"The Secret of Oz" by Bill Still

[ich1baNMember]

I saw a comment and concern about Bill Still’s Secret of Oz youtube video and I thought it would be prudent to start a thread to allow people to watch the movie and comment here and then I will attempt to answer the person’s question:

http://www.youtube.com/watch?v=7qIhDdST27g

Question from Counterpartyrisk:

http://www.silverdoctors.com/open-letter-to-cftc-regarding-gold-manipulation/

“Marshall,

Are you 427? I just finished watching The Secret of Oz, which was posted 2 or 3 days ago by 427. I was hoping to discuss it a bit. It appears to be a better option than currently in place, but it spends a lot of its time bashing gold.

I agree banks should not be allowed to lend money they do not have.

I agree that we should not be paying interest on paper money created from thin air by individuals, but the movie advocates continuing allowing individuals to create paper money from thin air. It makes no difference if the bankers or the politicians are creating paper money. Paper money is debt, whether or not it needs to be repaid. Paper money is a claim on assets with intrinsic value. Until that claim is executed, it is a claim on something.

Wealth is not created by me or anyone writing a $ on a piece of paper, it really makes no difference if the paper has to be repaid.

The movie states that printing money creates wealth as long as it does not have to be repaid – false. 
It also says that the bankers can control the supply of gold money – false (only in short or medium term, then they will no longer have any gold left).
It states gold is not money – false.

Let’s look at the example of Rome making coins out of copper and bronze and valuing them above their fair market value of the metal. If my copper coin is worth its weight in silver, due to manipulation by the government on the price of copper coins, it will cause a flow out of all silver from the market. The government would be required to use force to stop that flow out of silver, sort of the way the US government did this with gold and forbidding private ownership.

The movie also forgets to discuss (unless I missed it) international trade. Would the US government (or any government) be willing to transfer all of their gold to any country that will print enough paper money to pay for it?

The movie seems to be a Keynesian economics propaganda piece. Prosperity cannot be printed.”

Here is my answer:

Hi CounteryParty Risk,

First, your concerns of the video were my initial thoughts as well. Why isn’t this guy giving gold and silver it’s rightful respect as money and a way to control monetary expansion. Now, I will go over some valid points that Mr. Bill Still does highlight:

First, he does make the distinction that the real reason wealth erodes is b/c of the manipulation caused by a central banking syndicate that uses “Fractional-Reserve Banking”. This is very true. If you take more time to think about it, it is true that you can have a currency that is representative of the population growth and productive capacities of the country without having it backed by gold and still holding value. The problem is the distortion caused by Central Banking’s Fractional Reserve System. 

However, once you take care of the FRBing you can either issue currency by the Treasury without private ownership of a central banking cabal or you can have that same US Treasury set the standards and weights of gold and silver to represent currency in the economy. Now, he does give respect to William Jennings Bryan’s attempts to allow silver into the market as a competitor. The problem of the gold money advocates vs. the free silver advocates in my opinion is misguided; there should be a “bi-metallic” standard where gold and silver represent the currency as they both trade in-sync and are precious metals that have decent amount of stocks. 

Now, with all that said Mr. Still (no pun) still favors a return to Lincoln’s Greenback which is still a little shaky as he does not cover this issue adequately. He does talk about the Talley Stick system in England for a while which does hold some water, but the only problem is that this system still does not represent money. Wood and paper (really 90% cotton) money are representative of something that can be counterfeited as it is easier to make replica’s. With proper care gold and silver through assaying and other detection methods (electrical and harmonic frequencies, water buoyancy tests, etc) can be verified as authentic 100% of the time. Also, wood and paper backed by nothing can still fall to the predation of consumer confidence even if the general public knows the money is not being expanded, people can act irrationally and still lose faith in the currency if they are afraid of counter-party banking risks such as the creation of synthetic and toxic assets and derivatives. 

In conclusion, Bill Still’s heart is in the right place but he tends to lean onto a greenback system such as Lincoln’s. He is right that the crux of the problem not only lies within a central bank and it’s moral hazard issues, but that Fractional Reserve Banking is the true devil as it allows banks to loan out money (ie debt) and then package that debt with other debt and loan it out as debt and have other banks then take that debt and receive debt based on that debt all b/c of the Central Bank’s of the world allowing private banks to create money based off a credit on the bank’s balance sheet up to 10x more than the value thereof.

[counterpartyriskMember]

It is very strange to be promoting a paper currency and pretending it is different and more valuable then the current paper currency.  Trade should be settled at the time of the transaction, as in a warehouse receipt or physical gold/silver.

Either he is confused or a talking head.

[ich1baNMember]

CP,

But you have evidence that societies used monetary systems that did not rely on gold or silver such as the talley sticks in England which was well established for over 600 years and worked well. The problem was that the central banksters of the time hated it b/c you couldn’t expand the money supply the way they wanted to. 

Now, with that said I would still agree that gold and silver represent a more natural form of money b/c it has been used much longer than any other form….. And quite frankly if we do go back to a metallic standard… it should be the Egyptian style Silver was more valuable than gold in their system!

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