Tag Archives: Federal Reserve

End the Fed: Cyprus vs. the Federal Reserve?

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The government of Cyprus is dominating the headlines at the moment, thanks to an audacious scheme to seize the savings of bank depositors. Many Americans are aghast at the situation. But is it really all that different from what the Federal Reserve does to U.S. depositors on a daily basis?

The Cyprus Conspiracy?

Cyprus isn’t the first European Union government to find itself in financial straits. However, the approach to dealing with those straits is unique. Usually, the EU provides immediate bailout money to such countries. In exchange, those countries agree to cut costs, raise taxes, and restructure debts.

This time, the EU required Cyprus to raise 5.8 billion Euros in order to receive a 10 billion Euro bailout. In order to pay for part of the bailout, the Cyprus government is effectively confiscating money from bank accounts worth more than 100,000 Euros (roughly equivalent to $129,000). Losses on those excess deposits might be as high as 40%…or perhaps even higher.

The Federal Reserve Conspiracy: Revisted?

The Cyprus seizure is theft by government, plain and simple. Ordinary Americans may find it hard to imagine this sort of thing ever happening in the U.S. But is the Cyprus Conspiracy all that different from the Federal Reserve Conspiracy? Not at all. Here’s more from Thomas Sowell at The American Spectator:

The U.S. government is very unlikely to just seize money wholesale from people’s bank accounts, as is being done in Cyprus. But does that mean that your life savings are safe?

No. There are more sophisticated ways for governments to take what you have put aside for yourself and use it for whatever the politicians feel like using it for. If they do it slowly but steadily, they can take a big chunk of what you have sacrificed for years to save, before you are even aware, much less alarmed.

That is in fact already happening. When officials of the Federal Reserve System speak in vague and lofty terms about “quantitative easing,” what they are talking about is creating more money out of thin air, as the Federal Reserve is authorized to do — and has been doing in recent years, to the tune of tens of billions of dollars a month…

(See the rest at The American Spectator)

Why did the Poker Bubble Burst?

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In late 2003, the American poker industry exploded. New players flooded the game. Tournaments flourished. Poker games became a fixture on television. By 2008, the bubble had burst. People left the game in droves. Tournaments got smaller. Television programs ended up on the chopping block. So, why did this happen? What caused the poker industry to boom and bust? Curiously enough, the answer lies in money, or at least the Federal Reserve’s control over it. Here’s more from Peter C. Earle at the Ludwig von Mises Institute:

Nearly a decade ago, poker exploded in popularity. Between television programming, media coverage, and pop culture references to it—in particular, the Texas Hold ‘Em variant—the game became virtually unavoidable. The American Gaming Association estimates that nearly 1 in 5 Americans played poker in 2004, up 50 percent from 2003; also, that nearly 20 percent of those new players had begun to play within the previous two years.

The creation myth associated with the poker boom credits the improbable victory of a prophetically-named Tennessee accountant, Chris Moneymaker, in the 2003 World Series of Poker (WSOP). Other accounts source James McManus’s 2003 book Positively Fifth Street and the 1998 poker film Rounders. Still other, more mystical explanations refer to the game’s sudden “cultural resonance.”

But fads and surges of popularity come and go; these explanations hardly account for why, in a short amount of time, tens of millions of people suddenly flooded into a familiar—indeed, 150 year old—American card game, frenetically expending tens of billions of dollars on it. Nor do they explain why between 2007 and 2008 poker television programs were suddenly cancelled, tournaments saw a drop in participation, and many poker-related businesses scaled back or failed.

Austrian business cycle theory (ABCT) can, however, explain the origins and outcome of the poker bubble as well as its simultaneity with the housing boom, which, as will be demonstrated, are by no means coincidental…

(Read the rest at the Ludwig von Mises Institute)

War on the Federal Reserve?

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The Federal Reserve is no good. Its money monopoly has wrecked havoc for 100 years. So, I welcome currency competition from Virginia, although I’d prefer it came from the free market. That said, the Federal Reserve will continue to dominate as long as legal tender laws are in full effect. Here’s more on the war on the Federal Reserve from Fox News:

Virginia is one step closer to breaking ties with the country’s monetary system.

A proposal to study whether the state should adopt its own currency is gaining traction in the state legislature from a number of lawmakers as well as conservative economists. The state House voted 65-32 earlier this week to approve the measure, and it will now go to the Senate.

While it’s unlikely that Virginia will be printing its own money any time soon, the move sheds light on the growing distrust surrounding the nation’s central bank. Four other states are considering similar proposals. In 2011, Utah passed a law that recognizes gold and silver coins issued by the federal government as tender and requires a study on adopting other forms of legal currency.

Virginia Republican Del. Robert Marshall told FoxNews.com Tuesday that his bill calls for creation of a 10-member commission that would determine the “need, means and schedule for establishing a metallic-based monetary unit.” Essentially, he wants to spend $20,000 on a study that could call for the state to return to a gold standard…

(See the rest at Fox News)

What is the Most Valuable Piece of Currency?

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I’m willing to bet that many of you have held a $50 bill in your hands. Maybe even a $100 bill. But have you ever held a $500 bill? Or something even larger? What is the most valuable legal tender bill in existence today? And what about the fabled 100,000 dollar bill? Does it exist?

The Most Valuable Piece of Legal Tender = 10,000 Dollar Bill

According to Life’s Little Mysteries, the most valuable piece of legal tender in existence is the $10,000 bill. It was printed from 1928 to 1946 and featured Salmon Chase. Chase was chosen for creating the modern system of banknotes by introducing the greenback, which was the first U.S. federal currency. Interestingly enough, he later expressed regret for this after becoming Chief Justice of the Supreme Court.

After World War II, the Treasury stopped printing any bill with a denomination over $100. Thus, the $500, $1,000, $5,000, and $10,000 bills were consigned to the dustbin of history. The Federal Reserve made the discontinuation official on July 14, 1969. While the Fed destroys these bills when they see them, “they remain legal tender while in circulation.”

Thus, you could technically waltz into your favorite store, fill up your cart, and whip out a $10,000 bill to pay for everything. But you’d be foolish to do so (and it’s doubtful that the store would take you seriously anyways). According to the most recent figures I could find, there were just 336 $10,000 bills known to exist as of May 30, 2009. There are 342 $5,000 bills, 165,372 $1,000 bills, and an unknown number of $500 bills. Due to their scarcity, these denominations command large prices among collectors. I found one site that’s asking $98,500 for a fine example of a $10,000 bill.

The Fabled 100,000 Dollar Bill?

However, there’s one bill that boasts a larger denomination than the Chase bill. That is the fabled 100,000 dollar bill (actually a gold certificate) featuring President Woodrow Wilson. For those of you who know about the Federal Reserve and Wilson’s role in creating that institution, this should come as no surprise.

Guerrilla Explorer’s Analysis

The Treasury printed 42,000 of these 100,000 dollar bills between December 18, 1934 and January 9, 1935. They were never released into general circulation and instead, were used by Federal Reserve Banks to facilitate transactions with each other. This form of business changed during the 1960s and most of the 100,000 dollar bills were destroyed. There are a few surviving copies, one of which currently resides at the Smithsonian Museum of American History.