Hopefully this explains just about everything we need to know about the history of the Federal Reserve, economics in-general, what we can expect from the path that Obama is leading us down, and what the REAL solutions are to the economic armageddon that we are now facing. It's LONG, but I believe it's a GREAT read, and it's in layman's terms. PLEASE take the time to read this!

Understanding the Financial Mess and Inflation

Seen enough discussing the cause of our economic woes? They're almost always incorrect, so I figured it was time to write one that addressed the real issues. This is written in plain English without the technical mumbo-jumbo so people will be able to understand it clearly. So, even though I will be leaving out some details everything in this message will be fundamentally true.

Okay, if you want to understand the problem we have with money in this country, you're going to have to understand 3 things:

Who makes our money.
How money comes into existence.
Inflation is nothing but a tax.
Let's tackle the first part:

PART I - Who Makes Our Money?

We have 2 different $100 Bills. One has a red seal, the other a green seal.

On the top of the first $100 bill, it says "United States Note". That means it is a note issued by the United States.

On the top of the second $100 bill, it says "Federal Reserve Note". That means it is a note issued by the Federal Reserve. It is NOT issued by the United States at all.

Well, who is the Federal Reserve? Aren't they part of the government you might ask? The answer to that is NO. The Federal Reserve is a private company, just like Federal Express. And it is no more federal than Federal Express is.

Now both of these $100 Bills cost 4 cents to produce. In the old days the govt would simply print up a red seal $100 United States Note for 4 cents and spend the money on something it wanted. Not anymore. Today, the Federal Reserve gets to produce the $100 Bill for 4 cents and then sells the $100 Federal Reserve Note to the US Government for $100 Face Amount.

That bears repeating. The Federal Reserve (a private company) gets to produce slips of paper for 4 cents ($100 Bills) and then sells those pieces of paper to the US Govt for $100 Face Amount.

Now since the government doesn't have any money of its own how does it buy these Federal Reserve Notes? It pays for them with debt: Treasury Bonds, Treasury Notes, & Treasury Bills. If you read the paper or listen to the nightly news you'll hear the media say things like "The Fed injected liquidity into the markets..." or "The Fed is buying government securities..." All this means is that the Federal Reserve is literally creating money out of thin air and then selling this money to our government for its face amount. This is the true source of our National debt, and this is the reason our debt never goes down.

If you read an economics book this will be covered under the term "Monetization of government debt."

Now some of you might be saying, "Why should I care about any of this?" I'll tell you why.

You know all that income tax that comes out of your paycheck every week? Well your money is paying for this. Your income tax dollars do not pay for things like you think. The personal income tax does not pay for the military, roads, schools, or anything like that. It simply pays for the federal reserve notes with the green seal. In fact both the income tax and Federal Reserve were created in the same year - 1913. The income tax was created to finance the federal reserve.

Okay, pretty crazy right? Why in the world would our government pay a private bank for money, and then tax it's own citizens to pay for it, when we could just issue the money ourself practically for free? There is a reason, and we'll touch on it later. Right now we're going to explain the next part.



Learn more about "Austrian Economics" at the Ludwig Von Mises Institute. Plenty of ***** downloads from various economists at http://www..mises.org

You can also Google or YouTube people like: "Ron Paul", "Peter Schiff", and "Jim Rogers", to get an honest evaluation of the economy and how it relates to current events.

Tune into http://freedomwatchonfox.com/ every Wednesday at 2pm Eastern Time to watch Judge Andrew Napolitano's internet program "Freedom Watch" where he always has new guests who explain the real deal within our government.

And sometimes it helps to talk to somebody who already understands these things. If you ever have any questions feel free to visit http://www.ronpaulforums.com. Most people at the forums are familiar with all the facts in this email and can probably help you answer any questions you might have.

And don't forget to read the Constitution and Declaration of Independence every now and then to give yourself a refresher course on Liberty. If you've never read either, then there is no time like the present to start. You'll learn a lot from these truthful and wise documents.

AF you need to condense this more, it violates copy right laws.
Thanks, oh, and your link http://www.spielbauer.com/JekyllDownload.htm is dead.

The link...ST

http://www.pearlegg.com/econ101.html 

Quote from: Solar on November 21, 2010, 07:33:56 AM
AF you need to condense this more, it violates copy right laws.
Thanks, oh, and your link http://www.spielbauer.com/JekyllDownload.htm is dead.

Thanks ST.  I already did some modifying and condensing of this, so hopefully that's enough.  I want to make sure that EVERYBODY takes the time to read this.

Quote from: AmericanFlyer on November 21, 2010, 07:46:42 AM
Thanks ST.  I already did some modifying and condensing of this, so hopefully that's enough.  I want to make sure that EVERYBODY takes the time to read this.

Thanks AF, I hate to tell you, but you need to shrink it down to 10% of the original.
They are really starting to crack down on violators.
And guess why? Because like ambulance chasers, the lawyer has found a new source of revenue, just like the music downloader, they go out in search of people violating CR laws all on their own, then contacting the author and selling them on the idea of an monitory award.
It's not about whats right, but what makes them money.

I'll let you choose what you want to keep in the article.

Well Solar, I can no longer modify it, apparently because there have been replies to it.  So either just delete the whole thing or modify it yourself.  Sorry.  I doubt that any of this is actually "copyrighted" anyway, especially if it has been modified.