Despite the wishful thinking of Washington economic mystics and the desperate hopes of millions of Americans, there will be no real economic recovery this side of a worse recession. The reason is debt and the debt-dependency of the Federal Reserve, fiat currency system. Your average fifth grader knows that you cannot borrow your way out of debt; that spending more will not counteract a shortage of income – yet that is the recovery strategy the economic mystics want us to believe in.
Another fact of economics every fifth grader understands – one that applies equally to nations and individuals – is that wealth can only be created by producing a product or providing a service and selling it at a profit. And as this principle is understood, so is the fact that thrift, coupled with real profits is the only way to amass the assets necessary to weather lean economic times.
So as Washington continues to vehemently deny what everyone else already accepts as fact – that the federal government is hopelessly swamped by debt, irretrievably overcommitted on future expenditures and pursuing an economic strategy guaranteed to result in total economic collapse – the rest of America is going about the difficult task of executing our own recovery in spite of “government help.”
Recent statistics on credit card debt reveal that average Americans know better than the beltway alchemists. According to the latest figures from the Federal Reserve, revolving consumer debt has sunk to the lowest levels since the Fed began tracking it in 1943. This means that while Obama and his economic mystics keep foisting free money on Wall Street bankers, telling them to lend it, Americans are passing on the offer. People know that when times are hard and the future looks grim, borrowing is just plain stupid. But what most Americans don’t realize that the Washington insiders know all too well is that debt, not production is the source of wealth in America.
Since Congress ceded its constitutional duty to “coin money and regulate the value thereof...” and surrendered the economic well being of the nation to the perpetrators of a ponzi scheme of fiat currency under the Federal Reserve Act of 1913, neither gold, nor rubies, nor the prolific industrial capacity and entrepreneurial spirit of the American people have been prized above the lowly borrower as the true source of American wealth.
Here’s why: The Federal Reserve System (and every bank in America) employs a process called Fractional Reserve banking and Debt Capitalization to make money. With this method, the entire investment banking system literally “makes” money out of nothing (well almost nothing) by lending money it does not own and claiming liabilities as assets. In plain English, they get rich through theft, fraud and counterfeiting. But since they are legally allowed to do so, it’s not really a crime even though the results are the same as they would be for the illegal version of these acts: unwitting victims are robbed and cold-blooded scoundrels are enriched.
Under this system, there are actually two kinds of money (although both look the same). One is the debt capital (money created out of nothing and “lent” to the government and banks by the Fed). The other is real capital (money paid to you for products and services). Real capital is the only thing that makes they whole scam work. People must accept the worthless script dispensed by the banks and the government, trade it with others for actual products and services (things that have intrinsic value), then – and this is the most important part, deposit it into your bank account or pay your taxes with it. Through this shell game, the Fed, the banker and the politician trade worthless pieces of paper for real currency. The money you “create” is of real value because it was generated in the actual exchange of real goods and services. This is why banks and the government must charge interest and taxes. Because the money you pay them is the only real money in the entire economy.
Now we can see why they entire system is destined to fail. The government apparently cannot stop spending the fiat money that the Fed makes available (trillion dollar deficits two years running in the midst of the worst recession in 80 years would indicate the hopelessness of this compulsion). Since debt capitalization is the fuel that primes this engine of pseudo-wealth generation; and real money that you earn and pay in interest and taxes is the real fuel that feeds the real economy upon which the debt capitalization parasites feed, the only logical strategy for a real recovery is to deny the parasites their fuel.
Such a strategy might involve everyone refusing to repay loans and pay taxes.
This would starve the pseudo-economy, causing it to die. But more importantly, it will retain all that real capital for the real economy; fueling a real recovery. As the leviathan of the banking, corporate, political parasite dies, there will be economic chaos (not a whole lot different than what we have endured on the Federal Reserve rollercoaster since 1913), but when the dust settles, the people who have been the true source of wealth in America will have survived while the scumbags that have been robbing us blind will be vanquished.
