MONETIZING DEBT Why There is Never Enough Money in the Economy by James Jaeger
Mar 16, 2009 (BBC Monitoring via COMTEX) -- [Article by Pavel Smorshchkov and Syuzanna Kamara: "Moscow Advises"]
Russia is proposing to the G20 the creation of a supranational super-reserve currency, the formulation of economic policy standards, and an obligation on the leading economies to comply with them.
Russia has formulated official proposals for combating the world economic crisis for the summit of G20 heads of state that will take place in London from 2 through 4 April. The world financial system is seen as the principal lever for this, and so the proposals encompass several areas for reforming it. These include increasing the role of international financial institutions, diversifying the system of world currencies and financial centres, tightening risk monitoring, and creating incentives for "rational behaviour" by financial market players. First, the document on the official Kremlin website suggests, "it is necessary to formulate and adopt internationally recognized standards in the field of macroeconomic and budget policy, compliance with which would be binding on the leading world economies, including the countries that issue reserve currencies."
This is a dig at primarily the United States, which the Russian authorities have repeatedly depicted as the cause of the world crisis because of its excessively "profligate" currency and budget policy.
BUSINESS AS USUAL:
Those of us that have been studying the U.S. and world banking system for decades have been expecting this play. It's the only play one can do in a ponzi scheme: broaden the pool of victims. It's also the only way a chain-letter can be kept alive.
Unfortunately, what the Russian bankers are proposing is just a broader fiat currency ponzi. Did you hear any mention of the word "gold" or a "return to a gold standard" in this article? Of course not. A gold standard imposes limits on monetary expansion, something no government wants, and what this Russian "plan" wants to avoid.
If a world fiat currency were established -- a so-called supra-reserve currency -- all it would do is allow the world's financial systems to do what they are already doing, but with more devastating results.
There are basically three major problems with the current monetary system and the globalization it provokes. 1) lack of redundancy, 2) violation of the first law of thermo dynamics and 2) endless debt. The second issue is addressed elsewhere. See http://www.jaegerresearchinstitute.org
The mainstream media is still out there hounding away at AIG bonuses and Bernie Madoff, both relatively insignificant issues. The real problem is: no one has any money (except the Fed-member banks and Big Oil companies). The phrase, "the banks aren't providing credit" is heard often. But has the media asked the question as to why no one has any money or why the banks won't extend credit? Wouldn't those be more sensible questions rather than drilling into the question of who put the February clause in the TARP money agreement that permitted the $160 million in bonuses to AIG executives?
The AIG bonus issue is paraded endlessly in the media so citizens won't ask real questions. Remember, as discussed in FIAT EMPIRE, the mainstream media's job is to 1) obfuscate the issue about fiat money and 2) facilitate the unconstitutional partnership between the Congress and the Fed. The media is beholding to the Congress for its broadcast licenses and most of its advertising revenues come from the big corporations that rely on fiat money from the Federal Reserve Banks. It's a tidy little conspiracy.
Thus the mainstream mass media will continue to throw at the public any and all issues it can to obfuscate. For less sophisticated members of society, the media will continually churn up subjects like the Octomom and missing person reports. For the more sophisticated it will exploit controversies like AIG bonuses and whether Senator Dodd or Treasury is to blame for the bonus clause.
The media's job is thus to protect the Fed, the President and the Congress but make it appear like it's "looking after the folks." And the Congresses job is to make it appear like it's protecting the People and "going after" the profligate executives on Wall Street. The very word "Wall Street" is an obfuscation to protect the banks, for the Fed-member banks are at the heart of the economic problem: not the general corporations listed on the DOW or in the Fortune 500.
THE WELL OF ETERNAL MONEY:
The reason no one talks about the Fed, except in the most reverent or hopeful terms, is because the Fed is "The Well of Eternal Money". It's the place from which all paper money emanates. It's the bank of issue-authority, the bank with an infinite balance sheet. It's the God of the U.S., hence World, Financial System. All money, for all hope and all mere mortals, whether People or corporations, ultimately comes from THE WELL. Also the place where TARP and STIMULUS money come, the Well is the place where WAR chests and all manner of SOCIAL programs come from.
THE FED IS THE PLACE WHERE MONEY COMES FROM WHEN CITIZENS DON'T WANT TO PAY TAXES BUT STILL WANT IT ALL.
So when the talking heads (in the media/gov/bank complex) say we are borrowing money for the TARP and STIMULUS, the salient, unasked questions are: Where is that money coming from? WHO are we borrowing it from if no one has any money or can get any credit? Since U.S. citizens are tapped out and since places like China and Japan aren't doing much better, WHO is able to lend money to the gov so it can provide bailout money and stimulus money to the tune of over a trillion dollars?
DEBT DRIVES THE SYSTEM:
The answer to this question is relatively straight forward: the gov borrows this money from the Federal Reserve, a cartel of quasi-private banks. Where does the Federal Reserve get the money? Simple: it prints it. The Fed prints the money and it then "lends" this new money to the gov at interest. The gov then takes this new money and gives it to companies like AIG. AIG then distributes this money to its "counter-parties." Note how former AIG CEO Bernstein and other system apologists are careful to use the term "counter-parties" rather than the term "banks." The counter-parties are basically banks, banks all over the world, as well as huge US banks, like Citi and BofA. So AIG has been acting like a huge international funnel to route TARP money, created by the Fed cartel, via the gov and taxpayer, into the coffers of Fed-member banks.
But here is the key thing to remember: all of this new money creates interest payments for these banks sooner or later. Thus, this "financial crises" is actually generating interest payments for the banks while you the tax payer are charged with paying for that interest as part of the national debt.
The only reason citizens are outraged about the AIG bonuses is because they can actually understand THESE transactions.
Given what the Fed-gov partnership, the banks and media are doing, it's clear, if the citizens understood what's at the heart of the situation, they would be even more our raged.
So, why is there no money? How come we are in a recession? How come all the stocks are falling? The answer to these questions becomes clear when one understands how money is created, a subject the mainstream media is covering up desperately.
In today's fiat-currency world, all money is created as a function of debt. This means, that in order for a dollar (a Federal Reserve Note or FRN) to come into existence, that FRN must be LENT into the system. Someone has to borrow the newly created FRNs the Fed has printed up. Thus, when new money is created, it is LENT into the system. Each FRN thus represents a unit of PRINCIPLE upon which interest is owed. But if each FRN is a unit of principle upon which interest is owed, where do the FRNs to pay the interest come from? They must be printed as well and then lent into the system as well. But the act of doing this, printing more FRNs to service debt, creates yet more debt to be serviced. Therefore, the entire US financial system is a ponzi. A ponzi is defined as: a scheme to satisfy former creditors/investors with later lenders/investors. Debt on earlier FRNs created must be serviced by creating yet more interest-precipitating FRNs.
The entire world financial system is a multi-trillion dollar ponzi.
WHY GLOBALIZATION IS FOOLISH:
Since irresponsible people from Nixon to Clinton have pushed for globalization -- a system that fuels itself with a multi-trillion dollar ponzi -- globalization is foolish. It is foolish on at least three counts:
1. Funded by a ponzi;
2. Fails to provide redundancy;
3. Violates First law of Thermo dynamics (discussed elsewhere).
We have allowed our nation's rulers to place all of our eggs in one basket and we have allowed them to finance this system using unsound monetary policies.
Ross Perot warned us of this when he said NAFTA was dangerous. But the media, invalidated him. Now Ron Paul warns us of this as well as other things. The media still invalidates this and continues to obfuscate the real issue with a bunch of endless trivia and misdirectors.
Why are the stocks of so many corporations taking plunges? Because many of them are over-leveraged, meaning simply: they have too much debt. Why do they have too much debt? Jefferson answered this very question over a hundred years ago. To wit:
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."
The Jefferson quote means this: When you allow a private banking cartel (the Federal Reserve) to wander from the Constitution, which states that the Congress shall coin money and this money is to be no THING but gold and silver (see Article I), this private banking cartel will put out endless amounts of fiat money (money NOT backed by gold and silver as stipulated in the Constitution) and lend it to their buddies (the corporations that surround them) at ridiculously low interest rates (i.e., rates below free-market rates), thus causing inflation (it now takes 100 pennies to buy what 5 pennies used to buy) and this will allow, if not provoke, these corporations to over-extend themselves with debt (i.e. become over-leveraged). This excessive debt on the balance sheets of these corporations (and bank corporations) will then make these publicly-traded entities less attractive to investors. These entities will also be less attractive to investors because of assets no one can easily evaluate (toxic assets) due to their overly complex derivative nature (CDSs and CDOs). Thus investors will withdraw their money (sell their stock) in these corporations (the corporations that have grown up around the banks) and this massive sell-off will depress the entire stock market causing a depression (deflation). Many of these corporations will also go out of business or lay-off workers. Since many people have their retirement funds invested in the stocks of these corporations, they will lose this money as well as collateral and dividend income (be deprived of their property). Since many of these people will (also) lose their jobs, they will not be able to pay their bills (and debt service on a mortgage is usually the largest bill), thus they will lose their homes (and thus they will wake up homeless on the continent their fathers conquered, as Jefferson stated). The conquered continent Jefferson refers to is America, then under British rule. Great Brittan is the very country that practically INVENTED fiat money and the very country Paul Warburg, prime architect of the Federal Reserve System. So who has really conquered who?
THE MESSAGES ON THE WALL:
The messages on the wall are simple:
1. The mainstream media is lying and obfuscating the real issues;
2. The Federal Reserve System violates the U.S. Constitution;
3. The heart of the problem is the fact you cannot base money on DEBT;
4. The US and world fiat money system is a giant ponzi;
5. Fiat money schemes serve the globalist agenda;
6. The globalist agenda is foolish because it violates the law of redundancy and the first law of thermo dynamics;
7. The stock market crashed because of Jefferson's warning;
8. Injecting more fiat money into the system may provide temporary relief, but this money will also get sucked up as interest payments;
9. American's will never have any money or prosperity until they get rid of the current debt-based monetary system and reject globalization as currently practiced;
10. The world will be a better place if 1 - 9 happen and a worse place if the Russian plan for some world fiat super reserve currency is instituted.
The reason YOU never have enough money and why there is NEVER enough money in the economy is because ALL excess money goes into INTEREST payments. The entire system is BUILT this way. Every dollar comes into existence as a new unit of DEBT. It is thus MATHEMATICALLY impossible for this system to continue because the productive energy of every man, woman and child is effectively siphoned off and allocated to the creators of money. The creators of money are the bankers, politicians and executives behind a system known as the Federal Reserve System. The Federal Reserve System is not only a system of unjust enrichment, it's a system that CAUSES debt slavery. It is also a System that violates the United States Constitution. The Federal Reserve System, and other alter-ego systems such as the IMF/World Bank, were covertly and gradiently institutionalized between 1910 and 1971. The full negative effects of this System are now being realized, for the Federal Reserve System is designed to benefit no one other than the LENDERS OF MONEY and the APOLOGISTS OF GLOBALIZATION.
One can analyze this System, and the economy it generates, using sophisticated accounting and economics language, but it all comes down to one simple point: YOU CANNOT MAKE MONEY OUT OF DEBT AND EXPECT FINANCIAL SANITY FOR LONG.
The current world banking System, and so-called "financial services industry" it spawned, is totally and completely insane and the source of unjust enrichment. Executives at AIG taking excessive bonuses -- criminal exploiters of the System -- are just the tip of the iceberg.
For citizens of the U.S. and/or the World to tolerate this System, or the greedy monetary scientists and CFR-infested government officials that have concocted it, is insane.
All People in the U.S. and World should therefore immediately cease to use government-issued, fiat money (Federal Reserves Notes) as well as EUROS and all other paper fiat currencies.
Further, U.S. Citizens should withhold future interest and tax payments until the meaning of Article I of the U.S. Constitution is adjudicated by the Supreme Court. All debts and taxes expected to be satisfied with fiat currency found to be unconstitutional should be cancelled on the grounds that any contract or statute that attempts to enforce payment with unlawful, unconstitutional money is null and void.
The attempt to issue unlimited amounts of unconstitutional fiat money is a covert attempt to destroy the United States because it undermines the general welfare of the middle class, the economic engine of a capitalist economy that relies on a moral citizenry and Constitutional republic to operate. All parties to actions that undermine these principles should be held accountable and removed from positions of influence.
Only Marxists and fascists would advocate a world fiat currency or ignore advice in the U.S. Constitution. People should study these issues and evaluate whether the role the mainstream media is appropriate or whether it is abetting crimes of bankers, members of Congress and/or (corporate) apologists of the Federal Reserve System.
For more information watch a movie called MONEY AS DEBT and FIAT EMPIRE. Read a book called THE CREATURE FROM JEKYLL ISLAND or via THE REALITY ZONE at www.RealityZone.com.
21 March 2009
Please forward this to your mailing list if you agree with even 51% of this article. The mainstream media will probably not address this subject because they have conflicts of interest with their advertisers, stockholders and the political candidates they send campaign contributions to. Thus it's up to responsible citizens like you to disseminate important issues so that a healthy public discourse can be initiated and continued.
Permission is hereby granted to excerpt and publish all or part of this article provided nothing is taken out of context and the source URL is cited.
Any responses to this article, email or otherwise, may be mass-disseminated in order to stimulate a public discourse. Unless you are okay with this, please do not respond. We will make every effort to remove names, emails and personal data before disseminating anything you should proffer.
Don't forget to watch FIAT EMPIRE - Why the Federal Reserve Violates the U.S. Constitution so you will have a better understanding of what we believe fuels most of the problems under study by the Jaeger Research Institute. Also, if you support a constitutional republic engaged in free-market capitalism, you might be interested in watching the progress of our current film production, ORIGINAL INTENT, at http://www.FiatEmpire.com/producers
If you wish to be removed from this mailing list, go to http://www.jaegerresearchinstitute.org/mission.htm however, before you do, please be certain you are not suffering from Spamaphobia as addressed at http://home.att.net/~cyberfilms/Journel2.html.
Source URL: http://www.jaegerresearchinstitute.org
| FIAT EMPIRE | ORIGINAL INTENT |
Mission | Full-Spectrum News | Books by James Jaeger | Host |
Jaeger Research Institute