The Counterfeiters … and the Fed

[EZ_E]

 

The Counterfeiters won the foreign-language Oscar on February 24, creating buzz for the Austrian film that had opened in this country in limited release just two days earlier.

 

Directed by Stefan Ruzowitzky, the movie is about a wartime Nazi plot to destroy the economies of Great Britain and the United States by using concentration-camp prisoners to print massive amounts of counterfeit currencies that would then be interjected into the target economies. The movie is based on the memoir The Devil’s Workshop by concentration-camp survivor/counterfeiter Adolph Burger, though in the movie the name of the real-life Burger is changed to Salomon “Sally” Sorowitsch.

 

Notwithstanding the evil nature of the Nazi regime, the plot brought to the silver screen by The Counterfeiters does illustrate the fact that the Nazis fully understood that inflation (increasing the money supply) can be used to destroy a currency. The Nazi regime fell before this plot got very far, but without the help of the Nazis or any other hostile foreign regime, our own Federal Reserve System has for many years been inflating our currency, effectively accomplishing what the Nazis had hoped to accomplish, albeit more gradually. Thanks to the Fed, almost $12 would be needed today to equal the purchasing power of $1 in 1945.

 

[BillJones]

I won't get into a long discussion about the Federal Reserve because I frankly do not agree with you. Perhaps the Fed’s policies in 1937 would have pleased you more. That year they put the breaks on the economy, which was just coming out of The Great Depression, and started another round of hard times. A great many other factors have influenced price levels since 1945, including technological changes which makes it hard to measure any level of inflation over a period of time as long as 60+ years. Yes, inappropriate increases in the money supply can cause inflation, but there are many other factors.

 

But the Nazis were hardly the first to try to ruin an enemy nation's economy by injecting counterfeit currency into its monetary system. Way back in circa 1778, the British set up a printing press on a ship in New York harbor where they counterfeited Continental Currency. For the price of the paper, you could have much “American” paper money as you wanted.

[PerryHall]

Sam Upham counterfeited Confederate currency during the Civil War with the full knowledge of the US government.

[jtryka]

The Nazis of course learned that lesson in their homeland in 1923...

 

As for the Fed, I agree completely with Victor, and with Andrew Jackson, who I am sure was spinning in his grave when that terrible act was passed in 1913...

 

And PS- inflation is defined as an increase in the total amount of money and credit in the economy, rising prices is merely a symptom of the underlying inflation. And yes, I am clearly in the Austrian school when it comes to economics and monetary policy.

[World Colonial]

I have addressed this topic in other threads many times and yes, I completely agree with you.

 

I would also be interested to know what the "other" factors are which cause inflation. In any event, technology is definitely not one of them. The trend in technology has been to increase the efficiency of production which makes producing products cheaper.

 

In any areas where technology appears to have the effect of increasing prices, it is not actually technology but primarily (if not completely) a lack of competition. One example is in the medical field where people frequently claim this has occurred. In actualily, there is no competitive market for medical services in this country. Sometimes this is the result of factors such as patents in the harmaceutical industry. In other cases, it is because there is no market incentive to control costs as there is most other areas of the economy. And in this particular case, the demand is relatively inelastic because all of us eventually will need these services.

 

This is an example of what is termed as the backward mirror of economic statitics. In the parallel Bizarro economic world we live, GDP increases and the country is statistically wealthier because we spend more resources on government, health care, a housing bubble, financial paper shuffling and 70% of the world's lawyers. In actuality, these are symptoms of economic poverty.

 

But the only reason why prices in total have increased is because of the increase in the money supply and changes in the velocity of money. All other things being equal, no one can increase prices in one area of the economy without a corresponding decrease in another.

 

In the near future, we are likely to experience this first hand. A good example of this today is with gasoline. As deflation gains the upper hand regardless of what the Fed does or does not do, people will find themselves with less discretionary income to buy other items and probably already have. So those prices will fall as their demand contracts. So instead of contributing to inflation, a price increase in a relatively inelestic good such as this will only stregthen defaltion.

[EZ_E]

I like to keep things simple. It is also know that the simplest explanation is usually the most accurate. Inflation is simply defined as an increase in money supply for whatever the reason. So, since the dollar has lost 33% of its value since 2002, the profits I made from selling multiple coins on ebay which I bought in 2002 and 2003 is really non-existant. Paper money is one of the absolute worse investments someone can have. A person's savings could literally be worth only a fraction of its former value over night in the event of a crash or other economic shennanigans.

[World Colonial]

The Nazis of course learned that lesson in their homeland in 1923...

 

As for the Fed, I agree completely with Victor, and with Andrew Jackson, who I am sure was spinning in his grave when that terrible act was passed in 1913...

 

And PS- inflation is defined as an increase in the total amount of money and credit in the economy, rising prices is merely a symptom of the underlying inflation. And yes, I am clearly in the Austrian school when it comes to economics and monetary policy.

 

Could not have said it better myself.

[physics-fan3.14]

I like to keep things simple. It is also know that the simplest explanation is usually the most accurate. Inflation is simply defined as an increase in money supply for whatever the reason. So, since the dollar has lost 33% of its value since 2002, the profits I made from selling multiple coins on ebay which I bought in 2002 and 2003 is really non-existant. Paper money is one of the absolute worse investments someone can have. A person's savings could literally be worth only a fraction of its former value over night in the event of a crash or other economic shennanigans.

 

Save your dollars! Buy the pound!

 

To get back to the original topic, however, the Brits also counterfeited the German mark during WWII, with the exact same intent. I actually just saw an article on Fox news the other day that was talking about it - Ian Fleming, the author of James Bond, worked in the British intelligence services and headed that plot up.

[BillJones]

As for the Fed, I agree completely with Victor, and with Andrew Jackson, who I am sure was spinning in his grave when that terrible act was passed in 1913...

 

Oh lord, Heaven help us ...

 

Collectors have tangible reminders of Andrew Jackson’s economic policies. They are called Hard Times tokens. Jackson’s policies caused continual liquidity problems for the economy of his time, and tossed the responsibility of maintaining a stable monetary system back on a most unstable group … the largely unregulated and often poorly run state chartered banking system.

 

When it came economic and monetary policy, Andrew Jackson was a Neanderthal.

 

Those who fail to study the lessons of history bound to repeat it ... if they come to power.

 

[EZ_E]

If I remember right, Andy Jackson's term concluded with a $0.00 national debt. Now, that is a great president in my book even though he was a peckerwood to the Cherokee.

 

Reagan tripled our debt. On the books we, the government, officially owe c. $8 trillion dollars. Unofficially, it is much, much more.

 

There is not even $1 trillion dollars of UD coins and currency in the whole world. Pretty bad when you owe multiples more than there is in total dollars in the world.

 

Something is wrong. Sum'ting Wong is not just my wife's second cousin's name, either. :þ

 

To get an idea of how much a trillion dollars is:

 

If you opened a business at the time of Christ and lost 1 million dollars per day, every day up until the present time, then it would still take another 600 years to lose one trillion dollars.

 

You going to defend this out of control gov't some more there, Bill?

 

[cointagious]

 

Reagan tripled our debt.

 

 

The President proposes, the Congress disposes.

 

 

[jtryka]

There has never in recorded history been a fiat system that did not end badly, we will be no different.

[Conder101]

The President proposes, the Congress disposes.

The President doesn't really even do that much proposing. He send the Congress a proposed budget which more often than not is declared dead on arrival and the congress then comes up with their own budget. And as far as any other spending bills not specificly cantained within the budget, those all by law must originate within the House of Representatives. The President does not have the power to submit a spending bill before the House. He can publicly ask for additional spending but it is up to the House to start the ball rolling. If they don't, no spending. What we have needed have been President more willing to use the veto pen when the spending Congress (both and ) appropreates more money than there is. Even if the vetos do hurt the country. We need a fiscally responsible President who will say "No you can't spend that that much, we don't have it. Go back and do it again."

[CHABSENTIA]

Reagan didn't triple anything. The President is the Executive Branch. Congres is the Legislative Branch. The President can propose but doesn't mean it will happen. The President can veto a Budget which will stand if the veto can't be over rode by Congress.

 

Congress approved the Reagan Tax Cuts whether indirectly ot directly but did not decrease spending to pay for the cuts.They increased spending a great deal.Congress wanted the Earmarks and Regan wanted the Tax cuts and this is what happened..

[EZ_E]

If a ship sinks or has an incident, the commanding officer is responsible even if a Boatswain's Mate deck ape was to blame. Same with Reagan. He actually campaigned to lower our national debt but did the exact opposite. Reagan was just as bad as Clinton and nearly every other politician that's ever walked this earth.

[World Colonial]

I do believe that Reagan did some good things, but more than anything else, his image is the beneficiary of bull market psychology. For those of us who actually want a smaller government, his administration was not a success. It was merely a form of incurable romanticism to believe that any other outcome could have been possible.

 

On the prior post mentioning that the veto pen needs to be used even if it hurst the country, I agree with those sentiments but probably would disagree that this would actually happen in practice. Most of the federal budget is a combination of unconstutional spending or a gigantic boondoggle thrown down a giant rat hole. Vetoing this collosal waste of money would not hurt the country. It would primarily hurt those who are the beneficiaries of the socialist income redistribution which is an entirely different issue.

[just-john]

HE may have helped to triple our dept but he bankrupted the USSR. The differences between us and them we had credit they didn't .Now take a look at our credit markets

and that should show you where we will be in 3 years.Man I'm really not looking forward to standing in line for potatoes .They say the pen is mightier than the sword but in a one on one fight I'll take a sword thank you .Gold and silver are nice but a little lead comes in handy sometimes.

[BillJones]

If I remember right, Andy Jackson's term concluded with a $0.00 national debt. Now, that is a great president in my book even though he was a peckerwood to the Cherokee.

 

Yes, and in addition to the Cherokees he slaughtered a large number of ordinary Americans starved or froze to death because, outside of the churches, there were no government safety nets at that time. When it comes to economic policy, Andrew Jackson was one of the worst presidents ever. His redeeming graces were giving the common man political clout and involvement in government, and he stood up to southern secessionists (via the Nullification crisis) years before Abraham Lincoln was faced with the Civil War.

 

There is nothing wrong having a national debt because government bonds serve a very important function in the economy. They set the "no risk" / "very low risk" benchmark for the financial markets, and they offer safe havens for widows and orphans funds. Some national debt is good and serves a positive function. It’s only when the debt grows faster than the overall economy for no good reason (good reason for increasing the degt is an economic depression or a major war) that it becomes truly bad.

 

I'll agree with you that the Federal government has too much red ink these days, and problem stems from out of control spending. If a tax increase would help to fix it, I'd support it. The trouble is tax increases do no good. It only encourages the spendthrift Bozos in Congress to spend more. Both parties are to blame, and it's one the reasons why the Elephant Party lost control of Congress in 2006. The trouble is the Donkey Party Congressional clowns want to spend even more than the Elephant Party Congressional jokers.

 

[Conder101]

Vetoing this collosal waste of money would not hurt the country.

Agreed, but my point about it hurting the country is because typically the Congress puts all that wasteful spending, pork barrel, and earmarks into legislation that is actually vitally needed and the only way to get rid of the bad spending is to eliminate the good spending as well. since there is no line item veto. Two years ago they loaded the Katrina disaster relief with pork barrell spending. The only way to stop it would also mean no disaster relief. Every year they pile it onto the annual appropriations bills. Vetoing those means either shutting down the government or living on continuing resolutions. This year we were on continuing resolutions for 3 months because they couldn't get the bills passed. In the past there have been time when the president wouldn't sign the continuing resolution and they did shut down the government for a few days. Problem is even though the government is shutting down because Congress couldn't get their work done, the President got the blame for it. (By law the ONLY thing that Congress HAS to do each year is pass 13 specific appropriations bills and they have 12 months in which to do it. They have only succeeded in doing so twice in the past 40 years.)

 

Anyway back to the movie! Does anyone know if it is out yet on DVD and if it isn't does anyone know when it will be? It's the only one of last years Academy Award winners that I have any interest in seeing.

[BillJones]

Reagan was just as bad as Clinton and nearly every other politician that's ever walked this earth.

 

You have forgotten about Jimmy Carter. He was easily the worst president of my lifetime, and that’s saying something considering that he has Lyndon “Vietnam War and War on Poverty” Johnson, and Richard “I AM a CROOK” Nixon for competition.

[CHABSENTIA]

You can't really beleve that. Apples and oranges.You are correct in your statement about the Captain being responsible on a ship.He is responsible because there is no shared responsibilty.He is responsible for both Legislation and Enforcement . He is all three. He is the Executive Branch. Legislative Branch and the Judicial Branch.

 

 

The Federal Government is divided into the Executive branch , Legislative branch and Judicial Branch.. Each have separate powers ans responsibilites. They were made that way by our founding Fathers and the U.S.Constitution for a Balance of Power.

 

The Legistaive Branch or both Houses of Congress are directly responsible for Legislation as to making laws and legislation of Spending etc.The Executive Branch can disapprove the Budget or approve it. If Vetoed by the Executive Branch and the Veto is over ridden by the Legislature by the required number of Votes then it makes no difference what the Administration wants or doesn't wnat etc.

 

 

A Course in Governement 101 would clear up the differences.

 

 

[CHABSENTIA]

Legislative Branch is still ultimately responsible and as long as over 90% of the Incumbents are returned to office then the Executive Branch means little in this direction.

 

If you were an employee and performed the same year after year and were not only retained but were given a yearly raise and more benefits then would you change?

[jesbroken]

EZ-great post which is IMHO the single largest issue supporting the destruction of our economy-the fed(a private owned corporation, not a government agency). Jeff, great reply and I'm sure many of our early prez's have rolled since 1913 and 1933.

The Fed is actually owned by foreign banks and whose stock is not traded at all:

Rothschild Bank of London Warburg Bank of Hamburg Rothschild Bank of Berlin Lehman Brothers of New York Lazard Brothers of Paris Kuhn Loeb Bank of New York Israel Moses Seif Banks of Italy Goldman, Sachs of New York Warburg Bank of Amsterdam Chase Manhattan Bank of New York

 

These banks run a printing press for our money-are paid to do it at their whim, loan the new false paper to we users at exhorbitant rates, and profit therewith.

England may have not lost the war after all.

 

Google Federal Reserve, it's pretty scary.

Jim

[EZ_E]

 

These banks run a printing press for our money-are paid to do it at their whim, loan the new false paper to we users at exhorbitant rates, and profit therewith.

 

That is the biggest scam, racket, boondoogle that's ever been sold to the American people.

[World Colonial]

Most of the spending that most people would describe as "necessary" is what I classify as unconstitutional and waste thrown down a giant rat hole. I am not talking about "pork" but most federal government outlays. It should either be abolished completely or sent back to the states where it properly belongs. Most people however, are not in favor of that. And one of the reasons for this is because they do not want a limit on government spending because the federal government can print money while the states cannot.

[World Colonial]

EZ-great post which is IMHO the single largest issue supporting the destruction of our economy-the fed(a private owned corporation, not a government agency). Jeff, great reply and I'm sure many of our early prez's have rolled since 1913 and 1933.

The Fed is actually owned by foreign banks and whose stock is not traded at all:

Rothschild Bank of London Warburg Bank of Hamburg Rothschild Bank of Berlin Lehman Brothers of New York Lazard Brothers of Paris Kuhn Loeb Bank of New York Israel Moses Seif Banks of Italy Goldman, Sachs of New York Warburg Bank of Amsterdam Chase Manhattan Bank of New York

 

These banks run a printing press for our money-are paid to do it at their whim, loan the new false paper to we users at exhorbitant rates, and profit therewith.

England may have not lost the war after all.

 

Google Federal Reserve, it's pretty scary.

Jim

 

You should be careful about the sources you believe. I've heard stories to this effect but some of the banks in your list do not even exist anymore.

 

N.M Rothschild & Sons (the most prestigious financial institution in the world in my opinion), Goldman Sachs, Lehman Brothers, Chase Manhattan (now JP Morgan Chase) and Lazard still exist. But except for JPM, none of them are members of the Federal Reserve system and though it is possible that they are owners there is no actual evidence because the owners are not public. So it is pure speculation.

 

M.N. Warburg and Rothschild Bank in Frankfurt disappeared around WWII I believe. (Paul Warburg, a senior partner in Kuhn Loeb and M.N Warburg, was the first chairman of the Fed in 1913.) Kuhn Loeb merged with Lehman Brothers in the 1970's. The others I have never heard of.

 

Most likely, the actual owners are dominated by JPM and the other large commercial banks and their successors such as Citigroup, Chemical Bank, Manufacturers Hanover, Bankers Trust and the Bank Of NY.

[EZ_E]

The Warburg brothers made a fortune off of the World War(s) by supplying opposing sides of the war machines, one brother supplying Germany and the other supplying the Allies.

 

We have such wonderful people shaping our history and our futures. But that's ok, history can always be rewritten.

 

[CHABSENTIA]

I had heard the same thing before and one should be careful about quoting others and what they say. I have heard the same scenario about the Captain of a ship before this. The Captain is responsible for the actions of the men under him. You can't compare the Captain to the Predident of the U.S. because the Captain is the person soley responsible for the Operation of the ship. He delegates and does not share.He also is the sole person who metes out Punishment via such Levels as a Captains Mast and recommends a Court Martial etc. Condor said it correctly as far as the Budget process is concerned etc. Things are a lot different with the Federal Government and different functions are shared by different Branches as a Balance of Power..No President is directly responsible for Legislative actions or Spending approvals because they have to be approved by both Houses of Congress.

 

I have also heard these rumors about a World Government and the Financial Institutions and all these meetings in Secret etc. There is no proof and it seems to be another one of these situations where if people kep repeating it enough then it takes on a life of its own. That is not to say it does or doesnt exist.

 

 

I have long felt that the actions by the Fed starting with the raising of the Federal Funds rate no less than 17 consecutive times and the fact that when the actions of it and the Sub Prime mess became evident globally they drug their feet..Another situation was when Paulson admitted that he had been in daily telephone converstions with Bernake.The Fed is supposed to be an Independent agency and this isn't a red flag?I also feel that the Dollar was driven down deliberately for reasons that I have mentioned before.

 

The latest News is even more disturbing. Paulson who is a former high level executive from Wall Street has announced with Bernake that the SEC needs to be eliminated and the necessary Enforcement Powers of the SEC then needs to be invested with the Federal reserve.. Bernake and Paulson also have announced that they believe that the Investment Banking Houses need to be regulated by the Federal reserve in order to prevent another Crisis such as the recent ones.

 

 

Am I the only one to see a Pattern here?

[EZ_E]

you can watch the movie "The Counterfeiters" free online here

[World Colonial]

The President may not be the captain but he still shares the blame. He can veto the garbage Congress sends to him at least occasionally as opposed to never.

 

As for the Fed and the current state of the economy, I have already covered that before. The Fed does not have the power that most people think it does, has no clue what interest rates should be and there is no more reason to try to fix the price of money (interest rates) than there is to set the price of popcorn or peanuts. Since Karl Marx included a central bank as a pillar of socialism, the very existence of the Fed or any central bank is contrary to how any free society should be organized.

 

Most people who know what the Fed actually is and does support it either because they are conventional thinking Keynsian economists or because they believe in populist socilistic income redistribution.

 

As for a central cabal, I believe that some of the claims made are true but not the central claim. One of the sources that is widely claimed for this belief lists an individual whom I am very familiar with because I collect South African coins. Lord Alfred Milner (1854-1925) was the Governor of the Cape Colony and then High Commisioner of South Africa from 1897-1905. Many of the claims made about him are almost certainly false.