People are funny about money and so is our government. The US government is funny with its money in that it ceaselessly prints more money to make up for spending shortfalls. No other country in the history of the world has gotten away with printing money in this way because the prices always rise with the printing and run away inflation makes the economy unstable. Eventually the house of cards collapses under its own weight. So how are we able to print so much money and and get away with it? I learned about how we are able to keep up the charade and much more by reading the book The Creature from Jekyll Island by G. Edward Griffin and will attempt to summarize it for you now.
The first puzzle piece is to understand the Federal Reserve Bank (the FED) and how it works. In 1913 Woodrow Wilson (who's presidency was funded by bankers) met with a limited number of the congress just before the holiday break and pushed through the Federal Reserve Act which set up the FED. The law turned over control of our national money supply from the US Treasury and handed this privilege exclusively to the FED. Bye bye US dollar, hello Federal Reserve Notes! The reasoning they gave to the people was to create a lender of last resorts which would stabilize the banking industry by lending to banks in need of reserves. This would eliminate the threat of bank runs and encourage people to keep their money in the bank. Nice little theory but why couldn't the US Treasury do this?
The FED is a private bank controlled by about a dozen shareholders. The FED essentially prints money when we tell it to and loans us back the money when we have shortfalls. Our budget shortfalls have been between $500 Billion and $1 Trillion for the past decade or so with total debt currently north of $22 Trillion. The loans come with interest which is how the FED generates income. By law 97% of the revenue the FED generates is given back to the US government but the FED keeps 3%. This 3% of revenue is equivalent to roughly $5 Billion per year. To make matters worse the FED invests this money into treasury bills so it earns compounded interest on money it shouldn't have had in the first place. Of our total debt the FED currently holds roughly $2.5 Trillion of it. So roughly 11% of our total debt comes from an activity which could easily be handled by the US Treasury but instead is handled by a private group of gangsters skimming off the top.
The second puzzle piece was the greatest gift ever given to the American people. After we basically saved the world from outright fascism and Nazi Germany in WW2, the Breton Woods agreement setup the US dollar as the world currency reserve by pegging other currencies to it and in turn we pegged the dollar to gold. What this meant was that when countries wanted to purchase materials like oil, copper, timber, etc. from other countries they utilized dollars. So there was an immediate increase in demand for dollars because it was essentially the clearing currency for global commerce. This allowed the US to expand very quickly, build highways, infrastructure and become the international enforcer for globalism and combating communism. Costly wars in Korea, Vietnam, and in the middle east have driven us further into debt but still we didn't go bust. Other countries still needed dollars to buy stuff so our printing was essentially buried in international commerce. Over time we devalued our currency by decreasing the amount of gold that could be purchased per dollar to 25% of what it originally was until 1971 when Richard Nixon ended the charade altogether and the dollar was officially not tied to our gold reserves. From this point forward our currency was fiat and our deficit was no longer under control as shown in this graph.
There were some tough years in the US in the 1970's and 1980's. We essentially experienced inflation and stagnant economic growth or "stagflation" as it was affectionately known by. In the US we typically experience inflation when the FED wants to expand the money supply by printing money to cover debts. It also lowers the rate at which it loans money to other banks so those banks in turn loan it for lower interest rates to the rest of us. This typically gives us economic expansion but at the cost of higher prices. But the gig was up for the US internationally. To combat our careless printing of dollars, the major oil producing exporting countries formed a cartel (OPEC) and fixed the price of oil at a higher price. The dollar was in a tailspin and prices were going way up on everything. To combat the fall in the dollar the FED does what it usually does to strengthen the dollar and slow the economy by raising interest rates which decreased lending and further slowed growth.
During this stagflation time there was also decreased activity on the war front, although we did our best to make Russia the boogeyman so we could maintain our military spending during the "cold war". We really didn't recover until the 1990's and the technology boom that has essentially carried us into the current. We have lowered taxes on the rich and been at war in the middle east since 2001 which has sent our deficits really out of whack. All this time the FED gets richer and our spending power decreases which means we all have to work more to cover our basic needs. It didn't used to be that both adults had to work in a middle class household but now we do. Savings are basically non-existent in the US and our economy is almost entirely based upon us continuing to spend everything we make. People are stressed out and living on the edge financially speaking.
So what should we do about it? In the long run we need to take back control of our money supply from the gangsters. We need to eliminate the FED and walk away from our bogus debt to them. Realize that we have had leaders step up and say this in the past but they were killed for even mentioning it (JFK). But that shouldn't keep us from speaking up against tyranny.
We need currency competition at the local, state and international level. Monopolies of any kind are bad but especially currency monopolies. Crypto-currencies are an intriguing option I am keeping an eye on assuming we can keep control of them in the hands of the people and away from the gangsters, and that is exactly what block chain technology does. What makes a stable currency is controlled supply and mutually agreed upon acceptance by producers in exchange for their real output. This is the hard part of creating new currencies but the hard work that must be done if we are ever to end our economic slavery.
In the immediate future each of us can begin producing tangible goods and services that can be bartered with other producers. The gangsters want us to believe the bartering system is archaic but only because they want to maintain their % cut on all economic activity. When we all barter they don't get their cut because we don't use their funny money. Food is an excellent bartering option because everyone eats. As a farmer I barter with many other producers of non-food services which allows me to share my abundance and focus on growing food, which is what I am good at. It greatly simplifies my life and is my way of sticking it to the gangsters, one tomato at a time.
The first puzzle piece is to understand the Federal Reserve Bank (the FED) and how it works. In 1913 Woodrow Wilson (who's presidency was funded by bankers) met with a limited number of the congress just before the holiday break and pushed through the Federal Reserve Act which set up the FED. The law turned over control of our national money supply from the US Treasury and handed this privilege exclusively to the FED. Bye bye US dollar, hello Federal Reserve Notes! The reasoning they gave to the people was to create a lender of last resorts which would stabilize the banking industry by lending to banks in need of reserves. This would eliminate the threat of bank runs and encourage people to keep their money in the bank. Nice little theory but why couldn't the US Treasury do this?
The FED is a private bank controlled by about a dozen shareholders. The FED essentially prints money when we tell it to and loans us back the money when we have shortfalls. Our budget shortfalls have been between $500 Billion and $1 Trillion for the past decade or so with total debt currently north of $22 Trillion. The loans come with interest which is how the FED generates income. By law 97% of the revenue the FED generates is given back to the US government but the FED keeps 3%. This 3% of revenue is equivalent to roughly $5 Billion per year. To make matters worse the FED invests this money into treasury bills so it earns compounded interest on money it shouldn't have had in the first place. Of our total debt the FED currently holds roughly $2.5 Trillion of it. So roughly 11% of our total debt comes from an activity which could easily be handled by the US Treasury but instead is handled by a private group of gangsters skimming off the top.
The second puzzle piece was the greatest gift ever given to the American people. After we basically saved the world from outright fascism and Nazi Germany in WW2, the Breton Woods agreement setup the US dollar as the world currency reserve by pegging other currencies to it and in turn we pegged the dollar to gold. What this meant was that when countries wanted to purchase materials like oil, copper, timber, etc. from other countries they utilized dollars. So there was an immediate increase in demand for dollars because it was essentially the clearing currency for global commerce. This allowed the US to expand very quickly, build highways, infrastructure and become the international enforcer for globalism and combating communism. Costly wars in Korea, Vietnam, and in the middle east have driven us further into debt but still we didn't go bust. Other countries still needed dollars to buy stuff so our printing was essentially buried in international commerce. Over time we devalued our currency by decreasing the amount of gold that could be purchased per dollar to 25% of what it originally was until 1971 when Richard Nixon ended the charade altogether and the dollar was officially not tied to our gold reserves. From this point forward our currency was fiat and our deficit was no longer under control as shown in this graph.
There were some tough years in the US in the 1970's and 1980's. We essentially experienced inflation and stagnant economic growth or "stagflation" as it was affectionately known by. In the US we typically experience inflation when the FED wants to expand the money supply by printing money to cover debts. It also lowers the rate at which it loans money to other banks so those banks in turn loan it for lower interest rates to the rest of us. This typically gives us economic expansion but at the cost of higher prices. But the gig was up for the US internationally. To combat our careless printing of dollars, the major oil producing exporting countries formed a cartel (OPEC) and fixed the price of oil at a higher price. The dollar was in a tailspin and prices were going way up on everything. To combat the fall in the dollar the FED does what it usually does to strengthen the dollar and slow the economy by raising interest rates which decreased lending and further slowed growth.
During this stagflation time there was also decreased activity on the war front, although we did our best to make Russia the boogeyman so we could maintain our military spending during the "cold war". We really didn't recover until the 1990's and the technology boom that has essentially carried us into the current. We have lowered taxes on the rich and been at war in the middle east since 2001 which has sent our deficits really out of whack. All this time the FED gets richer and our spending power decreases which means we all have to work more to cover our basic needs. It didn't used to be that both adults had to work in a middle class household but now we do. Savings are basically non-existent in the US and our economy is almost entirely based upon us continuing to spend everything we make. People are stressed out and living on the edge financially speaking.
So what should we do about it? In the long run we need to take back control of our money supply from the gangsters. We need to eliminate the FED and walk away from our bogus debt to them. Realize that we have had leaders step up and say this in the past but they were killed for even mentioning it (JFK). But that shouldn't keep us from speaking up against tyranny.
We need currency competition at the local, state and international level. Monopolies of any kind are bad but especially currency monopolies. Crypto-currencies are an intriguing option I am keeping an eye on assuming we can keep control of them in the hands of the people and away from the gangsters, and that is exactly what block chain technology does. What makes a stable currency is controlled supply and mutually agreed upon acceptance by producers in exchange for their real output. This is the hard part of creating new currencies but the hard work that must be done if we are ever to end our economic slavery.
In the immediate future each of us can begin producing tangible goods and services that can be bartered with other producers. The gangsters want us to believe the bartering system is archaic but only because they want to maintain their % cut on all economic activity. When we all barter they don't get their cut because we don't use their funny money. Food is an excellent bartering option because everyone eats. As a farmer I barter with many other producers of non-food services which allows me to share my abundance and focus on growing food, which is what I am good at. It greatly simplifies my life and is my way of sticking it to the gangsters, one tomato at a time.
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