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The author is professor of economics at NYU but this is beside the point.
No, it is the point, because your esteemed professor is just as ill-informed as you are since neither of you seem to grasp two key differences:
1) The Zimbabwean Dollar was not recognized by the BIS as a valid currency; and
2) Because the Zimbabwean Dollar was not accepted by any country other than perhaps one or two of Zimbabwe's neighboring States, it could not sell treasury securities.
Got it?
You're comparing a State whose currency is not internationally recognized with a State whose currency is the de facto international reserve currency and the de facto international currency of trade.
To add insult to injury, you're comparing a State that cannot sell treasury securities with a State that does.
Now that you're informed, perhaps you can fire off an email to your esteemed professor and educate him.
As long as the public debt (and federal reserve notes) are underwritten by 330+ million human resources, via FICA, there's little chance of the uSA becoming Zimbabwe.
...
Of course, if a substantial number withdraw from FICA, and cease underwriting the CONgress' profligate behavior, the debt will no longer have enough collateral, and collapse the funny munny system.
Let's see, Argentina has defaulted on their sovereign debt 9X, a tenth time coming, and, from what I understand, people are still breathing, eating, working down there.
Lucky us, we can sell of the Hawaiian and Alaska islands one by one.
The author is professor of economics at NYU but this is beside the point.
Actually, he is not.
He is not on the faculty of NYU's Economics department.
He does not hold a PhD in Economics, the generally accepted credential to be considered "an Economist."
Actually, he doesn't hold a PhD in any discipline whatsoever; he just has a BS degree.
Actually, he is not a professor at all - he is an "adjunct" -- in this case sort of a lay person without the formal credentials or education.
Actually, he's not really even an adjunct. He's an "Assistant Adjunct" in NYU's School of Professional Services. You can't get much lower on the academic totem pole.
Some people claim to be economists but are not, so it is always good to check credentials.
By the way, he's not the first. There's Jared Bernstein, who was appointed by Joe Biden to a brand-new position. From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Biden in the Obama Administration (why Biden needed an economic advisor separate from the White House's excellent staff of economic advisors is a different topic.)
It turns out Jared Bernstein has an BA in Music, an MA in Social Work, another MA in Philosophy, and a PhD Social Justice. He possesses no formal education or training in Economics.
Last edited by RationalExpectations; 06-14-2020 at 12:31 PM..
Let's see, Argentina has defaulted on their sovereign debt 9X, a tenth time coming, and, from what I understand, people are still breathing, eating, working down there. [Are they collateral on the US debt? No? Then why use them as an example?]
Lucky us, we can sell of the Hawaiian and Alaska islands one by one. [Nope. No government that is trustee for public property can sell it to creditors.]
I've never worried about our foreign debt.[If you are an obligated party, you should be very very worried]
MINI MONEY PRIMER
=\=\=\=\=
The following about money is only in reference to American law.
REAL MONEY - Money which has real metallic, intrinsic value as distinguished from paper currency, checks and drafts.
- - - Black's Law Dictionary, Sixth Ed. p. 1264
MONEY - In usual and ordinary acceptation it means coins and paper currency used as a circulating medium of exchange, and does not embrace notes, bonds, evidences of debt, or other personal or real estate. Lane v. Railey, 280 Ky. 319, 133 S.W. 2d 74, 79, 81.
- - - Black's Law Dictionary, Sixth Ed. p. 1005
NOTE - An instrument containing an express and absolute promise of signer (i.e. maker) to pay to a specified person or order, or bearer, a definite sum of money at a specified time. An instrument that is a promise to pay other than a certificate of deposit. U.C.C. 3-104(2)(d)
- - - Black's Law Dictionary, Sixth Ed. p. 1060
FIAT MONEY. Paper currency not backed by gold or silver.
- - - Black's Law Dictionary, Sixth Ed. P.623
TENDER - An offer of money ... Legal tender is that kind of coin, money, or circulating medium which the law compels a creditor to accept in payment of his debt, when tendered by the debtor in the right amount.
- - - Black's Law Dictionary, Sixth Ed. p. 1467
. . . . .
Federal Reserve NOTES
“ The said notes shall be obligations of the United States ...and shall be receivable ... for all taxes, customs, and other public dues.”
- - - Title 12 USC Sec. 411
AS an obligated party, the government must accept its own notes in lieu of lawful money. What about the rest of us?
Can you GUESS what made "all the rest of America" into obligated parties?
Here's a HINT:
CONTRIBUTION - ... The share of a LOSS payable by an INSURER when contracts with two or more insurers cover the same loss... The sharing of LOSS or payment among SEVERAL...
--- Black's Law Dictionary, Sixth Ed., p. 328
....
Enumerated human resources who sign up with the Federal Insurance CONTRIBUTIONS Act are obligated parties on the debt, since they SHARE the loss, thus making those FRNs into "their" notes... and LEGAL TENDER.
"Federal reserve notes are legal tender in absence of objection thereto."
MacLeod v. Hoover (1925) 159 La 244, 105 So. 305
All duly enumerated American socialists cannot object to the tender of the notes that THEY are obligated parties to. (thanks to FICA)
FRNs are NOT MONEY but are legal tender on the obligated party of those notes - the Federal government (12 USC Sec. 411) . . . AND the 330 million enumerated socialists (Social Security Act of 1935).
Recapping:
● Lawful money = gold / silver coin (aka real money)
● Money = lawful money or currency (i.e., certificates which are receipts for real money in the vault)
● Notes are not money, by law, nor are they "fiat" because they're debt (negative value)
Holding a note in your hand does not give it face value. It may be legal tender at face value to an obligated party on said note, but that does not give it value.
If you emit an IOU, "I, John Doe, owe the bearer one dollar," what value does it have? Did you give a dollar to the note holder? No. You gave nothing of value - only a promise to pay in the future. Not fiat. Minus one dollar.
Until the note is extinguished by redemption, it is a minus value.
• Fiat currency is not debt, is not minus, and is not redeemable.
• Notes are not fiat, being redeemable, in lawful money.
Repudiated notes of a bankrupted government underwritten by 330 million human resources, via FICA, are still not fiat.
BUT if you are an obligated party (via FICA) on said note, beware when the creditor comes after you and yours!
Federal Insurance CONTRIBUTIONS Act (Social Security Act) is not insurance for the participant.
In two important cases, Helvering v. Davis and Flemming v. Nestor, the U.S. Supreme Court ruled that Social Security taxes are simply taxes and convey no property or contractual rights to Social Security benefits. Benefits are at the sole discretion of Congress. FICA was never insurance for you, but for the bankrupted U.S. government, who gratefully bribes all those who survive long enough to enjoy the ‘entitlements' of Socialist InSecurity, a most vile Tontine scam to "tax and bribe" a nation into compliance with self-enslavement.
How does it work?
"Contributors" are liable to pay claims made against the bankrupted U.S. government, via FICA taxes. In other words, all participants, as underwriters, are not only liable to pay their own claims, they owe on everybody else's claim. Isn't socialism wonderful !?
[sarcasm flag off]
Agreed. Having spent time with several of these Fed officials recently, they grasp these concepts quite firmly.
Not so sure about that myself:
Quote:
The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost.
-- Nov. 21, 2002, Ben Bernanke, Chair of the Federal Reserve 2006 to 2014.
Yes indeed, and in the context of the U.S. Constitution Mr. Bernanke’s boastful quip about digital money might raise some eyebrows:
“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law;”
(Art 1, sec IX)
The money the Fed creates is not taken from the Treasury.
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