A political cartoon from the book: U.S. Money Vs. Corporation Currency, "Aldrich Plan.": Wall Street Confessions! Great Bank Combine, published by Alfred Owen Crozier in 1912—shortly before the Federal Reserve Act was enacted the day before Christmas eve in 1913.
LETTER TO THE EDITOR
Fiat money is a currency established as money by government regulation or law. The term derives from the Latin fiat ("let it be done", "it shall be") used in the sense of an order or decree. It differs from commodity money and representative money. Commodity money is created from a good, often a precious metal such as gold or silver, which has uses other than as a medium of exchange (such a good is called a commodity), while representative money simply represents a claim on such a good.—WikipediaWhat is money? Where does it come from? Why do we exchange pieces of paper for goods and services? What gives this paper value? These are some crucial questions that are not often pondered, but the answers hold the key to many of our economic woes. Economics is poised today as a complicated subject the average person cannot understand. Nothing could be further from the truth. An economy simply consists of human interactions where each individual looks to enhance their standard of living through voluntarily exchange. The overall goal of an economy is to fulfill the wants and needs of individuals within a society by using limited resources as efficiently as possible. One of the most innovative concepts ever created within an economy is money.
Money is a medium of exchange invented to phase out the complicated barter system of ancient times. Money provides a common medium everyone will accept in trade, eliminating the barter system. Money provides the simplicity and organization needed in an economy to allow everyone to participate in trade. A history of economic trial and error has provided guidelines as to what is best for suited for money. Five major characteristics of money require that it should be durable, divisible, scarce, portable, and have intrinsic value providing a long term store of wealth. The items that best suit these characteristics are precious metals, specifically gold and silver. Over thousands of years, societies have freely chosen gold and silver as money until recently.
In today’s society, the entire world operates under a system called fiat. Fiat money is money that operates due to government decree. Currently, the US Dollar is fiat, meaning it is demanded by the government that this paper circulate as money. These government demands are implemented via legal tender laws, and the fact taxes must be paid in this form. The US Dollar is merely a faith based currency meaning its value derives from people’s faith that the currency will be accepted in the future. The US Dollar is not backed by gold, silver, or any other good that contains intrinsic value. The dollar was backed with gold at a fixed price up until 1971 when Nixon removed the gold standard. Ever since 1971, the entire world has operated under this government decreed, paper based monetary system.
Since we now know the money used today is nothing more than paper backed up by faith and government decree, the next logical questions are, “Where does it come from?” and “Who has the power to create money?” In the case of the US Dollar it is not the government. The Federal Reserve System (Fed) is one of the ways in which money is created today (the other being fractional reserve banking). The Fed has been given the power to create the US Dollar and has had that power since 1913. If you take a look at the money in your wallet, then you will see “Federal Reserve Note” at the top. The Fed is a quasi-government agency owned by the world’s most powerful bankers. The Federal Reserve has been granted the power to create money out of thin air, which is counterfeiting. As we all know, counterfeiting is wrong because it is theft. The purchasing power of the newly created money is stolen from those who are holding the money. The Fed does several things with this counterfeit money including buying government bonds. Since the Fed’s institution in 1913, the dollar has lost over 95% of its purchasing power. This is known as the stealth-tax or inflation-tax. The public pays for this tax through currency devaluation via inflation. Adding insult to injury, the US Government is running a ponzi scheme with its bond market. The US Government takes out new loans to pay off old loans and as explained above the Fed often buys this debt with its counterfeit money. As with all ponzi schemes, the US bond market will eventually collapse leading to even more drastic devaluations of the US Dollar.
Knowing these unfortunate truths, the next common question is “So what? What do we do about this?” The most important step to take is educating yourself and others about the reality that we are all being systematically robbed via this fraudulent system. I encourage everyone to check out EndTheFed.org for more information. Another step to take is to store some of your wealth in precious metals to protect yourself from the Fed’s theft. The power rests in the people’s hands, and the system can be brought to its knees with a mass change in consciousness. Set the mental brush fires needed to free society.
Thank you for reading,