Eden Hill Journal

Comments, dreams, stories, and rantings from a middle-aged native of Maine living on a shoestring and a prayer in the woods of Maine. My portion of the family farm is to be known as Eden Hill Farm just because I want to call it that and because that's the closest thing to the truth that I could come up with. If you enjoy what I write, email me or make a comment. If you enjoy Eden Hill, come visit.

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Location: Maine, United States

Wednesday, March 11, 2009

Parsley Sage Rosemary and Rhyme

My chosen title today has nothing to do with what I will be writing. It came about as a typo in a chat window this morning, nothing else.
What really IS on my mind at the moment is a letter posted by Juan Cole in his blog this morning written by Chas Freeman. The letter speaks for itself.
I'm going out on the limb a bit here by citing Chas Freeman as a man worthy of my attention, not because he doesn't have an amazing resume, he does, and not because he doesn't see things the way I have come to see them, he does - this from 2006 when Bush was still firmly in power. I'm going out on the limb because I haven't followed the controversy that led Freeman to withdraw yesterday from consideration to chair the National Intelligence Council.
However, I tend to believe what Freeman is claiming, that it was the Israeli lobby which drove him out. The letter is worth a read.

Monday, March 09, 2009

New Money

A March 3 article in the International Herald Tribune states that the Bank of England may soon start buying government bonds, corporate bonds, and "commercial paper" with new money to ease the credit crunch brought on by the world economic crisis.
It's hard to wrap your head around this kind of power but I've been trying recently to do just that. Silly little questions pop into my head when I think about this level of power, such as:
Why is it that the Federal Reserve can earn interest on government debt when the Federal Reserve has the power to simply create new money with a few keystrokes on some magic computer somewhere?
If money is in short supply, why don't we just print new money and inject it into the economy by spending that instead of taxing the existing money supply?
Why is it that when the government does do that, it winds up owing interest on that money in perpetuity to unspecified and generally unidentified "investors"? Since there are no actual investors in the Federal Reserve Bank, where does this interest money go?
Does the Federal Reserve Bank have vaults filled with money? If so, why? Whose money would that be? If not then where does the interest money on US Treasury debt held by the Federal Reserve Bank go?
Why do we use this system in the first place? If we do it to protect the value of our money, then why does gold cost so much more now than it did when we ceased using it as the basis for our currency? That's what we call protecting the value of our currency?
How much new money could the Federal Reserve inject this way into the economy before it triggered inflation? If there's some headroom here, then why aren't we doing it?
Oh, yeah, right... We ARE doing it! That's what the stimulus package is. That's what deficit spending is. Two questions, though. Why do taxpayers wind up paying interest into perpetuity by doing it this way and why are Republicans against doing this?
Perhaps this article will help - Creating New Money by James Robertson. Also this article from a link in the previous one - HOW PRIVATE, COMMERCIAL, NATIONAL and INTERNATIONAL MONEY is CREATED; abridged from the works of Michael Rowbotham.
By the way, if ever the right by nations to print their own currencies is terminated and a central international currency is established, the owners of that currency would virtually dictate the entire world. No doubt this has been the dream since the days of the Phoenicians. Carthago delenda est!