02-01-2010, 08:25 PM
Yes Gold at one time and also silver were used as a base for currency in the USA.
There are volumns of economics text's written but they are really no more than a smoke screen to hide how the money system really works.
Here is actually what happens..
There is no base for currency in the U.S.A. today. It is not based on the GDP.
The government prints Bonds. These Bonds are no more than a promise that the people of the U.S.A. will cover the face value of the Bond pluss interest to the holder of the Bond for their return.
The Federal Reserve Bank, which is a private bank, then loans the money (electronicaly) to the government at a preset interest rate.
Now here's the thing...the federal reserve bank operates on the fractional banking system which states that any bank only has to have 10% of the assets on hand to cover what it loans out. Sounds fare right? Well no, look at it this way. I'll use small numbers.
USA needs a 1 million dollar loan.
USA prints a 1 hundred thousand dollar bond.
Federal reserver bank takes the bond from the USA
Federal bank prints 1 million dollars and gives it back to the USA
The federal reserve bank has never put up a single cent of it's own.
The money has litteraly been created from thin air.
From nothing they collect interest by way of tax's. You may find this a bit hard to swollow but this is in fact how it works.
There are volumns of economics text's written but they are really no more than a smoke screen to hide how the money system really works.
Here is actually what happens..
There is no base for currency in the U.S.A. today. It is not based on the GDP.
The government prints Bonds. These Bonds are no more than a promise that the people of the U.S.A. will cover the face value of the Bond pluss interest to the holder of the Bond for their return.
The Federal Reserve Bank, which is a private bank, then loans the money (electronicaly) to the government at a preset interest rate.
Now here's the thing...the federal reserve bank operates on the fractional banking system which states that any bank only has to have 10% of the assets on hand to cover what it loans out. Sounds fare right? Well no, look at it this way. I'll use small numbers.
USA needs a 1 million dollar loan.
USA prints a 1 hundred thousand dollar bond.
Federal reserver bank takes the bond from the USA
Federal bank prints 1 million dollars and gives it back to the USA
The federal reserve bank has never put up a single cent of it's own.
The money has litteraly been created from thin air.
From nothing they collect interest by way of tax's. You may find this a bit hard to swollow but this is in fact how it works.