Posts Tagged ‘Fiat Money’

If you’re like most people in the United States, you’re working 60 or more hours a week and taking home less spending power.  In addition to the past decade of wage stagnation or reduction, prices of goods and services necessary to sustain life have continued rising.  Although the US inflation rate is under 2%, consumers’ ability to purchase has decreased over time specifically because of what is now called “quantative easing”.  That’s where the Federal Reserve prints money and lends it to banks for them to decide whether or not to lend it to business and individuals.  This injection of money into the system is intended to stimulate the economy to return to prosperity.  When the money is used for long term investment, reinvigorating enthusiasm and hope, this process can indeed be like a shot of adrenalin to a shock victim.

The reason we can print unlimited supply of dollars is because we no longer use gold or other uniform standard by which to establish value.  It’s like pledging a drawing of your home as collateral for the loan.  The drawing, while looking good on paper, is worth what the holder thinks its worth.  If you happen to be a famous artist, you can command big bucks for throwing paint on a canvass.  But if you are like most of us, no matter how talented you are, after two weeks on the fridge, the drawing of your house is fit for the recycle bin.  This is called the fiat money system.

I saw a music video that sums it up nicely on YouTube.

It’s time to rethink what kind of world we are creating.

There is a lot going wrong with the world today.  It is a make-or-break time in human history.  We can choose to keep believing in the American Dream with capitalism as its engine or we can look around and see it isn’t working because of one deadly sin:  Greed.  It is the responsibility of every corporation to increase shareholder wealth, at any cost.  Destroying the planet and human life is called collateral damage and tolerated as long as it costs fewer dollars.

Today’s pink slips are no longer due to insufficient volume requirements.  Employees are called upon to work longer hours, completing the work of those laid off.  Now companies terminate employees for short-term profit, making Wall Street smile.  Those left behind endure unreasonable expectations so they eliminate all “unessential” steps.  Unfortunately, the only “essential” step in business is one that immediately demonstrates revenue, regardless of quality or ethics.   When uncertainty and fear permeate the masses, decisions made by the people who comprise corporate America are directed toward self preservation, and hording becomes the norm.  Corporations reap huge profit and save, rather than invest at a time of market transformation; further eroding the foundation upon which our society is based.

Now that America, the poster child for capitalism has splatters of innocent citizen blood, the reputation celebrating democracy and capitalism is tainted.  After being exploited since the Industrial Revolution, those who developed technology, innovation and workmanship are more expensive than labor people in developing nations.  Outsourcing is the only rational decision any business executive can make because his job is to increase share holder wealth at any cost.  People’s lives are destroyed as their ability to food and shelter evaporates.  Life, liberty and pursuit of happiness, cornerstones of the country, are guaranteed … according to your ability to pay.

This degree of corruption is unfathomable for a freely elected government.  Conventional wisdom suggests offenders would be exposed voted out of office.  But that isn’t the norm.  Instead, government officials that successfully keep constituents in enough fear to surrender liberties get polished by the political establishment and supported in an unimaginable web of deception.  Capitalism is supposed to reward the highest value to society but instead, bestows financial manna to whoever can market it best and make it cheapest.  In a demonic dance, corporate and government mingle until their minds are as one, focused on control of resources by the elite.  It is sad to add that the masses are considered elite resources to be controlled.

Centrally owned media fills the air waves with mentally addictive formats to establish various elite-sponsored perspectives, giving an illusion of creative thought and self-governance.  Corporations spend as much money as necessary to support specific political campaigns through elaborate marketing strategies designed to fool the public into believing government officials work for us.  Exercising voting rights is like being asked to choose which convicted sex offender to hire as your nanny.  It’s a very bad joke by the elite at the expense of the masses.

About 40 years ago, the United States Corporation abandoned the gold standard of money.  Like a credit card, fiat money can be used wisely in an investment for long-term productive reasons – as long as the balance can be paid off at a reasonable rate of interest.  Unfortunately, with the questionable practice of the Federal Reserve, a private/pseudo governmental agency, printing fiat dollars and lending them to banks, combined with fractional banking, lending many times more dollars than they have in deposits, there will never be enough money in circulation to pay off even the interest, much less the principle.  This is called a debt-based currency.

Our fiat system of money has been an open credit card for the wealthy and influential interests of the world.  They took us off the farms with self-sufficient life styles to make them richer, creating a dependent on corporate America to earn our daily bread.  As reward for our success, millions of once productive members of society fall toward poverty through unemployment while everyone else works at least full-time and a half, just to scrape by.

This is not an American problem alone.  The world money supply is based on the American dollar.  Unemployment, famine, disease and homelessness encroach upon an ever increasing mass of people all over the earth.  People are organizing against injustice, peacefully demonstrating in large numbers at government and businesses around the world.  The good news is that there are more of us than there are of them.  We still have a voice and we’re raising it in unity with diverse and distant people across the globe.  Our hope is in the numbers.

If you work harder and longer for less, look at the unemployed and see your future.  Will it be in 5 years, 5 months or 5 days?  I don’t know.  But if you think you’re immune, you’re probably not.  Skills, experience and education mean nothing when your industry gets flushed.  Or a computer program you designed to make yourself more productive is operated by a clerk you hired and then you get the axe.  After 6 months or a year of diligent job searching, your next best thing might be at 50% of your former wage.  Governments also reduce their workforce as more and more people require services.  But that’s okay because funding to feed the hungry, house the homeless and provide medical care for the unfortunate is vanishing anyway.  Just about no one is “safe” from the economic collapse.  Any perceived financial stability you have is a mirage.

If you work harder for less, look around and see how many other people are feeling the same way.  Then look at those people whose job you’re doing to make your company rich and realize the unemployed people are not to blame for your suffering.  They are early collateral damage in the middle class meltdown.  Fiat money is the vehicle used to transport your investment dollars and work hours into the pockets of very rich.

You can either read this and say “they can take care of themselves or die” because you’re already busting your tail just to lose ground or you can consider yourself fortunate, do your own research about demonstrations, petitions, legislation, wars, etc. and join with others taking action to make the world better for everyone.

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I’ve come to believe the creation of the United States was a great experiment in what would happen if elites convinced the common man he was free to choose, innovate and govern himself.  This understanding came from realizing I, a once active contributor to society, became redundant and obsolete.  I don’t believe that all of the sudden there is something wrong with me, even if that is what long-term unemployment is supposed to instill.  I know I’m not alone.  So let’s look at some history of the country and connect the dots.

Building the dream, there was an industrial revolution from 1820 – 1870, interrupted by a civil war over constitutionally guaranteed state sovereignty (marketed with human rights propaganda) from 1861 – 1865. As if by design, the nation fell into a long depression from 1873 – 1879, starving farmers off their land to work like slaves for elite factory owners. When the first depression ended, USA demonstrated to the world how freedom fostered innovation, technological advancement and prosperity for the common man … or so it seemed.

The Great Depression began in 1929. The “New Deal” seemed to be the solution, giving social safety nets like Social Security and Unemployment Compensation that rescued Americans from starvation and homelessness but also indebted the population to the government; secretly moving to a dance of deception with international bankers.

In 1932, the Norris-La Guardia Anti-Injunction Act was the first of many pro-union bills passed, reestablishing organized labor as a force with which to be reckoned, creating an environment that built a strong middle class. By 1945, the USA was recognized as a world power, emerging as the world leader after the Cold War with USSR.

Under the perception of superiority, the United States appears to have lead the world into a Fiat system of money in which the population exchanges goods and services for accounting entries based on paper money, not backed by anything of real value, invades and occupies countries, establishes governments under the guise of democracy and propagates capitalism as the means to wealth for the common man.

The link below shows how the unemployment rate in the US has changed over the past couple years. When you get to the map, click the arrow in the middle and watch how things change. It is incredible what “The Great Recession” has done to the unemployment rate that devastates the lives of hard working Americans.

Check out the 38 second video “The Decline: The Geography of a Recession“.  It is frightening.  There is no where to hide from unemployment.  The Federal Reserve, charged with maintaining employment through monetary policy has failed.  Instead of punishing those in charge, suggestions to eliminate that goal from the responsibilities of the Fed.  Instead of changing the laws that created a country where 10% of the workforce is left for dead, there is talk about eliminating the minimum wage so corporations can compete in the global market against countries with no employee protections or product standards.  Instead of correcting the trade deficits, mega-business profits at the expense of the American middle class.

What do you think about US being the poster child for capitalism and democracy?  How has this economic collapse affected you?  What will happen if this successfully spreads to the world?  How has it spread already.  I want to hear your story.  Is capitalism working for you?  If so, what advantage do you have over the 15 million unemployed people?  Are the unemployed really lazy, ignorant, stupid, unskilled, uneducated people that should be allowed to die preventable deaths?  If so, why?  When the Department of Labor claims there is 5 job seekers to every 1 job, even if college educated people flock to low-paid retail and service jobs, where will the other 4 work?    How can we regain our innovative edge when so many people are suffering?

As more people become divided along contrived religious, economic and political grounds, fracturing the masses like shattered glass, fear drives people to fight against themselves, begging the government for help.  But government is bought and paid for by unnamed donations driving hypnotic advertisements.  Negative advertising fuels the flames of destruction.  Slowly, patiently, the powers that (think they) be tighten the vice around the necks of the American public.  Unless the masses realize we, the people have allowed this to happen through our own complacency and inaction, we, the people will suffer shrinking life styles, erosion of liberty and watch the poverty grow exponentially.

When we, the people start realizing “grass roots” political movements by charismatic personalities are financed by powerful elites, we can ask ourselves why.  In capitalism, profit is the only motive.

I don’t know how to fix the economy, eliminate greed and corruption or establish liberty and justice for all. But I can do research, draw my own conclusions and write.  For those of you who are too busy working multiple jobs just to tread water, I’ve summarized my research below:

In an article called “Why do people have different opinions?by Dale Husband (centrist liberal), from Friday, January 16, 2009 he said “One of my most basic axioms is that there can only be one truth and one standard of right and wrong as far as empirical facts as well as ethical standards go, but that the limited vision and knowledge of human beings makes us unable to know absolutely what that truth or standard is; we can only approximate it in our minds.…I believe that we humans, for all our intelligence, are still limited in our minds as well as our perceptions of reality. We can only know so much or sense so much and thus when we form opinions based on our knowledge and perceptions, we are prone to error. The problem comes when clashes between people with different opinions occur. Often, debates result in which efforts are made by both sides to show that the other side is in error. Usually, however, most supporters of both sides refuse to budge in their positions, and so the debates prove fruitless.”

In an article called “The Value of Dissension”, posted by Ben Tomhave on September 16, 2008, discussing consulting issues, he says “There seems to be a fallacy in American politics and corporate life these days that conformity and blind acceptance of the prevailing BS perspective is the apex of social evolution. Nothing could (or should) be farther from the truth. The fact of the matter is that conformity and the oppression of dissent is a fundamental threat to the very foundations of this society. It undermines creativity and innovation, causing an erosion not only in social values but also in the ability to solve problems.  The prevailing problem, as I see it today, is that the powers that be believe their way is the only way, and that anybody who dares question that way is in fact threatening the basis of their existence…This suppression, repression, oppression of progress is a subversive manner of attacking dissenting opinions. Innovation should introduce creative solutions to complex problems that ultimately frees us to focus on other problems. The only way to evolve is to build on previous evolutionary steps…Where is the beauty of the simple solution? In the case of politics, it’s very easy: throw the bums out, bring in different bums who hopefully have different allegiances or are at least not as sold-out as the last bums. However, we need to be wary of the violent resistance that the status quo may throw in our face. Never before do I recall seeing such violent opposition from the establishment – usually it’s the other way around! It’s a sad state of affairs when the threat of social evolution is viewed as so great that the establishment will violently work to oppress the next state of being. Perhaps this belies the importance of the underlying corruption and the false belief that power is everything. Perhaps the solution to such oppression is to find a way to remove the power without having to directly confront the status quo.”

I watch the 24/7 news cycle in disbelief as media points viewer attention to a few, insignificant and/or deceptive stories.  This coverage elicits strong emotional reaction rather than providing an honest overview of global concerns and facilitating solutions.

In “Reflections on a Largely Forgotten Book: Herbert Schiller’s The Mind Managers” (1973) by Paul Street, he writesThe main media institutions are owned and operated by giant profit-based state-capitalist super-conglomerates like General Electric (owner and part owner of NBC, A&E, American Movie Classics, Biography Channel, Bravo, CNBC, Court TV, History Channel, MSG Network, MSNBC, National Geographic Worldwide and more), Time Warner (owner of film and music production companies, theme parks, sports teams, magazines, websites and book publishers as well as Turner Broadcasting), Walt Disney (ABC, Disney Channel/Network, Lifetime Network, ESPN, Classic Sports, E! and more), Viacom (CBS, Paramount, Blockbuster, theme parks, music publishing, book publishing, Nickelodeon, MTV, TNN, and more), the News Corporation (FOX Channel, Fox News, Wall Street Journal, New York Post, 20th Century Fox, London Times, TV Guide, the LA Dodgers, many stadiums, five New York sports teams, FOX Family Channel and more).”

In “Manipulation of The People— The Rudiments of Propaganda” by Andrew P—09/2003 (updated 09/05), he says “Media ownership is central to the manipulation of the people. Manipulate the people, and you manipulate their vote. You either control the media by owning it or by doing favours to those who own it. In the United States, large corporations own the media and these, in turn, receive favours from the Government in the form of influence over legislation and special tax breaks. Worryingly, only five mega-media corporations now control almost all of the US media, which is why the American people are among the most ignorant and brainwashed in the world… As Noam Chomsky once observed, expecting NBC News (owned by the leading “defense” contractor General Electric) to give an objective and un-biased account of world affairs would be like expecting General Motors’s company newspaper to give a truthful and detached account of working conditions in its automobile plants.“

Isolated stories of government and corporate fraud pretend to defend justice when the underlying cause is ignored and forgotten by the sound bite scholars punctuating this generation.  Comedians do a better job exposing media accountability than any consumer advocate group.  See the below links for an example:

Jon Steward and Jim Cramer Part 1

Jon Steward and Jim Cramer Part 2

Jon Steward and Jim Cramer Part 3

I used to be complacent and intentionally ignorant of the whirlwind of despair and injustice plaguing our generation.  I didn’t watch the news.  I believed in Capitalistic ideals.  But lately, I’ve had cause to question and time to research why corruption and greed dominate this planet.  When I researched the effect of economic collapse on the middle class, I couldn’t help but note references to the Fiat system of money under the capitalistic system as practiced today.

Fiat money is money declared by a government to be legal tender.[1] The term derives from the Latin fiat, meaning “let it be done”. Fiat money achieves value because a government accepts it in payment of taxes and says it can be used within the country as a “tender” (offering) to pay all debts. In effect, this allows it to be used to buy goods and services and to pay tax.

I read many articles from google-generated sources but this one, called “The United States Fiat Money & The Federal Reserve Systemby Darryl Schoon on June 23, 2008, sums it up well.   He says “Fiat money is an oxymoron. Traditionally, money has been both a storehouse of value and a medium of exchange. Fiat money exists by mimicking both; but when its ability to do so ends, fiat money exposed for what it is, reverts to what it is—government issued coupons with expiration dates printed in invisible ink…While productivity is doing more with less, fiat money allows governments to do more with nothing. …

The issuance of fiat money by governments is, in truth, a white collar crime; and, as happens when white collar crimes are discovered, a highly visible paper trail leads directly back to the wrongdoers—in this case, the central banks…

Central banks are the mechanism by which society’s productivity is drained and indebted. Credit-based money issued by central banks turns into debt, debt which immediately begins to accrue compounding interest paid by productive members of society, e.g. workers, businessmen, farmers, savers and taxpayers. The interest, of course, is paid to bankers, non-productive members of society.

…The longer a fiat money system exists, the greater the odds of economic collapse. Over time fiat credit money destroys economies because time exacerbates the systemic flaws of credit-based, sic capital, markets.

In fiat credit-based economies, savers are penalized and speculators are rewarded. And while this is welcomed by Wall Street, it is a death warrant for Main Street. In the US over the past twenty years, while Wall Street has expanded, Main Street has contracted.

The shift in America from a productive to a speculative economy is evidenced by the recent growth and dominance of financial “services” companies, e.g. Goldman Sachs, JP Morgan Chase, BofA, Morgan Stanley, Lehman Bros, Wachovia, etc. —their only “service”, of course, is a uniquely destructive and deadly form of “self-service”… It is my belief the next five years will determine America’s destiny. Once seen as a beacon, it is now distrusted and feared and rightly so. Those who bled this nation dry are still in control and the American people, America’s only hope, are not even aware of what has happened; and, if America is to be saved, there is not much time left in which to do so.

The odds aren’t good and Americans, heavily indebted and addicted to credit, are still hoping the Federal Reserve can save them, much as a patient hopes doctors will provide the right medicines, not knowing the doctors are getting kickbacks from the pharmaceutical companies and are skimming prescriptions for their own benefit.

In fiat based economies, time is the enemy and 95 years have passed since fiat money was introduced into the US. In America and elsewhere time is passing and the clock is ticking and recently it’s been sounding more and more like a time bomb.

It is hoped the election of a new president will save America. It won’t. Democracy, once the hope of the world, is now its greatest disappointment. Money—and fiat money at that—has subverted the democratic process everywhere; and today, in all nations, politicians from both conservative and liberal parties dance to fiat money’s funereal beat—in a mockery of democracy’s original intent.”

The author has a long list of credits, available to anyone with a google search engine.  He is one of thousands screaming inaudibly into the tornado mass complacency.  It is frightening to note that he wrote that article before the Wall Street collapse, the bailouts and near double-digit unemployment rates.

My research has pulled me out of complacency and led me to believe that Fiat money + the Capitalistic System as practiced today equals economic ruin for the masses and redirects wealth to the obscenely rich.  If you agree, disagree or want to know more, let your voice be heard.