In his new book “The Birth of the Euro”, Dr Otmar Issing, former ECB chief economist, forgets that money is a good that needs an anchor in reality. Money is not digits. By the same token, Issing dares not make explicit that the ECB is marking its gold reserves to market.

Money is a GOOD readily acceptable in exchange by everyone in a given geographical area, and is sought for the purpose of being re-exchanged. (1)

Money is not digits, nor a freely floating abstraction which exists in the mind only. Money does not come into existence by attempting to capture the “reality” of economic relationships into a MODEL. (2)

Money is not a wager that completely disregards the important relationship between itself, money, and prices. (3)

Money needs an anchor, an anchor in reality, not in the mind. Money cannot be itself the anchor if it has no reality. Money cannot be itself the anchor if it exists only in the (digital) mind. (4)

The central element in the economic problem of money is the objective exchange value of money, popularly called its purchasing power. (5)

Historically, the device that has evolved most frequently in many different places and over the course of centuries to give government some responsibility for monetary matters, yet at the same time limit the power thereby given to government, is a commodity standard, i.e., the use as money of some physical commodity such as gold or silver, brass or tin, cigarettes or cognac, or various other goods. (6)

In the first century AD, the stability of the currency was ensured by the natural scarcity of the metal, correctly says Dr Otmar Issing, former chief economist at the European Central Bank (ECB), whom I nevertheless quoted in note 4 contra (against) my position, in his new book “The Birth of the Euro” (Cambridge University Press, 2008).  (7)

This tradition of the gold standard anchored the exchange acceptability of the currency in the metal.

In that tradition of the gold standard, people placed trust in the lasting value of their savings, says Dr Issing correctly. (8)

In that tradition of the gold standard, stock prices were related to the intrinsic value of the company.

Under the gold standard, central banks had to intervene when the market rate of the currency fluctuated outside certain bounds (9) and thus could not direct policy towards price stability (10), says Dr Issing correctly.

This tradition of the gold standard is the antithesis of today’s system of fractional-reserve banking, leverage, and derivatives.

In today’s system, the financial industry, not just the central banks, intervenes with a view to achieving stock, and other, prices which correspond to a model which aims at capturing the “reality” of economic relationships by determining the number of fiat digits which is necessary to achieving leverage and guaranteeing a virtual return. (11)

Whereas the tradition anchored the exchange acceptability of the currency in the metal, the financial industry anchors the acceptability of fractional-reserve banking, leverage, and derivatives in the expectations of the sheeple that reality will not make the virtual system collapse.

Hence, the sheeple continued to save in “their” currency.

As the fractional-reserve banking system is collapsing, governments are now being convinced to guarantee the digits which do not exist. There is no way of course that these guarantees will lead to inflation, thereby further eroding the value of currencies.

Until some months ago, our Masters needed to display gargantuan efforts in orders to find one billion euro. These days, the banks just have to name their number into in order to get the (their) number of billion euros.

PRICE OF GOLD

Spending on gold nears $3bn as investors flee shares, says the 19 October 2008 Independent on Sunday. Gold is seen as a natural safe haven given the uncertainty in the banking system and the volatility in the stock market, says the article. (12)

Still, the price of gold is not moving, except downwards. And this at the moment that the financial system, with its fractional-reserve banking, leverage, and derivatives, is collapsing.

Whereas the price of paper gold is (more on the nature of paper gold in a moment – paragraph “Monkey see, Monkey do!”) is at the time of writing under $800 an ounce, if the holders of the certificates embodying the contracts/wagers as to the future price of gold receive delivery of the gold, they could well be able to sell that physical gold for more than $1,000 in the streets of Bombay, Shanghai, Moscow or Rio de Janeiro. This mere fact indicates that the paper-gold market is fraudulent, just like today’s guarantees by governments to guarantee the bank deposits of “their” citizens are fraudulent.

The only function of today’s financial industry, which our Masters want to preserve at all cost, is to enable the virtual paper digits, which are created out of nothing, to fly around. Those digits do not represent anything anymore and one can’t buy anything with these digits in the physical economy. This, our Masters call leverage, an arrangement that exaggerates the effect of the price of the underlying investment. By analogy, they even call this volatility.

Just try queuing at “your” bank and ask them your virtually digitised savings. Hence, the fraudulent government guarantees to guarantee these digits.

DOLLAR IS THE CENTRE

The US dollar is the centre of this financial system.

Since at least the 1920s, the USA possesses the capacity to disrupt the world economy, writes Martin Wolf this Wednesday 22 October 2008 morning in the Financial Times. (13)

Before 15 August 1971, when USA President Richard Nixon broke the Bretton Woods agreements of 1944, this centrepiece was linked to gold at fixed parity of 40 something dollar an ounce and all other currencies were linked to the centrepiece.
Nixon did never explicitly say that he severed the link of the US dollar with gold. He only repealed its redeemability, thinking that from the moment you have a claim to gold, you possess that gold, even though there is no way in which that debt could be settled by the debtor through a physical transfer of gold.

Since then, the ability of the USA to literally print dollars to service and repay it obligations establishes its financial and economic hegemony (backed up by the military threat implied or real), as seems thus being confirmed this morning by Martin Wolf in the Financial Times.

If the USA wanted its inflating currency remaining stably ANCHORED to its gold reserves, it should have inflated those reserves.

There were two ways to achieve this inflation of the gold reserves. Either through taking more physical gold in reserve or through letting the price of gold proportionally float to the extent that the currency was inflated.

The dollar regime has done neither since 1944.

At the end of the day, we are left with a financial system without anchor.

MONKEY SEE, MONKEY DO!

So-called gold bugs then became only interested in paper gold, that is, contracts embodying wagers as to the price of gold as it will be determined by the buying and selling of the traders of physical gold. The contracts are sold by the bullion banks to the oil producers and by the gold mines to the hedge funds. Every increase in the price of gold leads to problems for the gold mines (c.q. the hedge funds) which must then sell gold below the market price.

These so-called gold bugs were not interested in the possession of gold as a wealth reserve, but only in concluding wagers over the price of gold, paper contracts about the price of gold, in order to pocket the monetary surplus value.

By the same token, we arrived at a monetary system whereby money was disjoined from the real economy.

Hence, the economic and monetary assessments which the ECB,
which does not have to intervene when the market rate of the euro fluctuates outside certain bounds and thus can direct its policy towards price stability,
has to carry out in order to fulfill its mandate of maintaining price stability cannot be carried out in a logically sound and methodologically correct manner “under one roof”, as it were. (14)

to be continued … perhaps, some freely floating currencies have also freely floating
(i.e., not linked at fixed parity of 40 something dollar an ounce)
gold reserves, contrary to what a civil servant like Dr Issing dares to divulge.

Dr Issing seems to have forgotten that his first boss at the ECB, the late Dr Wim Duisenberg, said in his Acceptance speech of the International Charlemagne Prize of Aachen for 2002 that the euro is the first currency that has not only severed its link to gold, but also its link to the nation-state. (15)

Ivo Cerckel
Siquijor, 22 October 2008

NOTES

(1)
George Reisman, “Capitalism – A Treatise on Economics”, Ottawa, Illinois, Jameson books, 1998. 3rd ed. p. 142

(2)
Here I am paraphrasing
Dr Otmar Issing, former chief economist at the ECB, “The Birth of the Euro”, Cambridge University Press, 2008, p. 81
in order to defend a thesis contrary to Issing’s  thesis.

(3)
Here I am paraphrasing p. 93 of Dr Issing’s quoted book
in order to defend a thesis contrary to Issing’s  thesis.

(4)
CONTRA
Otmar Issing, op. cit.

p. 107
Money provides a natural nanchor for a monetary policy commitment to price stability.
IVO: only if money has value

p. 180 euro acts also as an anchor currency.
IVO: yes, because it has gold reserves

(5)
Ludwig Von Mises, “The Theory of Money and Credit”, Indianapolis, Liberty Classics, 1980, (the original second German-language edition of this book was published in 1924), p. 177

(6)
Milton Friedman, “Capitalism and Freedom”, The University of Chicago Press, 1982, 2nd ed., pp 39-40

(7)
Issing, op. cit., pp. 3-4

(8)
Issing, op. cit., p. 22

(9)
Issing, op. cit., footnote p. 169

(10)
Issing, op. cit., p. 170

(11)
Here I am paraphrasing p. 81 of Dr Issing’s quoted book
in order to defend a thesis contrary to Issing’s  thesis.

(12)
Spending on gold nears $3bn as investors flee shares
By Mark Leftly
The Independent on Sunday, 19 October 2008
http://www.independent.co.uk/news/business/news/spending-on-gold-nears-3bn-as-investors-flee-shares-965959.html
SNIP
Investors spent $2.8bn (£1.6bn) on gold on world stock exchanges in the third quarter this year, as individuals and companies fled volatile share markets.

(13)
The world wakes from the wish-dream of decoupling
By Martin Wolf
Financial Times, October 21 2008 18:50 | Last updated: October 21 2008 18:50
http://www.ft.com/cms/s/06241274-9f94-11dd-a3fa-000077b07658,s01=1.htm
SNIP
The US retains the capacity to disrupt the world economy which it has possessed since at least the 1920s.

(14)
Issing, op. cit., p. 112

(15)
International Charlemagne Prize of Aachen for 2002
Acceptance speech by Dr. Willem F. Duisenberg, President of the European Central Bank, Aachen, 9 May 2002
http://www.ecb.eu/press/key/date/2002/html/sp020509.en.html
SNIP
The euro, probably more than any other currency, represents the mutual confidence at the heart of our community. It is the first currency that has not only severed its link to gold, but also its link to the nation-state. It is not backed by the durability of the metal or by the authority of the state. Indeed, what Sir Thomas More said of gold five hundred years ago – that it was made for men and that it had its value by them – applies very well to the euro.

Being lender of last resort means that the central bank injects liquidity into the banking system and that it does this by buying domestic assets from these banks.
[This violates the dollar peg of the dirham which says] that every [dirham] issued by the central bank should be backed by [dollars].
(Paul De Grauwe, “Economics of Monetary Union”, Oxford University Press, 2007, 7th ed., p. 130)

UAE To Channel AED70 Bln Into Long-Term Bank Deposits – Report
Sunday, Oct 19, 2008 DUBAI (Zawya Dow Jones)– The United Arab Emirates’ plan to inject 70 billion U.A.E. dirhams ($19.05 billion) in the banks will be in the form of long-term deposits, U.A.E.-based Al Ittihad reports Sunday. These facilities, which will be channeled into banks as…
19-Oct-08 | Zawya Dow Jones Newswires – NEWS

UAE to inject $19bn into bank deposits
Reuters on Sunday, October 19, 2008
http://www.business24-7.ae/Articles/2008/10/Pages/UAEtoinject$19bnintobank.aspx
SNIP
The United Arab Emirates will inject Dh70 billion ($19.06 billion) into long-term bank deposits under a government plan announced this month to address a liquidity shortage, a newspaper reported on Sunday.

Mission Impossible – Unanimously in the abyss!

Let the system collapse now!

Fractional-reserve banking is fraudulent.

Sarkozy, Merkel Call for Joint Action by Europeans (Update3)
By Patrick Donahue and Francois de Beaupuy
Last Updated: October 11, 2008 18:50 EDT
http://www.bloomberg.com/apps/news?pid=20601087&sid=aEYvz8O9gCP8&refer=home
SNIP
Merkel said Germany will unveil its strategy to assist banks tomorrow evening and declined to rule out the possibility of the government purchasing stakes in banks. UNSNIP

Unanimously in the abyss!

Paris et Berlin affichent leur unité avant la réunion de l’Eurogroupe
LEMONDE.FR avec AFP, Reuters et AP | 11.10.08 | 16h48 • Mis à jour le 11.10.08 | 18h59
http://www.lemonde.fr/la-crise-financiere/article/2008/10/11/paris-et-berlin-affichent-leur-unite-avant-la-reunion-de-l-eurogroupe_1105869_1101386.html

Bushs Mission Impossible
Von Gregor Peter Schmitz, Washington
11.10.2008

http://www.spiegel.de/politik/ausland/0,1518,583599,00.html

SNIPS
George W. Bush appelliert an die Weltgemeinschaft – die Finanzkrise könne man nur gemeinsam lösen. Doch wer hört noch auf den vermeintlich mächtigsten Mann der Welt? Zu viel politisches Kapital hat dieser US-Päsident verspielt. Doch auch der Nächste könnte mit einer Krise dieses Ausmaßes überfordert sein.
+
Der Präsident hat seit Beginn der Finanz-Krise viele Reden gehalten, beinahe im Tagestakt. Doch die Märkte wollen partout nicht hören auf den vermeintlich mächtigsten Mann der Welt.

A £516 trillion derivatives ‘time-bomb’
Not for nothing did US billionaire Warren Buffett call them the real ‘weapons of mass destruction’

By Margareta Pagano and Simon Evans

Sunday, 12 October 2008

http://www.independent.co.uk/news/business/news/a-163516-trillion-derivatives-timebomb-958699.html

HAHAHA

Pressure grows for details of stabilisation plan
Oct 12 2008 00:20
http://www.ft.com/cms/s/7c577604-97ef-11dd-b720-000077b07658,s01=1.html
SNIP
Pressure mounted at the weekend on the world’s leading economies to spell out the specific “urgent and exceptional” steps they have promised to take to stabilise financial markets before they open on Monday. UNSNIP

Read Chapter 8 of “America’s Great Depression” (by Dr Murray N. Rothbard (Auburn, Alabama, Mises Institute, 2000, 5th ed.)). We guarantee déjà vu. says Google ads.

p. 209, start of Chapter 8 “The Depression Begins : president Hoover Takes Command”:
And so we see that when the Great Depression struck, heralded by the stock market crash of October 24, president Hoover stood prepared for the ordeal, ready to launch an unprecedented program of government intervention for high wage rates, public works, and bolstering of unsound positions  (Ivo: banking positions???) that was later to be christened the new deal. As Hoover recalls:

the primary question at once arose as to whether the president and the federal government should undertake to investigate and remedy the evils … No president before had ever believed that there was a governmental responsibility in such cases. No matter what the urging on previous occasions, presidents steadfastly had maintained that the federal government was apart from such eruptions …. therefore we had to pioneer a new field.
(Hoover, “Memoirs of Herbert Hoover”, New York, MacMillan, 1937, vol. 3, pp. 29 ff)

Ivo: Let the fraudulent system collapse now!

Thank You, Google ads!

Here’s the start of Chapter 9 of Rothbard’s quoted book, p. 239:
By early 1930, people were generally convinced that there was little to worry about. Hoover’s decisive actions on so many fronts – wages, construction, publics works, farm supports, etc., indicated to the public that this time swift national planning would turn the tide quickly.

Angela, bitte, können Sie mich hören?

Read “America’s Great Depression”; chapter 6 is taking place now, says Google ads now.

Start of chapter 6, p. 169 :
One of the reasons that most economists of the 1920s did not recognize that existence of an INFLATIONARY (Ivo’s emphasis) problem was the widespread adoption of a stable price level as the goal and criterion for monetary policy

Ivo: Got gold?

To repeat:
Gulf central banks look to gold as uncertainty rises
By Cleofe Maceda, Staff Reporter
Published: October 07, 2008, 23:26
http://www.gulfnews.com/business/Commodities/10250412.html
SNIP
Dubai: Central banks in the Gulf and elsewhere in the world will likely turn to gold as the global banking crisis boosts the metal’s appeal as a buffer against dire economic conditions, industry sources said on Tuesday.

IMF warns of meltdown; France says Europe to act
Sat Oct 11, 2008 11:18pm ED
http://www.reuters.com/article/newsOne/idUSTRE49A36O20081012
SNIP
French President Nicolas Sarkozy and German Chancellor Angela Merkel, meeting in France, said they had “prepared a certain number of decisions” to present at a European summit on Sunday to try to restore normal flows in blocked credit markets. UNSNIP

The […] modest rate of increase in the quantity of money in the late 1920s presaged a fall in velocity. From June of 1925 to June of 1929, the money supply increased at a compound annual rate of approximately only 1.1 percent. The fall in velocity began by the end of 1929, and intensified thereafter. The disastrous monetary contraction of the period 1929-1933 can be explained on the basis, first, of an undue increase in the quantity of money, coupled with the conviction that the federal reserve system would prevent any future depression. These factors reduced the demand for money and raised the velocity of money to levels that could not be sustained in the absence of a continued rapid increase in the quantity of money. This continued rapid increase in the money supply did not occur. When, as a result, the demand for money finally increased and velocity correspondingly fell, the effect was reduced spending, hence reduced revenues and incomes, and thus a decreased ability to repay debts.
This last, in turn, resulted in BANK FAILURES and an actual decrease in the quantity of money, as fiduciary media were wiped out under the FRACTIONAL-RESERVE system of the time.
(George Reisman, “Capitalism – A Treatise on Economics”, Ottawa, Illinois, Jameson books, 1998, 3rd ed., p. 524, capitalisations mine)

Is there any hope? Does Merkel get it?

Chancellor Merkel said governments must “redirect the markets so they serve the people, and not ruin them”.
(EU chiefs confront markets crisis
Page last updated at 05:31 GMT, Sunday, 12 October 2008 06:31 UK
http://news.bbc.co.uk/2/hi/business/7665729.stm

“We are aware that state interventions are necessary because uncontrolled markets are not able to surmount these problems,” she added.
(European leaders seek bank plan
Agence France-Presse
First Posted 14:35:00 10/12/2008
http://business.inquirer.net/money/breakingnews/view/20081012-166023/European-leaders-seek-bank-plan

This blogger is afraid that Merkel does not get it.

ivocerckel@siquijor.ws

With its oil and gold reserves freely floating in the background, the Gulf Single Currency will also freely float and the market will determine interest rates.

Meanwhile Gulf Central Banks are buying gold.

Gulf central banks look to gold as uncertainty rises
By Cleofe Maceda, Staff Reporter
Published: October 07, 2008, 23:26 http://www.gulfnews.com/business/Commodities/10250412.html
SNIP
Dubai: Central banks in the Gulf and elsewhere in the world will likely turn to gold as the global banking crisis boosts the metal’s appeal as a buffer against dire economic conditions, industry sources said on Tuesday.

(Note how this article given a nice description of the wealth value of gold.)

The GCC (Gulf Co-operation Council) Single Currency will therefore
not be pegged to a basket of currencies
but will freely float
with its gold and oil reserves also freely floating in the background.

This article in today’s Emirates Business 24/7
Basket of currencies best option for GCC
Wednesday, 08 October 2008

http://www.business24-7.ae/articles/2008/10/pages/10082008_4d3980c26cab48c19a1a278f67f302e7.aspx

quotes a report arguing that a move to a free float can be ruled out at present as the region lacks a well-developed debt market that helps transmit interest rate signals.

Yes, that’s why the GCC will not elaborate a debt-based monetary system,
but a wealth(gold)-based monetary system
whereby the market does not respond to interest rate signals
but whereby the market determines interest rates.

By the same token, every increase in the price of gold and/or oil will lead to an increase in the value of the GCC Single Currency.

ivocerckel@siquijor.ws

Yes, it is government which authorises fractional-reserve banking,
but that does not mean that the sheeple should not (have) take (taken) precautions.

Let me quote Dr Nathaniel Branden,
“Taking Responsibility – Self-Reliance and the Accountable Life”, Simon & Schuster, 1996

p. 39
The practice of self-responsibility begins with the recognition that I am ultimately responsible for my own existence; that no one else is here on earth to serve me, take care of me, or fill my needs; I am the owner of no one’s life but my own. This means that I am willing to generate the causes of the effects I want. It also means that if I need the co-operation of others in the pursuit of my goals, I must provide them with reasons meaningful in terms of their own interests and needs; my wants per se are not a claim on anyone.

Furthermore, as I live my life, I have the choice to operate mindfully or mindlessly or anywhere between. I am accountable in any issue for the level of awareness I select. To think is an act of choice; so is to avoid thinking, and I am the cause of that choice. Self-responsibility entails my willingness to be accountable for my choices, decisions, and behaviour. I take responsibility for thinking about the consequences of my actions and hold myself accountable for them as well. When I choose an action whose consequences I can foresee, I am also choosing the consequences, and I accept that fact. END OF QUOTE

TO REPEAT

Fractional-reserve banking
From Wikipedia, the free encyclopedia

http://en.wikipedia.org/wiki/Fractional-reserve_banking

SNIP
Fractional-reserve banking is the banking practice in which banks are required to keep only a fraction of their deposits in reserve with the choice of lending out the remainder while maintaining the obligation to redeem all deposits upon demand. This practice is universal in modern banking.

Criticism of fractional-reserve banking
From Wikipedia, the free encyclopedia
(Redirected from Debt-based monetary system)

http://en.wikipedia.org/wiki/Debt-based_monetary_system

SNIPS
Some critics of fractional reserve banking and the related monetary system may refer to it by the political term debt-based monetary system
+
Critics of fractional reserve usually note that the banking system “creates money out of nothing”. The insight that banks “create money by extending loans” is not new, and the subject is covered in most introductory economics textbooks and many popular reference works

The US of A and Europe have now expressly replaced the principle of personal responsibility with that of riba. At this turning-point, it is up to the GCC to lead the world to stability through FreeGold in order to escape the fall into the abyss to which the irresponsible riba system is leading us at an ever increasing speed.

Riba literally means increase. As a technical term, it means usury and interest, and in general any unjustified increase of capital for which no compensation is given. Derivatives from the same root are used in other Semitic languages to describe interest. (1)

The definition of riba in Islam also includes transactions that are based on deception and which give to the deceiver a profit, a gain to which he is not justly entitled. In American vocabulary such a transaction is described as a “rip-off”. (2)

Riba is also at work when wealth is sucked from the masses through legalised fraud involved in the use of artificial paper money which has no intrinsic value. The value that is assigned to artificial money loses constantly value over time, as the system was designed to make it happen. Banks are the major actors at work in forcing a decrease in the value of money and banks make the most profit when such occurs. As money loses value, the value of everything is decreased. Prices rise and wages lose value. Labour is then imprisoned in slave wages. (3)

UNITED STATES OF EUROPE AND AMERICA

Friday’s emergency economic stabilisation act of the US of A instituted the office of financial stability. Through this office of financial STABILITY, Mr. Henry M. Paulson, secretary of the treasury of the US of A, is authorised to establish the troubled asset relief programme (TARP) to purchase in a graduated structure up to $700 billion in “troubled assets” (residential or commercial mortgages, and any securities or obligations based on such mortgages) from financial institutions, that is, from the major actors at work in forcing a decrease in the value of money, as well as a programme to insure the payment of principal and interest on such troubled assets to financial institutions. (4)

Reuters says that at Saturday’s European Union (EU) crisis summit in Paris, at the invitation of the rotating president of the EU council, during the current second half of 2008, Michel Sarkozy, the president of the French republic, Europe’s politicians remained committed to ensure the soundness and stability of  “their” banking system, that is, of the system encompassing the major actors at work in forcing a decrease in the value of money,  “at any cost”,  and confirmed that they therefore will breach the STABILITY and growth pact which they had nevertheless agreed at their Dublin summit in December 1996, and which had and still has, as its main objective, that there should be budget balance. (5) (6)

In order to deal with the global credit crisis, Europe’s politicians pledged to bail out “their own” nations’ banks while stopping short of a regional Wall Street-style rescue plan for the bloc’s beleaguered banks. Those politicians want those  major actors at work in forcing a decrease in the value of money to continue parasiting on the rest of us.

Emirates Business 24/7 quotes this Sunday, prime minister Francois Fillon of the president of the French republic as saying that the world is on the edge of the abyss because of an irresponsible [riba] system. (7)

GOLD

What is gold?

Taking gold metal into physical possession is a vote of no-confidence by the person taking that possession vis-a-vis the administrators of the currency under which that person is living.

Six billion people can have diverging reasons for taking that decision vis-a-vis the administrators of the currency under which they are living.

If the currency is continuously losing its purchasing power, its administrators are guilty of maladministration.

The ultimate and most universal method to protect oneself against that is to take gold into physical possession.

The world is divided into two camps:

On the one hand, there are the regimes which cannot tolerate that gold brings their maladministration into the open.

On the other hand, there is the Gulf Co-operation Council (GCC) which recognises that gold has a wealth-preserving function. The euro also belong(s/ed) to this camp, but the president of the euro’s administrator, the European Central Bank (ECB), Jean-Claude Trichet, was present at Saturday’s EU crisis summit in Paris and thus seems to have endorsed the decisions taken there, that is, seems to have endorsed the abrogation of personal responsibility, to deal with what he, Trichet, on Thursday called the intensification of market turmoil, resulting in a high level of uncertainty. (8)

The competition between the fractions becomes stronger and stronger, that is, goes in crescendo.

By its acquiescence to Saturday’s EU’s decisions, the ECB seems however to be bailing out in favour of the dollar fraction.

The more maladministration by the dollar fraction, the more the victims will lose confidence in the dollar regime.

Today, we are witnessing that the planet is being polluted by financial products which were allowed to take off under the dollar-maladministration. This directly and indirectly impairs the purchasing power of many currencies, thereby threatening our prosperity.

When the value of the money collapses, legalised theft takes place through a massive transfer of wealth from the masses to a predatory elite located within and beyond the borders of the state. That is riba. (9)

Gold is NO investment or speculation. Gold is wealth. Gold is a wealth-preserving asset.

The maladministrating dollar regime has now been systematically suppressing the Gold-Vote of No-Confidence for seven decades. This has allowed the regime to grow into a superpower.

This systematic suppression of the Gold-Vote of No-Confidence will now gradually and exponentially come to an end.

Unfree gold will become FreeGold.

The dollar-regime’s maladministration will then have to face competition from the Vote of No-Confidence.

Because a crisis is a catharsis, a turning-point.

THE EVENTS OF FRIDAY AND SATURDAY

The events of Friday and Saturday in the US of A and Europe conclusively demonstrate to the world that the United States of Europe and America remain committed to save their riba-based systems at any cost.

Moreover, they don’t recognise the principle of personal responsibility.

Everybody has to be bailed out of his blind faith in fractional-reserve banking.

Yes, it is government which authorises fractional-reserve banking, but that does not mean that the sheeple should not (have) take (taken) precautions.

As former Belgian banking commissioner, later advocate-general at the EU court of justice, Walter Van Gerven puts it, the US of A and Europe broadly share values on which a political and social system is based, values which are worth to be preserved. (10)

As a former banking commissioner, Van Gerven perfectly knows that fractional-reserve banking is the banking practice in which banks are required to keep only a fraction of their deposits in reserve with the choice of lending out the remainder while maintaining the obligation to redeem all deposits upon demand; that this practice is universal in modern banking; (11)
and that this creates a debt-based monetary system, whereby, by extending loans, the banking system  is to able to “create money out of nothing”. (12)

Of course, if there were no interest, if there were no riba, banks would not have any “interest” in extending loans to such an extent and fractional-reserve banking would not exist.

If fractional-reserve banking did not exist, we would not have the present banking crisis.

By bailing out all banks, the United States of Europe and America are demonstrating to the world that for them, personal responsibility is not a value worth to be preserved.

The value which for them has to be preserved is riba.

As prime minister Francois Fillon of the president of the French Republic said, the world is on the edge of the abyss because of an irresponsible riba-system. (7, again)

The riba-system is being globally run in order to lead to mankind’s collapse, its maladmistrators being enabled to steal wealth everywhere they can get at it. (13)

As riba has taken the place of personal responsibility in the United States of Europe and America, it is up to the GCC to lead the world to stability through FreeGold in order to escape the fall into the abyss to which the irresponsible riba-system is leading us at an ever increasing speed.

Because a crisis is a catharsis, a turning-point.

A danger, but also an opportunity …

ivocerckel@siquijor.ws

NOTES

(1)
C.E. Bosworth, E. van Donzel, W.P. Heinrichs and G. Lecomte, assisted by P.J. Bearman and Mme S. Nurit,, eds.,  (under the Patronage of the International Union of Academies), “The Encyclopaedia of Islam”, Leiden, E.J. Brill, 1995, New Edition, vol. VIII, verbo “riba”

(2)
Imran N. Hosein, “Jerusalem in the Qur’an – An Islamic View of the Destiny of Jerusalem”, Long Island, New York, Masjid Dar al-Qur’an, 2002, p. 210–211

(3)
Imran N. Hosein, “Jerusalem in the Qur’an – An Islamic View of the Destiny of Jerusalem”, Long Island, New York, Masjid Dar al-Qur’an, 2002,  p.218-219

(4)
Emergency Economic Stabilization Act Establishes Office of Financial Stability and Program to Purchase Troubled Assets  10-3-2008

http://www.wallerlaw.com/articles/financial_services?id=59593

SNIP
The Secretary of the Treasury (the Secretary), through a newly created Office of Financial Stability, is authorized to establish the Troubled Asset Relief Program (TARP) to purchase in a graduated structure up to $700 billion in “troubled assets” (residential or commercial mortgages, and any securities or obligations based on such mortgages) from financial institutions as well as a program to insure the payment of principal and interest on such troubled assets to financial institutions.

(5)
European leaders vow to fight financial crisis
Sat Oct 4, 2008 6:51pm EDT

http://www.reuters.com/article/newsOne/idUSTRE49267J20081004

SNIPS
“We jointly commit to ensure the soundness and stability of our banking and financial system and will take all the necessary measures to achieve this objective,” the leaders of France, Germany, Britain and Italy said in a statement.
+
The leaders’ statement explicitly referred to the fact that EU rules which impose limits on national deficits also allowed for exceptional circumstances to be taken into account in their application, and that such circumstances now existed.
+
British Prime Minister Gordon Brown said no sound bank would be allowed to fail for lack of liquidity.
“We will continue to do whatever is necessary,” he said. Leaders were calling on the European Investment Bank, the EU’s public lending arm, to “frontload” a 30-billion-euro rise in loans to small firms squeezed by a U.S.-induced credit crunch.

(6)
Sarkozy: EU budget rules to be adapted for crisis
The Associated Press
International Herald Tribune – France: October 4, 2008

http://www.iht.com/articles/ap/2008/10/04/business/EU-Europe-Crisis-Measures.php

SNIP
PARIS: The leaders of Europe’s four major powers called Saturday for flexibility on applying EU economy rules as they tackle a global financial crisis, and took a “solemn vow” to support their banks, French President Nicolas Sarkozy said.
The leaders said in a joint statement they would take “all necessary measures” to ensure the soundness and stability of the banking and financial system.
Only France, Germany, Italy and Britain were represented at the summit, along with the European Central Bank and the European Commission.

(7)
UK, Germany shoot down bailout proposal
By Agencies  on Sunday, October 05, 2008

http://www.business24-7.ae/Articles/2008/10/Pages/10052008_97bed12981b749588811323b76722722.aspx

SNIP
French Prime Minister Francois Fillon said the world is on the edge of the abyss because of an irresponsible system.

(8)
Introductory statement with Q&A
Jean-Claude Trichet, President of the ECB,
Lucas Papademos, Vice President of the ECB
Frankfurt am Main, 2 October 2008http://www.ecb.int/press/pressconf/2008/html/is081002.en.html

(9)
Imran N. Hosein, “Surah Al-Kahf and the Modern Age”, San Fernando, Trinidad and Tobago, Masjid Jami’ah, 2007, p. 129

(10)
Walter Van Gerven, “The European Union – A Polity of States and Peoples”, Stanford University Press, 2005, p. 388

(11)
Fractional-reserve banking
From Wikipedia, the free encyclopedia

http://en.wikipedia.org/wiki/Fractional-reserve_banking

SNIP
Fractional-reserve banking is the banking practice in which banks are required to keep only a fraction of their deposits in reserve with the choice of lending out the remainder while maintaining the obligation to redeem all deposits upon demand. This practice is universal in modern banking.

(12)
Criticism of fractional-reserve banking
From Wikipedia, the free encyclopedia
(Redirected from Debt-based monetary system)

http://en.wikipedia.org/wiki/Debt-based_monetary_system

SNIPS
Some critics of fractional reserve banking and the related monetary system may refer to it by the political term debt-based monetary system
+
Critics of fractional reserve usually note that the banking system “creates money out of nothing”. The insight that banks “create money by extending loans” is not new, and the subject is covered in most introductory economics textbooks and many popular reference works

(13)
Henk Ruyssenaars + Les Visible
HR-Intro + In the Quiet Between Lightning and ThundeR
Fri Oct 3, 2008
IN THE QUIET BETWEEN THE LIGHTNING AND THE THUNDER

http://disc.yourwebapps.com/discussion.cgi?disc=234999;article=2096;title=APFN%20MESSAGE%20BOARD

Is personal responsibility a value worth to be preserved?

All plans to impose the New World Order from above are doomed to fail and are already failing.

The new system should grow from the grassroots level up.

The newly (that is, yesterday) created US office of financial STABILITY equates Ayn Rand’s bureau of economic planning and national resources.

Through the office of financial STABILITY, Mr. Henry M. Paulson is authorised to establish the troubled asset relief programme (TARP) to purchase in a graduated structure up to $700 billion in “troubled assets” (residential or commercial mortgages, and any securities or obligations based on such mortgages) from financial institutions as well as a programme to insure the payment of principal and interest on such troubled assets to financial institutions.

At the Dublin European Union (EU) summit in December 1996, Europe’s politicians agreed the STABILITY and growth pact which has, as its main objective, that there should be budget balance.
(Paul Temperton, “Euro-X”, in Paul Temperton, (ed.), “The euro”, John Wiley and Sons, 1998, 2nd ed., 145, p. 146)

Stability has a different meaning on both sides of the Atlantic. In the US of A, it is about maintaining the fraudulent system at any cost. In Europe about budget balance.

We will have to see whether, plagued by fears for the stability of the banking system, today’s Paris EU crisis summit will maintain its definition of stability.

At that moment, we will know whether the US of A and Europe broadly share values on which a political and social system is based, values which are worth to be preserved, says former Belgian banking commissioner, later advocate-general at the EU court of justice, Walter Van Gerven.
(Walter Van Gerven, “The European Union – A Polity of States and Peoples”, Stanford University Press, 2005, p. 388)

Yesterday’s US of A emergency economic stabilisation act, which institutes the office of financial stability, displays that the US of A does not recognise personal responsibility.

Will Europe follow suit?

Nicolas Sarkozy, president of the French republic, who is hosting today’s summit, said that the goal of the summit is above all to prove that voters and businesses in Europe can count on governments to rapidly mobilise the resources needed to keep banks up and running and protect peoples’ savings, irrespective of national borders and laws.

It seems likely that the Paris summit will also deny personal responsibility.

Yes, it is government which allows fractional-reserve banking,
but that does not mean that the sheeple should not (have) take (taken) precautions.

Is the denial of personal responsibility a value worth to be preserved?

Ivo Cerckel

WEBOGRAPHY

Emergency Economic Stabilization Act Establishes Office of Financial Stability and Program to Purchase Troubled Assets  10-3-2008

http://www.wallerlaw.com/articles/financial_services?id=59593

SNIP
The Secretary of the Treasury (the Secretary), through a newly created Office of Financial Stability, is authorized to establish the Troubled Asset Relief Program (TARP) to purchase in a graduated structure up to $700 billion in “troubled assets” (residential or commercial mortgages, and any securities or obligations based on such mortgages) from financial institutions as well as a program to insure the payment of principal and interest on such troubled assets to financial institutions.

Atlas Shrugged by Ayn Rand
Chapter Summaries and Commentaries – Part One: Chapter 8—The John Galt Line

http://education.yahoo.com/homework_help/cliffsnotes/atlas_shrugged/33.html

SNIP
Rearden sells his ore mines to Paul Larkin and his coal mines to Ken Danagger, a hard-bitten Pennsylvania coal producer who started his career as a miner. Rearden’s calls to Wesley Mouch in Washington go unanswered, and he then receives a letter announcing Mouch’s resignation. Two weeks later, Rearden reads in the newspapers that Mouch has been appointed Assistant Coordinator of the Bureau of Economic Planning and National Resources.

Paris summit seeks European response to crisis
Fri Oct 3, 2008 8:09pm EDT
By Brian Love

http://www.reuters.com/article/worldNews/idUSTRE4906XW20081004

SNIPS
PARIS (Reuters) – Plagued by fears for the stability of the banking system, European leaders meet on Saturday for a summit French President Nicolas Sarkozy hopes will limit the damage caused by the worst financial crisis since the 1930s.
+
Sarkozy’s goal is perhaps above all to prove that voters and businesses in Europe can count on governments to rapidly mobilise the resources needed to keep banks up and running and protect peoples’ savings, irrespective of national borders and laws.

Quousque tandem?

Leterme: ‘We zijn nog niet uit de gevarenzone’
vrijdag 3 oktober 2008 5:28

http://www.tijd.be/nieuws/ondernemingen_financien/Leterme__%27We_zijn_nog_niet_uit_de_gevarenzone%27.8084935-433.art

UITREKSELS
‘We zijn nog niet uit de gevarenzone met ons financieel systeem.’ Dat heeft eerste minister Yves Leterme (CD&V) donderdagmiddag tijdens de zitting in de Belgische senaatcommissie Financiën over de huidige bankencrisis. De premier herhaalde wel dat geen enkele spaarder zijn spaargeld zal kwijtspelen.
+
Leterme herhaalt de boodschap dat geen enkele spaarder zijn spaargeld zal kwijtspelen. ‘De continuïteit van de grote bankinstellingen is de beste garantie voor de spaarder’, zegt de eerste minister daarover. Door die garantie wordt de nood aan een discussie over de waarborgen minder prangend. ‘Geen enkele waarborg kan de totale verliezen aan spaartegoeden dekken. Dus ik hoop dat we nooit in zo’n extreme situatie terechtkomen.’

Ivo:
De ware crisis moet nog komen.

Zal meneer Leterme alle financiële instellingen en alle spaarders uitbailen? Neen, daartoe is hij onmachtig, geeft hij zelf toe. Waar zal hij dan stoppen? Ah neen, of ah ja, het is first come, first served.

Het grondwettelijk gelijkheidsbeginsel stelt dat enkel zij die zich in hetzelfde geval bevinden recht hebben op gelijke behandeling. En het mag Leviathan behagen om het tijdstip waarop de vordering tot uitbailing wordt ingediend als criterium voor gelijk geval te beschouwen. Zo gaat dat bij ons. Wij werden toch democratisch verkozen, niewaar.

Persoonlijke verantwoordelijkheid bestaat niet in dit land. Zij die het langste zullen standhouden zullen op niks uitbailing ‘recht’ hebben.

Bankiers mogen geld creëren uit het niets.
Spaarders moeten maar hopen dat Leviathan hen blijft zand in de ogen werpen en parachutes geeft om niet te vallen. ZOLANG DE VOORRAAD AAN VALSCHERMEN STREKT

De criminele collaboratie tussen enerzijds de oligarchen-staat met haar toezichthouders en anderzijds de bankiers mag haar dolle vlucht (omhoog, zonder parachute dus) nemen.

Quousque tandem?

Wel, tot er Vrijgoud komt.

Dat zou nu niet meer lang moeten duren …

Dames en Heren, heranalysering van de uitreksels uit De Tijd toont aan dat Leterme gek is. De premier herhaalde dat geen enkele spaarder zijn spaargeld zal kwijtspelen, doch hij kan geen enkele waarborg geven dat hij de totale verliezen aan spaartegoeden kan dekken. Dus hoopt bij dat we nooit in zo’n extreme situatie terechtkomen en … erkent hij dat sommige spaarders mogelijks (?) hun spaargeld zullen kwijtspelen.

Ivo Cerckel

We, the depositors, did not know that fractional-reserve banking is a fraud.
So government should help.

Ivo: Yes, it is government which allows fractional-reserve banking,
but that does not mean that the sheeple should not take precautions.

Exklusiv Paris will Rettungsplan für Europa
von Wolfgang Proissl (Brüssel), Peter Ehrlich (Berlin) und Rolf Lebert (Frankfurt)
Aus der FTD Financial Times Deutschland vom 02.10.2008

http://www.ftd.de/politik/international/:EU-Notfonds-Paris-will-Rettungsplan-f%FCr-Europa/420916.html?eid=237639

SNIP
Die französische EU-Ratspräsidentschaft plant einen milliardenschweren Hilfsfonds zur Rettung angeschlagener europäischer Banken. Staatschef Nicolas Sarkozy will die Idee auf einem europäischen Krisengipfel in Paris präsentieren.

Exclusive: Paris wants rescue plan for Europe
SNIP
The president of the EU-Council plans rescue funds of billions (of euros) to rescue the European banks in danger. Head of state Nicolas Sarkozy will present this idea at a European crisis summit in Paris.

IVO:  No financial institution can survive a bank run.

A confidence crisis in European banks
Oct 01 2008 21:20

http://www.ft.com/cms/s/0/b8db7480-8fe4-11dd-9890-0000779fd18c.html

SNIP
Banks gather money and lend it out. Their ability to survive depends on the confidence of depositors. NO FINANCIAL INSTITUTION COULD SURVIVE if all its depositors asked for their money at once. That is the risk facing Europe’s banks as the financial crisis that has engulfed Wall Street sweeps across the Atlantic. It is the reason why the Irish government, panicked by large-scale cash withdrawals on Monday, announced a blanket guarantee for two years on all deposits at six big banks and protection for other creditors including bondholders.

There’s too much money in the system.
Still, our friends, the bankers, are experiencing problems.
Belgium’s De Standaard is quoting former Belgian banking commissioner Jean-Duplat, this morning, as arguing that non-central bankers should be taken to criminal courts.
Duplat should know better.

Too much money
By Andrew Shouler, Editor, Gulf News Quarterly Financial Review
Published: September 30, 2008, 01:18

http://www.gulfnews.com/business/Business_Feature/10248642.html

SNIP
You could reasonably say that the root cause of the massive systemic crisis in global finance was excessive monetary growth

BANKIERS MOETEN OP DE STRAFBANK
woensdag 01 oktober 2008

http://www.standaard.be/Artikel/Detail.aspx?artikelId=0V217270&kanaalid=9

BRUSSEL – Jean-Louis Duplat, gewezen voorzitter van de banktoezichthouder CBFA, eist dat er een parlementaire onderzoekscommissie komt naar de afgang van Fortis en Dexia. Hij wil ook een betere bescherming van beleggers en aandeelhouders.

BANKERS SHOULD BE TAKEN TO CRIMINAL COURT
Wednesday 1st October 2008
BRUSSELS -Jean-Louis Duplat, former banking commissioner, demands a parliamentary inquiry commission into the facts leading to the collapse of the Fortis and Dexia banks. He also wants more protection for investors and shareholders.

Ivo:
The only solution is FreeGold, Mr. Duplat.

There should be a parliamentary inquiry commission into the way in which our masters (including the banking commission and  … parliament) have allowed fiat money.

The real criminals are the tax parasites
(the thief does not periodically come back, nor does he pretend to be stealing in the public interest)
who have allowed the system to exist.

If the supervisors had fulfilled their so-called job seriously, Fortis and Dexia would never have been able to exploit the system to such an extent.

The supervisors should be jailed.

It is their fault that FreeGold does not yet exist.

The non-existence of FreeGold is the cause of the present problems.

But it is far easier to send those who were duped, or doped, by the possibility to create money out of thin air, to a criminal court.

In that way, the fiscal system can survive a little longer and the tax parasites, including the magistrates of the court, can also survive a little longer.

And investors and shareholders are sure to be denied of any protection against the parasites.

Ivo Cerckel