Digital 'Dollars'

[Carl]

By Me

The vast majority of people use an alternate currency all the time, it's called credit or digital dollars, which are not legal tender.

Do you think you would confuse a gold sovereign with a tally stick? They were both used to purchase the same basic things at the same basic price. Because they shared this functional commonality, does that make them the same thing? Money - Credit.

What about the official legal tender money supply which is a product of Law and Government, and credit (digital tally sticks), which can be created by anyone in contract. They are both used to purchase the same basic things at the same basic price. Because they shared this functional commonality, does that make them the same thing? Money - Credit.

As with that gold sovereign, you can hold a legal tender note free from any obligatory attachments. Not so with credit, it only exist as a debt obligation. In fact, unlike tally sticks, you can't even hold credit, you are totally dependent upon the banking system to hold and manage its existence for you. And when I say existence I mean exactly that, the bank goes insolvent and your credit is gone!...POOF! Still believe legal tender money and credit are the same?

Read this carefully:
Congress has specified that a Federal Reserve Bank must hold collateral equal in value to the Federal Reserve notes that the Bank receives. This collateral is chiefly gold certificates and United States securities. This provides backing for the note issue. The idea was that if the Congress dissolved the Federal Reserve System, the United States would take over the notes (Fed liabilities). This would meet the requirements of Section 411 (Federal Reserve Act), but the government would also take over the assets, which would be of equal value. Federal Reserve notes represent a first lien on all the assets of the Federal Reserve Banks, and on the collateral specifically held against them.

Do you comprehend that? (I knew you would)

Now, what does the government NOT get in that transaction?

It does not get the Trillions in credit created by the banks and Wall Street!

Why is that you may ask?

Because all that credit created by the banksters and Wall Street IS NOT PART OF THE MONEY SUPPLY!!!
Still believe legal tender money and credit are the same thing?

It is because we conflate money with credit, we are living in a bankster's paradise (debt hell for us).

Do you think the banksters give a rat's ass worth of care that their exuberant over expansion of credit drives inflation up and the value of the legal tender down? NO! They just create more credit to compensate!

Do you still believe legal tender money and credit are the same thing?


Digital dollars are not Federal Reserve Notes, Legal Tender, Fiat, or even Money. Credit is a free market medium of exchange that is accepted almost everywhere, even as payment for taxes. So if you don't want to use the legal tender money, then don't, just whip your debit card and let the digits fly

[Carl]

There is a difference between Money and Credit.

Money as defined by law. Section 31 U.S.C. 5103, defines legal tender as "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues.

The Fed defines credit as such: "Credit dollars are a debt generated currency that is denominated by a unit of account. Unlike money, credit itself cannot act as a unit of account. However, many forms of credit can readily act as a medium of exchange. As such, various forms of credit are frequently referred to as money and are included in estimates of the money supply."



I guess no one is concerned with the implications of this........

[Sparky]

So, if I give the bank teller $10 to put in my account, does that become credit? How does that type of credit compare to the spending allowance that my credit card gives me? In other words, is the credit owed to me by the bank for making a deposit the same as the purchasing power that my credit allows me? In one case, I pre-paid the credit, so to speak. In the other case, I did not. So does credit=credit?

[govcheetos]

Had this train of thought for a while now. Interested in others opinions on DEBIT in relation to this subject.

Good thread.

[Sparky]

The whole money system (currency, credit, debit, cash, accounts, bills, notes, bonds, etc.) is so fascinating it's a wonder that the whole thing works. We all suspect the system will inevitably suffer some major damage, but the fact that it's held together this long is amazing.

And to think that gold, which has represented wealth for millennia and can actually be measured and held in your hand, is considered the odd duck of the money system. Go figure.

[Sparky]

"Right now, the fear is country-specific. Europeans start to distrust their government and shift to gold, without necessarily questioning foundational concepts like big, activist government and central bank management of fiat currencies. They still assume that the euro would be fine if managed correctly.

The next stage will begin when enough local currencies blow up to make people realize that the problem isn’t with specific governments or national forms of money, but with the idea of fiat currency itself. When that happens the global gold chart will look like Europe’s — but with more zeros."

This Is What Gold Does in a Currency Crisis (http://dollarcollapse.com/gold/this-is-what-gold-does-in-a-currency-crisis-euro-edition/)

[Carl]

The problem isn't even in the fiat money.

The problem is in the 10's of trillions of credit/debt that are promises/obligations to pay in fiat money.

How can the obligation to pay the money, BE the money at the same time?

Why, do you suppose, the Fed counts debt obligations, which have no form or substance other than book keeping entries, as being a part of the legal tender money supply?

All deposit accounts are 100% credited accounts, not one penny's worth of actual money is in any of them. It is all, Bank Debt.

[Sparky]

Carl, isn't all of that a product of the fiat money system?

A fiat money system could actually work if it weren't corrupted. The thing that's hard to understand is that productivity is "like" money, so it's okay to create money consistent with production.

Let's say there is no money. The bank creates 100 dollars worth of credit for me. I owe the bank $100. I buy a bicycle from Joe for $100. I then weed Joe's garden for a month, and he pays me $100. I pay back the bank. There was $100 worth of "production", and a $100 asset (the bike), so this almost works out. Except I still owe the bank $1 interest that doesn't exist anywhere. I think this is the real conundrum. So it's the charging of interest on created credit that seems to be the problem.

What's also amazing is that the money system ever "got off the ground". At some point, someone declared that gold or paper or seas shells or tally sticks were convertible to assets, and everybody went along. Eventually the world converged on one such system. Isn't that amazing?

[Carl]

No, all of that is a product of FRAUD.

A credit is a promise/obligation to pay in legal tender fiat. The issue of that credit is also an assurance that legal tender fiat is available for payment.

"Let's say there is no money. The bank creates 100 dollars worth of credit for me"

See above.

The real problem, as I see it, is the 10's of trillions in bankster debt obligations being charged to us, simply because they've incorporated those debt obligations into the count of our money supply.

[Sparky]

So then what is legal tender fiat? Federal Reserve Notes? If that were the case, then the gov't could make good on all of its debt obligations by simply printing more FRNs. But FRNs are simply more debt, right? So what exactly is legal tender fiat?

[Carl]

So then what is legal tender fiat? Federal Reserve Notes? If that were the case, then the gov't could make good on all of its debt obligations by simply printing more FRNs. But FRNs are simply more debt, right? So what exactly is legal tender fiat?

FRNs are not debt, unless we spend them outside our economic domain for goods and services.

When that occurs, we incur an obligation to redeem that money spent into their economy with goods and services in kind. That's why trade balances are important to maintain. (that also makes the notion of a "global economy" a fraud and a lie.)

If the government took over the money supply and printed to pay its debts, that would add another $19-Trillion to the actual money supply. A large sum to be sure but taken in the context of a 57-Trillion debt saturated economy, that only has about 550-Billion FRNs, it's not that much.

[midnight rambler]

The problem isn't even in the fiat money.

The problem is in the 10's of trillions of credit/debt that are promises/obligations to pay in fiat money.

How can the obligation to pay the money, BE the money at the same time?

Why, do you suppose, the Fed counts debt obligations, which have no form or substance other than book keeping entries, as being a part of the legal tender money supply?

All deposit accounts are 100% credited accounts, not one penny's worth of actual money is in any of them. It is all, Bank Debt.

You will have all the answers to all your questions if you're ever able to fully comprehend the Synagogue of Satan's Uniform Commercial Code.

The situation was morphed when the banksters transformed substance as money into colorable money.

[midnight rambler]

FRNs are not debt

Technically true. FRNs are pieces of paper with the term 'note' printed on them. FEDERAL RESERVE NOTES are EVIDENCE of debt on their face.

And according to 12 USC 411


Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank.

[osoab]

So then what is legal tender fiat? Federal Reserve Notes? If that were the case, then the gov't could make good on all of its debt obligations by simply printing more FRNs. But FRNs are simply more debt, right? So what exactly is legal tender fiat?

The way I look at it, legal tender is a fiction.

[Carl]

Technically true. FRNs are pieces of paper with the term 'note' printed on them. FEDERAL RESERVE NOTES are EVIDENCE of debt on their face.

And according to 12 USC 411

12 USC 411 Continued ~ Any Federal Reserve bank may make application to the local Federal Reserve agent for such amount of the Federal Reserve notes hereinbefore provided for as it may require. Such application shall be accompanied with a tender to the local Federal Reserve agent of collateral in amount equal to the sum of the Federal Reserve notes thus applied for and issued pursuant to such application. The collateral security thus offered shall be notes, drafts, bills of exchange, or acceptances acquired under section 92, 342 to 348, 349 to 352, 361, 372, or 373 of this title, or bills of exchange endorsed by a member bank of any Federal Reserve district and purchased under the provisions of sections 348a and 353 to 359 of this title, or bankers’ acceptances purchased under the provisions of said sections 348a and 353 to 359 of this title, or gold certificates, or Special Drawing Right certificates, or any obligations which are direct obligations of, or are fully guaranteed as to principal and interest by, the United States or any agency thereof, or assets that Federal Reserve banks may purchase or hold under sections 348a and 353 to 359 of this title or any other asset of a Federal Reserve bank. In no event shall such collateral security be less than the amount of Federal Reserve notes applied for. The Federal Reserve agent shall each day notify the Board of Governors of the Federal Reserve System of all issues and withdrawals of Federal Reserve notes to and by the Federal Reserve bank to which he is accredited. The said Board of Governors of the Federal Reserve System may at any time call upon a Federal Reserve bank for additional security to protect the Federal Reserve notes issued to it. Collateral shall not be required for Federal Reserve notes which are held in the vaults of, or are otherwise held by or on behalf of, Federal Reserve banks.

If a FRN goes into circulation it must be backed by unencumbered collateral of equal value to the notes put into circulation.

The obligations incurred by the U.S. with the FRN are the same as it has/had with the un-backed USD, that they would not over-issue.

The Fed, on the other hand, puts the entirety of its assets and the collateral specifically held as backing for the FRN, on the line.

[midnight rambler]

12 USC 411 Continued

No, you posted Section 412.


the un-backed USD

There was no such thing UNTIL 1933 (20 years after the creation of the Federal Reserve) because through early 1933 ANYONE could redeem paper for gold at virtually any *solvent* bank within the states.

[Carl]

No, you posted Section 412. OK, Section 412 then, which happens to alter the dynamic of your contention to some degree, don't you think?



There was no such thing UNTIL 1933 (20 years after the creation of the Federal Reserve) because through early 1933 ANYONE could redeem paper for gold at virtually any *solvent* bank within the states. Thanks for that useful information.

How does that affect the legal tender vs. Bankster credit/debt posing as tender issue?

[mick silver]

are all of us in the usa unencumbered collateral ? DEFINITION of 'Unencumbered'An asset or property that is free and clear of any encumbrances such as creditor claims or liens. An unencumbered asset is much easier to sell or transfer than one with an encumbrance. Examples of typical unencumbered assets are a house without any mortgage or other lien on it, a car where the automobile loan has been paid off or stocks purchased in a cash account, rather than a margin account.

[Carl]

Treasuries and gold certificates that have not been hypothecated for any other purposes, are held as collateral/backing for the FRN issue.

[osoab]

are all of us in the usa unencumbered collateral ? DEFINITION of 'Unencumbered'

An asset or property that is free and clear of any encumbrances such as creditor claims or liens. An unencumbered asset is much easier to sell or transfer than one with an encumbrance. Examples of typical unencumbered assets are a house without any mortgage or other lien on it, a car where the automobile loan has been paid off or stocks purchased in a cash account, rather than a margin account.

Incumbrance (http://webstersdictionary1828.com/Home?word=Incumbrance)


Incumbrance

INCUM'BRANCE, noun A burdensome and troublesome load; any thing that impedes motion or action, or renders it difficult or laborious; clog; impediment; embarrassment.


1. A legal claim on the estate of another.



So "unencumbered" could also mean that there is no legal claim.

[Hitch]

Let's say there is no money. The bank creates 100 dollars worth of credit for me. I owe the bank $100. I buy a bicycle from Joe for $100. I then weed Joe's garden for a month, and he pays me $100. I pay back the bank. There was $100 worth of "production", and a $100 asset (the bike), so this almost works out. Except I still owe the bank $1 interest that doesn't exist anywhere. I think this is the real conundrum. So it's the charging of interest on created credit that seems to be the problem.

I think the problem is how long it takes you to weed Joe's garden. What if you injure your back and can't complete the gardening?

That $100 you took out on credit, is a measure of future production and no longer a currency, but a token of debt. Now if you make your example bigger, such as student loans. Say a student takes out $100,000 worth of credit to obtain a degree. How long does it take to pay that off? If it can? Multiply that by millions of students and you can see just how big that particular bubble is.

I now longer view a $100 bill as currency. That $100 bill makes us debt collectors. $100 worth of goods and services is owed to us by the future productivity of the system.

[midnight rambler]

OK, Section 412 then, which happens to alter the dynamic of your contention to some degree, don't you think?


Thanks for that useful information.

How does that affect the legal tender vs. Bankster credit/debt posing as tender issue?

I suggest you consult someone who fully comprehends (lol) the UCC and will give you honest answers.

[Carl]

I suggest you consult someone who fully comprehends (lol) the UCC and will give you honest answers. I have you for that so, consult away. Let here your defense of the banksters.....

[midnight rambler]

I have you for that so, consult away. Let here your defense of the banksters.....

If you're looking to me to defend criminal activity and outright fraud you're looking in the wrong place.

I'm no expert on the UCC, however I find this part extremely fascinating -


(b) If tender of payment of an obligation to pay an instrument (http://www.law.cornell.edu/ucc/3/3-104#Instrument) is made to a person entitled to enforce (http://www.law.cornell.edu/ucc/3/3-301#Personentitledtoenforce) the instrument and the tender is refused, there is discharge, to the extent of the amount of the tender, of the obligation of an indorser (http://www.law.cornell.edu/ucc/3/3-204#Indorser) or accommodation party (http://www.law.cornell.edu/ucc/3/3-103#Party) having a right of recourse with respect to the obligation to which the tender relates.

http://www.law.cornell.edu/ucc/3/3-603

Which translates to any promissory note you sign and properly tender is just as good as any paper banksters produce. However getting an adversary to recognize that is a tricky matter so YMMV.

[Walter Mitty]

I don't think your promissory note is "legal" tender. I bet the definition of Legal Tender in the Federal Reserve act would preclude doing what you suggest.

The United States Government has the right to emit bills of credit. I believe they have by law established the Federal Reserve to administer this emitting of bills of credit.

There is no substantive difference in my opinion between a U.S. T-Bill, Bond or FRN.

U.S. Treasury debt is acting as currency between various holders.

[Carl]

If you're looking to me to defend criminal activity and outright fraud you're looking in the wrong place.

I'm no expert on the UCC, however I find this part extremely fascinating -

http://www.law.cornell.edu/ucc/3/3-603

Which translates to any promissory note you sign and properly tender is just as good as any paper banksters produce. However getting an adversary to recognize that is a tricky matter so YMMV. Good observations, not relevant to the topic though.

[Carl]

Bump.....

So I was wondering, if we were to properly segregate the actual money supply from the bankster credit/debt and then priced the their credit/debt in dollars, how many units of their credit/debt could we get for a dollar?

[Carl]

Some say that if you were to divide $1.3-Trillion in actual legal tender money supply by the Fed's M2, you get 11 bankster credit/debt units per dollar.

That means that a ₵30,000 car, priced in bankster credit/debt units, would sale for about $2,430 Cash legal tender.

But I think that formula is giving banksters too much credit.....

[midnight rambler]

Good observations, not relevant to the topic though.

The UCC has everything to do with the topic. Your denial doesn't negate that and never will.

[Carl]

The UCC has everything to do with the topic. Your denial doesn't negate that and never will. I denied nothing, I said it was not relevant to the topic.

UCC does not speak to the legal tender money supply, it speaks to debts incurred through the use of credit.

[midnight rambler]

I denied nothing, I said it was not relevant to the topic.

UCC does not speak to the legal tender money supply, it speaks to debts incurred through the use of credit.

What do you think a 'tender' is??

The use of 'legal tender' is the act of discharging debts with limited liability under the UCC. (discharging debt does not extinguish the debt)

[7th trump]

I denied nothing, I said it was not relevant to the topic.

UCC does not speak to the legal tender money supply, it speaks to debts incurred through the use of credit.

I beleive you are correct sir!