Now that we have discussed the basics of how technology and the controllers of that technology will be able to control most of the world given enough time and money, let’s discuss the system as it is today in more detail. We may be able to distinguish the basics of an agenda-driven pattern unfolding itself onto society, but connecting all the dots is something that is going to prove to be a bit more difficult. It may be difficult to narrow down exactly who - if it even is a single person - is behind the brokenness we see in today’s system by connecting these dots, but we can certainly get close. If we are going to be good detectives in trying to detect sabotage, let’s look at how the current system’s money is being handled… since money can’t lie. One way to see how money is being handled is to understand how money’s value is even being defined by the system in the first place. After all, controlling the core nature of citizens’ inherent purchasing ability can dramatically increase overall power of the ultimate controllers. One thing that we can immediately notice is that humans have mostly lost their learned skills to harvest necessities and build shelter to survive when no money is around. Today, losing the ability to purchase necessities with earned wages can easily lead to death. Self-sufficiency is no longer normal. Mankind has given up its independence and ability to survive in the wild because it collectively trusts the system and the money it hands out. What really is this money that we rely so heavily on and where does it actually come from?
The current system is completely fueled by the almighty dollar. The United States Dollar (USD) is the most widely circulated and the most powerful currency in the world. These little green pieces of paper with intricate artistic designs are constantly being moved through millions of different hands every day. The number of physical dollars circulating hands, however, steadily decreases as virtual currency takes its place. This really doesn’t matter, though, since the money we use today, physical or virtual, does not actually exist anywhere other than in our imagination. Ever since the decoupling of the U.S. Dollar from gold by Richard Nixon in 1971, a system of national fiat currencies has taken control and is now being used globally. Fiat money has been defined loosely as any money declared by a government to be legal tender.
“The modern banking process manufactures currency out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented… If you want to be slaves of the bankers, and pay the cost of your own slavery, then let the banks create currency”. - Lord Josiah Stemp, Former Director of the Bank of England
FUELED BY IMAGINATION
The imaginative creators of this system, backed by man’s word instead of physical gold, specifically coined the term “fiat” to describe the nature of how they created money for the world on command. Taken from Latin meaning “let it be done/made,” this word appears in Latin translation of Genesis, the first book of the Bible, when God proclaims “let there be light” or “let light be made” (fiat lux). Another Latin phrase, “ex nihilo,” also describes the nature of fiat currency, which means “out of nothing” in English. We can combine these concepts into a Latin phrase that accurately depicts the central banking system: “fiat pecunia ex nihilo,” meaning “let money be made out of nothing”. This phrase is similar to the creation story in Genesis where God creates the universe out of nothing: “fiat lux ex nihilo,” meaning, “let there be light / let light be made out of nothing”. This “divine” power is used in many different ways, one being the demand of a slice of your paycheck each and every time you receive one, with refusal to pay ultimately leading to a prison built by the same “divinity”. Some may call the result of imaginary currency an ultimately artificial economy.
Fiat currency specifically allows the central banks to flex their superhuman power by implementing expansionary monetary policies like quantitative easing to artificially resurrect a market back to life. Quantitative easing is an unconventional monetary policy where the central banks purchase government securities or other securities from the market in order to lower interest rates and increase the money supply. In general, as interest rates are reduced, more people are able to borrow more money. The result is that consumers have more money to spend, causing the economy to temporarily grow and inflation to temporarily increase (higher inflation coming from the lower interest rates). Inflation is one of the primary key indicators that an economy is doing well, so, too low of an inflation usually means the economy is slowing down. This ability to create money out of thin air means that those with access to the right buttons can simply press them to artificially flood the market with additional cash. This sudden influx of money is known to artificially and temporarily “stimulate” or “shock” a dying market back to life. More money in the market means that inflation will spike, breaking whatever trend of deflation there was before. This all increases the velocity of the money being spent in the market: more money = more spending. The increased spending by corporations creates more jobs and increases employment rates while raising salaries. For manufacturers, this may help stimulate growth because exported goods would be cheaper in the global market. Although this may appear to be an obvious fix to a dying economy, at its core, it is only temporarily patching the problem that caused the initial move toward deflation in the first place. Ever since its inception, quantitative easing has been a controversial topic with its share of supporters and detractors; garnering a variety of criticism from all pockets of the economic system. The argument is that the long-term effect of power being used like this may be a guillotine to our economy as a whole through the overall devaluing of the domestic currency – the result of an artificial economy. Quantitative easing surely isn’t the only factor that is contributing to the current system’s inadequacy mentioned in the first chapter, but let’s take a few moments to understand its details, as this will help us understand the larger picture.
· Currency Devaluation
o Quantitative easing’s ability to bring a drop in the value of the currency is serious. Each time a dollar is added to the economy, the value of the existing dollar sees a slight descent. Thus, the trillions that have been already added to the monetary base will only scathe the dollar.
· Unfueled Credit
o Quantitative easing is commonly used to encourage spending and lending in the market. However, it has also been observed that the money that commercial banks receive from the sale of financial assets isn’t always put to use in lending. Many banks hold onto these funds to improve their credit, and are afraid of lending it. The demerit in this case is that banks can choose to not loan money to businesses or households. Plus, in the case of a liquidity trap, a bank may completely overlook lending because of the zero interest rate. There is also the possibility that there may not be a demand for loans either as a result of the unstable economy.
· Inflation Dangers
o It came to reality in 2011 in the United Kingdom when an analysis by the Bank of England estimated that inflation grew by 1.5 percent owing to quantitative easing, and resulted in damaged household’s disposable income. It has also been observed that the combination of economic stagnation and quantitative easing over an extended period of time can add to the possibility of hyperinflation. This isn’t always the case according to a study by the IMF in 2013, but is certainly a legitimate concern that adds to the big picture.
· Deflationary Effects
o When a given economy is stuck in a Liquidity Trap then QE can cause deflation as well.
· Competitive Devaluation
o Quantitative easing has been criticized by BRIC countries under the banner that quantitative easing is a form of Protectionism and Currency War/Competitive Devaluation.
GREAT RECESSION, BIG DREAMS
Ben Shalom Bernanke introduced the first round of quantitative easing in the U.S. during the worst of the financial crisis, as global markets tumbled and liquidity was sucked out of the system. This took place in November 2008 when the Federal Reserve spent $600 billion on purchase of Mortgage-Backed Securities (MBS). This loosens monetary policy further after having dropped the Federal Funds rate to the zero range. The fed funds rate is one of the most important interest rates in the U.S. economy since it affects monetary and financial conditions, which in turn have a bearing on critical aspects of the broad economy including employment, growth and inflation. The fed funds rate also influences short-term interest rates, albeit indirectly, for everything from home and auto loans to credit cards, as lenders often set their rates based on the prime lending rate. The prime lending rate is the lending rate at which banks charge their customers. In the case of longer-term interest rates, these are indirectly influenced by the fed funds rate.
Through the fed funds rate, the Federal Open Market Committee (FOMC) can control inflation, growth, and many other crucial factors of the economy. It consists of twelve members--the seven members of the Board of Governors of the Federal Reserve System; the president of the Federal Reserve Bank of New York; and four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis. The FOMC makes its decisions about rate adjustments based on key economic indicators which show signs of inflation, recession or other issues. These include measures like the core inflation rate or the durable goods report. This is done by purchasing longer-term assets, such as 10-year Treasury bonds, in order to push down interest rates further down the yield curve.
Quantitative easing came into prominence after Japan attempted to prop up its economy after a massive financial and economic crash during the 1990s. Japan entered what is commonly referred to as the "Lost Decade," where not even quantitative easing managed to boost output substantially. As our research will continue to prove: If a boat is leaking, it is usually best to rebuild the boat before sailing instead of just patching the holes.
A SYSTEM OF BIBLICAL PROPORTIONS
To extrapolate on the previous Genesis reference, let’s take a look again at the original verse:
“In the beginning, God created the heavens and the earth. The earth was without form and void, and darkness was over the face of the deep. And the Spirit of God was hovering over the face of the waters. And God said, ‘Let there be light,’ and there was light”.
If one takes this well-known verse and reshapes it to describe the mentality of those in control of the Federal Reserve, it begins to say:
“In the beginning, Government created fiat currency. The economy was without form and void, and darkness was over the face of the country. And Congress was hovering over the face of the waters. And Government said, ‘Let there be money,’ and there was money”.
The trick is that this money the government spoke into existence only exists within the mind of man as imaginary “light,” in that it cannot be physically grasped like gold but can only be seen in the mind’s eye. Believing that having this imaginary cash is equivalent to having physical assets, which can’t be immediately destroyed at the bounce of a stock ticker, takes considerable faith in the creators of the system… or just blissful ignorance (blind faith). You can purchase alot with the numbers you see in your bank account right now, but if the system that acts as the foundation for those numbers collapses, what happens to those numbers that you depend on for food and rent? They disappear. A United States backed Treasury Bond (T-Bond) is a common choice among investors who desire a piggy bank that is mostly risk-averse and focused on generating long-term income (usually for retirement). However, if the government supporting those bonds collapses, not even the most secure virtual piggy bank will protect the value of your assets – meaning your assets become ashes.
Thanks for your theory!