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On Monetary RebellionRichard Karn Curing an economy suffocating with debt by advocating the assumption of more debt is like a doctor proscribing smoking more cigarettes for a patient suffering from lung cancer. The central bankers of the world know this--and deep down, you do too. You've just become so apathetic, so brow-beaten by generations of economic bullies stridently repeating the same lies over and over again in the classroom, in the halls of government, in the media, that you just don't want to think about it anymore. But let's get a few things straight. Central Bankers do not work for you or me. They are not your friends. They are not trying to protect your interests or to promote full employment or to control inflation or to preserve the purchasing power of your money any further than it serves their interests to do so. Central Bankers only care about perpetuating the profit streams they have arranged for their respective cartels. Their loyalty is only to money and to each other, not to their depositors. Everything else is just very sophisticated propaganda. We are living through a pandemic of corruption engendered by the universal use of fiat currency. And yes, a fiat currency regime is a conspiracy. History is unequivocal: a fiat currency regime is a conspiracy between the financial sector and the government of a country to orchestrate the controlled, gradual decline in their currencies' purchasing power in order to reap unfathomable wealth and power by defrauding their nation of its wealth. It is theft on a national level that saps an economy of its vigor and eventually results in collapse. And today it is a global phenomenon. Don't kid yourself: the financial sector is motivated purely by the lust for money; the government is motivated purely by the lust for power. Every single fiat currency regime in history has failed, destroyed by the very corruption the fiat currency regime itself engenders: when you can create money without effort, without producing anything of substance, or without offering any service that promotes economic growth, and can spend that money on any boondoggle you can dream up to buy votes, how would it be possible for that money to retain value over time? That we assign a dollar any value whatsoever is a matter of convention, of habit, of enforcement, and in many ways it is only a form of mass delusion. Central bankers' role in this conspiracy is to facilitate the stealthy theft, literally the embezzlement, of your money through the uncontrolled issuance of debt that literally lends money into existence and from which they earn interest. And with each new dollar, yen or euro 'lent into existence' the value of the dollar, yen or euro in your wallet is diluted. By design, the money you earn is worth less every year, losing value in terms of what it can buy faster than the number of dollars you earn increases, so even though you may appear to be earning more money, those dollars buy you fewer goods and services than they did the year before. Using the Federal Reserve Bank's own inflation calculator, over the last ten years the dollar has lost 24.8% of its purchasing power, so if you have not seen a 24.8% increase in your wages over the last ten years, you have literally been robbed by the financial sector and the government--and your standard of living has declined as a consequence. Also by design, what money you save by thrift and sacrifice from your wages and put into a bank to save for later use, be it for retirement or the purchase of a home or for your children's education, is blatantly robbed of its purchasing power: what you could buy for $10,000 in 2003 now costs $12,478. On the most fundamental of levels, the financial sector loans us money that does not exist and then profits from the interest they charge us. And there are millions and millions of us taking out loans that run to trillions and trillions of dollars every year for houses and cars and education and business and credit cards--and the bankers collect the interest on every bit of it even though they actually had but the merest fraction of the money they lent you and you often end up repaying the bankers multiples of what you borrowed. These banks have conspired to manipulate LIBOR interest rates, corrupting the baseline interest rate that affects virtually all financial transactions as well as these loans, for their profit at our expense. They knowingly promoted risky assets as 'safe investments' to their customers, many of whom are pension or investment funds that manage your retirement money--and then profited by actively betting those very assets would fail. For more than a decade they have been involved in money laundering for terrorist organizations, pariah regimes and drug cartels, not to mention run-of-the-mill tax fraud and tax evasion on a truly global scale. And when they get caught in these illegal activities, it has become routine for these financial institutions to pay a fine amounting to the smallest fraction of what they have stolen--and they pay the fine to their government cronies, not the victims of their crimes, without admitting any guilt for their actions, and go right back to doing whatever it is they think they can get away with. Such crime pays; getting caught amounts to admonition by their cronies to do a better job of disguising their activities next time; the fine amounts to 'the cost of doing business.' It makes you wonder whether these fines the financial sector has been paying are tax deductable. These banks are supposed to be bound by limitations regarding just how much money they don't have that they can loan to people, but in reality there are no limits--because today, when people like you and me can no longer support our debt burdens and our 'bad loans' cumulatively threaten the solvency and very existence of these banks, they run to their government cronies crying 'the sky is falling, the sky is falling,' and the government, ostensibly to avert an 'end of the world financial collapse,' gives them more of our money. That's right, our money--even though we are broke and we have been the victims of these crimes. The government excuses the financial sector by claiming these banks pose a 'systemic risk' and have grown too big to be allowed to fail--so the financial sector, which caused the global financial crisis, has been growing their 'assets' faster than they were before the crisis. And the banking sector in the US has been doing this regularly for more than 40 years, ever since the US dollar became a pure fiat currency regime in 1971, demanding ever more taxpayer money from the government for each crisis on an ever more frequent basis, bailouts growing from hundreds of millions of dollars in the '70s to tens of trillions of dollars today while fewer and fewer executives are jailed for their crimes. Global financial crises are not rare occurrences--they are the norm. In the apparent calm between financial crises, bankers are using your money to buy up assets their misbehavior has depressed to bargain basement prices so they can profit from them in the next cycle. The government's role in the administration of a fiat currency regime is primarily to enforce legislation that enables this theft by the financial sector, growing in lockstep with the expansion of financial sector profits, and manipulating public opinion to further the fraud. The government extorts the money it spends from its citizens through relentless taxation and penalties and spends it primarily on expanding the size and reach of government and on making specious promises to the most vulnerable of us. As history has demonstrated ad infinitum, a government is a drain on an economy because it produces nothing except more laws and regulations that make it ever harder for an economy to function. The larger the government, the more inefficient and corrupt it becomes, and the larger the drain on the economy until one day, such as that day in 1989 in the Soviet Union, the economy simply stops working--as inevitably as the patient proscribed cigarettes to cure his lung cancer, the economy just dies. Over time the corruption integral to a fiat currency regime permeates society and reaches the stage we are living through today in which financial institutions reap extraordinary profits from new forms of criminal behavior they are never incarcerated for to supplement their bread and butter fraud of loaning money they don't have to people who cannot repay their debts, many of whom have adopted the rationalization, 'well, everybody else is doing it.' When these loans inevitably default, the financial institutions then turn to their government cronies for financial assistance; the government, which produces nothing itself, creates money that we will have to supply from future taxation to prop up the profligate banks so they can go back to 'business as usual.' When our income and savings can no longer service our debts, our assets are seized or foreclosed on by the very banks that lent us money they didn't have, our 'credit-worthiness' is destroyed, and we are pushed into a dependence on the services the government provides for us 'in our time of need.' The government promises us this 'social safety net' as an entitlement and is always adding more services and benefits for those of us unfortunate enough to have been marginalized, and pays for these services with taxes they take from those of us who are still working. Of course, those who have landed in the 'social safety net' will never vote for any politician that threatens to reign in these entitlements; in fact, many only vote for politicians who not only promise to give them more benefits but who also assuage their guilt for not working with myriad excuses for their failure--excuses that usually single out one group for blame and persecution, such as 'the rich' or 'capitalists' or the Jews, to deflect the Public's deep-seated frustration and hostility away from the politicians themselves. But the truth is that those of us that are still working have not been able to supply enough in taxes to support these and countless other government spending programs for decades now, which is why we have 'deficit spending.' With deficit spending, the government steals money from our descendants without their consent, literally indenturing our children and grandchildren to servicing our debts for generations to come, which decades of propaganda have convinced many of us, especially those who have come to depend on government largess, is 'like borrowing from ourselves.' But in actuality, such runaway spending is the cancer consuming our metaphorical smoker, and if the financial sector is left unchecked by stringent regulation that is actually enforced, and if the size of government is not reduced and its spending strictly controlled, the cancer will kill the patient. The longer the cycle goes on, the larger the debts, the larger the deficits, the more the banks 'profit,' the larger, more intrusive and more authoritarian government regulation becomes to perpetuate the crime, and the larger and more dependent on government the ranks of the marginalized become. Weeks turn into months and then years until entire generations know no other existence, and a country as promising as the United States of America becomes in fact more socialist than the Soviets ever attained. It is a sign of American Exceptionalism that the economy has been innovative and resilient enough to last as long as it has, which is why the US dollar has survived as a purely fiat currency regime for more than 40 years when the reputed average lifespan of a fiat currency regime historically has been about 28 years. 28 years: that's how long it usually takes a society to awaken to the crimes they have been victims of and to respond in the only ways available to them: they either leave their country, stage a rebellion to regain control of their money and government, or they purposefully destroy the currency in an orgy of consumption, frantically trading what they now understand to be intrinsically worthless paper money for real assets before others reach the same conclusion and add to the frenzy of spending that drive prices to unimaginable heights. Bankers and politicians are old hands at administering fiat currency regimes, seeing as how they have regularly imposed them for more than 2000 years, and they tacitly acknowledge that money and power transcend political ideology and economic models by co-operating with each other on a global basis to prolong the crime. Because the fiat currency regime is the source of their wealth and power, they strive to keep its debilitating effects hidden from their people--and will, in fact, do absolutely anything to preserve 'the system.' Notable fiat currency regimes of the 20th century include those inflicted on the peoples of China, Russia, and Germany. Each of these countries closed their borders, as much to keep their people in as to keep foreigners out. Each of these countries confiscated their citizens' firearms in order to lessen the chance of open revolt against their government's reprehensible behavior as well as to better oppress their people with 'Cultural Revolutions' and Stalinist purges and concentration camps that killed well over 100 million people last century--more people, in fact, than died during World War II. Each of these regimes also confiscated gold, ownership of which was viewed by those administering the fiat currency regime as 'monetary rebellion' that had to be stamped out. Does any of this sound familiar to you? You can change doctors and get a second opinion, America, or you can have another cigarette and listen to that niggling rattle in your bronchi. As Machiavelli noted, "History repeats because human nature doesn't change." ...Enlightened Anarchy, anyone? ### Feb 7, 2013
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