FUNNY MONEY

By: Marion Valentine

April 3, 2009 at 9:10 am

There are two groups in the U.S. that don’t pay taxes. Those two groups consist of the very poor, and the ultra rich. As a result, the middle class has been bestowed with the sole economic responsibility of repaying the obscene abomination known as the national debt. It’s not enough for the middle class to support those who are unable to work as well as those who choose not to, but to also provide the a major source of wealth that is being siphoned off by the Central Bankers and distributed to the elitists. I believe their motives have always stemmed from a desire to redistribute the wealth of the middle class to the ultra rich. This is a basic ploy right out of the collectivist’s handbook. In this way they are, in the words of Omar Khayyam, attempting to “tear it down, and rebuild it in their own image.” They are preparing for the intended eminent worldwide financial Armageddon.

In order to continue to supply the Government with more and more funny money, the Fed has to keep creating it. Obviously, the more they create, the more it is diluted and the less valuable it becomes. They have positioned the U.S. dollar on a huge playground slide, placed a piece of waxed paper under it, and let it go. Its accelerating decent has become big news. Even the sycophantic rah-rah rooters on CNBC are talking about it. The dollar is visiting lows not seen in almost twenty-five years.

“Bubbles” Greenspan would have us believe that this is an engineered devaluation designed to reduce our trade deficit. Hooey. The Fed has lost control of the dollar. Their mindless creation of credit has insured a mind-boggling meltdown of the entire financial system. This is not a good thing for anyone, anywhere. The dollar is the world’s reserve currency. Seventy-five percent of all dollars in existence are in foreign hands. Whatever their value was when those foreigners got them, that value is evaporating right before their eyes. It’s like buying ice by the pound and watching it melt away before you have time to use it. “Joe Six Pack” doesn’t seem to mind. He can still buy a beer for $2.50 at the pub. Five years ago they were $1.25. By the end of next year they will be $5.00.

But it’s not just the irresponsible creation of debt that has brought us to the economic gates of hell, but also the Fed’s botched attempt to control the markets through manipulation and intervention. Their attempts to “play God”, in an otherwise free market, have exacerbated, skewed, and distorted market realities to such an extent that its function has become one of dysfunction.

The turn of the century brought with it a paradigm shift in economic policy in America. With the flight of the domestic manufacturing sector, America’s balance of trade rapidly became extremely unbalanced. In an attempt to keep the economy afloat, the Fed targeted the American Consumer as a replacement for the American Producer as the chief contributor to the U.S. economy. To insure the American Consumer would be, at least temporarily, capable of such a task, “Bubbles” lowered short-term interest rates to their lowest level since 1958. This action, combined with the introduction of a plethora of reckless mortgage products, (ARMS, interest only loans, etc.), provided for an unprecedented number of new home purchases. Over thirty percent of those purchases were made by lower income individuals who had previously been unable to qualify for mortgage loans. The result was a boom in residential construction, and all related industry. The domestic housing market had effectively filled the void that resulted from the flight of the manufacturing sector and, in doing so, became a primary contributor to the American economy. That, coupled with a wave of refinancing, spurred on by the lure of cheap credit, allowed homeowners to bury themselves in debt. The application of this new found cash provided borrowers the means to buy new SUVs and invest in stocks, which effectively held up the automotive industry, as well as helping to keep the markets inflated.

Fast forward to the present. Real unemployment is running around 12%. Wages have been stagnant for the past four years. Almost everyone who wanted to refinance has already done so. Their refi money has already been spent. The automotive industry, and the housing industry are both beginning to feel the pinch. Rising energy costs, which are a result of a growing scarcity, as well as inflation, are exacerbating the situation. The DOW, which has remained basically flat over the last three years when valued in U.S. dollars, is substantially down when valued against the Euro, the Rand, the Yen and several other major currencies. The continuing devaluation of the dollar has provided the DOW with the appearance of strength, at least to the American public. More smoke and mirrors. In order to continue to lure foreign investment, the illusion that the economy is healthy and robust is of paramount importance. This presents a big problem considering our economy is in the throes of a terminal illness. The Fed is desperate to come up with a new source of support.

Enter, Social Security Reform. Now politicians are suggesting that federal withholding revenues be redirected into the stock market. Wow! What an idea. That should keep the markets inflated for a little while longer. It could certainly give the Fed a new a new source of wealth to siphon off. But wait. One of the biggest myths about Social Security is that there is any money in the Social Security trust fund. The fund has been systematically tapped and squandered by every administration since its inception. It was an unconstitutional sleight of hand to begin with. It is, and has always been a Ponzi scheme, which depends on new workers to pay the old workers. Maybe that is why the present administration is doing everything in its power to tear down the borders and accommodate as many illegal aliens as possible. Maybe that’s why they’re attempting to raise the age of retirement. The privatization of Social Security is simply one more scheme to siphon off the wealth of the middle class through commissions and fees, and keep the stock and bond markets inflated for a little while longer. Do you see a pattern emerging here?

What’s next? What new source of wealth will be found to target? What if there isn’t another source. How about those foreigners? How can the Fed keep them buying treasury paper, which allows the Government to keep on borrowing? When approached from this perspective, we realize that keeping the bond market inflated is the primary aim of the Central Bankers, (the Fed). To what lengths will they go to keep the bond market inflated? What new legislation will they dream up for their puppet politicians to pass? If it never occurred to you that the Federal Reserve, (a private corporation), owns the U.S. Government, please read the following statement made by Fed Governor Ben Bernanke.

“By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.“

What in blazes is positive inflation? And why would anyone, representing the people, want the price of goods and services to rise? Who, but a banker could benefit from inflation? Inflation equals rising prices. Rising prices equal more loans. More loans equal more interest. The natural evolution of man would have provided for a continuing improvement in the standard of life for all persons, if it wasn’t for the heinous contrivance called inflation. Technology has provided new and improved ways to produce and deliver almost everything. Without inflation almost everything would be cheaper, or at least remain the same price. Let me restate that last part. If it wasn’t for the Federal Reserve, everything would become cheaper, instead of more expensive. Most people believe that inflation is a natural economic occurrence. This is simply untrue.

Constitutional mandates insist that American currency be backed by precious metals. Adhering to those mandates would insure inflation and deflation would only occur if the quantity of precious metals was significantly altered, thereby skewing the supply/demand equation. Because of the energies necessary to locate, mine, refine, smelt and coin precious metals, the value will always be relatively maintained. Because of the fact that practically no energy is necessary to produce “funny money”, there is no value to begin with. Producing more of it makes it worth less than nothing, as it becomes a liability and the biggest threat in the world to liberty, freedom, peace and justice. Any devaluation of American currency is a direct result of the money that the Federal Reserve is stealing out of your pocket.

Consequently, there are other ways, besides inflation, that the Fed can cloak reality and present the appearance of a robust economy. One of these ways involves direct intervention in all three major indexes. The Fed has created a fund called the repo pool, which can exceed $30 billion. When the Federal Reserve temporarily supplies these funds to the market by buying securities from dealers with a commitment to resell, the transaction is called a repo, (repurchase agreement). The Fed uses this cash to purchase securities from primary government bond dealers. This action circumvents natural free market pressures and pumps unnatural liquidity to the banking system. Member firms, at the direction of the Fed, use this liquidity to make major purchases in the futures markets or to purchase select market weighted stocks. Through the continual manipulation of a basket of major stock issues, they can effectively hold the markets up with their “funny money”. All activity of this nature is covertly inflationary, and obviously unconstitutional. Because the shareholders of the Fed, complicit banks, and dealers also profit from these deals, anti-trust statutes are broken on an hourly basis. Wall Street has devolved to nothing more than a den of thieves.

Yet another way that the Fed utilizes “smoke and mirrors” to maintain the appearance of a healthy economy, rather than allowing the specter of “black death”, which hangs heavily over the real situation, to become apparent, is through the use of clandestine offshore accounts. Through these accounts, agents of the Fed buy up the treasury bonds that are not bought by hedge funds, elitist transnational corporations, or foreign central banks. During a routine sale of U.S. Treasury bonds in early September 2004, an unprecedented event took place. Foreigners, who, up to that point, had been regularly buying nearly half of all debt issued by the U.S. government, didn’t buy any. This could be the Fed’s biggest nightmare.

The afore mentioned usual suspects, (the hedge funds, elitist transnational corporations, or foreign central banks), could be buying US Treasury notes and bills via the Bahamas, Bermuda, the Cayman Islands, the Netherlands Antilles and Panama, but I find that highly unlikely. These bankers and fund managers aren’t stupid. Why buy into an asset whose value is destined to decline. Robert McTeer, head of the Dallas Federal Reserve Bank, stated in October of 2004;

“Over time there is only one direction for the dollar to go – lower.”

Our Government finances itself through the collection of taxes, (which basically go to pay the interest on the national debt), and the sale of treasury instruments, (i.e., bonds, bills, notes), which are effectively IOUs from “We the People”. In its first term the Bush administration increased the Federal debt by $2.2 trillion. Congress raised the Treasury debt ceiling three times, by $450 billion in 2002, by $984 billion in 2003, and by another $800 billion on November 19, 2004, to $8 trillion 184 billion. The ready willingness, of the members of the House and Senate, to finance such deficits is a clear indication of the political and ideological makeup of most members of Congress.

More disturbing is the fact that the voting public continues to re-elect these people in the glaring face of fiscal insanity. The wars are obviously a ruse to convert the national debt into vast wealth for the elitists, (see $1,100 dollar a barrel Iraqi oil above). Please understand that there is no way that fiscal responsibility, a by-product of a gold backed currency, could ever provide for the reckless levels of debt that the American people, and their descendents, are currently being shackled to.

All the people in the world that hold Federal Reserve Notes are being fleeced. That’s usually an occurrence reserved for sheep. How apropos. But, so long as crazy foreigners continue to loan us more of their “funny money” to fight these wars, the game can go on. When foreigners finally wise up to the insane nature of our economic policies and cease buying our IOUs, where will the money come from?

According to the research of Robert Chapman,

Caribbean Treasury investments soared 54% to $85.2 billion during the first ten months of 2004, seven times the 8.3% increase of all of 2003. The region is now the fourth-largest holder of US government debt, behind Japan, China and the UK. This is not coincidence. It is very significant and it has to be the Fed keeping the dollar afloat.

The previous paragraph might suggest that the Fed has stepped in and is secretly buying government debt. The reason that they are doing it secretly is because when the Fed directly buys government debt, and then uses that debt to create more money, it is immediately inflationary. No trickle down here. It is nothing less than hyperinflationary. Obviously, if the people ever began to realize that, through this action, they were getting royally screwed, they might quit electing these bozos and start to clean up the mess. Hyperinflation will make Government bonds far less attractive. Remember, the bond market is the cash cow that the central bankers depend on to continue to milk the economy. Therefore, the Fed will do everything in its power to insure that the bond market will be the last to deflate.

In order to keep the bond market inflated, the Fed will have to substantially raise rates. They will not do this, however, IMO, until the people finally wake up and start to make some noise. The sheeple are not known for public outcries, so the throes of hyperinflation will already be choking the economy long before the Fed makes any meaningful increase, (read in: double digits). The dollar is in free fall. When it breaks below the USDX .80 there is nothing in the world that can stop it, except for a massive interest rate increase. When they finally do make a meaningful rate increase, the markets will begin overtly crashing, (as I mentioned above, they have been covertly crashing for years), and the panicked investors will stampede to the bond market for security, like lemmings heading for the cliff. The bond market will find new life, and gold and silver will enter “phase three” and explode in price.

Right before the stock market melts down, the real estate bubble will go kabloowie, Fannie and Freddy will go up in a puff of smoke, and the domestic banking system will come to a screeching halt. The Fed will mindlessly continue to keep the presses running for as long as they can, (after all, that’s all they know how to do). The erosion of the buying power of dollars will accelerate exponentially. From an American economic standpoint, we will have arrived at “end game”.

Everyone, (except Joe), is beginning to get very nervous. Since we are absolutely dependent on the kindness of foreigners in terms of sustaining our current standard of life, their nervousness is, to say the least, very disconcerting. If they don’t continue to hold our dollars, our economy is toast. Unfortunately, people all over the world are beginning to dump their dollars, and for good reason. What would you do, given the same set of circumstances? There are reports that in some places, U.S. dollars are no longer accepted. Where will these dollars end up? Why, right here, where they started. And when they get here, and there’s a glut of them, what will happen? The good new is that there will be so many of them that they will be a lot easier to get. The bad news is that no one will want them because they won’t be worth anything. Let me put a time frame on these events and attempt to put them in perspective. I believe it will become apparent to anyone paying attention within the next six months and finally come to a head within 3-5 years.

Get ready for a $10.00 cup of coffee, a $200.00 dinner, water bills that look like your electric bill, and electric bills that look like your mortgage payment. The value of coffee is not going up. The value of food is not going up. The value of water and electricity is not going up. The value of the dollar is going down. A ten-cent candy bar can still be had for a dime, providing that it’s a silver dime. If you are using Federal Reserve Notes, a ten-cent candy bar now costs $1.00, and it will soon cost $2.00.

I believe that the powers that be have employed their ability to invent money by using its corrupting influence to cataclysmically screw things up. They have, with the help of their bought and paid for acompli, screwed it up so bad that it won’t be easily fixed. I have always believed their plan was to casually strip up of all our liberties before they pissed us off. They have been doing a pretty good job of stripping us of or freedoms and liberties for years, and no one seems to have minded very much. After all, they successfully debased our currency and pocketed the difference, entwined us in a mire of disputes all over the globe and managed to get the whole world pissed off at us, strapped us with untenable debt that will eventually enslave our offspring, dismantled the Bill of Rights through Patriot Acts One, Two, and soon to be Three, are currently scheming to rob us of our retirement by hijacking social security, and still we re-elect them. Apparently, they haven’t pissed us off enough for anyone to do anything about it.

Given the pandemic apathy, that addles the collective mindset of our nation, there is not much hope for a political solution. By the time the sheeple wake up and attempt to politically change things, it will be far to late. We are witnessing the decent of the Phoenix, and she’s going down in flames. I also believe that the Phoenix will rise from the flames and soar to new heights. Unfortunately I do not believe it will be anytime soon, and when it does, it will be under far different circumstances.

What can you do? Open your eyes. Identify, for yourself, the signs of the tyrannies of collectivism. The easiest way to identify a collectivist is to observe how he proposes to help those in need. If he advocates true charity (the giving of one’s own money) and freedom-of-choice to give or not to give, he is an individualist. If he advocates pseudo charity (the giving of other people’s money) and the use of taxation to coerce everyone to participate whether they choose to or not, he is a collectivist. The use of coercion for redistribution of wealth is the foundation of socialism, communism, Nazism, fascism, and all other variants of collectivism.

Protect yourself. Get ready now. Sell everything you don’t need. Accumulate gold and silver, (most especially silver). Invest in gold and silver mining issues. The day is soon coming when the people demand that precious metals regain their place in a Constitutionally sound economic system. Prepare to defend your Constitution, yourself and those you love. Follow the course opposite to custom and you will almost always do well…

Eliminate as much debt as possible, especially “variable rate” debt, such as credit cards and lines of credit. Interest rates will be rising, so the elimination of debt offers a “real return” of escaping rising rates by creditors.

If you are depending on Social Security, stop.
It’s not what you don’t know that will screw you up; it’s what you know that is wrong. The spin you hear from the mainstream media is intended to mislead you. Open your eyes and face the future. If you leave your head in the sand and ignore it, you are only leaving your butt exposed for the world to kick. This all may sound like gloom and doom, but when you get a handle on what is going to happen, you will have a future filled with opportunity. Fortune favors the Informed.

free web counter