Economics: Economics 101

Economics 101

Once upon a time there was an empire called the Roman Empire. At the height of the Roman Republic they had gold, silver, brass, and copper coins. Their coins I believe were roughly 80 to 90% pure. However, wars broke out and the Romans wanted to keep expanding their empire and that would cost more money than what they could steal from their vanquished foes. So what did they do? They began adding impurities to their new coins so they could make more of them. They would also tax the people of the empire, and then they would take those coins, melt them down, and add impurities, thus inflating the money supply. Over the years as there were more and more coins in circulation, you needed more and more of them to buy the same things that you use to only need a few of them to buy. What caused this? Was it that the things that they were buying became more expensive for some reason, maybe they were improved, as the governments of today would have you believe? No! It was because their government through the creation of money was debasing their currency’s value and creating inflation until basically the Roman Empire collapsed from war and corruption in their money and in their people. There were several times throughout the empire where there was monetary reform and during those times things were better. However, they couldn’t resist debasing their money to steal the wealth from the people.

A great civilization is not conquered from without until it has destroyed itself from within.

Will Durant, Philosopher

Gold Standard, A monetary standard under which the basic unit of currency is equal in value to and exchangeable for a specified amount of gold.

Give me control over a nation’s currency, and I care not who makes its laws.

Baron M.A. Rothschild

That was then and this is now, so what does that have to do with what we are going through today? Besides events like the Civil War, from the late 1700s to the early 1900s, America was on a gold and silver standard. However, this was too honest a system and it was too difficult for the US government and the elites to steal the wealth of the people, especially the middle class and poor. Honest money such as gold and silver are an enemy to the rich and powerful, so they attacked it in November of 1910. Elites met in secrecy on Jekyll Island in Georgia and there they drafted plans to introduce the unconstitutional central banking system in the USA. Therefore, America in actuality might as well have lost its Revolutionary War with England because that’s one of the primary reasons that the war was fought. America wanted to free itself from the oppressive monarchy and central bank of England and issue its own currency, which would be free of debt. Architects of this grandiose plan were said to have included tycoons and banking families alike, names like Rothschild, Rockefeller, Warburg, Morgan, and several others. Then this was sold to the government in 1913 as a way to provide an elastic money supply, expanding and contracting as needed to keep the currency stable, in theory mimicking the gold standard. Within that same year they introduced the unconstitutional income tax as well, which wouldn’t have been necessary without the central banking system, the private Federal Reserve. This grand plan wasn’t just being spawned in America either; other governments adopted this system nearly simultaneously, selling their citizens into slavery to the private owners of the central banks. It’s impossible right now the way things are for anyone to find out who currently owns these private central banks, even people in the governments of the world. However, given information that is currently out in the open and given the massive dislocation of planet Earth’s wealth, I don’t think it’s too hard to speculate who owns them. Simply follow the money, as in any crime.

For more information on this subject read The Creature from Jekyll Island, by G. Edward Griffin (Reality Zone).

We have no poor houses in the Colonies, and if we had, we would have no one to put in them, as in the Colonies there is not a single unemployed man, no poor and no vagabonds.

It is because, in the Colonies, we issue our own paper money. We call it Colonial Script, and we issue only enough to move all goods freely from the producers to the Consumers; and as we create our money, we control the purchasing power of money, and have no interest to pay.

Benjamin Franklin to English officials about the financial health of the Colonies

The colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction. The inability of the colonists to get power to issue their own money permanently out of the hands of George III and the international bankers was the PRIME reason for the Revolutionary War.

Benjamin Franklin’s Autobiography

Gold was attacked again in 1933 when Roosevelt outlawed the private ownership of it so that he could confiscate it from the people because the government was going through the Great Depression, which they, the elites, and the unconstitutional Federal Reserve caused by increasing the money supply by about 62% from 1921 to 1929, then viciously contracting it. Then came WWII, which they caused by forcing Germany to pay war reparations, which created conditions of desperation and squalor, giving rise to the likes of Hitler. After WWII in 1946 they made a bit of a return to gold with the Bretton Woods System. This would tie global currencies to the U.S. dollar (USD), which, in turn, they agreed should be convertible into gold at $35 per ounce. As time went on France realized that the United States was issuing way more worthless pieces of paper currency than it had in gold in storage, so France along with other European countries started exchanging their paper for gold. Nixon couldn’t allow this to continue because America was bleeding gold, so in 1971 he ended the Bretton Woods Agreement and allowed the U.S. dollar to float and now for the first time in all of history no global currencies were linked to any physical commodities. Thus was born fiat money in America and all around the world.

Fiat Money, Money that a government has declared to be legal tender, despite the fact that it has no intrinsic value and is not backed by reserves.

Inflation, A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.

Gold and silver are very expensive to mine and they are finite; there isn’t an infinite amount on Earth. They are rare and in a lot of cases (more so for silver) they are consumed for things like electronics. They have been used as a medium of exchange for over 5,000 years and they have been incredibly successful. From looking at history we can see that when empires or civilizations stray from the disciplines of precious metals they end in disaster, chaos, and war. Why would it be any different this time? We no longer use gold or have a gold standard, so how is the money supply controlled? How is it measured and balanced? It is controlled by unelected Central Bank Chairmen like Alan Greenspan and now Ben Bernanke, who do whatever they are told in secret by other unelected individuals on committees that no doubt contain members of the owners of the banks themselves.

As you can see from the 10 year charts above, as the money supply explodes so does the price of precious metals. However Gold and Silver aren’t really going up, fiat money is loosing it’s value as they print it into oblivion.

Wake up, you idiots! Whatever made you think paper was so valuable?

Paper is poverty…it is only the ghost of money, and not the money itself.

Thomas Jefferson, U.S. President, 1801-1809

All countries who have attempted to create money out of thin air have seen the currency eventually destroyed.

Congressman Ron Paul in interview for America: Freedom to Fascism.

Since 1913 the USD has lost about 96% of its purchasing power. This loss of purchasing power accelerated even more after 1971. I believe that back in the seventies my grandfather bought my dad a house for around $10,000. That same house would go for about $300,000 today. This appreciation is mostly a result of inflation, a result of an increase in the supply of money and credit, which decreases the value of the money already in circulation. Real money, gold, has gone from $35 per ounce in 1971 to $1381 per ounce and rising. An average automobile has gone from a few thousand to about $20,000 to $30,000.

If the American People ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers occupied. The issuing power of money should be taken from the bankers and restored to Congress and the people to whom it belongs. I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies. We are completely saddled and bridled, and the bank is so firmly mounted on us that we must go where they ill guide. The dominion which the banking institutions have obtained over the minds of our citizens...must be broken, or it will break us.

Thomas Jefferson, U.S. President, 1801-1809

Over the last ten or twelve years the governments of the West and of the world have really begun to ratchet up the inflation rate in an orgy of theft and extortion that eclipses any other time in history. It really got a kick into high gear with the stock market bubble of the late nineties, which was created through monetary inflation. That bubble burst in 2000, and then we got a double whammy with the attacks of September 11, 2001. Now with just the bursting of the tech bubble alone we should have had a very severe recession; however, Bush remembered that his daddy didn’t get re-elected because the economy was faltering after the first Gulf War. So Greenspan lowered interest rates to nearly zero percent and in an orgy of money creation Greenspan cut down all the trees, wore out the number pad on the keyboard, and ratcheted up the money printing to Biblical levels unseen in history. This blew up the biggest, most obscene bubble mankind has ever seen in real estate. Since America is perceived as the planet’s best customer for everything, every other country on Earth began sinning against their citizens by printing money and creating credit at Biblical levels to prevent the USD from falling against their currency. So this real estate bubble has become a global phenomenon.

Money Supply Increases 2007-2008

• Australia 14% (MAO)

• Brazil 17.5% (MAO)

• Canada 10.2% (MAO)

• China 19.2% (MAO)

• Denmark 10.9% (MAO)

• Europe 12.3% (SCA)

• India 23.9% (MAO)

• Poland 16.1% (MAO)

• Russia 51% (FOR)

• Saudi Arabia 17.9% (MAO)

• South Africa 20% (SCA)

• South Korea 12.3% (SCA)

• Sweden 15.7% (MAO)

• Turkey 15.2% (MAO)

• U.A.E. 36.6% (MAO)

• UK 15.8% (MAO)

• USA 16% (SCA)

• Venezuela 69.3% (MAO)

Hyperinflation or Deflation

So what happens next: hyperinflation like they had in Weimar Germany in 1923, where prices quadrupled every month? Or will we have deflation, where prices collapse? That all depends on the people we have running our world. If they raise interest rates to where they need to be and start destroying some of the paper money and credit in circulation through bankruptcies and such, then Earth will likely fall into the worst depression mankind has ever seen. If they keep interest rates artificially low and continue with their ever-increasing money supply and credit, then America and likely every nation on Earth supporting her dollar will run the very real risk of spiraling into hyperinflation, and once it gets a hold on there is no turning back.

If we look back through history to see the results of hyperinflation, we need to look no further than Weimar Germany.

Weimar Germany

Stock Market (Average Estimate)

• 1914-18 000000126

• 1919-21 000000278

• 1922 000008981

• 1923 26,890,000

Interest Rates (Average Estimate)

• 1914-18 005%

• 1919-21 005%

• 1922 012%

• 1923 900%

German Mark

• 1914-18 4-5/USD

• 1923 4 Trillion/USD

Economics

Pageviews

Tuesday, May 17, 2011

Economics 101

No comments:

Post a Comment

Blog Archive