Peter Schiff: the Fed, fractional reserve banking, FDIC, health insurance, and education 8/7/09

[feelthewyrd]

Schiff supports FRB. How is that gold backed money? It is a multiplying factor of commercial money to central bank money by definition. FRB is a license to create money that banks aint got! The issuing of such licenses is transparently corrupt. Citizens arent allowed to multiply money using FRB with their friends

FRB functions just as easily with fiat or gold currency if the central banks are complicit. Schiff clearly states that he supports the expansion of the money supply by a central bank.

[tothemax01]

@feelthewyrd Debt is not money. Deposits are debts owed by banks to customers. Money can be settled no further, debt can, therefore debt is not money. All citizens are within their rights to write 'My loans' on a notebook, and issue and accept debt by writing dues into the book - this is all banks do, and this is what merchants historically did. 'Gold backed money' is no money at all. Gold is the money, the banknote is a debt contrac, and the backing of the banknote is contract law.

[feelthewyrd]

@tothemax01

debt is money if it is exchangeable for cash or goods. Debt created by banks under the FRB system IS legally exchangeable. A debt loaned to a customer can be deposited in another bank under FRB, & then relent again just like any other deposit. It makes no difference if the customer deposits a loan (created by another bank) or cash. Both are valid deposits & both can be used to create a loan or buy something. Therefore under FRB debt is money just like cash. That is FRB

[PositiveMoneyUK]

A biggest public campaign has started to abolish fractional reserve system. Visit POSITIVE MONEY website and support the campaign.

[20Proff]

Hey AroundSun, that quote is lifted from zeitgeist. You would have to have written that down or been watching it at the time. Lol. True though...

[AroundSun]

Amongst all of social institutions we are borned in, directed by, and conditioned with, there seems to be no other system taken for granted and so misunderstood as the monetary system. Taking on nearly religious proportions, the established monetary institution exists as one of the most unquestioned forms of faith there is. How money is created, the policies by which it is governed, and how it truly effects society are unregistered interests of the great majority of the population.

[TheAttackRat]

People should be made aware of FRB and it should be allowed to continue at people's own risk.

So, for example. lets say we abolish the FED but allow FRB to continue ONLY if those banks made it clear what it was doing, and how much will be kept on reserve. Perhaps people will continue, but it would likely lead to banking collapses and then people will start trusting only high reserve banks, and full reserve banks.

[deltapunk21]

The purpose was not beneveolent it wasa creature of the communists namely Wilson and his gang to destroy American banking.

[PontiffMystic]

I don't agree with FRB personally. I agree with Rothbardian view of FRB in that FRB banking is just legalized embezzling. Such embezzling is illegal in other types of commerce such as grain storage. Since made illegal to issue paper backed fractional grains, bankruptcy involving grain vanished. Fed standardized FRB, and the government made it legal, when it should of been made illegal versus legal. Inflationist support FRB. There is no such thing as full reserve these days. Extinct.

[dimaniak]

Without FRB supply of money = supply of gold. With FRB supply of money > supply of gold.

As result price go up while bankers get their iterest rate for FREE! Borrowers can pay less interest rates. But WHOLE society suffers. FRB is a fraud!

[dimaniak]

*prices

[bajoverga]

Schiff isn't FOR FRB. He's for FREE MARKET solutions. The 19th century is full of examples of bank panics that were CAUSED by Banks issuing too much paper and not having enough reserves. that is a risk that each bank takes. they can make more money, but if they get a run they're out of business for good. That's a GREAT free market check and balance.

[dimaniak]

it's not when they lend more money than they've got from clients then both banker and borrower become THIEVES! They are stealing from the rest of society.

[capemaychange]

@bajoverga Exactly! The guy's a libertarian at heart. If people want to invest their money in a bank that only holds fractional reserves that's their economic right. It's probably an idiotic move under most circumstances but the point is that it's NOT the federal government's responsibility to regulate banks.

Now, if a bank lies about it's reserves to a client that's fraud and will be prosecuted in the court of law. Still, buyer beware.

[PersianPaladin]

Customers cannot regulate the banks now.

Fractional reserve banking CREATES INFLATION, and it should be illegal.

[RocinanteSWS]

I like Schiff, but he's a little bit naive when it comes to central banking and it's intent. It was always designed to corrupt a government. Not the other way around. It's a fixed game that eventually filters all wealth to the top, gradually eliminating the middle class, so all that's left is the wealthy owning everything and poor people enslaved to them. He needs to read up on our history, and exactly what our founding fathers really said about the evils of central banks.

[Stevo2444]

It seems Schiff is for Free Banking.He may be naive on why the FED was founded but the important thing is he supports abolishing it. HE realizes it is a rigged game now, regardless of whether he thought it was rigged back then. I was discussing the economic crisis with the friend.I told him most derivatives were interest rate derivatives.And he goes,"Isn't it a conflict of interest that private shareholders set the interest rates and then create derivatives based on whether they go up or down?"

[NoisemakerArrow]

He's fully aware of why the Fed was created, but if you start saying "The stinking Rothschilds put this shit in place to enslave us", the media owned by the aforementioned Rothschilds will immediately try to run you out of town.

[capemaychange]

@RocinanteSWS He just doesn't want to sound like a conspiracy theorist and lose votes. He supports auditing the Fed. And we all know a true audit would result in the FR being abolished the next day. Even Bernanke admitted it!

[pee6984]

I would disagree with him on fractional reserve banking. The periods in american history when we didn't have a central bank we still had many depressions every 20 years or so because commercial banks were able to lend out their fictional commercial bank notes expanding the money supply. I am for a 100% gold backed currency. NO atificial expansion of the money supply and you will end the boom bust cycle. Other than that I still support the man. Lets get rid of that crook Chris Dodd. Schiff 2010!

[ExquisiteDoom]

I would go as far as to say that you could manipulate the market with speculations and create mini-bubbles that way even without a central bank. But with a gold backed currency, it gives enough discipline to greatly lower the impact of every bubble. Meaning people get to rebuild without losing their life worth of earnings. It would at the very least half derivative shennannigans and leveraging for free (bailouts -_-). Thought i'd add to your comment :D

[PersianPaladin]

I agree with you that ending fractional reserve banking will prevent the development of inflationary bubbles. However, with the gold standard you need to be very careful about deflation.

[ExquisiteDoom]

Agreed. But i beleive that fundamentally when people are exposed to reality (Gold standard) over being exposed to illusion (Fiat system) they will be rational, over irrational. If you think it's all good, you'll act relative to it, but if you know it's not, then reality takes it's toll. :)

[UmPhishMcGeek]

I love this guy, but he is wrong about two things: 1) The FED was created for nefarious purposes and the bill for it was written by the most powerful bankers of the day to transfer the loses of defaulted loans to the tax payers. (bailouts)

2) Banks deposits need insurance, BUT it should be provided by private companies who will implement moral hazard and only insure banks who have good business practices. (unlike the gov insurance which provides compulsory insurance.)

[ExquisiteDoom]

Doesn't Peter agree with both? I know he says he doesn't beleive in conspiracies but... we both know he can't tell the truth there :P And about insurances, didn't he just say exactly that? Just wondering if i misunderstood.

[UmPhishMcGeek]

I am sure he understands that banks need private insurance and just meant by his statement here that they shouldn't have gov insurance.

I would also bet he understands how and the real reasons why the FED was created; however, this would take so long explain and even to longer to convince people of. So he takes the short route to avoid this.

[ExquisiteDoom]

Ah, okay, that's what i thought. I totally agree with that. Schiff isn't dumb. :P

[painisanillusion7]

The private bankers met up secretly to draft the bill and presented it during Christmas when congress was on recess. That's what I call malicious intent. Look what the second bank tried doing. Peter Schiff is WRONG.

[ExquisiteDoom]

-_-. Give him a break, you know he's not serious.

[hazeee123]

Here we go again.. trying to win an election by preaching reason.

Haven't we learned this lesson yet? When Schiff will go on a major old media TV show they are going to tear him apart like they did Ron.

What he needs to get into his head is that even though we need him for his beliefs and stand points it will take something else to get elected.

What exactly you ask your self? Deceiving images on link tv

[MetalMilitiaESP]

lol, that was me asking about fractional reserve banking. I froze up and got nervous and stumbled :(

[victoriaous]

Bravo, Amazing, this man makes so much sense. Get this man in Congress, we need minds like this in government, so he can shrink it.

[fatjohn1408]

senate he might run for senate

[rawful]

What date did the fundraising start on?

[LeeKwangEng]

Does not matter when it starts, the money bomb is today!

[rawful]

I mean for determining the total amount for what the new record is.

[rawful]

Peter is going to demolish that fundraising record.

[m72mc]

Peter go go