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I often hear people around here say "we need to pay it back" or "it's out of control". In the Federal Reserve System, debt is money. If all debt was paid, there would be no money. The national debt cannot be paid, because the money to pay the interest is not created.
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All U.S. government debt is created through the Federal Reserve system.
When the government wants more money, the U.S. government swaps U.S. Treasury bonds for "Federal Reserve notes", thus creating more government debt. Usually the money isn't even printed up - most of the time it is just electronically credited to the government. The Federal Reserve creates these "Federal Reserve notes" out of thin air.
When the Federal Reserve creates money this way, it does not also create the money to pay the interest on the debt that has been created. Eventually this puts pressure on the U.S. government to borrow even more money to keep the game going. So what this creates is a spiral where the U.S. government must keep borrowing increasingly larger amounts of money, where the money supply is endlessly expanding and where the value of the U.S. dollar is destined to continue going down forever.
As long as the Federal Reserve system exists, the national debt will keep going up, the money supply will keep going up and the U.S. dollar will continue to decline in value.
This is not because of some big mistake. This is what the Federal Reserve system was designed to do. It was designed to trap the U.S. federal government (and by extension all of us) in perpetual debt.
If the U.S. government really wanted to get out of debt it would take back control of our currency from the bankers and would start issuing debt-free money. But don't expect that to happen any time soon.
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The bottom line is that Congress and the banking cartel have entered into a partnership in which the cartel has the privilege of collecting interest on money which it creates out of nothing, a perpetual override on every American dollar that exists in the world.
Congress, on the other hand, has access to unlimited funding without having to tell the voters their taxes are being raised through the process of inflation. If you understand this paragraph, you understand the Federal Reserve System.
That means all the American dollars in the entire world are earning daily and compounding interest for the banks which created them. A portion of every business venture, every investment, every profit, every transaction which involves money -- and that even includes losses and the payment of taxes -- a portion of all that is earmarked as payment to a bank.
And what did the banks do to earn this perpetually flowing river of wealth? Did they lend out their own capital obtained through investment of stockholders? Did they lend out the hard-earned savings of their depositors? No, neither of these were their major source of income. They simply waved the magic wand called fiat money.
The flow of such unearned wealth under the guise of interest can only be viewed as usury of the highest magnitude.
I also hear people say the U.s dollar is just paper backed by nothing. This is not true. The U.s Dollar is backed by the value of OPEC's oil reserves. Their oil is sold exclusively in U.s dollars which creates demand and gives it backing from a resource far more important in the modern world than gold. You need dollars to buy OPEC oil.
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Viewed from a different angle, an oil price ceiling is a dollar floor. Oil is traded in greater dollar volumes than any other commodity so the oil standard had more liquidity than gold ever did.
According to the December 20, 2004 issue of the Oil and Gas Journal, the oil reserves of OPEC at yearend 2004 are estimated to be 885 billion barrels. The oil equivalent of Fort Knox was not the Strategic Petroleum Reserve; it was the combined oil reserves of OPEC, three orders of magnitude greater and much larger in value than all the gold mined since the dawn of history.
According to the United States Geological Survey, the total gold ever mined in the world is about 3.4 billion troy ounces. At $42 per barrel for oil and $420 per troy ounce for gold, the value of Opec's reserves is 26 times the value of all gold ever mined.
It's also backed by the U.s military, who forces countries to accept it, and they must accept it if they want to export to the largest market in the world.
Please read and understand this before you continue to say things that are not true. Stop blaming left or right. It's the same story.
I often hear people around here say "we need to pay it back" or "it's out of control". In the Federal Reserve System, debt is money. If all debt was paid, there would be no money.
Thats one of the most ridiculous statements I've heard in my entire life, and considering the fact that you've made lots of statements like this, thats some accomplishment.
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Originally Posted by Thatsright19
If the U.S. government really wanted to get out of debt it would take back control of our currency from the bankers and would start issuing debt-free money. But don't expect that to happen any time soon.
You've made this statement before as well but there was NEVER debt free money. money was always backed by the issuance of US bonds
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Originally Posted by Thatsright19
I also hear people say the U.s dollar is just paper backed by nothing. This is not true. The U.s Dollar is backed by the value of OPEC's oil reserves. Their oil is sold exclusively in U.s dollars which creates demand and gives it backing from a resource far more important in the modern world than gold. You need dollars to buy OPEC oil.
Just when I thought it couldnt get any stupidier, you proved me wrong. The oil is traded in US Dollars, but the oil doesnt back it no different than you going t work and being paid in dollars guarantees the debt.
Please stop pretending like you are some economsists and educate yourself before commenting again.
The oil is traded in US Dollars, but the oil doesnt back it
Oh, really? How do you get OPEC oil without dollars? You can't. So basically, dollars are convertable to oil, something every economy needs. If you want access to OPEC oil, you need dollars.
When the value of the dollar goes down, the price of oil goes up. Which creates more demand for dollars...and strengthens the dollar. Any time the dollar goes down, the value backing it goes up, so nothing in the proportion changes. the The dollar is the standard in which other currencies around the world float against.
Basically, the United States created "globalism" to dollarize the world. We make dollars (paper) and everyone else makes things (real goods/resources) that dollars can buy. From us having an (intentional) trade deficit, the other countries would build up dollar reserves. They would then invest these reserves in U.s treasuries, which allowed us to consume more (with intentional budget deficits). This setup created even bigger trade deficits...which meant more dollars floating out. Bingo. You guessed it. Foreign central banks needed to hold even more reserves (to prop up the dollar and keep their currencies low to maintain their export based economies). We were more than happy to supply the budget deficit and extra consumption. This loop has been keeping the U.s artifically doped for nearly 4 decades like the article above outlines. It was a form of colonizing the world more slick than the British could have ever dreamed of.
Any OPEC country that stops accepting dollars for their oil is attacked. Iraq, Libya, and soon possibly Iran.
You do not know how the Federal Reserve System works.
You didn't refute what I said. So come back when you have an actual response.
I know exactly how the federal reserve system works, its clear though that you dont, especially considering your comments about taking back the printing of money so we can issue debt free money.. That was histerical
Lincoln, Money, Greenback, JFK, Kennedy, Edmund D. Taylor and C In reality, bonds were created to "back" the various greenbacks issues. And these bonds became a source of bank credit. They were sold to bankers at discount and at 6% interest in gold! In the end, this had the effect of making the issues of greenbacks a forced loan from the people to the government, saddling them with costs that should have been totally bypassed by the issue of greenbacks. The bond purchasers not only insisted on deep discounts to purchase the bonds, but gold interest to boot – and before the maturity of the bonds approached, and the Resumption Act was passed (1873, and effective in 1879), they finally received gold, in payment of the principle!
THE HISTORY OF MONEY Abraham Lincoln's Greenback Dollar Hazard Circular - London Times 1865 From this extract its plan to see that it is the advantage provided by the adopting of this policy which poses a threat to those not using it. 1863, nearly there, Lincoln needed just a bit more money to win the war, and seeing him in this vulnerable state, and knowing that the president could not get the congressional authority to issue more greenbacks, the money changers proposed the passing of the National Bank Act. The act went through. From this point on the entire US money supply would be created out of debt by bankers buying US government bonds and issuing them from reserves for bank notes.
It was NOT debt free, so I'm not sure why you kooks keep starting these ridiculous threads making such nonsense claims.
If all money is created with debt, how is there enough money to pay the debt back? The money for the interest was never created. The banks win in times of inflation, and they win in times of deflation.
"If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered." Thomas Jefferson.
The debt CANNOT be paid back. National debt will continue to get larger and larger. Look at any graph since 1971, when the OPEC oil/dollar standard was created, and debt shoots straight up.
Oh, really? How do you get OPEC oil without dollars? You can't. So basically, dollars are convertable to oil, something every economy needs. If you want access to OPEC oil, you need dollars. .
If you have $100 Billion in oil, and I buy $2 Billion of it, this doesnt man the $100 billion backs the transaction. For gods sakes you are ridiculous.
Furthermore, if you are in China, and you want oil, you actually trade in your yen to get dollars, to obtain the oil, this doesnt mean the oil is backing the transaction either because they can choose tomorrow to take Yen, or Pesos or whatever other dam currency they wish.
Notice you said $100 billion in oil. Which means, if that oil is to be sold, the other countries need to get dollars some how FIRST. This creates an artifical demand for the dollar, giving it strength. In essense, it's covertable to oil just like currencies used to be convertable (backed) by gold.
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Furthermore, if you are in China, and you want oil, you actually trade in your yen to get dollars, to obtain the oil
Yep, they need dollars first. We are the sole printers of those dollars. The chinese need to export to us and hold reserves to get those dollars.
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because they can choose tomorrow to take Yen, or Pesos or whatever other dam currency they wish.
They can get those currencies, but they can't buy OPEC oil with them. They need dollars if they need the most important resource in history. More important than gold. Oil.
Its a very important line in the article which is utterly stupid and ridulous, and if its false, the rest of the claim falls apart.
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Originally Posted by Thatsright19
If all money is created with debt, how is there enough money to pay the debt back? The money for the interest was never created.
No one claims the debt needs to be paid back, but it does need to stop growing to the point that the interest payments exceed revenues. Once that happens, the nation is bankrupt.
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Originally Posted by Thatsright19
The debt CANNOT be paid back. National debt will continue to get larger and larger. Look at any graph since 1971, when the OPEC oil/dollar standard was created, and debt shoots straight up.
If you look at federal spending since 1971, its easily explainable why debt shoots straight up..
Pursuant to law, the unit dollar was a silver coin with no less than .77 ounces (troy) of pure silver.*
A 1/2 ounce gold coin (eagle) was equivalent to 10 unit dollars.
A one ounce gold coin (double eagle) was equivalent to 20 unit dollars. (See Coinage Act of 1792)
A Federal Reserve note was a promise to pay face value, in dollars, in the future. (See Title 12 USC Sec. 411)
That promise was repudiated in 1933, in House Joint Resolution 192, etc.
FDR confiscated (stole) all the private gold money, in 1933, and criminalized the possession of gold money by "free" Americans. The Great Confiscation: Gold ownership was illegal in the USA from 1933 to 1975
Since 1933, no lawful money has circulated, and Federal Reserve notes are worthless (no par value). Thus we have lived under a perpetual "temporary" State of Emergency.
*Silver was demonetized in the Coinage Act of 1873.
The public debt, denominated in "dollars" cannot be repaid with "dollar bills" (IOUs). Pursuant to law, the over 15 trillion dollar debt computes to over 750 billion ounces of gold, stamped into coin.
Problem #1: Fort Knox depository holds 147.4 million ounces (allegedly).
Problem #2: World wide supply (2007 est) is 5.3 billion ounces.
Q: What money was lent to Congress to substantiate the public debt? Art. 1, Sec. 8, states that Congress has power to coin money (stamp bullion) or borrow money. It has no power to create money - otherwise why would it need the power to borrow it?
" Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything. This has been the case since 1933. The notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are "backed" by all the goods and services in the economy."
Q: How did YOUR labor and goods underwrite Congress' bankruptcy?
A: FICA.
Didn't they tell you that you volunteered to be a surety on the debt?
{See "contributor" in a legal dictionary}
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Senate Report 93-549
War and Emergency Powers Acts
"A majority of the people of the United States have lived all of their lives under emergency rule. For 40 years (as of the report 1933-1973), freedoms and governmental procedures guaranteed by the Constitution have, in varying degrees, been abridged by laws brought into force by states of national emergency."
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