Enjoying your Starbuck's latte coffee and blueberry muffin this morning? Don't spill your coffee or spit out your bite of muffin when you read this blog, but get ready to feel sick to your stomach anyway!
I received such a wave of questions on another recent blog about this subject, I decided to repeat some facts along with more parallel issues that provide a more clearer picture of our 2013 fiscal cliff and higher taxes.
In 1910 the Federal Reserve Plan in U.S. banking and currency laws had been formulated in a secret meeting on Jekyll Island off the coast of the U.S. state of Georgia. Senator Nelson Aldrich, R - RI, and other well connected financiers attended it to essentially gave full control of this financial system to private bankers. Woodrow Wilson, a Progressive Democrat and socialist, later became President (1913 -21), actively supported this legislation.
In 1913 Congress passed the Federal Reserve Act, which gave its power to coin our nations money to a group of bankers. The record shows that there were no Democrats voting "nay" in the Senate and only two in the House. Although the President nominates the Chairman of the FED, the banks themselves are not beholden to Congress, they have never been audited, and Bankers, of their own admission, were responsible for the Stock Market Crash of 1929 which led to the Great Depression.
One of the heads of these banking dynasties which control the Federal Reserve Bank was 
Mayer Amschel Rothschild (23 February 1744 – 19 September 1812) who was a German banker. He was the founder of the Rothschild family international banking dynasty that became the most successful business family in history and is ranked number seven in the world. Rothschild once said, “Give me control of a nations money supply, and I care not who makes it’s laws.”
These bankers knew that if they controlled a nations money supply, they controlled the nation. H. L. Birum Sr. once said, “The Federal Reserve Bank is nothing but a banking fraud and an unlawful crime against civilization. Why? Because they “create” the money made out of nothing, and our Uncle Sap Government issues their “Federal Reserve Notes” and stamps our Government approval with NO obligation whatever from these Federal Reserve Banks, Individual Banks or National Banks, etc.”
However, as long as our nations currency was tied to gold, the FED could only print as much money as we had in gold to back it up. If you look over the course of our nation’s history, there were few periods of sustained inflation. These usually followed periods of war, but our country returned to normal after a short time afterwards.
Economics 101: Velocity of MoneyHowever, when FDR took us off the gold standard that gave the FED the green light to print as much money as they wish. It also gave Congress the ability to ask for unlimited amounts of money to fund projects, as they could borrow now, pay later with no regards as to how much gold there was to back up their spending.
Since then inflation has been on the rise, the price of gold has quadrupled, and the buying power of the dollar has steadily diminished.
Economics 101 Lesson: The monetary principle of "the Velocity of Money" is a simple concept, yet is an extremely convoluted and complicated process in practice. Economists call it “velocity,” or how quickly money cycles through the economy measured by the average frequency with which a unit of money is spent in a specific period of time and is often calculated as the Gross Domestic Product (GDP) divided by the money supply - stay with me, it should be clearer after you see the example below.
So, for example, in a very small economy, a farmer and a mechanic, with just $50 between them, buy new goods and services from each other in just three transactions over the course of a year
- Farmer spends $50 on tractor repair from mechanic.
- Mechanic buys $40 of corn from farmer.
- Mechanic spends $10 on barn cats from farmer.
So, then $100 changed hands in the course of a year, even though there is only $50 in this little economy. That $100 level is possible because each dollar was spent on new goods and services an average of twice a year, which is to say that the "Velocity of Money" was 2/Yr.
Therefore, the "Velocity of Money" explains why printing money can lead to a virtual flood of currency in the marketplace to devalue the worth of the dollar which spurs inflation that attacks everyone's pocketbooks with higher cost since it takes more bills to pay for goods and services - Congratulations, you just passed a Economics 101 test. LOL!
Former Fed Chairman Alan Greenspan had this to say about the gold standard, “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation." … This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”
Fed Chairman Ben BernankeOur government spends, and spends, and spends, all of which is spent by borrowed money, created out of thin air, by the banks.
All this debt is passed on to us, the people by way of our taxes, which do not even begin to pay the interest upon our national debt.
~ REMEMBER...
VOTE Nov 6, 2012! ~
