Hi Chris,
When I saw your answer to “what you would do”, it made me think of the response given by President Andrew Jackson in the 1830’s, to comments from the US Central Bank President at the time, as to how Jackson could “put suffering on the people” by not allowing the Central Bank to get a charter to continue operation.
Here was his answer:
Andrew Jackson - “Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families more, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, I will rout you out.”
(If you’re aware of the history behind Andrew Jackson and the USA’s earlier struggles with Central Banking, you’ll know how passionate he was against it, as were the Founding Fathers in Jefferson, Madison and Adams. At one point, an assasination attempt was made on Jackson, of dubious origin, but he survived as the guns misfired. Upon his tombsone is engraved “I Beat the Bank!”)
As to the question you were asked, issuance of the currency should be returned to the Treasury, in the form of tangible-backed US Notes (not Fed Res Notes), as per the US Constitution, correcting the unconstitutionality of the FED.
The savings in interest alone would pay for tremendous investments in the shared US infrastructure, which is a legitimate use of taxpayer money.
A direct transfer of 1-to-1 US Notes to Fed Res Notes should take place immediately, with the monies otherwise placed into the Resolution Trust redirected toward common infrastructure investment, insofar as no fractional-multiplier would take it.
The fractional multiplier effect should be born by the Banks only.
Nice job on the latest installment of Crash Course Chris!
And I agree that this is a day for the history books. Truly unbelievable. Do you have any insights/opinions as to how events play out over the next several months?
It would appear that so far every financial levy that has been erected since last August has been overwhelmed by the toxic debt / derivative flood and now the Fed and Treasury have went “all in” with this latest bailout/reinflation scheme.
If this does not restore normalcy to the credit markets what else do they have left? And even if it does sooth debt markets will it fly in the currency markets?
Any thoughts?
Thanks
The idea that we’re going to sequester all of the bad debt in a shadow organization and bail out the guilty parties is just ludicrous. We have somewhere between $600T and $1Q worth of derivatives globally, most of it leveraged, most of it gone bad just like spoilt milk. That’s up to 1,000 Trillion dollars worth of sour paper. Even if we bailed out just 5% of it, it would be $50 Trillion. That compares to a world GDP of $66T?
I’d say we’ve got a lot of printing to do, and this is just a stall tactic.
Oh, and fabulous job on your Crash Course. I have never seen the peak oil net energy concepts presented so concisely. Thank you!
this is just an uneducated guess but i think they are bailing everyone out because they dont want to have all of this exposed in a bankruptcy court. assets on the books may really turn out to be liabilities or worth only pennies on the dollar not what they are declaring. if they sweep it under the govt rug we will never know the extent of the shenanigans.but i could be wrong.
but my faith in the system was restored when i remembered alan saying “we at the fed have the most powerful econometric tools on the planet and just because we have been wrong the last 14 quarters doesn’t mean we won’t be right in the 15th”
With banks dropping like flies and the stock market looking like the latest roller coaster, what should my friend do with over $100k that is tied up in mutual funds: let it ride, deposit in savings acct., buy gold, or put it in a sock drawer? My friend is over 60 years old and hopes to retire soon. I want to make sure that she money to do it! 
Thanks!
Hello Chris and everyone else.
I’ve been keeping up with all of this news on your site and around the web. Needless to say, its terrifying and exhilarating at the same time.
My question/comment has to do with the North American Union which is supposedly to be announced by 2010. Because the North American Union will be a collaboration between the U.S., Canada and Mexico, do you believe that the fed is spraying money everywhere because it realizes that once the union is announced, the dollar will be replaced by the Amero and our problems will be solved because we can easily spread our problems towards Oil rich Canada and Mexico?
To me, there is no other logical reason why this is happening.
I do admit to being shocked when these events happen, but as a long student of Austrian Theory and economic history, the dons are following the same script as every other nation that resorted to inflation. They are going to destroy the dollar.“There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
— Ludwig von Mises – Get your gold and silver and beat the rush.