When someone does come along and says that it must end soon, it cannot go on, it must collapse, etc., they are told that there aren't any economic laws that say it cannot go on forever. The great belief is that if all people had confidence, then that is all that is required.
There is widespread belief that a total fiat system can function if it is universally adopted. The fact is ignored that people must work to produce goods, that before "division of labor" there wasn't any need for a common commodity as a medium of exchange. When an exchange was mutually desired it was accomplished by "bartering," goods exchanged for goods (wealth for wealth). When division of labor increased the volume of exchanges, the old -bartering" became cumbersome and too slow. A new vitality was introduced into the system of exchanges when it was discovered that a common commodity (a thing produced, which maintained its relative value to all other things produced better than any other) would serve as an "intermediate possession" between the time one disposed of his product to one person and was able to acquire the product desired from another. The widespread mutual acceptability of this common commodity throughout all lands made it the preeminent means of high velocity exchanges.
High velocity exchanges with wealth (gold and silver coins are wealth). There wasn't any money (credit) (inflation) in the system. Anyone who wished to increase the liquidity of the economy could fashion his own gold or silver possessions into the commonly accepted form for use in the market place. Wealth always exchanged for wealth, the difference between production and personal consumption by the producers, was the gross national product, and it equaled the total supply of "mediums" of "exchange" (wealth). No one could exchange more than he had-to be without goods to offer was to be without purchasing power. It was necessary to perform labor to acquire goods, in order to trade with another producer, and when a trade was made using the common commodity as a purchasing medium, the transaction was complete wealth for wealth.
With the introduction of coin debasement, money (credit) (inflation) was born. Money exists in the mind of man. True, if he accepted a debased coin he was giving up wealth his wealth for a coin which was not fully 10096 equal to the value he was attributing to that coin in his "mind," when he was deciding to accept it in exchange for his wealth. The difference between the value he was "attributing" to the coin (face value or non debased value) and the actual wealth content it had, is money (credit) (inflation), With a debased coin in possession, a person has imaginary demand that is not "supply'' equal to the difference between its "real" worth and its face value. What must be realized is that a person accepting a token worth less than the wealth that is being surrendered is convinced mentally that someone else will surrender the same value for it later on. This belief is the "confidence" that makes the fraud seem reasonable. The only time tokens will be accepted is when the receiver is convinced mentally that they have a value in relation to the value surrendered. Without an imaginary parity connection to some commodity the token is unacceptable. Media debasement always starts with a minor amount and increases through time. It is this subtle slow transition that makes the fraud acceptable. People are unaware of the invisible attack on the natural laws of economics.
To believe that any group of people, any nation, could ever get all its producers to agree to let any individual have the privilege of being able to take any or all of their production at any time without any compensation is ridiculous. Aware of those conditions, no one outside a mental institution would permit it; therefore one must be subjected to mental conditioning in order for it to "work" at all. By allowing redemption of fiat for real wealth in the beginning (paper bills were redeemed at the banks for gold and silver coins for years), the fraud is concealed and the "confidence" in the fiat is cultivated and brought to a fantastically high, exploitable degree. By the slow systematic increase in debasement, the removal of gold coins, then silver coins, the people do not realize that the banks will no longer redeem the fiat for any wealth at all. The people themselves are the only ones "attributing" any value to fiat. They go on exchanging their goods and services for fiat amongst themselves, supporting their "confidence" with "confidence." So it appears to the great perpetrators that the fiat could stand on its own as long as the "confidence" is maintained, but they are guilty of ignoring the natural laws of economics.
Imaginary demand cannot be controlled ……95
When debased coinage enters circulation, it expropriates wealth to its creator, and no amount of passing it amongst the people will replace that wealth removed from the economy. The expropriator would have to redeem the coins and replace the w h. The accumulation of fiat is proportional to the amount of wealth removed and no longer available to its producers, stolen from them without their becoming aware of the fact. This lack of awareness has allowed the condition to progress to the degree that it has. If the people really knew what has caused the destruction of our economy they would react, but instead they have been effectively duped into accepting a mental medium as a "thing" equal to their original wealth, and since its representative tokens can be exchanged for gold it is considered by the people, in their ignorance, as being just as good as gold.
Where once people had the wealth they produced as the capital goods with which to extend their industrialization, and could convert wealth into capital directly, they now are forced by their lack of knowledge to accept a ghostly non-material manifestation, issued by the owners of the "credit machine" who can control the machine but not Its output.
Present-day production is not conducted with the wealth of the people as the capital used. The people are no longer paid their earnings in wealth; therefore they do not have wealth to use as capital directly. When people are forced to use money, they relinquish the reins of business to the creators of money. When money must be used to purchase the capital used in business, the means of expanding the industrial progress of the nation rest in the money creator's whim as to whether the credit machine is "on" or "off" and available to the people. When it is "on," its output cannot be controlled and it will be used to Inflate; when it is "off," inflation is curtailed and the already inflated economy suffers an illiquidity crisis, which will lead eventually to deflation.
The entire means of production are then at the mercy of the money creators, who by natural law can only turn it "on" or "off' but cannot control its output. A free market controls itself; any attempt to control a free market by an alien "money" (the imaginary media) immediately germinates the seed of eventual downfall, manifesting itself in wage controls, price controls, rationing, and then collapse.
The "credit machine" in the "on ' " position allows almost anyone to instigate the creation of purchasing power by putting up collateral for a note loan or by simply using a credit card. There isn't any difference between the inflation resulting from the creation of credit by a bank or the creation of credit by the use of a credit card. The bank's credit creation can be influenced by the various directive manipulations of the Fed.
Bankers' credit creations are subject to reserve requirements, bank liquidity levels, and various other "on" and "off' regulations that can be imposed by the Fed at their discretion. The public, however, can decide for themselves when they wish to purchase, and when they do not. In efforts to control people's buying impulses, government has seen fit to try various directives, such as changing "down payment" requirements. The down payment requirement regulation was an attempt to limit credit extension, by business lending directly to its customer, by carrying its "own book." If customers had to have down payments, then obviously their buying volume would be reduced. It is easy to see that the raising and lowering of down payment requirements would have an effect on the buying volume and, of course, the credit creation to facilitate those purchases; but the effect is by no stretch of the imagination, "control." Controlling credit creation would mean the ability to limit it to a given 'amount' at a given 'time' to accomplish a given "result." This degree of control over credit creation never was and never can be, accomplished by any means invented to date.
By passing the "truth in lending law," it was possible in most cases to take credit creation away from the local businesses extending credit to their customers directly, and move it into the banking system through the use of credit cards. Credit cards, however, are either valid or invalid, and even though the amount of credit may be limited on the individual card, there are still the people to consider. The credit card may be used or not used according to the people's whim, so although the card may be recalled by the bank or its limit raised or lowered by the issuing bank, they still cannot control the exact extent or timing of its use. Millions of credit cards already issued and in the hands of the people are a tremendous potential purchasing power always at the "ready"! Credit control laws are a fake. Creation devices can be turned "off" or "on" but as long as it takes people to use them the output cannot be controlled. The output is credit, credit is money, money is inflation and therefore inflation cannot be controlled. Once a credit device is installed and turned "on" there will be uncontrolled inflation.
"Money" The Greatest Hoax On Earth …..96
All output of the credit machine bears interest, and interest can only be paid if the machine stays "on"; turning "off" the machine will make interest payment impossible and create a liquidity crisis. The lowered liquidity will "throw" the imbalance of money (imaginary demand) vs. goods (supply) available over to a "condition" where the parity of money in relation to goods will rise, which will cause lower "prices" and lower employment. Owners of the credit machines reap the profits, all credit expropriates wealth from the people. The people (victims of the expropriation), although they are never quite aware of the "direct thievery" the "credit" is guilty of, do become aware of the inflation itself when it causes the "price" of all commodities to rise. The owners of the credit machines would like nothing better than to be able to perpetrate the expropriation of wealth, and " control" inflation, the result would be the best of all worlds for them. Natural law, however, will not allow it, when inflation (money) is used to purchase food, for instance, the food is consumed and the credit (inflation) remains to accumulate.
The result of "inflation" is eventual hyper-currency debasement," controls, shortages, and rationing which lead to the eventual collapse of the people's belief in the credit machine's output, collapse of the economy, and deflation. People purge themselves of the credit machine's creation (dollars), and turn to bartering" to subsist, earning what they can, where they can, and making direct exchanges in a self-erected free market which does not use the credit machine's created dollars.
Credit machine owners cannot expropriate wealth if the machines lay idle. The owners cause laws to be passed, labeling the people's self-erected free market a ''black market" and imposing penalties on anyone operating in the "underground" free market in "violation" of their "uncontrolling" regulations.
The cycle is always the same, once inflation is commenced, it will increase in proportion to the degree of the expropriation desired by the credit creators, and confer upon them the control" of the means of production and the people. Once turned "on" the process can only be turned "off" for brief intervals, and the cycle will have a life span influenced by the relative dwell times of the "on'' and "off" periods. The entire process is self-terminating by nature and cannot be perpetuated. The inflation, once begun, cannot be stopped until it runs its course, it can only be affected briefly during its life span, but it can never be controlled!
The area of operation of the inflation process does not alter its self-terminating nature. Basically, effects of inflation are the same, although there are effects of its application, internationally, that are somewhat complicated, and perhaps to most observers a bit confusing. just as the people here will only accept the created money as long as they believe they will be able to pass it along later and get comparable wealth for it, so it is with people all over the world-they are no different.
The nations of the world have been inflated just as we have. The German people have been robbed by the German central bank and the Italian people by their central bank, etc.
The degree of inflation varies to some extent in different nations, but the delusion of the people to is exactly the same. The people do not see the true nature of the robbery taking place, that they are being robbed by the very creation of money. The higher "prices" resulting in the lowering of the purchasing power of that money is an effect of "natural law" trying to alert the people and motivate them into taking corrective measures. The central bankers who are the owners of the credit do know the difference.
Imaginary demand cannot be controlled ……..97
Central bankers have been content to extract the wealth of their individual nation's citizens with the art of delusion, perfected over many years of practice. The whole international system is about to collapse because they have become so skilled in the United States that the Fed has used the scheme on citizens of other countries to such a degree that their individual systems have now been placed in jeopardy.
In their collective efforts to make their respectively created currencies stand firm, without direct value in terms of the common commodity "gold," they agreed upon a "reserve currency scheme.'' This scheme, born at Bretton Woods in 1944, was to make the delusion complete and include the entire population of 120 nations of the world, and to make the awareness of the primary thievery still one more step away from any possible exposure to their victims. The system involved making the United States monetary unit (the "dollar") the reserve currency. The "dollar" alone would be the only currency linked to "gold" directly in a fixed amount (35 dollars equals one ounce of gold). To find the gold 11 value" of a German D-mark or an Italian "lira," one must use its dollar parity and compute. The currency parities agreed upon at Bretton Woods were to be maintained by the various member nations' central banks by "controlling" their inflation so as to keep the multitude of currencies parities in relation to the dollar within one percent up or down.
It was shown earlier that controlling inflation is impossible, it can be turned "on" or "off" at will, but once "on" it can only be turned "off" for brief intervals during its life span, but it can never be controlled. The same natural law that makes it impossible to control inflation within the sphere of influence of one central bank, also has the same power when it is attempted on a world-wide scale. The "prices" rising due to the lowered purchasing power of the currency units created, which is the inflationary effect of natural law violation, made the normally exportable goods of the United States too high in "price" to be competitive in the world markets.
The result of having goods that are not competitive is a "balance of trade deficit" (an unpaid account) they won't take our goods and we will not pay them in gold!
We purchase the goods of other nations and offer "dollars" in payment for the imports. The dollars go out to pay for imports, but are not returned in payment for our exports, because the dollar's parity in relation to our goods has fallen too low. Dollars building up in the central banks of the world are claims on United States Gold, and to prevent excursions of greater inflation the central banks must try to send them back to the United States to be redeemed for gold. Meanwhile, to fulfill their obligations which were mutually agreed upon at Bretton Woods, central banks of other nations must exchange the dollars held by their citizens for the currency of their own nation, when they are tendered for exchange on that level of the foreign exchange bank. To exchange dollars for D-marks, as an example, the German central bank may have to step in with newly created D-marks to purchase dollars because the parity of dollars is lower in relation to the parity of D-marks "available for exchange." The international inflationary effect, brought about by natural law, is this building up of the unreal parity of the country's currency against the volume of another country's currency, in the foreign exchange market, as a direct result of the refusal to pay for imports with gold. The non-redemption of dollars then affects their respective parity with the other nation's currency and exchanges are not possible because the parity of their currency has risen above its allowable limit in parity relationship to the dollar (it had hit its ceiling or penetrated it).
When a nation's currency has risen above the allowable one percent parity range, the Bretton Woods agreement called for that nation's central bank to "support" the dollar, because they "let" their currency rise too high in "value" in relation to the dollar.
This bit of absolute nonsense still stands as the most incredible part of the international delusion.
To lower its currency's value in relation to the dollar, a central bank must enter the foreign exchange market and purchase dollars at the official parity with newly created units of their currency until its parity in relation to their goods has fallen to where the parity of the dollar and their currency's parity are within the allowable range (one percent up or down), and let the normal exchanges resume. The build-up of dollars then forces other central banks to increase the creation of their currency to make these dollar purchases, and their inflation is increased.
"Money" The Greatest Hoax On Earth ……98
In order to maintain the "gold backing" for their currency in the same relationship indicated by their currency's parity to the dollar, the central banks have to -send the dollars here to be redeemed for gold, and the gold received will then "back" the new units of their currency created.
All those dollars coming back to be redeemed for gold are a drain on our gold supplies, and the Fed knows that gold is wealth-their wealth. They stole it from the people who produced it, (they purchased it with "dollars" they created at no cost to them) and they want to keep it. It is more than that; it is the people who are deluded, not the Fed or the other central banks. The issue becomes one of survival. If we ship the gold they will have a lesser imbalance between the volume of their currency created and the wealth behind it, or less inflation. If we keep the gold we will have less relative inflation and theirs will be greater. It is clear that the higher rate of inflation, the closer a country comes to the end of the cycle. When President Nixon closed the "gold window" he was telling the world, "If one of us must collapse first, let it be one of you."
Closing the gold window and removing the last vestige of make-believe redeemability also ended the dollar's long use as worldwide "reserve currency." The Bretton Woods agreement and the international monetary fund were dead. Without a tie to the common commodity gold or to any common wealth commodity, it is impossible to arrive at currency parities. There is talk of using S.D.R.s, but S.D.R.s are also just paper and ink recorded figments of the deluded people's imagination, and only get their respective "valuation" by a tie to gold (central banks can buy S.D.R. bookkeeping credits with gold, but gold cannot be bought with S.D.R.s). So we must acknowledge that any currency to have even an imagined value" must be referred to in terms of wealth.
Rulers cannot rule with wealth unless they get it from wealth producers (people). To get it from the people without resistance they must serve the people. To rule the people and not serve them they must have their created currency accepted. To have it accepted, it must be tied in some way to the wealth that the people produce and exchange. Wealth is produced by labor: when the people labor they create wealth, they create more than they consume, and when they exchange wealth they never lose it-it is constantly replaced by their continued labor. Wealth can and will work for the wealth producer, but it cannot and will not work for the non-working "ruler." Any attempt to rule with accumulated wealth, to control people and support them on welfare will dissipate that wealth, and it will not be replaced because governments do not produce wealth.
When the final collapse of the created currency comes, with it will come the realization of the credit machine owners that their machines' output must be accepted or they cannot control the people. This realization is the force which finally brings about the eventual deflation and the following depression period until the people can be deluded into accepting the new currency as being as good as gold.
The United States citizens have not had the experience of going through these cycles, but the Europeans have, and for generations the memories have managed to survive. The people of Europe know and fear the awesome power of a currency collapse, and their respective central banks will make every effort to keep the delusion going, but it s impossible to keep it going. Dollars are flooding Europe and Asia, and all attempts at supporting the dollar are failing.
The Smithsonian agreements that the dollar was "supposedly" devalued was another incredible piece of sheer nonsense. On August 15, 197 1, President Nixon declared the dollar in any amount not good for gold, in redemption, then months later in December came the decision to devalue the dollar. It was at zero value then, and they were going to devalue. They all Agreed the dollar that couldn't buy gold at $35.00 an ounce would now not be able to buy it at $38.00 an ounce. How can 38 dollars be worth an ounce of gold if no one in the world will give an ounce of gold for 38 dollars?
Imaginary demand cannot be controlled ……99
An attempt was being made by our central bank to delude the other central banks into having the baseless faith our citizens have in the make-believe value" of the "dollar." If, magically, a way were found to give the "dollar" the value of gold without its in any way being redeemable in gold from its creator, then we surely would have advanced to preeminent heights undreamed of by the alchemists of old who only wanted to change lead into gold. If we could only make "them" believe it does not have to be redeemed with its creator's wealth, that it is still good and if they will only believe it and give their gold for it, it will be as good as gold again, all over the world.
The foreign central banks agreed to support the dollar again at the "new" rate and newly adjusted parities, but we had to promise to make an effort to control our inflation. Inflation cannot be controlled and our dollar are flooding Europe and Asia, and causing greater inflation throughout the area by the increased creation of other currencies needed by them to support the dollar. By April 1972, dollar flooding had caused so much havoc; the other central banks had a meeting at Luxembourg and decided to try to establish discipline. The expropriation of foreign wealth was progressing at fantastic rates, and the Imaginary, ghostly, nonmaterial link to gold was not "holding-after all, if you never have to make good on your IOUs why not give them all they will take, and take from them all they will give up? The Luxembourg accord in April was an attempt to put discipline into the system; they agreed to narrower allowable excursions of parity for their own currencies in relation to each other, through their respective relationship to the dollar.
They mutually agreed upon a provision that any country whose currency had to be supported by another would have to reimburse that other country for the support out of its own reserves. The reserves were to be paid in relationship as to how the supported currency's country held its assets. If the supported currency's country held 33% dollars, 33% gold bullion and 34% S.D.R.s, then its reimbursement had to be in proportion.
It is plain to see what was happening without the discipline of gold redemption requirements, each country could inflate its currency and buy its neighbor's goods, and they knew it! To try to stop such stealing from each other they were attempting to control the inflation that was now international in scope. They were attempting to circumvent natural law, and at the same time reacting to it. They were attempting to get the discipline of gold without using gold, yet the only thing the central banks would readily accept from each other was the gold and gold claims from their respective assets. They were attempting to demand that any of them that inflated to the degree that their currency needed support by another should make it good to the other in gold or other assets. It is proof positive that they were at the moment of truth, realizing that it was just as impossible to control this international inflation, as it was to control domestic inflation, with everyone holding credit cards.
The international monetary fund was an attempt to create a single credit machine, and have it create the reserve currency. All currencies would have parities in relation to the reserve currency and the reserve currency would be increased and decreased as required to facilitate nations settling their balance of trade deficits.
The fallacy is that with only the creators of wealth (people) redeeming all these created monetary units, and all countries using their own private credit cards (their own power to create their own currency), and each one contesting with the other to get all they can before anyone else beats them to it, the world would be in "parity chaos" in no time at all. With all the credit machines existing, and as many "button pushers" turning them "on" and off haphazardly, it should be perfectly obvious that the end will come fast.
"Money" The Greatest Hoax On Earth……100
It would appear that some of the European central banks have had their monetary vision of this tremendous potential for worldwide monetary collapse, and a resulting worldwide depression, and are advocating a rapid return to some form of gold redeemability and discipline. Should the people ever be exposed to the full score of this induced delusion of monetary unit creation, by just such a collapse, it might be generations before the world population could again be brought to the brink of total one-world control and exploitation. A world wide, large-scale deflation and a return to redeemability are the only ways 'in which the credit machine owners can salvage some degree of control. They will have to let the wealth producers retain a little of what they produce, for the natural law indicates that when you take all that a worker earns he stops working, and without workers to produce, there cannot be any wealth to steal.
Before we arrive at that point in time, the credit machine owners and distributors of the created "dollars" will declare a deflationary exchange of currency, reverting to redeemability. It will happen as a united move all nations simultaneously. The nations cannot individually return to redeemability without complete loss of all international exchange or making only exchanges of production (bartering).
It would be disastrous for any nation to have a redeemable currency and try to make exchanges with inflated nations with nonredeemable currency. The nonredeemable currency would seek out redeemable currency anywhere in the world, and expropriate the wealth of that nation.
All nations wishing to conduct international exchange will have to return to currency redeemability or bartering-there is no alternative!
To return to redeemable currency there will have to be a large-scale deflation and all the
production stolen over many years will be paid for by the holders of dollars and dollar instruments, all over the world, taking the loss when those dollars are turned in for the new redeemable currency.
Only people's labor produces wealth.
The division of labor makes exchanges imperative.
People produce more than they consume.
The excess of production over consumption is savings.
Savings in the form of precious metal coins are excellent media.
Precious metal coins are production in wealth media form.
Production in wealth media form is potential demand (wealth).
Production in wealth media form is potential supply (wealth).
Law: Supply and "demand" cannot be unbalanced where wealth is the only media.
The people are producers and consumers. Since the excess of production over consumption is the production converted to wealth media, when all exchanges have been completed and all consumer goods consumed, the media remain.
Consumer "A" buys goods from producer -13--receives goods, giving up wealth media. Result: "A" still has same total wealth.
Producer "A" sells goods to consumer "B", receiving wealth media and giving up goods. Result: "A" still has same total wealth.
Producer "B'' sells goods to consumer "A," receiving wealth media and giving up goods. Result: "B" still has same total wealth.
Consumer "B" buys goods from producer "A," receiving goods and giving up wealth media. Result: "B" still has same total worth.
Proof: Goods are exchanged and used or consumed without any loss of wealth media.
MONEY IS CREDIT IS INFLATION
Imaginary media (money-credit- inflation) represented by tokens (metal disks at 97% seigniorage) and paper and ink bills (tokens) at 99.4% promise.
The United States Treasury gives the metal and paper tokens to the federal reserve for issuance.
Producer "A" sells goods to consumer "B" who borrowed "dollars" from a Fed banker, giving up goods and receiving tokens (97 to 99% imaginary promise of future exchange value).
Result: "A" has extended credit-accepted created Inflation.(continue)
Imaginary demand cannot be controlled nnnnn101
Consumer ''A" buys goods from producer "C" receives goods, gives up token (97 to 99"/o imaginary demand)-result: "A" has used inflation as a medium of exchange.
Producer "C" sells goods to consumer "B" giving up goods and receiving token (97 to 99% imaginary demand)-result: "C'' has extended credit-accepted inflation.
Consumer "C" buys goods from producer "A", receives goods, gives up token (97 to 99% imaginary demand)-result: "C" has used inflation as a medium of exchange.
Tokens spent into circulation take out production, which is replaced by credit money inflation.
The borrower "B" takes full value in production and contributes a token (paper bill or metal disk with a value of less than 3% of goods purchased), (he pledged full value to the banker who gave up nothing.)
Production flows out of the economy as credit- money- inflation flows in: first a trickle, then a flood, as the wealth media in circulation are extracted by the inflation.
To circumvent discovery of the loss, the wealth media are declared unlawful.
The original promise of redemption removed, token production can be speeded up and the expropriation of wealth increased.
The producers of wealth are left with only what they use or consume.
To circumvent awareness, the producers are allowed to create credit- money - inflation also.
Producers are issued credit cards (the new money - inflation) and allowed to borrow into the future.
All title to wealth gravitates to the credit distributors as time passes.
Human desire is not limited, and the use of credit cards cannot be controlled.
All purchases made with credit cards are inflation and the inflation accelerates.
Token and credit distributors can start the system but it can only be stopped for short intervals.
Any prolonged stoppage would reduce the volume of exchanges and trigger deflation.
Token and credit distributors try to control the inflation by manipulation of the tokens (metal disks and paper bills), but the buying impulses of people and their credit creation (via use of credit cards) cannot be controlled.
Unable to be stopped, except for brief intervals, inflation roars onward gathering size and speed like a hurricane.
Inflation does not respect borders, it enters into other nations' economies becoming worldwide in scope.
Inflation from without added to inflation within accelerates the domestic inflation in the nation invaded.
Inflation becomes runaway falling currency parity and feeding on itself, explodes onward.
''Prices are changed so rapidly that people will no longer extend credit or put off purchasing.
Every producer demands goods for goods and we are back to bartering.
Bartering does not involve money -credit -inflation to facilitate exchanges.
Bartering with a common commodity as a wealth medium of exchange can handle any volume.
With money credit inflation not in use, the credit distributors cannot purchase production and they have to work to eat, as natural law dictates, but that thought is revolting to them.
They must prevent people from becoming aware of the true nature of money-credit inflation.
The money creators will declare a deflation and return to promises of redemption in wealth.
All the production that was taken will be paid for by the holders of money, when it is exchanged, at a loss, for the new promises.
"Money" The Greatest Hoax On Earthnnnn102
The definitely imaginary nature of " money" having been established, we can try to understand why the banking elite allows it to continue toward inevitable collapse without making any visible effort to halt it. Perhaps they are not as certain as I that the collapse is inevitable, but if that is so, why has all promise of payment to the bearer on demand been removed from all our paper token currency in circulation?
Possibly, they have accepted the idea that in reality there isn't any natural economic law that can cause the inevitable end to this charade. Perhaps they think it requires only that people believe in their imaginary "money" to make it work forever. Do they think that if the idea 'Its failing never occurs to people that it can go on forever? That may be what the banking elite believe because that is the conclusion one would reach if their actions were carefully observed.
Inflation is the money itself, ever increasing in volume, but they always refer to the inflationary effect" as the "Inflation" and attempt to control the "Inflationary effect. They have a heyday explaining that, "inflation" in foreign lands, is greater than here in the United States when in reality it is not true. Realism abroad, less effort to hide the "inflationary effect," enables the elite here to say "they" have higher inflation.
The "Inflationary effect" is the "price reaction" taking place when greater and greater amounts of "money" as imaginary demand enter the market and bid up the commodity prices." It is this specific reaction of "prices rising" that the elite invariably refer to as the inflation" and make every effort to control. In this area some Influencing is possible. Inflation cannot be controlled because inflation is the "money" (credit) itself, and because it is psychologically created, its creation is sponsored by all make-believers.
When people believe that the economy is thriving, and going to get even better, they increase their activity in the stock market and when Dow Jones rises and stock prices are higher, their loan values are higher and the latent "money volume" is increased thereby with the people who caused it, totally unaware of what they had done.
When "money" is all "make-believe" all - make-believers" make the "dollars" created a matter of record, and until then they are not officially created. It is in this area that the banking elite have made their big effort to control the inflationary effect. All make-believers can create latent money volume, but only the bankers can dispense it and demand its eventual repayment plus interest.
If we liken this vast banking system's ability to make huge volumes of dollars generated in the minds of humans to an atomic pile undergoing a chain reaction with the "dollars" as neutrons, we can see the control method more clearly. The more "dollars" created and released as loans to borrowers, the more "dollars" must be created to facilitate interest: "dollars" generated by "dollars" released (neutrons released by neutrons). It is the same kind of reaction and just as dangerous, if not controlled. In an atomic pile undergoing a chain reaction, the "mass" can become critical if not controlled. The control means in an atomic pile are carbon rods that are advanced into or withdrawn from the active chamber. Introducing the rods into the active chamber has the effect of slowing down the chain reaction, since the rods absorb neutrons as they are released and prevent their hitting other atoms and releasing other neutrons. Withdrawing the rods prevents their absorbing neutrons released and those released and unabsorbed fly into other atoms releasing other neutrons and the chain reaction is allowed to accelerate.
In the banking system the "carbon rods" are the Treasury bonds sold into and repurchased from the banking system by the federal open market committee (F.O.M.C.). Treasury bonds sold to the banking system extract "dollars" from the banking system into the F.M.O.C., an agency of the federal reserve system, thereby deflating the banking system's pool of lendable "dollars." When the Treasury bonds are purchased from the banking system by the F.O.M.C., the dollars from the F.O.M.C. again enter the pool of lendable "dollars" and so it can be seen that the action of the Treasury bonds is exactly the same as the carbon rods in the control of an atomic pile.
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"Dollars" extracted from the banking system by the introduction of Treasury bonds cannot be used in the active market place, and therefore selling bonds to the banking system lowers the amount of "dollars" entering the active market place to raise "prices." When the deflationary effect has done its Job and the situation looks as though it may swing too much and there may be a liquidity problem or crisis, the F.O.M.C. buys bonds from the banking system. The dollars coming in, as the bonds leave, swell the pool of lendable "dollars" and the additional dollars enter the active market place as units of imaginary demand having their effect on the "prices" and employment level.
The "inflationary effect" is evidenced by the rising price level'' (falling dollar parity) of commodities and the relative balance of imaginary demand vs. real supply and demand (wealth) in the market place which is called "Inflation" by the banking elite and has been their main influential effort. At best, their main effort has been a coarse one, and does not constitute fine tuning." The activity in this area is considerably enlightening when the figures associated with these efforts are understood.
In fiscal 1970 when the federal budget went $23.5 billion in the red, the total transactions of the F.O.M.C., selling and repurchasing Treasury bonds from the banking system, amounted to $738 billion and 50% of that was not by written drafts but actually was accomplished by pushing the programming buttons of a computer. The $738 billion figure is three and one half times the total transactions of the New York Stock Exchange for the same fiscal period.
In fiscal 1971 the total transactions were $1100 billion and 60% of that was by computer. In the first six months of 1972 these transactions totaled $968 billion and 76% was handled through computers (at the speed of light). it would be ridiculous to believe that it took $738 billion of Treasury bond sales and repurchases in and out of the banking system to support a $23.5 billion deficit in the federal budget. It must be evident that there is some big reason why all these transactions are necessary. What fantastic situation made it necessary in the year 197 2 for a total transaction of sales and repurchases of Treasury bonds to the banking system to equal over four times the federal budget total deficit of $430 billion.
It is the fact that inflation in the United States is over 20,000% in real terms. If our system was as stated officially and a dollar was redeemable for I / 38th of an ounce of gold, then the "Inflation" in realistic terms would be the volume of dollars of record in relation to the gold available to redeem them and that ratio at present is over 200 to one. In realistic terms there are enough "dollars" of record and "owned" by someone that if all were brought to the active market place as imaginary demand at one time, for illustration purposes say within one twenty-four hour period, then the imbalance of goods available to be purchased (supply-demand wealth) and purchasing power (imaginary demand "dollars") available would be 1: 1666. There are "dollars of record'' over 1666 times the average daily production of goods for exchange.
Keeping 1,665 (1666-1) times the average daily production of goods in imaginary demand from triggering massive "hyper inflationary effect" in the United States is a Herculean feat, comparable to balancing a steel ball on the point of a needle and takes the massive power of being able to shift huge sums of imaginary demand here and there at the speed of light. What are we going to see next-are they going to increase the speed of 100 They may believe that this situation can be extended indefinitely but I cannot.
In the United States where the citizens are compelled to accept legal tender laws, the situation can be extended quite far indeed but the eventual outcome will be a return to redeemable currency either engineered and dictated by government or by the people when natural law dictates. All the attempts by the federal reserve system to hide the terrible monster inflation and never let us show through and cause the inflationary effect have not been greatly effective. The falling dollar parity which is the ''Inflationary effect" has been evident and we are aware of it. All the efforts at hiding the inflation have not even remotely neutralized its potential for destruction.
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The fact that the daily production of goods in the U.S. is less than $2.8 billion in dollar value and the fact that the people hold $55 billion in government bonds alone make this quite plain, The vast amount of "dollars of record" belonging to the people and spendable by them is what makes the situation so fantastic. If in one day 5% of the holders of those bonds decided to spend the 5% ($2.75 billion) in addition to their normal purchases, the bidding could double commodity "prices" in that one day (one hundred % inflationary effect in one 24 hour period).
The people have $450 billion in demand deposit accounts in banks, only 6/ 10ths of 1% of that entering the market place as additional purchasing power in one 24 hour period could double commodity "prices" (100% inflationary effect in one 24 hour period). It hasn't been mentioned, but think of the potential of credit cards as imaginary demand in the same way. Some holders of credit cards have the potential purchasing power of several thousand dollars with them and yet could not pay the interest on that sum if they were to use its total potential. To prevent just such an eventuality as described here it will be necessary for fine tuning planners to figure some greater control method over our right to spend our earnings in our own way, either by rationing everything or by forced savings (mandatory payroll "bond" deductions). They must find some way to prevent our being able to bring that vast potential imaginary demand to bear on the active market place if they are to have any further influence in preventing the inflationary effect from becoming more pronounced as time passes. When the inflationary effect gets to the point where the people as a whole can see the price level" inching upward right before their eyes, they will become disenchanted with the purchasing power of the "dollar" and attempt to rid themselves of "dollars" before they sink much lower. When that point comes and the $55 billion in bonds and the $450 billion in banks are brought into play, the game is over-collapse, and the "steel ball" will tumble from the point of the needle.
