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3.  Federal Reserve & Inflation

Although the causes of potential national insolvency are numerous, only one is certain.  Inflation.  And where does inflation come from?

The Federal Reserve.

We all know what inflation is…it is the shrinking of the value of our money, supposedly because of an increase in supply.  This is presumably because of the law of supply and demand.

I say presumably because it would be true if the kind of money we use today were a scarce commodity.  However, because we can always print more money, this is not really true.  If it were, such situations as Lincoln’s Greenbacks and the Tally-stick system that was used in Great Brittan in the past would have resulted in inflation.

The only reason we have inflation is so that the owners of the Federal Reserve can make money for the trouble of printing money for America.  In fact, if we printed our own money, inflation would not be necessary.

But there is another reason why inflation is necessary.

Most today already understand that the Federal Reserve is NOT FEDERAL, but rather, a private banking concern that has the authority to print money FOR the use of the United States, at interest.  And they don’t actually print it for a price, but rather, they print it, then LEND it to the U.S. at interest.  So WE THE PEOPLE borrow money from them and must repay that same money with interest.  Where does the interest come from?

They have to print more money, which they lend to us to pay the interest.  So all we are doing is becoming in greater debt to the Federal Reserve every time we must print money.  Then, to pay the interest AND initial Principal, we must borrow more.  To pay that, we must borrow more and continue this process to infinity.

It does not take a genius to figure out that this creates a debt situation from which one can never escape.

To make it even more clear, here is an example:  Let us say that you want to borrow a dollar from me and I am the ONLY source for dollars.  I loan you $1, but you owe me that dollar back plus 10%.  So you owe me $1.10.  OK, but where are you going to get the 10 cents to pay the interest?  I am the only source, so you must borrow 10 cents from me, at interest.  Now how much do you owe?  $1.11.  The original $1.00 + the initial $.10 interest + $.01 interest on the interest payment borrowed.  Where do you get the additional $.01 to pay me?  Borrow again.

See, no matter how many times you borrow to pay me, you are only going to go deeper into debt.  Sweet huh?

It is if you own the Federal Reserve.

So who owns it?

Well, that is pretty much a secret.  No one knows for sure, but we owe them everything.

Finally, consider this.  In the 1970s, the U.S. government passed laws against Pyramid Schemes.  Basically, such a scheme is illegal because it is not sustainable.  It is not sustainable because it requires perpetual growth to infinity or else it will collapse.

This is the same thing the Federal Reserve has set up for the nation.  Without growth, it will collapse.  So how does the growth continue, especially at a time when the workforce begins to shrink?

This is where inflation comes in.  Without inflation, the entire house of cards, the pyramid scheme we call the Federal Reserve, will fall.  Inflation is the means by which production can be artificially increased.  How so?

To illustrate, consider this:  We measure productivity in America by GDP.  GDP is the measure of output in dollars.  Now think.  Based on this concept, here is what happens.  I make widgets in my business.  It takes 1 hour to produce a widget and I sell it for $1.00.  If I sell 100 widgets, my GDP is $100.  Suppose I then raise the price of the widget to $1.50?  My GDP increases to $150.  But did production increase?  No.

So GDP is a bad means of measuring productivity and most economists will agree.  So why do we use this measure?

Because if we did not, our debt would eventually outstrip “production” and we would rapidly go bankrupt.  Inflation allows the GDP, measured in this way, to artificially float our financial house.  It is the same fraudulent scheme that brought down ENRON, among others.  It cannot be sustained forever because it is a Pyramid scheme.  One day it will collapse.  Of that, there is no doubt.

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