STUDENT LOANS How Fiat Currency and Mal-Investment
Have Destroyed a Generation
by James Jaeger
Student loan debt has just passed $1 trillion, a debt even higher than credit card debt. What does this mean for the future?
When I went to school, tuition for a good education was about $1,500 per year for a "prep" school and about $3,000 a year for an "ivy league" college. Today it costs $30,000 a year for such a school and as much as $100,000 for such a college. To any reasonable mind, this is beyond absurd. But how did it happen?
A Short and Illegal History:
In 1971 -- after Nixon "closed the gold window" effectively removing the country from the "gold standard" required by the Constitution -- the money supply became subject to the whims of the U.S. Congress and a bunch of elite New York bankers. In essence, the banks could print up as much money as the government wanted, and from 1913 to the present, they slowly configured the system to do exactly this. Today, the Congress does not have to go crawling to the taxpayers for money to fight its perpetual, undeclared wars like, Korea, Vietnam, Iraq I and Iraq II. It just "monetizes debt" -- turns debt into "money" by creating "Federal Reserve Notes" out of thin air.
It wasn't long before the banks realized this was quite profitable: creating money out of thin air and lending it at interest! And, so long as the Congress got its fix of money every time it wanted to kill a bunch of people in another country or "war," the state looked the other way when the banks made fraudulent loans on assets that don't even exist.
This system of institutionalized "unjust enrichment" -- whereby the banks get to print up money for the military-industrial complex's wars -- and then generate even more "unjust enrichment" through a Ponzi fraud known as "fractional reserve lending," is known as the Federal Reserve System.
The Federal Reserve System is a quasi-private, government-sanctioned, anti-Constitutional banking system operating on a bogus economic philosophy known as "Keynesian economics." The System is technically illegal because it violates the highest law in the land, Article I, Section 10 of the U.S. Constitution. This section specifically stipulates that "no State shall ... emit Bills of Credit or make any Thing but gold and silver Coin a Tender in Payment of Debts." In other words, no thing BUT gold and silver COINS are money and "Bills of Credit" (i.e., Federal Reserve Notes) are not to be used as money, hence their use is illegal under Constitutional law.
Go Get those Students:
From 1913 to 1971, having evolved the ability to create money "out of thin air" through the monetization of debt and fractional reserve banking -- the New York bankers were in a position to make endless STUDENT LOANS.
Figuring that there is nothing dumber than a teenager who watches thousands of hours of Hollywood movies and TV shows while smoking pot, drinking beer and/or screwing everything that moves, the Federal Reserve banksters offered them a drug they could not refuse: "free money" -- also known as "fiat money" or "Student Loans."
Hey, what could be better than sex, rock n' roll and "free money" especially to attend a "school" where there's a Jacuzzi and fast-food vending machines on every floor? But the banksters and registrars promised even more. They assured everyone that there would be even MORE free money when the student got into the workplace: starting out at 80 grand a year with the corporatocracy. "Hell, the students of America figured, I take out an 80 or 320 grand Student Loan for four years of college at Penn State, UCLA, Harvard, BU or Wharton and I'll pay it back in no time working on Wall Street."
Building America's Future:
And the loan officers and registrars across the nation not only initiated this promise, but BUILT upon it. Literally, every prep school and college across in the U.S. took out construction loans to build more classrooms, laboratories, gymnasiums and plush dormitories, complete with more fast-food vending machines, Jacuzzis and wifi hot spots. Since there were now so many students out there that could "afford" the ever increasing tuitions, why not?!
Case in point, my school and college spent millions building new buildings and completely re-engineering their respective campuses. Other schools bought huge tracts of land and constructed brand new campuses with 20 or 30 state-of-the-art buildings. Hey, this is all great, but where did the money come from? It came from the Federal Reserve bankers in New York. Yes, the banksters were not only lending a trillion dollars to the pot-smoking, ecstasy-swallowing KIDS across the nation, they were lending it to their BabyBoomer PARENTS, now in charge of the school systems of America. Yes, these cultural Marxist-infested BabyBoomers had learned their lessons well: consume, consume, consume. Eat, screw, drink and rock-on! Yes, the Greatest Generation of the 1950s provided the Flower Power Generation of the 1960s with every possible advantage won by fighting and suffering through a century of World Wars and a "Great Depression." Thus, the idea of working hard and SAVING money was a completely alien concept to the BabyBoomers by the time they took over the civilization. Why work and save when one can rock and borrow!
And so, not only did the Flower Power Generation encourage their KIDS to borrow for tuitions, THEY borrowed to erect endless empires of scholastic masonry, chrome and glass. And, with the government guaranteeing that all the student loans would be paid off, there would be an endless, SECURE, cash flow for THEM to pay off THEIR construction loans -- trillions and trillions of dollars of them.
So today, not only are the STUDENTS of America in a trillion dollars of debt, their pot-smoking, PARENTS are in trillions of dollars of debt as well. This observable fact gives us a couple of corollaries:
TUITIONS ARE HIGH BECAUSE SCHOOLS AND COLLEGES HAVE OVER-BUILT THEIR FACILITIES REQUIRING EXCESSIVE DEBT SERVICE.
TUITIONS ARE HIGH BECAUSE FIAT MONEY-DRIVEN LOANS PROVIDE ARTIFICIAL COMPETITION IN THE MARKETPLACE OF STUDENTS.
This adds up to another classic example of what's known as "mal-investment," Latin for BAD-investment.
Mal-investment is any investment that is NOT dictated exclusively by MARKET forces. When the Federal Reserve prints up money and causes the interest rates on such money to be so low every Tom, Dick and Harry can borrow "money" for tuitions, this unnatural ability to borrow distorts the market. By this it is meant that fiat money-driven loans give everyone in the market the ability to bid up prices to RIDICULOUS levels. The ONLY reason prices on large-screen TVs and DVD players haven't risen as much as tuition prices (now known as "enrollments") is because you can't outsource a "brick and mortar" university to China.
If schools and colleges know that students can simply borrow money for tuition, they will steadily raise tuitions "as much as the market will bear." The exact same thing has happened in the U.S. health care industry. Since insurance companies pay for everything, the hospitals and doctors feel free to rape and pillage all the money they possibly can from sick people.
Artificially excessive tuition revenues then encourage the schools and colleges to engage in an endless cycle of mal-investment by taking out more and more construction loans to expand their facilities and campuses beyond prudent measures. After all, they "reason" that they have the cash flow to service the additional debt and -- since they are in competition with all the other schools and universities who are taking out debt to spruce up THEIR campuses -- they better jump to it. Thus more construction loans, more mal-investment and more student loans spiral up in a dance of endless debt. Schools that once charged $1,500 a year for tuition now MUST to charge $30,000 a year. Universities that once charged $3,000 a year, now MUST to charge $80,000 to $100,000.
Source of the Problem:
So the SOURCE of what has happened is this: the anti-Constitional Federal Reserve System has flooded the U.S. economy with so much bogus money it has encouraged mal-investment in the entire educational system and even ruined the construction industry. Now, a generation of kids are not only in debt as soon as they emerge from college, there are no jobs which they can take to pay off that debt because the rest of the economy is ALSO burdened with so much debt there ARE no jobs.
Congratulations BabyBooners, you have just raised a generation of serfs.
And it doesn't stop there. With the outsourcing of the U.S. manufacturing base by the corporate fascists that have hijacked Congress, the only "jobs" that pay high enough wages to service debt are jobs on Wall Street or jobs with the banks -- jobs that don't create anything of value, just manipulate paper for profit. Welcome to the "Financial Services" industry. If you have no idea what I'm talking about, watch a documentary film called CORPORATE FASCISM at http://www.CorporatFascism.org.
Debt-driven, "higher" American education has, in essence, created two classes of workers: Financial Service industry workers and Ordinary Service industry workers. Financial Service workers on Wall Street schlep out endless, worthless paper -- such as credit default swaps and collateralized debt obligations. Ordinary Service workers schlep out endless, worthless fastfood -- such as heart-attack hamburgers and grease-boiled French fries.
This is why we now have the OCCUPY WALL STREET MOVEMENT where the Ordinary Workers (the "99 Percent") vs. the Financial Service workers (the "1 percent"). The student that went to the most expensive $80,000 per-year-college will hopefully get to be one of the 1% Financial workers at a Goldman Sachs-type job on Wall Street rather than become another one of the 99% Ordinary workers a McDonalds-type job in a hamburger stand on Main Street. But there are only so many desks at Goldman. On the other hand, the hamburger eaters of America slaughter over 30 million cows a year -- plenty of cows for every student to consume at fast-food restaurants between job interviews in the Financial Services industry.
So, these are examples of the unintended consequences of government intervention. What was the government intervention? The government intervention happened in 1913 when seven major, New York bankers stole away to Jekyll Island and secretly formed a banking cartel that has gone into partnership with the U.S. Congress. See http://www.FiatEmpire.org for details. Again, the deal was as follows: To avoid taxing the voters, Congress could borrow all the money it wanted and the government would never prosecute the Fed-member banks for fraudulent lending practices.
What exactly is the fraud?
THE FRAUD IS THE FACT THAT THE U.S. FINANCIAL SYSTEM IS A PONZI SCHEME: Federal Reserve Notes come into existence as a result of debt. That's why they're called Federal Reserve NOTES. This debt requires Federal Reserve Notes to service it (because only Federal Reserve Notes are "legal tender for all debts public and private"). Since there are never enough Federal Reserve Notes to both pay back the debt principle AND make interest payments ON that principle, ever more Federal Reserve Notes must be created, with yet more interest requirements. Thus technically:
THE FRAUD IS GENERATING INTEREST ON ASSETS THAT DO NOT EXIST. THIS IS THE ESSENCE OF BOTH FRACTIONAL RESERVE LENDING AND ISSUING FIAT CURRENCY.
In laymen's terms, the fraud is: CHARGING INTEREST ON MONEY THAT WAS CREATED OUT OF THIN AIR.
When a business entity can generate a positive cash flow of interest off an "asset" that took no physical effort to create, that is effectively an "infinite profit margin."
THE WORLD'S BANKS THUS OPERATE ON INFINITE PROFIT MARGINS.
Did you ever wonder where the banks got the money to build or purchase almost all of the large sky scrapers in every American city?
Did you ever wonder where the banks got the money to purchase the real estate on two or three corners of every major intersection in America?
Did you ever wonder where the banks got the money to lend Americans into trillions and trillions of dollars of student loan debt, construction debt, credit card debt, mortgage debt, automobile debt and business debt?
Did you ever wonder where the U.S. government gets over $700 billion every year to build and maintain over 900 military bases around the world?
Did you ever wonder where the U.S. government got over $3 trillion to spend on the welfare state and two wars yet it LOWERED taxes during the Bush Administration?
THE BANKS AND THE CONGRESS GET THIS "MONEY" FROM THE FEDERAL RESERVE CENTRAL BANK AND ITS ABILITY TO GENERATE ANTI-CONSTITUTIONAL CURRENCY OUT OF THIN AIR.
THIS IS WHY 1 PERCENT OWN OVER 40 PERCENT -- SOME SAY 60 PERCENT -- OF THE WORLD'S ASSETS.
This is how fiat currency has destroyed a generation, and we will all be lucky if it's only one generation.
So, here's a message if you are a student or parent:
1) Do not borrow any money for education. If you are too stupid to figure out how to educate yourself, you will be too stupid to APPLY any education you PAY to acquire.
2) Do not accept government education. The public school system is little more than the indoctrination factory for a population of debt-slaves and would-be military recruits who are used by the state to keep the state in power and murder the state's "enemies" where ever the PATRIOT Act arbitrarily declares they exist.
3) Homeschool and/or attend free and/or inexpensive on-line universities, such as Khan Academy. Given the fact that the sum of human knowledge is almost all present on the Internet, it's obvious that the future is autodidacticism. And if you don't know what that word means: LOOK IT UP IN A DICTIONARY AND YOU WILL BE ON YOUR WAY TO BEING AUTODIDACTIC.
5) Cut all your credit cards in half and never use one for the rest of your life. Why feed the Banking Beast? The 21st Century is the century of NO debt and NO banks. Make it so.
6) Do not work for Wall Street, a bank or one of the corporations that surround the banks (as Thomas Jefferson used to say). These corporations rely on Wall Street products or discounted loans from the Federal Reserve System. Wall Street, in the heart of decaying New York City, is little more than a den of thieving scum that has no intention of doing a day's work other than pushing buttons on a bunch of computers.(1)
7) Do not join or support any military of any government or fight or support any war of any government. Do not even fight your own government, as obnoxious as it may be, otherwise you will end up no better than them. All of the power of the state comes from two sources: its ability to create money and its ability to sucker young people into fighting its wars. Do not participate.
8) Also, do not participate in ANY industry or company that researches, develops, designs, finances, manufactures, markets, transports, distributes or deploys weapons of any kind anywhere in the world for ANY government.
9) Get a job -- or start a company -- that MAKES something that is needed and wanted by society. Don't just "surf the system" as an investor, speculator or gambler. PRODUCE something of value.
10) Get a job where you can deliver a SERVICE that is needed and wanted by society. Don't be just another parasitic agent, such as a paper- or regulation-generating lawyer, (tax) accountant, broker, trader, or middleman. Deliver a SERVICE of value.
11) Default on all your Student Loans and encourage all your friends to do the same. These "loans" are NOT based on real assets and you are paying interest on money that was generated out of thin air by an illegal and fraudulent banking cartel of "organized crooks" as John Adams used to say. This system has scammed you and bribed the U.S. Congress into passing "banking laws" that violate the U.S. Constitution and the will of WE THE PEOPLE. Any "law" that is inconsistent with the U.S. Constitution is null and void.
Do not tolerate the abuses of the New York banksters and the rogue congressmen that the fiat money-dependent corporate fascists have installed in Congress. Join the RON PAUL REVOLUTION and help get the Fed audited and as much of the government shut down as necessary to comply with the "limited government" mandate of the original intent of the Founders. Your future depends on doing these things and you know it. This is why you have been supporting Ron Paul, who is nothing less than a rock star at rallies and colleges across the nation -- all the while the mainstream media totally blacks it all out. But you have heard that ...
THE REVOLUTION WILL NOT BE TELEVISED.
Now you know it. You also know, intuitively, that the debts run up by the Federal Reserve System are technically impossible to pay, for there is not enough money in the entire system TO pay them. So why are you paying these "organized crooks" interest you are earning by the sweat of your brow? You must stop that nonsense immediately. Sue and jail these bastards. Don't PAY them for God's sakes! THEN you can rock-on!
(1) New York City is a rotting, decaying city that does little more than push worthless paper and its decadent culture to the extremes of Earth. And evidence of this is the fact that the city has only been able to build one (1) building taller than the Empire State building in the past 81 years, and THAT building was torn down by all the people that hate New York and what it stands for. Not only that, there are scores of buildings all over the world that rival most of the buildings New York City has to offer. The idea that New York is supposed to be the "financial capital of the world" speaks volumes about what that "capital" is all about, certainly not PRODUCTION or INNOVATION.
ORIGINATED: 28 April 2012
SUPPLEMENTED AND REVISED: 30 April 2012
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