Jennifer Yourdon,

Ray and I have been discussing the stability of the banking system on this thread:

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000ub0

I am not an economist and I wanted an economist to comment on some articles Ray posted on the thread about our fiat banking system. I believe I see some weaknesses in the reasoning behind the articles and I wanted an expert opinion. I called Mr. Decker to comment on this and now I would like your opinion as well.

I hope you have time to read the thread and the two articles Ray had asked me to read. I would be particularly interested in hearing your comments on whether our banking system is a scam destined to fail, y2k or no y2k.

Let me apologize for imposing on your time by asking you to comment on this. If you do not answer I will assume that you either didn't see this thread or you have other pressing engagements that must take priority over commenting here.

Robin Messing

-- Robin S. Messing (rsm7@cornell.edu), June 07, 1999

Answers

LOL

Robin, welcome to the Illuminati! The best thing about this conspiracy is that by the time you understand it, you realize you are part of it.

-- Adam Weiskaupt (I@in.pyramid), June 07, 1999.

Dear Mr. Messing, I'll assume that you are sincere. Your two articles contain so many incorrect assumptions that I would have no idea where to start. Yes I know the way to eat an elephant is one bite at a time, but I'm not very hungry at the moment.

I suggest you start by reading the following books. Fiat Monetary Inflation In France by Andrew Dickson White, 3,000(?) Years of Wage and Price Controls(out of print, try http://www.mxbf.com), A Monetary History of the United States by Rose and Milton Friedman for starters.

I suggest you also research fiat monetary history and note that no fiat money system lasts very long. For the US you can start the clock when Nixon closed the gold window, so far we are breaking the record. Now by last I mean that the currency retains its purchasing power. You might want to look at the French money's purchasing power right before and after the defeat of Napolean and compare it to other overthrown governments.

I'll see if there are online resources for various US laws that you will find of interest on this topic.

Current figures that you'll want to research is the percentage of profit of the top 10 US banks from the derivatives market. Also compare the capital exposure of those same banks as ratios of falling stock market prices on the derivatives that they hold. Ie., a fall of the stock market of X% eliminates Y% of the bank's capital.

-- Ken Seger (kenseger@earthlink.net), June 07, 1999.

Fiat money is like a Fiat automobile. It will break down when you need it the most! Fix It Again, Tony. It this case, Fix It Again Alan.

-- Mr. Adequate (mr@adequate.com), June 07, 1999.

Ken,

Thank you for the reading recommendations. I took out the books by Friedman and White from the library today. I'll read the White book this weekend. The Friedman book is long so it could take me a while to plow through it.

I especially appreciate the Andrew Dickson White book. I work at Uris Library on the Cornell campus. White was the first president of Cornell University and we have a room in the library named after him. The room is one of the nicest rooms on campus and Andrew Dickson White's desk resides there. It would be indeed an interesting development if the book you recommended to me was written on the desk that is located in the building where I work.

-- Robin S. Messing (rsm7@cornell.edu), June 09, 1999.

Jennifer Yourdon is getting married this month--may even be this weekend. Anyway, a June bride, and probably isn't spending much time reading this board.

-- fake (fake@out.com), June 09, 1999.