by Bill Sardi, Lew Rockwell:

What Will You Do To Keep The Small Amount Of Money You Now Have?

Money Is Increasingly Less Valuable To The Point Of No Return

Americans may have never thought about where money comes from and its main drawback.  When money is created, there is no “money” for the interest that is tagged to borrowing it (usury).  Eventually, societies have to perpetually increase the money supply simply to pay the interest on increased borrowing, and the fan of inflation has begun.

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There are different ways to create money, for example, one way is to take the “money” a foreign country earned by selling the U.S. oil or cars, such as Saudi Arabia or Japan, and borrow it back so we can buy more oil and automobiles.  That is what then Secretary of State Henry Kissinger negotiated with Saudi Arabia, the so-called Petro-Dollar.

Again, for example, the US does this by issuing to Japan a US Treasury Note (IOU).  Japan now holds $1+ trillion of these IOUs (which appears will never be paid back).  We pay Japan ~2% interest for this borrowed “money.”  Where does the 2% come from?  It doesn’t exist.

Human societies need more money to grow their economies, and at least to supply money to a growing population, + interest.  Printing more paper (fiat) money never covers the cost of interest to lend and borrow it.  That is why interest on US Treasury Bonds are ~2% and the target inflation rate is ~2%.

How do you have enough money to grow an economy?

In a recent commentary David Lifschultz addresses the above question with a remedy – – – gold-backed money.  Since there is only a measured amount of gold, on a supply-and-demand basis, the value of gold rises with its demand, and now you have a true asset-backed currency plus money to pay interest.  You have enough gold to grow your economy because it just rises in value.  The more borrowing the higher the value of gold.   But that is in the next world, not this one.  The spot price of gold is manipulated so as to never compete with fiat.

Inflation

You drive your society to ruination by adding interest, printing more and more paper money, which is the present situation (Congress is forced to perpetually vote to increase the debt limit, and by so doing generates inflation.)

Adding more money to the pile w/o increasing productivity or assets simply dilutes the value of existing “money,” and plentiful money results in makers of goods and services realizing they can charge more (what the market will bear), which is another form of INFLATION.

That is all that Congress is doing now – – creating a loss of the purchasing power of your money.  Intentional?  Well, yes, because government can’t pay back money taken from the public for future medical care or pensions without fully inflated (worth less) dollars.

What you never learned in school: debasing currency

For the seventh time, I present by example, Social Security that paid $321 average in 1980 and now pays, on average, ~$1437/month to pensioners.  But if factored for inflation, it should be more like $7617/month! (ShadowStats.com inflation calculator).  This is how they make up for the interest, by paying you back in worth-less dollars!!!  No one catches on to the shell game.

Imagine you were paid back your Social Security in those tin pennies they now produce (they don’t even sound metallic when you drop them), but you originally paid into Social Security with copper pennies.  You would feel cheated, right? That is what is going on today. Debasing the currency.

Your bank passbook is deceiving

To make matters worse, interest on your banked money is less than 1% and inflation is around 15% (source: ShadowStats).  About 7 in 10 Americans have savings accounts that are  losing value.  Not a soul dares to bring this topic up in Congress.  Silent bank robbery by another name.

Americans are mindless because they read their savings account passbook and it still has $10,000 in it.  But it won’t buy what it did just a short time ago.  That is called purchasing power.

Go around the usurious interest collectors

Few Americans realize they will pay in interest nearly two-times more than the purchase price of a home.   Debt.org provides an example: a $160,000 loan over 30-years will add an additional $107,000 in interest.

The Fed collects interest for doing nothing

In the 1920s the U.S. considered building a public works project, a hydro-electric dam at Muscle Shoals on the Tennessee River in Alabama.  The project would cost an estimated $40 million.  Congress was reticent to raise taxes or issue bonds (30-year bonds at 4% interest) at the time to fund the project.  At the end of 30 years the project would cost an additional $48 million in interest!

The inventor Thomas Edison and the industrialist Henry Ford stuck their noses into this project.

Edison commented: “Any time we wish to add to the national wealth, we are compelled to add to the national debt.”

Ford/Edison new monetary system

Ford and Edison proposed a new monetary system whereby workers and manufacturers would be paid for public works projects directly from the US Treasury, rather than running it through the Federal Reserve central bank + interest.  The money would be backed by the goods and services created, in their example, electricity.

Edison and Ford said it was just as easy for the federal government to issue a dollar bill as a dollar bond.  Mr. Edison said he “opposed the private banker, the money profiteer, through a fictitious and false value given to gold” (dollars were gold-backed at the time).

Ford and Edison were not critical of banks in private and commercial lending, saying banks play a useful role there.  But in public works projects, this made no sense because the central bank (Federal Reserve) does nothing and earns, in this example, $48 million (in 1920 dollars).  It does pay some of that back to the federal government (the people), but it takes its cut for doing nothing.

Edison and Ford never posited that the increased value of gold would make up for the interest as Lifschultz does.  But their idea was only sound for public works.

JFK was told the US would be crippled by inflationary debt

This is what John F. Kennedy realized in 1963, that America was headed for financial ruin by printing more and more paper (or electronic) money and running it through the Federal Reserve Bank to lend out to community banks so Americans could buy houses and cars.  But there was no provision for interest added.  We were letting a guy (Fed Reserve) get a cut of the action by charging interest for doing nothing (not adding any value to the money).

When someone else gets a cut for doing nothing, that is what we call mafia.  That is what the central bank is — the mob, with a fancy building in Wash DC as cover for mobsterism.

In 1963 JFK went around the “money changers” and printed $4 billion of silver-backed money.  The fiat money boys (central bankers) would have none of it…… JFK was assassinated.  The silver-backed dollars were quietly withdrawn from circulation.  How anyone dare challenge the bankers (mob) and go around them.

Build America Bonds

The current Executive branch of government is thinking of peddling Build America Bonds (BAB) that allow states to fund infrastructure projects with interest costs subsidized by the federal government, similar to the situation Ford and Edison addressed in 1920.  This type of bond was offered in 2008 after the banking/lending crash.

It involves the Federal Reserve Bank underwriting 35% of the interest to be paid to bond issuers so they can offer lower interest rates (7.4%), which is taxable income.  Government does get something out of it (taxes), but so does the central bank, who adds nothing to the equation.

The BAB lending is a whopping $6 trillion over a decade of public works projects.  A 20-year bond @7.4% interest yields some unholy total, grillions in interest.  While this is denied, this is going to burden Americans with tax increases.

There is a lot of smoke and mirrors in this scheme.  The increased debt is only minimized by a promise to collect more taxes on un-reported income, which is still taking money out of Americans pockets.  So, it is said the BAB loans would only add $160 billion to the National Debt over a decade, or $16 billion/year.

In other words, $6 trillion of “Build Back Better” projects over 10 years would make the same mistake Ford and Edison griped about a century ago.

Increased value has been for top one-percenters

To make matters worse, in the past decade or two almost all of the increased value in our modern society has been captured by the oligarchs, the billionaires.  The top 10% owns 70+ % of everything.  Now Congress just has oligarchs fund stuff instead of voting in Congress.  Private enterprise launches satellites.  Bill Gates funds vaccines.  In case you didn’t know, this cozy relationship between business and government is called FASCISM.

Americans need to learn to own assets

The masses are groveling around, losing their shirt regardless of how hard they work.  The more they make, the more they stuff in the bank, the more those gains are ruined by inflation.  Americans need to learn to own assets and gold and silver.

Silver coins vs lottery tickets

It has been said, the rich buy stocks and the poor lottery tickets.  If the poor purchased one US Silver Dollar every paycheck, after 40 years of labor, they would hold a liquid asset that has far more value than a pile of lottery tickets.  And they would, as a class, increase the value of their own investment by increased demand for silver!  A sure profit!

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