In another video, Peter Schiff goes to Occupy Wall Street to debate some of the people out in the street. With his “I am the 1%, let’s talk”, the arguments begin. My favorite is the watching the woman’s face at 2:50.

View the full version of this video.

I want to highlight a few pieces that a found particularly entertaining.

The Federal Reserve is accountable to the Congress for two objectives–maximum employment and price stability, on an equal footing.

While those stated objectives are accurate, accountability is questionable. With unemployment reaching 10% and a 100-year record of depreciating the dollar by over 95%. If they are accountable, Congress isn’t holding them to it.

From the Associated Press:

During a speech Tuesday in Boston, Bernanke said the steps the Fed took during the crisis proved to be successful.

Really? Successful? By what measure? Didn’t you just say that the economy was  “close to faltering”?

A Reuters article from 4 October states that:

Earlier this month, Bernanke told members of Congress that the economy “is close to faltering.” He assured lawmakers that the central bank was prepared to take further steps to try to bolster economic growth.

Also from the Associated Press:

Minutes of the Sept. 20-21 meeting reflected the policymakers’ uncertainty over why the economy is struggling to grow and create jobs more than two years after the recession has ended.

So which one is it? Did your steps prove to be successful? Is the economy close to faltering? Do you just not know what’s going on? Does it even matter if you aren’t accountable for the things you do?

The Liberty Dollar was a private currency produced by Bernard von NotHaus and his organization NORFED (National Organization for the Repeal of the Federal Reserve and Internal Revenue Code). The Liberty Dollar served as warehouse receipts for real gold and silver until it was shut down following a raid by the FBI and Secret Service. The website for Liberty Dollars now reads  “Site Removed Due to Court Order.”

According to Wikipedia, “VonNotHaus was charged with one count of conspiracy to possess and sell coins in resemblance and similitude of coins of a denomination higher than five cents, and silver coins in resemblance of genuine coins of the United States in denominations of five dollars and greater, in violation of 18 U.S.C. § 485, 18 U.S.C. § 486, and 18 U.S.C. § 371; one count of mail fraud in violation of 18 U.S.C. § 1341 and 18 U.S.C. § 2; one count of selling, and possessing with intent to defraud, coins of resemblance and similitude of United States coins in denominations of five cents and higher, in violation of 18 U.S.C. § 485 and 18 U.S.C. § 2; and one count of uttering, passing, and attempting to utter and pass, silver coins in resemblance of genuine U.S. coins in denominations of five dollars or greater, in violation of 18 U.S.C. § 486 and 18 U.S.C. § 2″

Based on these charges, VonNotHaus was trying to counterfeit US currency. VonNotHaus must be the stupidest counterfeiter ever. Rather than producing a replica of currency at a lower than face cost, VonNotHaus was producing a similar currency that was actually worth the face value of what he was “counterfeiting”. According to the prosecuting attorney, Bernard von NotHaus is a domestic terrorist.

Attempts to undermine the legitimate currency of this country are simply a unique form of domestic terrorism. While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country. We are determined to meet these threats through infiltration, disruption, and dismantling of organizations which seek to challenge the legitimacy of our democratic form of government.
U.S. Attorney Anne Tompkins

I’m not arguing whether the printing of Liberty Dollars is or should be legal. I’m criticizing the word choice of U.S. Attorney Anne Tompkins.

Terrorism is defined in the following ways:

• Princeton Wordnet: the calculated use of violence (or the threat of violence) against civilians in order to attain goals that are political or religious or ideological in nature
• Cambridge dictionary: (threats of) violent action for political purposes
• Encyclopedia Britannica: the systematic use of violence to create a general climate of fear in a population and thereby to bring about a particular political objective.

According to U.S. Attorney Anne Tompkins, this includes ‘Attempts to undermine the legitimate currency of this country’

All previous definitions share two things in common. The need for a political objective and the use or threat of violence. VonNotHaus clearly had political motivation behind the distribution of Liberty Dollars, but by no definition did he use or threaten to use violence. If Tompkins is expanding her definition to include inciting fear, then she should go after roller coaster manufactures and makers of horror movies. If she is focusing on threatening the economic stability of this country – which is not a crime – she should go after the federal reserve itself. Creating repeated recessions and destroying the value of the currency by diminishing its buying power by 96% seems to fit the bill.

NORFED has been openly and publicly issuing Liberty Dollars into circulation for 10 years. Suddenly, it’s a crime that is a ‘clear and present danger to the economic stability of this country’.

Tomkins also criticizes VonNotHaus for his ‘anti-government activities’ and his his attempt to ‘challenge the legitimacy of our democratic form of government’. Neither of these are crimes. By the nature of democracy and free speech, VonNotHaus has the right to challenge the legitimacy of our democratic form of government. It’s not against the system, it’s an inherent part of the system. Criminalizing VonNotHaus’ actions is the real crime.

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As of August 31, 2010 the total institutions on the troubled bank list reached 829. This is a 100% increase over the 416 banks on the list at the end of August 2009. The 829 institutions on the troubled bank list account for over 10% of all FDIC insured banks.

United States Constitution – Article One, Section Ten

No state shall… coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts

The principal author and “Father of the Constitution” James Madison agrees.

Paper money is unjust; to creditors, if a legal tender; to debtors, if not legal tender, by increasing the difficulty of getting specie. It is unconstitutional, for it affects the rights of property as much as taking away equal value in land. It is pernicious, destroying confidence between individuals; discouraging commerce; enriching sharpers; vitiating morals; reversing the end of government; and conspiring with the examples of other states to disgrace republican governments in the eyes of mankind.

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George Washington

Paper money has had the effect in your State that it ever will have, to ruin commerce–oppress the honest, and open a door to every species of fraud and injustice.

George Washington letter to Jabez Bowen – 9 January 1787

Thomas Jefferson

Paper is poverty,… it is only the ghost of money, and not money itself.

Thomas Jefferson letter to Colonel Edward Carrington – 27 May 1788

Abraham Lincoln

No duty is more imperative on the government than the duty it owes the people of furnishing them with a sound and uniform currency.

Lincoln during the Log Cabin campaign – 1840

Alexander Hamilton

To emit an unfunded paper as the sign of value ought not to continue a formal part of the constitution, nor ever hereafter to be employed; being, in its nature, pregnant with abuses, and liable to be made the engine of imposition and fraud; holding out temptations equally pernicious to the integrity of government and to the morals of the people.

Alexander Hamilton – Resolutions - June, 1783

Andrew Jackson

In reviewing the conflicts which have taken place between different interests in the United States and the policy pursued since the adop tion of our present form of government, we find nothing that has produced such deep-seated evil as the course of legislation in relation to the currency. The Constitution of the United States unquestionably intended to secure to the people a circulating medium of gold and silver. But the establishment of a national bank by Congress with the privilege of issuing paper money receivable m the payment of the public dues, and the unfortunate course of legislation in the several States upon the same subject, drove from general circulation the con stitutional currency and substituted one of paper in its place.

Andrew Jackson -  Farewell Address – 1837

Thanks to Lawrence Parks and his lecture for the idea.

Alan Blinder then claims that “Ben Bernanke got a lot of things right”. When prompted by Schiff to name one thing that Bernanke got right, Blinder says that he doesn’t have enough time. That’s right, not enough time to name one.

Schiff then rattles off that,

he [Benanke] said that there was no housing bubble, and then that even if we have a decline in the housing market its not going to have a meaningful impact on employment. He said that the subprime mortgage problems were contained, that we didn’t have to worry about it. I can’t think of one thing that he got right. Not only was he wrong, he was as wrong as you can possibly be on a grand scale.

In this short video, Schiff also explains the effect of savings in China on spending in the US, a response to Bernanke’s Global Saving Glut.

To read the whole book… buy it online | read it for free

Our Enemy, The State
by Albert Jay Nock, 1935

If we look beneath the surface of our public affairs, we can discern one fundamental fact, namely: a great redistribution of power between society and the State.

It is unfortunately none too well understood that, just as the State has no money of its own, so it has no power of its own. All the power it has is what society gives it, plus what it confiscates from time to time on one pretext or another; there is no other source from which State power can be drawn. Therefore every assumption of State power, whether by gift or seizure, leaves society with so much less power; there is never, nor can there be, any strengthening of State power without a corresponding and roughly equivalent depletion of social power.

Every positive intervention that the State makes upon industry and commerce has a similar effect. When the State intervenes to fix wages or prices, or to prescribe the conditions of competition, it virtually tells the enterpriser that he is not exercising social power in the right way, and therefore it proposes to confiscate his power and exercise it according to the State’s own judgment of what is best.

The process of converting social power into State power may perhaps be seen at its simplest in cases where the State’s intervention is directly competitive… It is obvious that private forms of these enterprises must tend to dwindle in proportion as the energy of the State’s encroachments on them increases, for the competition of social power with State power is always disadvantaged, since the State can arrange the terms of competition to suit itself, even to the point of outlawing any exercise of social power whatever in the premises; in other words, giving itself a monopoly.

Thus the State “turns every contingency into a resource” for accumulating power in itself, always at the expense of social power; and with this it develops a habit of acquiescence in the people. New generations appear, each temperamentally adjusted–or as I believe our American glossary now has it, “conditioned”–to new increments of State power, and they tend to take the process of continuous accumulation as quite in order. All the State’s institutional voices unite in confirming this tendency; they unite in exhibiting the progressive conversion of social power into State power as something not only quite in order, but even as wholesome and necessary for the public good.

In the last section of the book (page 38), Nock makes one of, what I believe to be, his most simple and insightful statements.

It is a curious anomaly. State power has an unbroken record of inability to do anything efficiently, economically, disinterestedly or honestly; yet when the slightest dissatisfaction arises over any exercise of social power, the aid of the agent least qualified to give aid is immediately called for.

Nock continues, making reference to the banking industry,

Does social power mismanage banking-practice in this-or-that special instance – then let the State, which never has shown itself able to keep its own finances from sinking promptly into the slough of misfeasance, wastefulness and corruption, intervene to “supervise” or “regulate” the whole body of banking-practice, or even take it over entire.

Withdrawal Notice
We reserve the right to require seven (7) days advance notice before permitting a withdrawal from all checking, savings and money market accounts. We currently do not exercise this right and have not exercised it in the past.

After receiving a lot of attention online, Citibank confirmed the notice with the following comment:

When Citibank moved to unlimited FDIC coverage in 2009, we had to reclassify many checking accounts to allow for immediate withdrawals in order to ensure all customers qualified for the additional coverage. When we moved back to standard FDIC coverage with most major banks in 2010, Citibank decided to reclassify those accounts back to make them eligible again for promotional incentives. To do so, Federal Reserve Reg D requires these accounts, called NOW accounts, to reserve the right to require a 7-day notice of withdrawal. We recently communicated this technical requirement to our customers. However, we have never exercised this right and have no plans to do so in the future.

While Citibank claims to have no plans to enforce this rule, its good to know that it exists.