MONEY DOESN’T GROW ON TREES… OR DOES IT?<\/p>\n
When I was a kid my dad always told me that money doesn’t grow on trees.
I always believed that until I found out about the operation of the Federal Reserve. If you asked 100 Americans what the Federal Reserve is, 90 of them probably couldn’t tell you. Most of us think that this outfit is part of the gubmint. But it’s not.<\/p>\n
The Federal Reserve is the nations’ central bank. It is the sole lender to the U.S. Treasury and it’s where the gubmint goes to borrow money. Astonishingly, the Fed is a PRIVATELY OWNED bank! No one knows who the shareholders of the Fed are, because the Fed has never been audited.
Now the gubmint spends all of the year’s tax revenues sometime in May or June, so it has to go to the Fed to get more. But how does this process work?<\/p>\n
Well, somebody goes down to the Treasury and says, “we need $100 billion dollars.” So the Treasury makes up a fancy certificate with nice edging and calls that a Treasury note. Then that Treasury note gets hauled down to the Fed. “We need to borrow $100 billion,” says the Treasury, “and here’s our promise to pay.”
The boys down at the Fed are delighted, because they now have a Securities Asset, which they can use to offset a liability. Why is that bloody piece of paper an asset? Because, ladies and germs, it represents labor and production. Your labor. My labor.
What does the Fed do? It issues a Federal Reserve check to the gubmint in the amount of $100 billion. Notice folks that there is NO MONEY anywhere to back this check. That $100 billion was created out of thin air. Nice work, eh?<\/p>\n
If you or I did that, we would be sent to prison.<\/p>\n
The liability of that Federal Reserve check is offset by the “asset” of the deposited Treasury note. That note, of course, represents our sweat and blood. So in banking terms, the books are said to be “balanced.”
So what does the gubmint do with that Federal Reserve check? It sallies forth down to one of the Federal Reserve banks and deposits that check. That $100 billion is now credited to the gubmint’s account.
The gubmint writes checks off that account to pay it’s bills, which then goes into the banking system and gets multiplied (through the multiplier effect of fractional reserves) into more and more and more and more money.<\/p>\n
And you wonder why we have inflation ?<\/p>\n
But the really great part of the fiat money scam (fiat money — “by decree”) is that the Fed gets to collect interest on the money it has created from nothing! As the old song goes “nice work if you can get it.” That would be like my friend Dave — who is chronically short of money — setting up a printing press in his basement. He’s $2,000 short this month so he prints up the money and pays his debts. Then he deposits what’s left over and collects interest on it. Pretty cool, huh?<\/p>\n
Did you know that the total amount of dollars floating around the world, in various financial instruments, is somewhere over 1 QUADRILLION dollars?
No, I didn’t think you did.
Even Congress, in it’s stupidity, recognizes that the U.S. is almost past the point of no return in its debt obligations (note that those debt obligations must be paid by you and me). I am not sure about this, but I read somewhere that there is an unpublished bill now in the House that will abolish the Federal Reserve, or nationalize it.
I say, it’s about time.
Since the Fed is a privately owned bank with private shareholders, we the people don’t get to see any of the profits.<\/p>\n
Okay, so much for my rant about the Federal Reserve.
I actually write about more uplifting things than that.
I write about the Big Picture at my website, https:\/\/kjmaclean.com\/
I’m really big on the idea that the universe is a logical place and it is set up to support our choices. Only one problem with that: for the past 5,000 years, mankind has largely made the WRONG choices. But we don’t have to be slaves to our past. We can wake up as individuals and as a species and change the direction of our lives in a positive fashion.
I have no bloody idea what I’ll write about next time.
Probably something enlightening.
Or maybe, I’ll get on another rant about something else…
Later,
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MONEY DOESN’T GROW ON TREES… OR DOES IT? When I was a kid my dad always told me that money doesn’t grow on trees.I always believed that until I found out about the operation of the Federal Reserve. If you … Continue reading