Is Credit Card Debt an expansion of the Money Supply?

[Steven Douglas]

Try to stay on topic, Steve.

Cute deflection and absolute avoidance of our subtopic of this topic, which is germane, and therefore very much on topic, Mr. Flag-who-is-not-the-OP.

FRBN are not IOU's...

The operative deflection word being "are", as opposed to "were" - which would have a different answer, and was the basis of the question I asked, which you completely and deliberately dodged.

And from that deliberate repeated non-answer, the actual answer (which everyone knows anyway) becomes self-evident.

 

[Black Flag]

The operative deflection word being "are", as opposed to "were" - which would have a different answer, and was the basis of the question I asked, which you completely and deliberately dodged.

Steven,

Let's end the confusion.


FRN are not, and never have been IOU's and are in circulation.

They are the only type of U.S. banknote that is still produced today and they should not be confused with Federal Reserve Bank Notes.

Certificates represented a certain mix and amount of ore.

FRN represent themselves. FRN were never, ever, never represented anything else - they did not represent "gold" or "silver" or anything.

FRBN were removed from circulation by 1945.

United States Notes, Certificates, etc. which look about the same, called the same thing, have the same pictures are are the same size but are not FRN.

Most people are confused about this - since the reason for the similarities is completely purposeful - so to confuse the people into thinking they are the same thing.

But they are not the same thing.

PS: I have, myself, muddled them up too in my abbreviations using FRBN instead of FRN - though essentially the same thing.

http://en.wikipedia.org/wiki/Federal_Reserve_Bank_Note

http://en.wikipedia.org/wiki/Federal_Reserve_Note

 

[rpwi]

FRN are not, and never have been IOU's ...FRN represent themselves. FRN were never, ever, never represented anything else - they did not represent "gold" or "silver" or anything.

This is not true. On the wikipedia page you referenced, you can see the different issues:

http://en.wikipedia.org/wiki/Federal_Reserve_Note#Series_overview

The 1914, 1918 and 1928 series clearly explain that they are redeemable in gold (albeit at the Treasury Department). This was not a 100% gold backing...but a fractional backing. Similar to how banks operate now.

The 1934 series clearly is off of the public gold standard as FDR dropped the gold standard for FRN's. The international standard remained...until Europe (especially France) traded their FRN's (and Federal Reserve Deposits) for gold. Because FRN's were on a fractional based system off of gold...Nixon really didn't have a choice but to take us off of the gold standard as it was going to happen on its own anyways.

Steven has a very good point. Why is it that bank deposits on top of dollar reserves are not money...but when the FR deposits and FRN's are fractionally based off of gold (as late as the Nixon era)...then FRN's are? They are both fractional banking. One is on a private level and the other on the a federal level.