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REAL Money   
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Contact:
Foundation for Economic Growth,
P.O. Box 10-282,
Wellington, N.Z.
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The Foundation for Economic Growth is a group of like-minded individuals who have decided to act rather than accept New Zealand's continuing poor economic performance. The Foundation is not affiliated with any political party. Add Your Comments Here.

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Most recent update: Jul 3rd, 2017 - 15:54:31

REAL Economics : REAL Banking
Ruling The World of Money

This is a fascinating account of the Bank for International Settlements written for Harpers magazine in 1983 by Edward Epstein.

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Oct 28, 2010, 15:44

REAL Economics : REAL Banking
Austrian Economics, Free-Banking and Real Bills

One hundred years ago banks had stores of gold and/or silver in their vaults which they stored on behalf of clients and lent out to customers in good standing - that is to say, wealthy.

But this was very restrictive for bankers and they sought to lend out more money than they had in storage as gold and thus gain interest for money that they didn't have. A very lucrative arrangement.

Unfortunately this was an unstable system and there have been numerous bank runs over the years to prove it.

(See Northern Rock for this recent bank run: http://www.youtube.com/watch?v=sKjdT8I6TnE)

(Or this more amusing interlude: http://www.youtube.com/watch?v=hXBcmqwTV9s&feature=related)

So they added in another layer of bank called the Central or Reserve Bank which stood ready to provide money for a bank in trouble. As the customers queued at the front for their money back the Reserve Bank would send truck loads of cash around the back door to meet the demand.

They soon realised that they didn't need any gold at all - which was the aim all along - and so we got our modern completely paper based fiat currency backed by nothing but debt or promises to pay.

As we can see from recent events it is not possible to run out of paper money. They don't even have to print it anymore but just create it inside their computers. The government issues a treasury bill which the Reserve Bank buys for newly created money and the government has money to meet its obligations. Easy Peasy.

Unfortunately all this money creation leads to a lot of inflation as the new money starts circulating. The world is now experiencing this problem.

Could there be a better way? Read this interview to gain a new perspective of banking.

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Oct 28, 2010, 13:16

REAL Economics : REAL Banking
Real Bills and Why They Are Not Inflationary

Real Bills were an essential part of commerce and manufacturing before 1913 but were killed off by the central bankers. This interview with Ingo Bischoff gives a very good account of that history and shows how they could be used to bring us back onto a gold standard again.

The article is from the perspective of the USA.

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Oct 28, 2010, 09:04

REAL Economics : REAL Banking
Gold Money

James Turk is the founder of GoldMoney.com and the web site gives a very good explanation of how it works.

Basically you store your financial wealth as gold or silver or platinum in grams or fractions of a gram and gold money deposit it for you in a special storage vault in Switzerland or England. At the moment paper money is depreciating at 10%, 20% or 30% against different currencies so gold or silver is a very good way of storing money. It can be changed back to currency at any time at the going rate or if you are buying or selling to someone else who also has an account with gold money you can pay direct in gold or silver.

There are many safe-guards. The most important of these is that your account is backed by a lump of gold held in a purpose built bank vault under your name. No matter what happens to paper money your wealth is protected.

The perfect banking solution.


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Oct 27, 2010, 14:50

REAL Economics : REAL Banking
A Cross of Gold

"Let me issue and control a nation's money and I care not who writes the laws." So said Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild.

As we are seeing very clearly now he was absolutely right. Without some external restraint, humans are just too frail (and greedy) to be trusted with paper money - they always print too much!

As we understand from our brief discussion in The Land of Nowhere, money should have value in and of itself. This is because it is a means for people to store up the results of their hard work for a future benefit. If that store of work loses value because of counterfeiting (whether by government or other agency or individual) people lose the result of their efforts. Their savings are diminished.

This is the basic problem with paper money and always in history it has led to the total destruction of each paper money system.

We are currently in the throes of losing the American dollar as our reserve system as Bernanke issues more and more debt to pay for previous debts and the interest that debt is incurring.

What cannot continue must stop.

But what happens then?

Those in power will do everything they can to retain their power. They are currently planning to replace the current money system with another paper money system - this time issued by the IMF. The powers that be are aiming at a world government, ostensibly run from the UN, but controlled by the printers of the paper money.

The one lesson we have learned from the 20th century is that centralised control leads to poverty and misery for the vast bulk of the population.

The only way to overcome this is for the people of the world to revert to gold and silver as money and to settle on a weight of each as the standard of value. Governments cannot devalue that money if they are not allowed to coin it or run a banking system to control it.

Are the people of the world likely to achieve this spontaneously or will China lead the world to freedom for the individual. They are already the world's biggest gold producers and keep all the gold they refine. They are also opening gold and silver shops around China and advertising on TV telling their middle class (300 million strong) to buy gold and silver. They certainly do not trust American paper money and they are telling the world what they think.

Their actions are speaking much louder.

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Oct 26, 2010, 15:30

REAL Economics : REAL Banking
Gold and Economic Freedom

It has always intrigued me that Alan Greenspan wrote this article in 1966 as a young man and then went on to become the Chairman of the US Federal Reserve and began one of the biggest paper money inflations in history. (Now superseded by Ben Bernanke.)

This article is a very clear exposition of gold and its importance to the world. Without a solid backing in gold to our money we are at the mercy of those who would aim to control the world - those who believe in strong central government and more control over the population.

We have seen where strong central government went in Germany under the Nazis, Russia under Stalin and China under Mao. Complete subjugation of the population.

What will happen if we succumb to world control of paper money through the IMF and the World Bank as many in the United Nations desire? A one world currency sounds very appealing to some but would lead to a monumental catastrophe.

Greenspan knew all this in 1966 yet he still joined the Federal Reserve and began expanding the money supply and initiating the American bubble economy which has now gone bust. What was he thinking?

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Oct 24, 2010, 11:15

REAL Economics : REAL Banking
A Return to the Gold Standard?

As fiat currencies approach their crisis point people are starting to look for better ways of doing things. When one understands the basic elements of economics and realises that money is used as a store of earned wealth, and therefore must have a value in and of itself, the answer becomes obvious; go back to the use of gold as money as our ancestors have done for untold generations.

This is the only way to restrict governments and their Central Bankers from artificially increasing the money supply, which causes the inflationary conditions under which we have suffered these past 100 years. Boom bust is a terrible way to run the world - especially when a natural uncontrolled market economy using gold and silver as money would find and maintain its own level of operation all by itself.

Our understanding is limited on this point because we have all only experienced economies where governments interfere more or less in their day to day running. We accept this as normal but it is not.

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Oct 23, 2010, 15:14























































Creating Wealth and Keeping it

The New book by Phil Scott, President of the Foundation for Economic Growth.

"This book is good, damn good and no statistics!" Lindsay Gordon, MA, MSC, PHD.

Every serious economics student should have a copy and read this ground-breaking foundation of clear economic thinking. Real Economics explains how human actions shape our world and why so much seems to be going wrong for Western economies. This book will bring enlightenment for the general reader who will see why a few very wealthy are becoming exceedingly rich and the middle classes are on the road to serfdom.

See more: www.realeconomics.co.nz