HERBERT G PETERS
Andrew Jackson Democrat
Candidate for US Senate,
California

 

34 US Senate Candidates on the Ballot.

 

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Money Money Money

 

Genesis 13:2 And Abram (Abraham) was very rich in cattle, in silver, and in gold.

 

Examples of commodity money.

 

Deuteronomy 25:15 But thou shalt have a perfect and just weight, a perfect and just measure shalt thou have: that thy days may be lengthened in the land which the LORD thy God giveth thee.

 

We started with a precisely defined dollar; the dollar was defined by Congress in the 1792 coinage act as 24.1 grams of pure silver or 27.0 grams of standard silver. Section 19 of the Act established a penalty of death for debasing the gold or silver coins authorized by the Act.

 

But; from our beginning, the banks were allowed to create money in the loan making process – and we had inflation from the beginning. With inflation each dollar lost value and a few bank runs resulted; and because of bank runs, about 90% of that bank’s customers lost their entire deposits. A likely serious blow to those victims.

 

The Congress “fix” (more of a bandage – they did not fix the real problem – inflation) “the fix” was the “Federal Deposit Insurance Corporation” FDIC which is a promise that the government will cover your losses – up to their artificial limit.

 

The real fix; the Congress would deny the banks privilege to create money in the loan process. This method would be best for almost everyone; and it would give us very rewarding interest rates for money savers. Under this method a person can easily outperform the “Social Security” system.

 

Capital Gain

 

Capital Gain/Inflation the longer the term the bigger the tax. Example, grandpa, at age 20 buys property for $30,000; 60 years later he sells the property for 90 times what he paid for it. The capital gain; $2.7 million minus costs. If grandpa had made no improvements the gain would be $2.4 million.  ALL of the gain in this example was from inflation.

 

REPEAT: ALL of the gain in this example was from inflation.  

 

Grandpa pays 15% capital gain tax of $360,000. If we had zero inflation grandpa would pay zero tax.

 

This is a made up example of how people suffer at our current tax system.

 

The people are mostly better off with no inflation, although it is comforting when every year you count your blessings and you look at your house and say my house is now “Worth” double what I paid for it.

 

When sold, some may be subject to the capital gain tax and the money left over is about half the value of the money was worth when the house was purchased. The primary thought is to understand why some entities love inflation – because of their gain from your inflation.

 

The idea is that we are better off with no inflation. I will work for zero inflation.

 

What Is Money?

 

Money is an article of “value” (or promise of value) that can be easily and precisely traded for other valuable materials. Money can be made of paper, or junk metal, or can be a number on a signed check (each of the three representing a promise of value), or precious metal which has intrinsic value. If there is integrity; the substance does not matter.

 

To prepare for the revolutionary war the Continental Congress borrowed what they could, were subsidized by France and printed paper “Continentals” as needed. The Continental had a Promise statement on the note that is was redeemable in gold or silver (dollar for dollar).

 

The expediency of the war needs inflated the supply of the “Continental” and partly accountable to the lack of understanding of the Congress of the “Continental” instrument, it became virtually worthless at the end of the war. The silver and gold coins existing then maintained value because they have value in themselves. (Commodity Money)

 

During our many years before about 1965 we mostly used precious metal coins and silver certificates and checks; and the people endured the inflation; and as time moved we developed faith in the silver certificates and the idea that our money was backed by precious metals.

 

The shift to fiat money

 

In 1965 the government ended circulation of the silver certificates and in 1968 it terminated redemption of silver certificates for silver and silver certificates are treated as federal reserve notes. Since 1970 all coins minted for circulation as currency are clad coins with no silver content.

 

Since the termination of precious metal backing of our money we have possibly completed the circle and are coming close to repeating the “Continental” which people lost faith in and it lost almost all of its value.

 

The government, between 1981 and 2016 has inflated the M2 money supply, from $1.8 trillion in 1981 to $12.4 trillion in 2016. That is approximately a 19% per year increase in the money supply. With these huge increases in currency it moves a person to think of Weimar, Republic, now known as Germany and the possibility of hyper inflation here.

 

There nothing intrinsic about gold or silver that makes one form of money more preferable over the other. The real issue is the control of how many dollars exist and the integrity of the government. Our Congress has failed the integrity test; therefore, I am for restoring precious metals to our currency; and fixing the supply of money.

 

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