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  • Understanding Fiat Money

    Because of the interest in the thread "On the Cusp" (about gold and silver and fiat money) I have decided, following the request of some via emails, to set up a new thread dedicated to explaining just what fiat money is and who controls it. When you put aside half an hour and watch these Youtube videos linked below you will see why our monetary system is so corrupt and why the big banks (like Bank of America, J P Morgan and Goldman Sachs) are "too big to fail". It is J P Morgan in particular that has been manipulating gold and silver prices by shorting them with "paper trades". If you watch these videos you will understand why.

    This could be the most important thirty minutes you have spent in a long, long time and will give you a very good insight into how flawed fiat money (the cash in your bank account) is and why the system is "off the rails".

    I would encourage others to add their video clip links and comments on this subject to this thread....

    1) What is fiat money .. excellent easy to understand 10 minute video: YouTube - Money As Debt - How our Banking system works.
    (Fiat money as no real value - that's why you can just print more of it)

    2) Two minute video on who owns the Federal Reserve Bank, IMF and World Bank: YouTube - Who owns the Federal Reserve Bank!
    (A private cartel of major US banks... who created the fiat system.)

    3) Five minute video exposing the secretive Federal Reserve Bank: YouTube - Exposing the Federal Reserve
    (The financial system is unconstitutional)

    4) Seven minute BBC video on the corrupt agenda of the World Bank and IMF and its four stages of manipulating states: YouTube - World Bank creating poverty (BBC Newsnight)
    Includes a comment on Drug companies who for years prevented people in South Africa suffering from aids getting drugs... operating under World Bank WTO rules... people just died and they did not care.

    5) Seven minute video on the move by the big banks towards a global currency: YouTube - The move towards a global currency

    6) Three minute video - So who owns South Africa? : YouTube - Who owns South Africa?
    (Demonstrates how gold is being literally stolen from South Africa by the big banks through the fiat system)

    In short, the global economy - including South Africa - is run by Wall Street bankers who have no interest in your welfare. Inflation is used as a form of private taxation that continually devalues your wealth and puts it in the hands of the ultra rich banking families.

    In these videos is the disturbing comparison of Tanzania with 25 million people and a GDP of just US$2.2 billion and Goldman Sachs sharing annual profits of US$2.2 billion among just 160 wealthy shareholders.

    Kind regards

    Scott Balson
    Last edited by ndoa18; 05-11-10, 23:59.

  • #2
    Hi Scott,
    "6) Three minute video - So who owns South Africa? : YouTube - Who owns South Africa?
    (Demonstrates how gold is being literally stolen from South Africa by the big banks through the fiat system)"

    watched the above YouTube video and find fatal flaws with it. Just two off-hand:
    (a) the statement "the Bank of England owns the South African Reserve" simply cannot be true. The SARB is owned by the South African Government and minority shareholders of whoever wishes to buy such shares (when they become available). I would suggest you read "Noseweek", which has shed great insight into the workings of the SARB. Also, the South African Government has recently passed legislation that defangs these minority shareholders.
    (b) the video said that overseas banks buy shares in SA gold mines, then manipulate the share price downwards to cause financial distress to the mines. A low share price does not cause financial distress to a company, only a low price for its the buying and selling of gold shares would seem to me to be the least effective way of manipulating the gold price?
    Mike Klee


    • #3
      Agreed but the thrust of the argument is correct.

      Hi Mike

      Pleased you picked that up!

      I am not suggesting that that video is without fault but the general thrust is correct. I would suggest that the private ownership of any state's central bank is NOT good - and that is what I am trying to point out. The SARB has a limit of 10,000 shares for any investor - out of just 2,000,000. The Reserve Bank of any country should be run by government seeing that its income comes from tax payers paying back public debt. It isn't. In the US (the global currency) the Federal Reserve Bank is owned by the major banking families and banks (who remain anonymous) - and if they sneeze South Africa catches a bad cold - see video two.

      Look at video one and the ACTUAL value of FIAT MONEY then consider how gold and silver prices are manipulated lower by PAPER TRADES on Wall Street - and that is S Africa's assets going overseas at a bargain discount price. That, to me, is theft. The IMF and World Bank (referred to in the video) are flag bearers for the major US banks and do not have your best interests at heart...

      If I had found a video on who owns South Africa which was without any faults I would have linked it.

      PS from a recent press release by the S A Reserve Bank you can sense the frustration shareholders.. Letter to Shareholders Have you ever heard of a public company being accused of corruption and theft and no comment in the media? And this is not any public company... see the other videos on how the media knowingly cover up the fiat system.

      This Business Day report linked here and quoted below gives an insight into the shareholder's concerns... South Africa: Reserve Bank Bill Process Challenged

      Cape Town — The Reserve Bank was pushing through amendments to its founding act with "unseemly haste", Charl Kocks, head of African governance ratings agency Afrika Ratings, told MPs yesterday.

      His criticism adds to the chorus of complaints by disgruntled Bank shareholders who object to the proposed amendments, intended to limit their power to elect representatives to the Bank's board.

      Does anyone know who is on the SA Reserve Bank's board and who they represent? Apparently the President (Zuma) appoints the governor, three deputies and three of fourteen directors.

      Interesting background on the SARB here:

      Kind regards

      Scott Balson
      Last edited by ndoa18; 06-11-10, 09:28.


      • #4
        The Bigger Picture

        PS I am not claiming to be an expert on the S A Reserve Bank - I am not.. maybe someone here is...

        I don't want us to lose sight of the bigger picture - see the other videos.

        So I will leave this part of the debate to others.

        Kind regards

        Scott Balson
        Last edited by ndoa18; 06-11-10, 09:33.


        • #5
          There is a defintely a general lack of understanding on how the financial system works. Here is the first of many installments I have on this topic. I can clarify these as necessary if anyone is interested. The analysis I wrote is written from the standpoint of the United States, but there is no substantive difference from one country to another, if any. The primary purpose of this analysis is to explain the dynamics of inflation and deflation and indirectly, who benefits from either.

          Defining money

          To most, this should not even need definition but before there can be any discussion on the prospects for inflation or deflation, it is necessary to define our terms.

          So what exactly is money? Today it is almost entirely fiat currencies issued by national central banks and treasuries. Most people think in terms of the paper notes they carry around but in actuality, the vast majority of the “money supply” is electronic debits and credits recorded in the computer systems of your financial institution.

          The first point I am going to make here is that contrary to the opinions of most people and specifically financial professionals and economists, there is no difference between money and non-money. It is purely arbitrary and artificial.

          In the modern era, “money” is the fiat currency issued by the central bank but historically, it has generally been gold and silver but also other base metals plus occasionally, other items. In theory, it could be ANYTHING, whatever the private economy decided if there was a free market in money. Due to practical considerations gold and silver have been the choice due to (1) scarcity (2) portability and of high value (3) divisibility.

          Today, most supposed “money” is actually NONE of these. There is little “money” in use in the financial system. The same applies to the “money supply”. The vast majority of the “money supply” is actually CREDIT and DEBT. If you ask someone where they have their money, they will tell you (as examples) in a bank account, the stock market or a bond. NONE of these are “money”. They are in actuality LIABILITIES of the issuer which must almost always first be sold before you can actually obtain ACTUAL “money”.

          Defining inflation

          This is another term which to most people is apparently obvious, but it isn’t either. There are two primary definitions of inflation.

          The first and technically correct one is an expansion of the money supply which today in actuality really means an expansion of outstanding credit.

          The second is an increase in prices which in actuality is the RESULT of credit and monetary inflation. For purposes of this discussion, I will use the term credit inflation for the first and price inflation for the second.


          • #6
            No John!

            Hi John

            I normally agree with you and really enjoy and respect your input but I have two points of difference with your last post.

            The first point I am going to make here is that contrary to the opinions of most people and specifically financial professionals and economists, there is no difference between money and non-money. It is purely arbitrary and artificial.
            Gold and silver have since the beginning of time been recognised as having value in themselves (ie a silver coin has an asset value in itself - the silver). Fiat currency is based on debt and (today) has nothing but future taxation of the masses supporting its value. Fiat money is at the whim of traders and speculators. Reminds me of some Biblical references regarding the money lenders in the temples - in my view they have just refined the process.

            And.. silver should be several thousand dollars per ounce .. if you accept the argument in this video .. it's all about manipulation by Wall Street. ) P S this video is just over a month old and the silver price then was under US$21...... it has gone up nearly 25% since then.

            Defining inflation
            Inflation is clearly a form of taxation with the profits (from our loss in value of assets) going to the central banks - ie not to support the community as it should be.

            It is because of this private taxation gold and silver have exploded in value - demonstrating just how we have been screwed ever since we went off the gold standard. The profits from "private taxation" land up in the hands of the major shareholders of the banks running the Reserve or Central Banks.

            In effect investing in gold and silver takes the manipulation of the banks out of the picture and (in my view) in light of the impending fiat currency implosion, gives those who hold gold and silver a head start.

            John, according to many commentators fiat money is unconstitutional in the US (representing the global currency) - I would be interested in our comments on:

            a) is that true?
            b) why are the public not aware of this fact? and
            c) just what the constitution actually says on this issue (the system of money)

            This video on Youtube seems to make a lot of sense:

            Kind regards

            Scott Balson
            Last edited by ndoa18; 08-11-10, 08:34.


            • #7
              The Banksters

              This video just about sums up corrupt fiat money: YouTube - Waiting for the Next Financial Meltdown

              Kind regards

              Scott Balson


              • #8
                Dangerous Times

                My intuition is freaking me out.

                We live in very dangerous times.

                The western media is controlled by Wall Street interests and do not tell the whole truth; the major banks in the US are now facing ruin through gold and silver short selling; quantitative easing has destroyed the US dollar's role as the global currency - its collapse is in virtual freefall (Wall Street in action); banks are closing down all over the US ... hundreds this year, and; despite the US Reserve Bank's "printing presses" going mad sufficient jobs are not being created in the US.

                What we have now is a growing class of poor in the US, a shrinking middle class and a tiny but extremely affluent and privileged wealthy class who are "too big to fail".

                In effect the super-wealthy bankers have become the aristocrisy of old. The Kings, Queens and their offspring live in castles built on screwing everyone else through their control of Fiat Money. We know that the US Senate is controlled by the lobby groups (despite Obama's shallow promise) and laws are enacted to protect their masters. And the money men will not let go of their wealth or influence without a fight.

                Sovereign debt in Europe is getting very much worse but the media have pushed this reality under the carpet. Fiat Money is in general collapse.

                Zoellick's comment overnight is as concerning as the first admission by the media in the 1990s, after years of denial, that "globalisation was a reality" .. and was of course "good for the plebs (you and me)". (See this post on BoB re Zoellick:

                The President of the World Bank is now signalling the basis of a global currency.. incorporating a few major first world currencies. China, the world's emerging financial superpower, is left off the basket suggested by Zoellick. If you look at all the world wars they have all been sparked by financial issues. Today we live in a world where guided missiles and unmanned aircraft form the first strike force - they are sophisticated weapons that will kill millions. In the Middle East we have the Sunni and Shia tearing the guts out of each other in divided Iraq. Israel, the West Bank and Iran is the wildcard. And then we have growing global poverty - which always leads to unrest, and as traditionally stable countries face instability the food and medical support they have given third world countries will dry up as self-interest prevails.

                The world is historically long overdue a major world war and the next one, whenever it happens, will be a duzie. In my view the next ten years will either see

                1) trade becoming more regionalised and localised (ie less global ownership, more nationalisation) with a gold based financial system replacing a failed FIAT money system - but, I believe, that this can only come as the result of a world war involving the US, China, the Middle East and Europe - because it will take this sort of global disruption for the Wall Street money power to lose its current control over the world,

                2) there will be a single global currency replacing all our state currencies (ZAR, Au$, Euro etc) with the banking aristocrisy completely controlling us like serfs - and, within the next 50 years, identification microchips under our skin monitoring our every transaction and move.

                I will say no more but that we live in very dangerous times and, sadly, the first option is, in my view, in the best interests of our grand children.

                NOTE: These comments are based on my intuition and research but have no factual basis.

                Kind regards

                Scott Balson
                Last edited by ndoa18; 09-11-10, 10:04.


                • #9
                  Shill Financing

                  We have all heard about shill bidding but how about a new term you heard first here on BoB?

                  Shill Financing

                  Citibank is one of the major banks in the US which was bailed out by the tax payers in that country following the global financial collapse. Of course the Au$ is strong so guess what is now happening as a result?

                  In the last three months I have had a cascade of unsolicited credit card applications from Citibank (the Australian arm) wanting me to take out their credit card with guaranteed facilities of thousands of dollars - no questions asked. They have all landed up in the shredder - as did the one received today.

                  Why is this important? CNBC (a US based finance cable program owned by General Electric - owned by the big banks) was talking earlier today about the major banks in the US using their wins from quantitative easing not to help their own economy but to look for opportunities in "emerging markets in Asia". I guess that now includes us.

                  Here is the fraud - quantitative easing is backed by US tax payers aimed at stimulating employment. However, the big banks are taking that money offshore to maximise their own profits. How does that help the struggling US tax payer? It doesn't.

                  Fiat money is a complete fraud and the US$ is rubbish!

                  Kind regards

                  Scott Balson
                  Last edited by ndoa18; 10-11-10, 07:37.


                  • #10
                    Its simple mathematics

                    The video clips below exposes the flaws of fiat money and inflation.... arithmetic takes away any argument suggesting that fiat money will survive.

                    So why did the greedy central banks develop a mortally flawed system knowing it would fail?

                    You must watch these.....

                    Youtube clip - part one (10 minutes): YouTube - The Most IMPORTANT Video You'll Ever See (part 1 of 8)

                    just after two minues in this part he talks about the impact of inflation on the value of your money, pension, share values.. it will blow you away! YouTube - The Most IMPORTANT Video You'll Ever See (part 2 of 8)

                    Remember when gold was backing currency (eg gold sovereign) there was no inflation for hundreds of years.

                    Remember inflation is a form of taxation levied by the central banks on us!!!!

                    Kind regards

                    Scott Balson
                    Last edited by ndoa18; 14-11-10, 11:49.


                    • #11
                      The facts according to Scott

                      NOTE: These comments are based on my intuition and research but have no factual basis.
                      Scott, you are truly amazing.




                      • #12
                        Facts and predictions..

                        Hi Derick

                        Let me explain. Nothing that is in the future can be predicted factually.. that's why we use the word predicted. Events from the past can be recorded factually - often this requires research.

                        Hope this helps.

                        Kind regards

                        Scott Balson
                        Last edited by ndoa18; 15-11-10, 00:13.


                        • #13

                          To answer your question on the constitutionality of US fiat money, I am not a constitutional "expert" but yes, I absolutely believe that the PRIVATE or at least QUASI-PRIVATE issuance of federal reserve notes is unconstitutional. But then, the apologists for the system have probably gotten around this by first claiming that the US courts have already ruled on this issue. They have but I believe they simply made the incorrect interpretation. And second, its also possible that because federal reserve notes are not issued by the US Treasury that this is why it is technically "legal".

                          The US constitution, which I believe to be the ultimate legal document ever written, does not address central banks. Probably for the simple reason that there were enough signotories who opposed one. There were some, such as Alexander Hamilton as first US Treasury Secretary, who favored it. But to my knowledge, the First Bank of the United States (1796-1816) and Second Bnak of the United States (1816-1836) did not resemble the modern Fed. But it might not have been that different to the Fed prior to 1933 and I just do not know it since both were constrained by the gold standard.

                          As for inflation, it is a tax (and a fraud) but not specifically for bankers. Its really for those who have first access to money. Personally, since banks have both their assets and liabilities denominated in depreciating fiat currency, I do not see that this particularly gives them any specific advantage.

                          Here is the next concept to cover.

                          Financial Systems

                          There are two types of financial systems in existence today, a currency based system and a credit or fractional reserve lending system.

                          A currency based system is one where the money supply is composed of circulating money such as bank notes and coinage. In actuality, there is no economy which uses a pure currency system because every economy (to my knowledge) has some credit, but for purposes of this discussion, I will refer to a currency system as one which provides limited credit availability or where credit represents a much smaller proportion of the “money supply” and purchasing power equivalents compared to the “sophisticated” (Ponzi scheme) financial systems.

                          A fractional reserve lending system is where most of the “money supply” and purchasing power is composed of credit and debt. This is the (Ponzi scheme) system that dominates the global economy today.
                          Last edited by jwither; 17-11-10, 03:57.


                          • #14
                            The money trust

                            Hi John

                            This short video gives an excellent understanding of how the Federal Reserve came about in 1913:

                            The banking cartel: YouTube - G. Edward Griffin on the Federal Reserve System

                            As you will the financial system is based on fraud, is fraud and aimed at deceiving the wider population.

                            Here is another article on this subject:

                            So who owns the Federal Reserve?

                            And this is what the money trust/ money power want (another short video): YouTube - The inevitable collapse of the dollar

                            Yes, they want the US$ to collapse - they want a global currency THEY CONTROL - like the mainstream media who are supposed to keep YOU informed.

                            Kind regards

                            Scott Balson
                            Last edited by ndoa18; 17-11-10, 09:05.


                            • #15
                              I'm not a believer in conspiracies in the sense that some are. I believe there is an "open" conspiracy to create a world government because there are many influential people who favor it or seem to favor it. David Rockefeller is one even though he denied it for decades.

                              But at the same time, it is a mistake and an error to assume, as most apparently do, that those who are behind this movement are monolithic. They are not robots who are going to sacrifice their self-interest more than anyone else will which is why you see the division and strife in political organizations such as the EU now. When it comes to currencies, many or even most of these people would either be ruined or lose a fortune which is why I do not believe that most of them either want to or will destroy the USD or any other hard currency inentionally. Not only do they not want to but they cannot do so because none of them have the power to do so unilaterally. The post I wrote before on what Fed Chairman Ben Bernanke can and cannot do applies equally to everybody else.