I think the free market would better allocate that money. That being a patriot comment however really made me think.

This is part of a longer debate between Dr. Paul and Charles Partee of the Federal Reserve on the Gold Standard. The entire debate can be seen here.

The paper they refer to can be found here: modern_money_mechanics.pdf or here as HTML.

• “I sincerely believe … that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.” — Thomas Jefferson to John Taylor, 1816.
• “Paper is poverty,… it is only the ghost of money, and not money itself.” — Thomas Jefferson to Edward Carrington, 1788.
• “Scenes are now to take place as will open the eyes of credulity and of insanity itself, to the dangers of a paper medium abandoned to the discretion of avarice and of swindlers.” –Thomas Jefferson to Thomas Cooper, 1814.
• “I now deny [the Federal Government's] power of making paper money or anything else a legal tender.” — Thomas Jefferson to John Taylor, 1798.
• “The maxim of buying nothing without the money in our pockets to pay for it would make of our country one of the happiest on earth.” –Thomas Jefferson to Alexander Donald, 1787.
• “Every discouragement should be thrown in the way of men who undertake to trade without capital.” –Thomas Jefferson to Nathaniel Tracy, 1785.
• “I am an enemy to all banks discounting bills or notes for anything but coin.” –Thomas Jefferson to Thomas Cooper, 1814.
• “It is said that our paper is as good as silver, because we may have silver for it at the bank where it issues. This is not true. One, two, or three persons might have it; but a general application would soon exhaust their vaults, and leave a ruinous proportion of their paper in its intrinsic worthless form.” –Thomas Jefferson to John W. Eppes, 1813.
• “Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burden all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs.” –Thomas Jefferson to Thomas Cooper, 1814.
• “We are now taught to believe that legerdemain tricks upon paper can produce as solid wealth as hard labor in the earth. It is vain for common sense to urge that nothing can produce but nothing; that it is an idle dream to believe in a philosopher’s stone which is to turn everything into gold, and to redeem man from the original sentence of his Maker, ‘in the sweat of his brow shall he eat his bread.’” –Thomas Jefferson to Charles Yancey, 1816.
• “The incorporation of a bank and the powers assumed [by legislation doing so] have not, in my opinion, been delegated to the United States by the Constitution. They are not among the powers specially enumerated.” –Thomas Jefferson: Opinion on Bank, 1791.

H/T LewRockwell Blog

Within minutes of the FED announcing the rescue of the crumbling insurer, I had the luck of being able to chat with an AIG employee about the Government’s repsonse and AIG’s current financial situation:

AIG employee looks like the Fed will be bailing us out. take THAT, taxpayers!

xyz ugh. this is really sickening.

AIG employee bwahahahaha!!

xyz you do realize that youre part of that “tax payer” category, right?

AIG employee yeah but the money this will bring me personally is probably more than Ipaid in taxes in the past year or so. finally the government does something right for a change. yay Fed!

xyz i disagree

AIG employee No, if AIG bit the dust then I just would’ve been canned with everyone else. Now we’ll be offered buyouts. That’s a lot of money for me.

xyz you should have been canned, just like lehman brothers. AIG was bankrupt and deserved to fail

AIG employee No, AIG is solvent and I did not deserve to be canned. There is a liquidity due to the Financial Services arm of the company. liquidity *issue*. Anyway, the insurance part of the company (where I work) is healthy and we have $1 trn in assets worldwide.

xyz an $85 billion rescue plan is solvent?

AIG employee You’re talking about something you don’t know anything about. it’s a bridge loan. AIG has more than enough assets to cover its credit default swaps, but not enough to to capitalize them. enough *time* to capitalize them


Read More…

http://mises.org/…

1. Introduction: Money and Politics
2. The Genesis of Money
3. What is the Optimum Quantity of Money?
4. Monetary Inflation and Counterfeiting
5. Legalized Counterfeiting
6. Loan Banking
7. Deposit Banking
8. Problems for the Fractional-Reserve Banker: The Criminal Law
9. Problems for the Fractional-Reserve Banker: Insolvency
10. Booms and Busts
11. Types of Warehouse Receipts
12. Enter the Central Bank
13. Easing the Limits on Bank Credit Expansion
14. The Central Bank Buys Assets
15. Origins of the Federal Reserve: The Advent of the National Banking System
16. Origins of the Federal Reserve: Wall Street Discontent
17. Putting Cartelization Across: The Progressive Line
18. Putting a Central Bank Across: Manipulating a Movement, 1897-1902
19. The Central Bank Movement Revives, 1906-1910
20. Culmination at Jekyll Island
21. The Fed at Last: Morgan-Controlled Inflation
22. The New Deal and the Displacement of the Morgans
23. Deposit “Insurance”
24. How the Fed Rules and Inflates
25. What Can Be Done?