- Your true wealth/economic energy is your time and freedom
- Money (Gold) stores your wealth, as it’s finite
- Currency (Paper) leak it away, as it’s not backed by anything so more and more is printed It’s based only on confidence and always returns to Zero
- US Has been exporting it’s’ inflation by sending large chunk of new printed money abroad in exchange of goods and services…but as other countries loose faith in it, they’ll start returning it
- Athens was 1st society to have gold coins, taxes and free market 2500 yrs ago. But in 27 yr war with Sparta they were running out of gold and so they mixed silver in gold coin minting (Deficit spending) upto point of hyper inflation and so they lost
- The rule of thumb is that people keep what is of value (gold and silver) and spend the junk (paper currency). This is Gresham’s Law: Bad Money Drives Out Good
- Every empire starts with Gold and SIlver as currency and then goes to Paper backed by G&S and then as greed increases, goes to Paper backed by nothing and then ultimately crashes and goes back to G&S…”7 stages of an empire”
- In the current cycle of “7 stages of an empire”,
- Before WW1 (1920), currency (Paper ) was completely backed by Gold (100% reserve ratio (RR0)
- But then post WW, in 1940 it was changed to 40% reserve ratio,
- Now in WW2 time frame (1933-45), europe was preparing for war and so was importing food and stuff from US and paying it in Gold. This caused US to amass 2/3 of all the Gold in the world.
- Finally, post WW2, Europe had NO Gold left. So US loaned it $. Then in 1944, WMF met and finalized on Bretton Woods system (BWS) whereby every currency on the planet will be backed by US $, and UN $ will be backed by gold at 35$ / ounce This is what made US a SuperPower..amassing all the Gold from an isolated place, while that rest of the world was fighting wars and paying US for goods
- This helped world trade boom as there was no Forex fluctuations…the exchange rates were constant..
- In 1950, US went into Vietnam and Korea wars for which it did defecit spending ….This was possible as BWS didn’t establish any RR.
- Finally in 1959, France called US on it’s bluff (printing of more $ than it had Gold) spoke up saying that US is taking on Debt (by printing more $) that it can pay back only by printing more $, that only it can print…so $ cannot be accepted as Global Standard, and said that it wants to go back to Gold Standard. So France and other countries started returning US it;s $ and asking for gold. This caused US to return 50% of it’s gold in 1960-1970.
- At the end of 1970, US had 12 times more $ (paper reciepts for gold) than actual gold.so as Nixon saw that if they are unable to correct this fraud, then their Monetary system ie $ would collapse and so he implored IMF to remove the condition that $ (and in turn all currencies) be backed by Gold to ensure stability …and so in 1971 all currencies became Fiat ie not backed by anything
- Since that all countries have been printing paper freely causing inflation and eventually one day the system will collapse….Fiat currencies (1000s in the past 5K yrs) have 100% Collapse rate in the past
- And then we’ll go back to Gold
- US $ is 60% of the Currency in the Worls, and half of it lies outside US. This is coz:
- $ is Central Banl’s Reserve Currency
- Oil is priced in $
- Since 2008 crisis, and now QE1, 2 and now 3 (Quantitative Easing) people and countries are moving away from $ towards Gold and Silver:
- Countries are accepting Euro and Gold for Oil Purchase
- BRICS nations are trading in local curriencies, not $
- Germany etc. are running Gold repartriation programs, gettign Gold in exchange for $
- Africa has banned the $
- Singapore removes tax on bullion
- with QE3, more than a Trilltion $ will be printed every yr..it took 200 yrs to go grom 0 to 1 trikkion $
- in a couple of years, Gold would buy you 14 times the paper $ than today.
- Price of something is just a no. what matters is the value of it.
- when $ goes to 0 Gold prize would be infinite, but in reality $ would just stop being a currency,,,,People will not want $
- there are more millionares created in times of crisis than in any other time. This is the greatest time of wealth transfer
- The reason Country goes into Deficit Spending is coz what the politicians promise to the public, to be elected, is more than the country can afford
- For spending more than the Govt can, it takes loan by issuing a Bond (IOU) through it’s Treasury
- These Bonds are called National Debt and have to be paid back by us only, by future taxation
- So a bond is basically Stealing the prosperity from the future, to spend it today.
- It is similar to how Individuals buy stuff on Loan or Credit
- Banks buy these bonds and then sell to Federal Reserve at a profit.
- Now, Fed has NO Money at all. So to buy those Bonds, it creates money by printing it.
- Banks use this money to buy more bonds and sell back to Fed at profit, and the cycle continues forever
- This is just the start….Now when Treasury gets the money from bank, Called Base Currency (say 100$) it spends it on stuff like war and education etc.
- This is how real people earn money.
- now real people deposit money in the bank (100$), but there is no such thing..
- All you can do is Loan the Bank your money, which it will use to make profit (remember, Money Makes Money).
- Moreover due to Fractional Reserve Lending (FRL), banks have to only keep a fraction of your money (10%) and use the rest for profit making by lending, gambling in stock mkt. etc.
- So now Bank suddenly has 190$ (100$ that u deposited and 90% that it loaned out to other guy)..
- this redeposit and relending leads to creation of thousands of $s of currency all backed up by the 100$ base currency. Rest is all Bank Credit
- Stats show that 96% of currency in circulation is created by Bank. Only 4% is base currency
- This massive expansion of the currency supply in ecomomy causes inflation
- Basically Currency is nothing but 4% of Printed Notes and 96% of electronic Bank Credits…Both of which are fictional as neither is backed up by anything
- The only value of this currency comes from the fact the real people work to accumulate it, and trust it, and use it…
- Now those nos. represent our Blood, Sweat, Tears, Labor, Ideas and Talent
- But the cruel joke is that our taxes go back to the Treasury to pay off the interests on The Bonds to the Fed, which had no money in the first place
- Before the Fed was created in 1913, there was no Tax
- Bottomline is that all the money is magically created (as its not backed by anyhing) from the Fed with interest obligations, and so the treasury has to take more debt (by issuing bonds) to payoff the earlier debt. “There is always more Debt in the System, than the Currency in Existance to pay the debt”
- Currency and Debt are like matter and antimatter….the original debt of $100 is the original currency(the Bond Principal, the actual Debt) which is the base for the multiffold increase in the currency by the banks…
- If we stopped taking loans and going in Debt, then there will be no new currency created and so eventually there will be no currency in the economy and the whole sustem will collapse.
- So not taking debt is deflationary and not possible for sustaining the current economy’s design of a Debt Based Monitory System, There cannot be a Debt Ceiling. The ideas itself is false
- The current system is designed to favor the Govt and the Banks and not Individuals
- The Fed is a private company owned by stockHolders who get a 6% divident every year. who these stockHolders are is a secret
- Money is a store of one’s economy. It shouldn’t loose it’s value over time ie it should be finite
- Currency is not money. It’s value declines over time ie it’s infinite
- The history of Money shows the world starting off with different metals as money, but all eventually gravitating towards Gold and Silver in 6th century AD
- when the monetary system collapses, it takes away the savings of the entire middle class, which is over 50% of the population..this makes them angry at govt., and scares them about future, and often leads to the rise of a dictator Eg. Hitler’s rise after great depression
Basically Govt, has taken a Loan of $100 from the Fed for it’s Deficit Spending. Now Taxpayers have to pay $110 to repay that loan.
Now, clearly, to do so, we need to have $110, which is impossible, as we got only $100 from Fed in the first place, and that’s all the money there is, in the economy.
So Govt gives this $100 to people in exchange for their labor and expect the people to pay $110 in return.
So you see that even if i work for the Govt for free I still will be $10 in Debt.
So it’s impossible to be debt free ever.
Here’s where the Banks come in. They take my $100 and in turn loan out $1000 as per FRL (to earn a percentage of interest as middleman fees).
Now now there are $1000 in circulation in the economy (electronic + cash).
So now, we not only owe the Fed $110, but we owe the Bank $1000 as well.
And we pay off both these loans (our Debts) by paying Taxes and repaying our Bank loans with interest, respectively.
And if we don’t pay either our Taxes or our Bank loan, the system will collapse, as the only reason it exists is because we choose to work for Fake Money and then use it to pay our taxes and keep the rest in Bank and take on and pay off Bank loans.
If instead we chose to work for Real Money, like Gold and Silver, or anything that’s limited and real and can’t be created out of thin air, we would not have to pay taxes and there would be No Inflation (as without FRL, Banks wouldn’t be able to convert $100 to $1000 magically)…
This is the worst form of Slavery there is…