Mayer Amschel Bauer Rothschild
"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States"
Sen. Barry Goldwater (Rep. AR)
"From now on, depressions will be scientifically created."
Congressman Charles A. Lindbergh Sr., 1913
This is a question that we all in the United States must be asking ourselves. Currently in the United States we manage our inflation levels through the manipulation of the interest rates. The consequences of this policy are devastating to savers and those attempting to live off of the passive income generated from their capital and create wealth.
How did we allow a private company to destroy the value of our currency and the wealth of a nation?
As part of the education process of developing financial intelligence, I highly recommend Murray Rothbard’s "What Has Government Done to Our Money?" You will discover how commodity based monies (real currency) has been replaced by fiat currency created by the central banks around the world. Through
this process, we the people slowly and unknowingly reliquished our wealth creation power to be controled by the government through the process of inflation, excessive taxation and devaluation of our currency.
The understanding of basic finance and money creation is essential to the understanding of our current financial crisis, how we are going to get out of this problem and how we are going to prevent it. It is imperative the we do something now, otherwise we are enslaving our children and our grand-children
to a life of perpetual goverment legalized slavery. This slavery does not discriminate on racial, ethnic, sexual orientation, or theological ideologies.
The Federal Reserve's, a private corporation, monopolistic grasp on the creation of our money out of thin air is responsible for boom-bust cycles in our nation. They are guilty of the destruction of our nation's wealth. Does this whole financial crisis or "financial cliff" have you baffled? Then this reading is a must for you.
It is the federal intervention with their fiscal policies that depreciates the value of the dollar, thus increasing inflation. This fiscal policy of "more money in the economy will fix the problem" is not necessarily good. Think about it, suppose there are today twice as many dollars in the economy as the day before. The normal reaction is that this is a good thing, we have more money. This could be true if the population doubled over night or we as a nation produced/manufactured more valuable services/products. If we are missing these elements under the fiat currency system, $1 is worth half as much as before.
This is what happened in the Weimar Republic after WWI. In 1929, the onset of the depression in the United States of America produced a severe shock wave in Germany. The economy was supported by the granting of loans through the Dawes Plan (1924) and the Young Plan (1929). When the American Stock Exchange (Wall Street) crashed in 1929, this left the struggling German economy in chaos. Industries failed and unemployment rose to 6 million. Social unrest followed, as people starved. Unemployment grew rapidly and in September 1930 a political earthquake shook the republic to its foundations.They owed so much to other countries from the Versailles Treaty that they printed money to pay their debt. As a result, there was hyperinflation, which caused their currency to become virtually worthless. Aside from the economic consequences, the poor state of the economy made way for a young, charasmatic politician named Adolf Hitler to capture the hearts and minds of the German people. You know the rest of the story.
In economic terms, printing money out of thin air is known as “monetizing the debt.” When a country prints more money to get out of a debt problem, it hopes to pay back the debt with more money than it had before. Doing so is inflationary and debases the currency. This may work short term for the government, but most likely it will make Americans poorer as their hard-earned dollars purchase less. You may be given a momentary illusion of prosperity and you may think that you escaped being directly taxed but inflation is another form of tax on your wealth.
Here are four ways that a government can use to debase your currency:
- Lowering the Quantity of Gold or Silver in Coins - In recent U.S. history, since 1965 all coins changed from silver coins to clad coinage. This makes the coins a fiat currency since they are only worth something because the government has decreed it.
- Eliminating Commodity Backing - By eliminating a commodity backing of a paper currency, the only backing is by government decree.
- Deficit Spending - governments print excessive amounts of money. Inflation occurs when the supply of money outpaces the demand for money.
- Fractional Reserve Lending - creating money out of thin air banks lend out much more money than they have in the bank. This can be a factor of 10 to 1 or more.
How did we allow a private company to gain control of the printing of our money, debase our currency and determine the fiscal policy of our nation? Why do we allow this private company to go unsupervised and unaudited?
One reason I recommend this reading is that you do not need a Phd in economics to understand it. The book covers what is money, government manipulations used to gain control of money from you and I, and provides two hundred year history of money and currencies in the Western world. It is through the studying and understanding of past events that we learn how government has abused its role, stole our wealth and sold us into slavery to the international bankers.
We were duped into exchanging coins made with gold and silver into gold and silver certificates and finally into unbacked paper currencies. During this recommended reading you will learn that real money is a commodity whose value is proportional to its weight. Therefore, paper currency, or its digital equivalent, have no such value.
I rediscovered my passion for economics by reading Dr.Rothbard's book and I expect that some of you will also learn or rediscover the importance of economics as part of our development of financial intelligence.
