I thought we were always 100% in this together.
By Melvin J. Howard
Imagine I am running for
the highest office in the free world the President of the United States Of
America and you overheard me say in a private meeting to a group of wealthy
donors something like this almost half the voters in this country 47 percent believe
they are "victims" and expect the government to provide free health care, food, and housing. And
then I go on to say of these people, "I'll never convince them that they
should take personal responsibility and care for their lives." What would
you think? First off you would think I just alienated and pissed off half of
the population that I hope to govern one day. Secondly you would think this was
a dishonest and unfair general characterization of the people of whom I am
referring too. Unless you are a hardcore trained financial quant analysts you
will not get how our financial and free market system really works. It is
technically to complex.
Follow me down the
rabbit hole we call our financial system and I will show you why. Did you know
that as little as 4% of the money in the world exists as paper cash and
coins. To put it in another way, for every $100 or its equivalent in any
other currency, only about $4 exists as printed-paper notes or coins, while the remaining $96 exists as (just numbers written on papers and computer disks)!
If you walk into most bank branches in
the world and ask for more than
$10,000 in cash, from your own account, they will politely let you know that you will need to give them a few days advance
notice so they can get the money
ready for you. If you don’t believe me try it. Unless you live in New York
City or some other high finance
center, you will be unable to get that much cash in physical form if you just
show up unannounced to withdraw your account. You would think that
most banks would have enough cash to pay off a person who walks
in to withdraw just $10,000. But most bank branches can't do that in this world. Why? The money, in physical form, does not
exist why not? To answer that
question, we will first pursue
the issue of what money
is. So back we go OK, now, when you go to the ATM cash machine and
look at your bank balance
and it tells you that you have $1,000 left in your account, what is that $1,000?
What is it? Yes, what is it? Don’t just say, “It is money”; you need to define it
for me what it is? Imagine I was from another planet and asked you this question. What would you tell me your $1,000 on
that ATM slip is? That is
the question.
Once you have gone over several possibilities in your mind, here is the answer. The $1,000 is simply a recorded number. Numbers written on a paper or computer disk you have agreed to it, your bank has agreed to it, and you even agree to
use it in a cashless way by paying for things using your ATM card. The $1,000
printed on the ATM slip does not represent any sort of wealth that the bank is keeping for
you. It does not, for example, represent
the value of diamonds the bank
is keeping for you in a safe. The
only difference between the $1,000 written on that ATM balance slip and $1,000 you would write on a
piece of waste paper is that the one on
the ATM slip is on record as having been agreed upon by
whomever you bank with. If you took that slip, or your ATM card, to a
country or civilization (on
Earth) where they don’t share your system, they would look at you as if you
were crazy as you tried to buy
real goods and services with a piece of plastic or a paper with a
number written on it. The point of all this is to show you that the
money we use in what you might call the Western civilization of today is 96%
imaginary numbers written
on invoices, slips, and computer
disks, while 4% of it is in
paper and coins. That 96% does
not exists in the sense that you cannot possibly go anywhere on this world and hold it, touch it. It is nowhere! It
physically exists nowhere at all
on this planet. You cannot see
it, feel it, taste it, or touch it.
It doesn't exist! The only reason it works is that we the people have agreed on it and we act in predictable ways when certain numbers are written down for us in
our name. Now that we know what
96% of it is, let us see what the remaining
4% is.
The 4% that exists as
physical real ‘things’ is not made of
gold or anything valuable at
all. It is made of funny colored pieces of paper, and cheap alloy coins not worth their own weight in money (they are made cheap so that people don’t profit from melting them into iron). So what is real, people and people believing on
what they can accomplish if they put their minds to it that is real.
Let’s
begin with debt, because here lays one key to much of the puzzle we find
our self and the economy in today
Healthy vs. unhealthy
debt
There
is nothing wrong with debt, when used healthily as a tool. But when
it arises,
as it mostly does, from fear, feeling of lack, and negative
self-worth beliefs,
then it is a control game being played, a painful one at that.
Additionally, what
most people don’t know is that debt, in our current civilization’s money system, is designed to
collapse for a certain number of its holders I bet you didn't know that did
you?
The Medici The Kings of the Renaissance
Before
cash money was invented in it’s present form, people used to trade by barter. They would exchange
goods and services. Finally,
one day, a powerful merchant
family such as the Medici family of Italy (powerful merchants and later bankers who ruled through
influence between the 13th and 18th century
i.e. the Renaissance) said, “We have another way we can do this. We can
make promissory notes
we shall call
money. They are more convenient to carry than goods and gold.” The first paper money worked as
follows. A trader would go exchange his or her goods for gold. They then take this
gold to deposit it with the Medici, and the Medici write up a paper with their
signature and family seal, a paper that would represent the gold that was deposited
with them. This paper, upon return to the Medici, would be exchanged into its gold
equivalent. That concept is where the gold standard came from.
Now
let us look at debt. Imagine that the Medici have just opened up their first bank and announced
the new scheme to the traders. So one trader, let us call him Melvin, goes to
the Medici and deposits $100 worth of gold. The Medici make up a paper saying
that they promise to exchange that paper for $100 worth of gold upon its return
(less a banking fee, plus an interest, whatever). Now another person comes
by the name of Alan then takes this paper and goes home. Alan can use this
paper to buy
things, but let us assume
he does not. So far, he is the only customer at the Medici’s new bank. Now James, another person,
wants to start a new business, a hotel. He has the land and building but needs
some pots and pans. He does not have any goods to trade in exchange for pots
and pans, but he hears that the Medici is giving “loans”. So
James goes to the Medici and asks for a $100 loan. The Medici says they can do that, but James has
to pledge his land and building as a security, collateral, in case of
default. The Medici makes up money (money that did not exist prior) by writing up
a new paper, sign and seal it, and give it to James. The condition is that on return, James has to give back $100
plus $10 interest. Now freeze that right there. Imagine that James and Melvin
are the Medici’s only two customers at the time.
This
means that the economy only has two paper notes out there, one with Melvin and one with James. And
James has to return his plus $10. Where will James get that $10, unless Melvin
comes and rents a room at James’ hotel for $10? The Medici did not print the
extra $10! So even if James is hyper-careful with his loan, even if he does not spend
it at all but returns it after a year, the $100 intact, it is physically impossible for him
to pay the $10 interest. This is because he cannot print the extra $10 money
and Melvin does not want to spend his money at the hotel, yet Melvin is the
only one with the only other note printed! Do you see the error in this system? Even
if James now has goods to trade, he cannot trade them for paper money because
there is no more out there and
the Medici wants cash money or
the collateral. James will have to lose his hotel to the Medici
simply because of a paper shortage error. He has the original $100 they gave him because he did not spend it, but he
cannot possibly get the $10
they want in addition as
interest, because he can't print money
nor does the only other person
with bank notes want to stay at his hotel and pay cash. His hotel may be highly successful, renting rooms in exchange for
goods, but he still would
not have the printed paper for
$10 that he has signed to give back
to the Medici as interest. So
his hotel would have to be seized by the bank.
This
example shows exactly
how our modern civilization’s debt system works. But because there are millions of people playing
this game, the players don’t realize there is a problem because only 8% of people
are caught by this error (about 8% of all debts are unpayable). And those that
are caught by this error think there is something wrong with them the so-called
47% of the U.S. population they never imagine that the system itself is
flawed are you getting this have we gone down far in the rabbit hole yet? Debt, by its very nature, in our current financial
system, is designed to fail
for a certain percentage of the
population, no matter how much
effort or care they put into it.
And it is so simply because there is not enough money created (printed) for the interest requested. The only reason this illusion has managed to run this far is that there are millions of players rotating
the money and it looks like it
works for most people, which
makes the few it doesn't work for look like something is wrong
with them and not the system.
Every
now and then, when the
debt bubble bursts like in 2008 that some become aware of this glitch. As you are about to see next, inappropriate use of
debt is a function of control and fear. Unhealthy debt is a product of fear, and a
deep-seated belief in not having and not being able to have. And fear is a means
of control. Now, let us consider the mortgage game that many of us whether we like or
not are playing right now. Mortgage what does that word mean? Where does it come from? Split it up
and look at its origins. Mort, mortuary, morgue... do you see the root? Gage, engage. Engaged till death. Why would your house loan be called a name that has its word origins from the words that
mean death and engagement?
Why those two? Of all the
millions of words, why those two?
Nevertheless, the unhealthy type of debt
is a
function of fear and self-worth issues. Remember,
we are not judging
anything here. We are merely observing basic facts. There is nothing wrong
with debt, when used as a tool. But when it arises, as it mostly does, from fear
and negative self-worth beliefs, then it is a control game being played, a painful one at that. A game we
created and continue to create.
The
Federal Reserve Banking System began when, in 1914 and after trying to do
so unsuccessfully several times before due to opposition when 300 people
and banks put together just $100 each
and formed the Federal Reserve Banking System. The job of the Chairman of the Fed is
to keep the economy going in a certain direction, and he
manages that consistently for many
years and that is why people find him powerful. The point is, he can and
does shape the economy. That is his job. Now, in the minds of most people, the economy is some wild crazy thing. But what if it wasn't wild at all?
What if it was very tame and always
listened to the boss? The point I am trying to make is this: (1) the Board has proven itself able to direct the economy with a fairly high degree of accuracy and (2) this
proves the economy is under the direction of the Board (otherwise the
Board would be powerless and we wouldn't even have it).
Now, and this is very
important, the economy only looks to be
out of control to those who are finding themselves in it but
hurting. Did you get that? This is very important if you are jobless, you will think the economy is bad and out of control, because that is your personal experience. But that is looking at it
from the bottom end. If you look
at it from the top end, there is
hardly any ‘out of control’ going
on. And this is why: At the
top, at the level where bankers see things, they control exactly how much
money is in the system the government has nothing to do with it since the
1914 law), they control the interest rates, the regulate
cash deposit reserves
(which determine how much
credit/debt you are ‘allowed’ to have), and so on. So what part of the economy
is a mystery to them? To you, the interest
rate is a mystery and can move
either way to end up hurting or helping you. But to them they can predict
it better than you can predict the weather – because it is they that set up the rate. To you, you don’t
even know what the money supply situation
is or will be – but they do because they have the power to print
the money. Much of the national debt is money ‘owed’ to the Fed. People think that
the Chairman of the Fed is tackling
some unknown thing and maybe so. However
there isn’t much in the economic equation that is unknown to him simply
because where he sits he has all the tools necessary to make sure the plan
works almost as planned (the tools in
this case being the Fed system,
banks, money press, monetary
controls, etc). So just because the
economy may look out of control
for you, personally, or even for a few million people that are in hard economic times, does not mean that, at the top level, it is out of
control at all. The point of the Board, to control the economy this perspective is very important. The truth can look very
different indeed depending on
what perspective you use to observe it on the right side or the left side of
the 47% . So if you think the Fed did not have to step in when they did to save
the economy I would love to show you some swampland I am selling. You probably
also thought that the U.S. health care system was just fine the way it was too.
Well if you did how about I throw in the London Bridge with that piece of
swampland. So before you go and make that critical vote remember seriously
think about what you are really voting for.
"A
democracy cannot be both ignorant and free" - Thomas Jefferson
