-- Posted Monday, 8 November 2010 | | Source: GoldSeek.com

Money is:

    1) A unit of transaction.
    2) A store of value.

These are two very different things which must be connected in a stable financial system.  The credit system is the means by which the unit of transaction and the store of value are connected.  With the current dollar system, there is no independent store of value because:

The Federal Reserve can print dollars at will.  This condition creates other conditions:

i) Banks can create loans at will without being concerned about a bank run.
ii) Investment banks can create structured financial products at will without being concerned about fraud.

a) Corporations use financial fraud to manipulate the bottom line and increase executive compensation.
b) Corporations suppress news that would give people a proper perspective on the state of the economy.

iii) The federal government can spend a vast sums without raising taxes, which leads to:

a) False statistics to keep the population from seeing the true condition of the economy.
b) Manipulation of markets to maintain the purchasing power of the dollar.

We have an unstable system, where our freely printed money flows to those in charge of the printing press via the the federal government and banking systems.  More money is printed, and the process repeats.

All of this leaves us asking the question:
    What is a dollar?

And the simple answer is:
    Nothing except what it can buy.

That is the heart of the problem with our economy, government and corporate environment.  The following graphic represents our current monetary and financial system:



There is nothing wrong with our current financial transaction processing system.  A gold based system can be attached to it without a great deal of difficulty. 

The problem with our system is that privileged entities can create dollars at no cost and with enormous profit.  Therefore, it is in the interest of these privileged entities to confuse and manipulate the store of value system and the credit system to obscure and enable their illegal activities.



Vincent Bressler
vincentbressler@yahoo.com

-- Posted Monday, 8 November 2010 | Digg This Article | Source: GoldSeek.com

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