What You Need To Know About Economics…

What do you need to know about American economics? Two words: Federal Reserve.

Whether or not you believe there is a potential for an impending collapse of the American economy, it’s important to understand certain things about economics. With information just beginning to leak about the “housing bubble” crisis, we’re on the brink of a severe economic downturn. A lot of people are going to be wondering how things got so bad…well, there’s a reason…but I’ll be damn if the media doesn’t want you to know about it.

Federal Reserve NotesIt’s kind of funny…when I hear media puppets talk about the strength of the US economy, I immediately take offense at the mere notion of it. What we have is a falsely created economy…with it’s only strength coming from our tolerance of extreme debt and willingness to enslave future generations to an ever-increasing national debt and subsequent economic slavery. America’s national debt is approaching nine trillion dollars, thanks to fiscally irresponsible politicians, which amounts to roughly the equivalent value of every person’s economic output, vehicle, building, natural resource, and everything else in a single US timezone. Did you know that your portion of that pie is around $30,000?

We hear talk from politicians about “balancing the budget”…or more succinctly put into layman’s terms, to stop going into debt. This is what is commonly known as the federal defecit…it says nothing about paying off the federal debt. A lot of American’s believe we’ve paid off the national debt at one time or another, but I assure you, we’ve been steadily increasing debt since this country started. What you’ve likely heard is the balancing of the defecit…and that’s seen only rare, fleeting moments in our history. The problem with the debt began to get out of control with our third economic system in the US, the central banking system called the Federal Reserve. The problem has been exacerbated by financially corrupt politicians that fully believe money grows on trees. This is what our debt trend actually looks like for the last sixty-five years, corrected for inflation using year 2000 dollar values (ummmm, yeah, those numbers on the y-axis are TRILLIONS of dollars):

US Debt Corrected For Inflation

Now, you need to know that the Federal Reserve is no more federal than Federal Express. (Doublespeak, anyone?) It’s a corporation, a bank to be precise, and it’s not run by elected officials…but rather, very wealthy elite. The relationship of how our government interacts with the Federal Reserve in the process of creating money is a bit outside of the scope of this post, but suffice it to say, the creation of almost every dollar incurs another dollar towards the national debt. In the end, where our previous economic systems were plagued by inflation…with the Federal Reserve, we now incur both inflation AND a rising debt that must be paid back. Some say that’s the price of having a stable economy…but eventually, if not properly managed, the latter will become increasingly instable.

I’ll ask you some simple questions…what happens, if you personally, incur much more debt that you are able to reasonably pay off? The people that lent you the money will eventually want to be paid back, right? If you’ve exceeded your ability to pay, what risks are you taking? If you’re unable to pay off your debt, what is your financial future? Where does all your money go and how will you manage to live? Debt is not a freedom…it is the acceptance of financial dependence.

Now, put that into the context of a country. What’s our economic future if we continue to overspend well over $1 billion dollars PER DAY? Will lowering the interest rates help? No, that just reduces our ability to pay back the national debt as we’re inclined to borrow more money. Will raising tax rates help? Well, if we all accept a 75%+ tax rate, sure…but then, what does that do to the economic viability of each one of us?

Debt PictureAnother interesting question is: Who do we owe this money called the “national debt” to? Well, without going into bonds and other technical aspects of monetary expansion, it’s graphically explained here. Note the two largest slices of the pie – the Federal Reserve and “Foreign and International.” The latter worries me…this means that we are financially dependent on foreign interests. You’ve probably heard that “China owns everything” or some simple concept like that on the news…well, now you can put two and two together. Oh, and remember what I said earlier about the Federal Reserve being a corporation? Yep, all that interest and profit goes to the benefit of wealthy, private individuals.

So, what to do about it? Is there anything you can do about it? Frankly, likely not…except for kicking a vote in 2008 for Ron Paul. Instead, what I’ve done, is to implement the gold and silver standard into my financial life. It seems to be a much more stable investment than other potentially disastrous stocks, bonds and other artificial money schemes. The paper commodities for silver and gold are increasingly volatile, with excessive trading that far outweighs actual supply. And it’s hella fun and gratifying to be involved in physical precious metals. No longer is the value of my savings compromised by inflationary rates and irresponsible financial management. I’d encourage you to do the same…some day, you’ll thank me for it.

Watch this video from Ron Paul, one of the few Congressmen to “tell it how it is” in the entire body of Congress:


For a goldmine resource (bad pun intended) you should check out the Gold Is Money forums. You can find varying degrees of opinion about our economy and solid financial advice, all for free. If you’re interested in finding out just how deep the rabbit hole goes when it comes to the Federal Reserve, you should read the following books: The Secret World of Money by Andrew Gauze and The Creature from Jekyll Island by G. Edward Griffin. Both are excellent books.

For the lazy those that don’t have patience for dry books, you really need to watch America: From Freedom to Fascism. You can also rent it from NetFlix or other online video place. In my opinion, it’s worth every penny of the purchase price, too.

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