The Big Debate: Greenbackers vs. Goldbugs


“If one creates money out of thin air and then lends what did not exist before, charging interest and obtaining physical assets as collateral, then that is in reality a model for theft.” – Dr. Prof. Franz Hörmann, University of Vienna

Creation of money out of thin air” is not by itself the problem. The problem is the private lending of these newly existing claims, the charging of interest on them, and the obtaining of physical assets as collateral and the power financiers to return money back into thin air. Not enough money is left in circulation for borrowers to meet their debt obligations which results in transfer of wealth produced in the business sector and earned by the household sector ending up in the hands of financial sector creditors whose only claim to it all is their ability to manipulate credit with a monopoly in making our purchasing power appear and disappear at will.

Biblical Law very clearly identifies usury and debt as being profoundly powerful instruments of personal and national enslavement; so much so that the penalty for charging usury is death. Likewise, divine law demands the nullification of all debt every 50 years in order to assure that no such situation (as that which we currently face) will never occur among an obedient and faithful people.

Greenbackers vs. Goldbugs

The battle to expose the Federal Reserve has been long and arduous. It finally appears that after nearly 100 years of absolute economic control and near complete debasement of the dollar, the Fed’s reign may be coming to an end. Its eventual demise is certain according to Black Swan author Nassim Taleb and others. With all the recent mainstream talk and speculation about the end of the Fed, it is time to debate solutions for the future of America’s currency. This may indeed be the most important discussion of our lifetime.

First, we must be aware that the Federal Reserve, along with other foreign private central banks and the IMF, have long had plans for a global currency. This is not conspiracy theory mumbo-jumbo anymore, but rather cold hard fact. Lew Rockwell wrote an excellent article summarizing the IMF’s push for a global currency – the Bancor. The recent international currency war may be the beginning of creating a false demand for something more stable for international trade. As all major currencies race to the bottom, the private banking cartel will surely offer their global solution. We know what their solution will be – continued debt slavery with more centralized control – but what will the people’s solution be?

Gary North wants gold in our pockets

Ellen Brown is for fiat money

There seems to be another currency war brewing right here in America. The debate between the two most popular proposed solutions of adopting the Greenback or the Gold Standard has just officially begun. Last week, Gary North, a Goldbug and author of Honest Money, wrote a scathing attack of Web of Debt author Ellen Brown, a Greenbacker. He took select samples from her book in an attempt to tie her public bank solution to Hitler, but failed to address the “interest-free” philosophy of her policy. Despite that, he does manage to frame the Goldbug’s argument against the Greenback, or public banking, as inferior:

Brown is a Greenbacker. She is open about this. Most people have never heard of Greenbackism. It has been a fringe movement in American political life ever since the 1860s. The Greenback Party in the 1870s was the first American political party to come out in favor of a pure fiat money economy, a paper money system controlled by Congress with currency irredeemable in gold coins or silver coins.

The Greenbackers are committed to paper money. They are opposed to any form of gold standard. They are opposed to fractional reserve banking. They are opposed to central banking, unless the central bank is 100% owned and controlled by Congress.

A rebuttal piece was then written by Interest-Free Currency activist Anthony Michgel [actually spelled Migchels — DE ] in defense of Brown and the Greenbackers where he goes after North and claims interest-bearing gold can never work:

What it is all about is the Goldbug people versus the Interest Free Money crowd. It is one of the most crucial debates around. As I have mentioned before both on this site and elsewhere, Gold is the preferred currency of the Banking Fraternity and they plan to reinstate it in their world currency, which is coming closer every day….

…North has managed to do something profoundly dishonest and unwise. In this enormous article of his he actually does not mention the problem of interest at all.

This is so totally unfair to Brown’s work, because this is surely one of the most important aspects of her narrative….

Interest free money, either printed debt free by the Government or through interest free credit either by private organizations or again by the State, is simple, proven technology and centuries old.

Yes, many systems have been abused resulting in inflation.

No, interest bearing Gold is definitely not an acceptable solution.

Passions already seem to be running high in the opening round of this most critical debate that surely will shape the future of our economy and society. Notably, both sides of this argument are in agreement that the Fed is a corrupt organization that must be ended. North acknowledged that Ron Paul and Ellen Brown share this common ground, but says the Tea Party movement (liberty movement) has “no economic understanding” and “They cannot distinguish Ron Paul’s opposition to the FED, based on the gold coin standard, from Ellen Brown’s opposition, based on a fiat money standard. They are intellectually defenseless.”

It seems a bit arrogant of North to suggest that the liberty movement is confused about why Ron Paul and Ellen Brown support ending the Fed, and it’s also disingenuous to say that one side of the growing movement is “intellectually defenseless” because of disagreements about the solution. Especially when Brown’s public banking movement appears to be immediately workable and is gaining ground as the first pragmatic step being to establish state banks — as proven in North Dakota, which has a state-owned bank and boasts the lowest unemployment and the only budget surplus of the United States.

The public banking movement opposes the Federal Reserve, like Paul, because it is unconstitutional, but also for a variety of other intellectually defensible positions, starting with the fact that they are a private monopoly who care not for Americans or the country. There are very real concerns that this group of banksters may maintain dominance of a gold-based system since they already have possession of most of the world’s gold – including much of the mining as well. Furthermore, if they can continue to create money on a fractional basis – even if backed partially by gold – and can continue to charge and determine interest, they’ll still possess the power to enslave-by-debt people, industry, and entire nations. Finally, the private profit motive of international banksters, driven by interest, has historically proven to encourage wars as evidenced by their funding of both sides of all wars. This would also seem to give them dubious power to determine the outcome of those wars.In turn, it’s a given that the liberty movement supports the restoration of the Constitution which clearly states that the coinage of money shall be in gold and that only the elected Congress is authorized to issue and control it. However, the Constitution says nothing of allowing a fractional reserve gold standard run by private bankers which is promoted by some Goldbugs. Furthermore, some Constitutionalists still maintain the strange notion that the government should belong to the people. Therefore, if we were able to restore the Constitutional principle for a government of, by and for the people, it would seem that interest-free currency issued and controlled by our elected government would be considered more constitutional than the current system.

It is true that gold has been valued in society for thousands of years and it will likely continue to maintain its terrific investment value for the foreseeable future. Gold clearly has a physical value derived from the incredible energy it requires to mine and refine it. But gold, as a limited resource, is interest bearing and can be hoarded by those with the wherewithal to do so. This would seem to suggest that gold could then be manipulated by the few who control vast sums of it. And that sounds a lot like the economic tyranny we face today with the private Fed.

North attacks Greenbackers because they “are opposed to central banking, unless the central bank is 100% owned and controlled by Congress.” As if to say, how dare the people demand ownership of their own currency. It shows a blinding distrust for Constitutional government and obvious preference for private banking interests. Goldbugs seem caught up on the fact that a unit of exchange must have intrinsic value, either backed by gold or as an instrument of debt, or both. They feel so strongly that fiat currencies are utterly unreliable, but spend little time discussing the motive behind the interest and supply manipulators. Additionally, it is unfair to suggest that fiat currencies are not redeemable in gold, as any widely acceptable unit of exchange can be traded for gold. Currently, one can buy an ounce of bullion for around 1400 Fed-deflated U.S. fiat Dollars.

I don’t want people to get the wrong impression. I believe gold is a great investment, especially in these turbulent times. And I also believe gold has a place in securing America’s currency. However, I worry that those who hold dear that a currency must be backed partially by gold in order to have legitimacy are susceptible to supporting a global currency if it includes gold as part of its currency basket. Perhaps I’m naive, but I’m not sure why a combination of the two solutions is not feasible, with interest-free paper Greenbacks redeemable in gold or silver, while also producing silver and gold coins for circulation – all tightly controlled by Congress, not a private organization, as per the Constitution. After all, Fort Knox is supposed to be the people’s gold, right?

Benjamin Franklin said that the American war for Independence was fought over money and currency (like every war) and the right of the Colonies to issue their own usury free currency apart from the Bank of England:

“That is simple. In the Colonies, we issue our own paper money. It is called ‘Colonial Scrip.’ We issue it in proper proportion to make the goods and pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one.”

“The refusal of King George to operate an honest colonial money system which freed the ordinary man from the clutches of the manipulators was probably the prime cause of the Revolution.”

“The Colonies would gladly have borne the little tax on tea and other matters, had it not been that England took away from the Colonies their money, which created unemployment and dis-satisfaction.”

(In a conciliatory letter to a friend after the American Revolution, “Bulletin”, February 1989 & November 1991 issues, P.O. Box 986, Ft. Collins, CO 80522).

Instead of the interest free notes they issued as evidence of debt to each other, and which they used as a currency which will never multiply debt in proportion to the circulation, the colonists were required to use notes issued by the Bank of England on which they were required to pay interest. Franklin reported, “Within a year, the poor houses were filled. The hungry and homeless walked the streets everywhere.

Biblical Injunctions Against Usury (sample):

25If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury. (Exodus 22:25, King James Version)

36Take thou no usury of him, or increase: but fear thy God; that thy brother may live with thee. (Leviticus 25:36, King James Version)

37Thou shalt not give him thy money upon usury, nor lend him thy victuals for increase. (Leviticus 25:37, King James Version)

19Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of any thing that is lent upon usury: (Deuteronomy 23:19, King James Version)

20Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the LORD thy God may bless thee in all that thou settest thine hand to in the land whither thou goest to possess it. (Deuteronomy 23:20, King James Version)

43The stranger that is within thee shall get up above thee very high; and thou shalt come down very low.

44He shall lend to thee, and thou shalt not lend to him: he shall be the head, and thou shalt be the tail. (Deuteronomy 28:43-44, King James Version)

7The rich ruleth over the poor, and the borrower is servant to the lender. (Proverbs 22:7, King James Version)Prophet Solomon’s words

Rev. 12:9: “It’s the same fatal bite of that old Serpent the Devil  and Satan which deceiveth the whole World”

8And prevailed not; neither was their place found any more in heaven.

9And the great dragon was cast out, that old serpent, called the Devil, and Satan, which deceiveth the whole world: he was cast out into the earth, and his angels were cast out with him. (Revelation 12:8-9, King James Version)

27Thou oughtest therefore to have put my money to the exchangers, and then at my coming I should have received mine own with usury. (Matthew 25:27, King James Version)

7Then I consulted with myself, and I rebuked the nobles, and the rulers, and said unto them, Ye exact usury, every one of his brother. And I set a great assembly against them. (Nehemiah 5:7, King James Version)

10I likewise, and my brethren, and my servants, might exact of them money and corn: I pray you, let us leave off this usury. (Nehemiah 5:10, King James Version)

5He that putteth not out his money to usury, nor taketh reward against the innocent. He that doeth these things shall never be moved. (Psalm 15:5, King James Version)

8He that by usury and unjust gain increaseth his substance, he shall gather it for him that will pity the poor. (Proverbs 28:8, King James Version)

2And it shall be, as with the people, so with the priest; as with the servant, so with his master; as with the maid, so with her mistress; as with the buyer, so with the seller; as with the lender, so with the borrower; as with the taker of usury, so with the giver of usury to him. (Isaiah 24:2, King James Version)

10Woe is me, my mother, that thou hast borne me a man of strife and a man of contention to the whole earth! I have neither lent on usury, nor men have lent to me on usury; yet every one of them doth curse me. (Jeremiah 15:10, King James Version)

8He that hath not given forth upon usury, neither hath taken any increase, that hath withdrawn his hand from iniquity, hath executed true judgment between man and man, (Ezekiel 18:8, King James Version)

13Hath given forth upon usury, and hath taken increase: shall he then live? he shall not live: he hath done all these abominations; he shall surely die; his blood shall be upon him. (Ezekiel 18:13, King James Version)

17That hath taken off his hand from the poor, that hath not received usury nor increase, hath executed my judgments, hath walked in my statutes; he shall not die for the iniquity of his father, he shall surely live. (Ezekiel 18:17, King James Version)

12In thee have they taken gifts to shed blood; thou hast taken usury and increase, and thou hast greedily gained of thy neighbours by extortion, and hast forgotten me, saith the Lord GOD. (Ezekiel 22:12, King James Version)

Quranic Injunctions Against Usury (sample):
Al-Baqarah 2:275 Those who charge usury are in the same position  as those controlled by the devil’s influence. This is because they claim  that usury is the same as commerce. However, God permits commerce,  and prohibits usury. Thus, whoever heeds this commandment from his  Lord, and refrains from usury, he may keep his past earnings, and  his judgment rests with God. As for those who persist in usury, they  incur Hell, wherein they abide forever

Al-Baqarah 2:276-280 God condemns usury, and blesses charities.  God dislikes every disbeliever, guilty. O you who believe, you shall  observe God and refrain from all kinds of usury, if you are believers.  If you do not, then expect a war from God and His messenger. But  if you repent, you may keep your capitals, without inflicting injustice, or incurring injustice. If the debtor is unable to pay, wait for a better time. If you give up the loan as a charity, it would be better for you, if you only knew.

Al-Imran 3:130 O you who believe, you shall not take usury,  compounded over and over. Observe God, that you may succeed.

Al-Nisa 4:161 And for practicing usury, which was forbidden,  and for consuming the people’s money illicitly. We have prepared  for the disbelievers among them painful retribution.

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Published in: on November 9, 2010 at 4:52 am  Comments (2)  
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2 CommentsLeave a comment

  1. I noticed this blog as a result of a pingback to ‘In Defense of Ellen Brown’.

    You may also be interested in an article I just published: ‘Is Gold God’s Currency?’
    http://realcurrencies.wordpress.com/2010/11/08/is-gold-gods-currency/

    • Will be interested to read it and share with the people that are interested in this topic.


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