserve System has shown that it can fool too many of them too much of the time. Whatever happens, one thing is certain. As usual, the people will be getting what they deserve.
Letter to the Editor Sam: I like the prison letters: good to know what is going on inside the American Gulag. Joseph; Northridge, California
In recent years, I've been gaining subscribers among the prison population and losing subscribers among the outside population. Prisoners appear to understand the Frontiersman much better than people on the outside. They pass the newsletters around for months and copies turn up in prisons where I don't even have any subscribers. I suspect that prison life destroys the brainwashing. If that's the case, then the government is really shooting itself in the foot by putting so many people in the prisons. editor
For PayPal payments, use editor@frontiersman.my3website.net. Back issues are available at http://frontiersman.my3website.net/. Also see Pharos at http://pharos.my3website.net.
|
Acknowledgments My thanks to the following: Sir James the Bold; SantaClara Bob; Lady Jan the Voluptuous; Lord Jeffrey the Studious; my mother; and Sir John the Generous. editor
Science Definitions From Kids
Alternate Meanings for Words
Frontiersman Cancellations If you don't want to keep receiving this newsletter, then print REFUSED, RETURN TO SENDER above your name and address and return the newsletter. When I receive it, I'll terminate your subscription. You can also cancel by letter, e-mail, carrier pigeon, or any other method that gets the message to me. Back Issues Back issues or extra copies of this newsletter are available upon request. Reprint Policy Permission is hereby granted to reproduce this newsletter in its entirety or to reproduce material from it, provided that the reproduction is accurate and that proper credit is given. Please note that I do not have the authority to give permission to reprint material that I have reprinted from other sources. For that permission, you must go to the original source. I would appreciate receiving a courtesy copy of any document or publication in which you reprint my material. Submissions I solicit letters, articles, and cartoons for the newsletter, but I don't pay for them. Short items are more likely to be printed. I suggest that letters and articles be shorter than 500 words but that's flexible depending on space available and the content of the piece. I give credit for all items printed unless the author specifies otherwise. Payment This newsletter isn't for sale. If you care to make a voluntary contribution, then I prefer cash or U.S. postage stamps. For checks or money orders please inquire. For PayPal payments, use editor@frontiersman.my3website.net. I don't accept anything that requires me to provide ID to receive it. In case anybody's curious, I also accept gold, silver, platinum, etc. The continued existence of the newsletter will depend, in part, on such contributions. Sam Aurelius Milam III, editor
For PayPal payments, use editor@frontiersman.my3website.net. Back issues are available at http://frontiersman.my3website.net/. Also see Pharos at http://pharos.my3website.net.
|
|
|