So life these days really has me stumped. I cannot figure out why and how the American masses continue to flow down the river of inexplicable inconsistencies without so much as a batted eye. What I mean is that almost all essential societal concepts in America today are rife with absurdity and perversion yet the acknowledgment of such invasive oxymoronic abstractions seems completely lost on the vast majority of the nation. It’s as though objective sanity renders one the mentally disturbed in America today.
But I remind myself this is America. A land settled by Europe’s most ambitious, intelligent and morally bound bloodlines. A land in which simple farmers victoriously took arms to overthrow an immoral empire. It is an almost mythical story but clearly somewhere along the line we morphed into a populace devoid of intellectual honesty. Our focus now being consumed with how we will afford our next trip to Walmart and on our dogmatic designation of either the Right or the Left. That mythical ideology that once defined America has never been so dislocated from our actualized America.
Intellectual honesty is the inclination to let go of our self defined designations to which we are both consciously and unconsciously chained. Liberals precluding all things conservative are false and vice versa and the vast majority’s unwavering unwillingness to question the policy objectives because such an act would create an uncomfortable cognitive dissonance. The overall societal system today in America is designed to ensure we remain chained to and unable to escape our dogma(s). A tremendous amount of strategy, expense and effort is being spent on maintaining the Left/Right and Patriot/Traitor false dichotomies of perspective.
The implication is that the best answer or the absolute truth of things, which so often lies somewhere in between these polarizing extremes is never discovered and that is by design. “The truth shall set you free” and perhaps the most epic con in human history is that modern America is the ‘land of the free’. We are a kept people and while certainly legislative freedoms have deteriorated over the past 15 years it is the decades long deconstruction of our capacity for intellectual honesty in America that truly has us blissfully enslaved.
I’d like to explore and expound on the absurdities and perversion of the essential societal concepts that have taken hold of our belief systems which is but the symptom manifestation of our inability and unwillingness to be intellectually honest.
Let’s begin with that all important money. Once upon a time in the US anyone could take raw copper, nickel, silver and gold to a US Mint where it would be refined into coins. Eventually paper notes took hold and there were various local currencies all throughout the US that were distributed by industry. For example Cleveland Cliffs in the Upper Peninsula distributed scrip that was accepted by local merchants and payable against the Treasury of Cliffs in Cleveland and New York. Local banks would also accept these notes.
Eventually the US Treasury determined it was more efficient to have a federal currency nationwide to allow for interstate commerce. And so the US Treasury wanted to have local banks across the nation distribute federal notes. The problem always comes back to trust in a note’s value. How do I know the paper note will maintain its stated value? See the coins derived from actual metal had inherent value. But paper notes have no inherent value and money is meant to be a storage of value and a medium of exchange. So if it failed to hold value or be accepted as a medium of exchange it was useless.
And so the government offered the local banks non-interest bearing promissory notes backing each note distributed with bullion (meaning the notes could be exchanged for bullion by the government). In turn, the government also wanted protection against the local currencies being used by the banks to purchase the federal notes. Therefore the banks also provided a non-interest bearing promissory note to the Treasury that the local currencies also were backed by bullion (typically gold) held by the local banks. These bilateral promissory notes were not for trade but were to be held only as collateral and the Treasury had full rights to audit the local banks to ensure they in fact had the collateral that was being offered up in the promissory notes.
So how this played out from an accounting standpoint was simply no effect to equity (net worth). That is, there were offsetting exchange of assets and liabilities on the balance sheets of both the banks and the government. Think of the balance sheet effect for all intents and purposes of making change for someone, five $1 bills for a single $5 bill. However, subsequent to 1913 and the Central Banking Act, banks no longer provide promissory notes to the Treasury but the Treasury now provides interest bearing debt to the Fed in exchange for the each Federal Reserve note printed by the Fed on behalf of the Treasury and distributed to banks. The implication of the change is massive.
The critical impact is that the Treasury is now providing an interest bearing debt obligation while not receiving an offsetting equivalent interest bearing debt obligation from the banks resulting in amassing liabilities and thus declining solvency. Now from 1913 to 1971 federal notes were still being backed by the nation’s bullion and so there was a limit on the amount of dollars that could be printed and that effectively put a governor on the nation’s insolvency. However, subsequent to 1971 federal notes were no longer backed by anything but the faith and credit of the US Treasury (i.e. fiat currency). This removed any limits on the amount of printing that could be done via Fed policy and well the result is glaringly obvious.
The immorality of the entire monetary system is epic. You see before 1913, banks loaned out capital they either had on deposit, had already earned or had borrowed themselves and would in turn charge an interest on the loans they made to borrowers . The difference between their costs of capital and the interest they charged borrowers became their profit.
But subsequent to the 1913 Central Banking Act (written by three banking families) the Fed now prints money on behalf of the Treasury (for which taxpayers now pick up the cost of capital via the interest bearing bonds given to the Fed) and distributes it to private banks who loan it out and profit on the interest they charge borrowers. This new system allows banks to loan much more capital than they actually have on hand and forces the taxpayer to pay for the cost of the capital. In fact, they loan 10x more capital than they have. So not only are they not paying for their capital they magically get to profit from 10x more loan value than the capital they actually have on hand. No other business benefits from such outrageously devious rules.
What is important to keep in mind when trying to understand how in the hell such a system was ever written into law is that the Fed is a private entity, not a government agency, and it is owned by the largest banks and thus banking families in the world. So very literally, the Fed is a creation of the largest banking families and its objective is as one would expect; to create an unimaginably profitable system for those families. Period.
So think for yourself. I don’t have to tell you the story we’ve all been spoon fed since birth but suffice it to say we’re asked to believe the Fed is absolutely necessary and that we’d be doomed without it…. kinda like that abusive husband yelling at his battered wife that she’d “be nothing without me!”. You can sit back and watch the nation plummet into debt ridden abyss or you can see the facts as they exist, detach yourself from your manipulated belief system and make a clear an intelligible determination as to whether you believe the Fed and our monetary system are really in the best interest of we the people.