No, you’re not going crazy, folks. In today’s world, nothing is as it seems anymore. Down is up. Bad is good. Black is white. And the money in your wallet — as well as the stuff making up your bank and retirement accounts — is nothing but an empty promise.
That’s right; the current worldwide monetary system is a debt-based system which perverts the entire concept of money. Why? Because in a debt-based system, “money” is created from debt, instead of productive work. As a result, it’s just an IOU!
So, how perverse is our debt-based monetary system? Well, let’s go down the rabbit hole and take a closer look at what happens when “money” is an IOU instead of something tangible like gold and silver — or even currency backed by gold and silver:
If you loan somebody $100 in Federal Reserve Notes (e.g., a $100 bill), you get to put that loan down on your books as an asset. On the other hand, if you or I deposit the same $100 in Federal Reserve Notes at a bank, the cash in that account suddenly becomes a liability for the bank. So cash is an asset, unless you loan your cash to a bank by depositing it with their establishment — then it’s a liability. Got that?
But wait; there’s more. When a loan is originated the principal is created out of thin air, but the interest is not — and that’s where the trouble arises, because those interest payments require the onerous transfer of your labor to the bankers in exchange for the relative ease they needed to generate the loan. Think about the absurdity of this: The banks are charging us interest on loans for cash that they didn’t even have in the first place!
The banks can get away with this because of fractional reserve banking rules. It used to be they could loan 9 out of every 10 dollars deposited. However, in 2020 the Fed changed that requirement. Now the banks can loan 100% of customer deposits!
Meanwhile, we slave away to pay off those loans — plus hundreds or thousands of dollars in interest — even though the bankers didn’t have the cash in the first place, and in reality, did nothing more than bang out a few keyboard strokes on the computer!
There’s only one reason for a debt-based monetary system: it allows banks and governments to steal the citizens’ wealth. They do this by robbing producers and savers via inflation, and debtors via interest payments. They also rob future generations by saddling them with bills they never agreed to pay for in the first place.
Of course, this scam would be impossible to pull off if we ever went back to a monetary system anchored by honest money: gold and silver. As a result, governments, and the banks they’re in bed with, do everything in their power to discredit precious metals.
The good news is, this 52-year-old financial sham — our current debt-based monetary system — is mathematically unsustainable. As a result, you can be sure that gold and silver will have their day in the sun again.
And judging by the most recent turmoil affecting the world financial markets, that day is coming. Quickly. There is too much debt on the books now — and it’s growing at an exponential pace. In fact, there is so much debt on the books that the system has become hopelessly dysfunctional.
It’s important you understand this. That’s because when enough people stop believing in “the full faith and credit of the United States government,” they’ll call in their chips. And that’s when the world’s fantasy debt-based monetary system will finally implode. It’s also when the curtain will rise on the true value of all those IOUs. And that’s when the real “fun” will begin.
It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
– Henry Ford
Photo Credit: stock photo
Great article.
Agree the debt based system is absolutely nuts and unsustainable. I just want to add that individuals can fight this by just saying, “No”. Say no to your own debt urges all linked to the sophisticated advertising industry for all those products and experiences ‘you just have to have’, you ‘deserve’, or things that ‘everyone else’…….. We all know the pressure.
I used to say that you know we are in trouble when a working man (my good friend and old high school buddy) thinks a yearly tropical vacation is normal and something people just do. He worked in a pulp mill, made good money, but….. This was in the late 70s.
Some debt can be useful, even necessary, or at least has been in my life. We went into debt to buy our first house. I was 24. My father-in-law said this at the time, ” Pay the house off as soon as you can. as soon as possible. When we were renting and when I owed on the house with our 4 kids we were broke. But after I paid it off I always had $100 in my wallet and always will”.
Anyway, we eventually moved on to a new location but had the next house paid off by age 35, sold out and bought a beater with land, etc etc. Sweat equity pays off as does saving and never going into debt for anything except for that first house. This year we bought a new truck, a four wheel drive Nissan that I use for hauling materials and that also allows us to move around in the winter for appointments, etc. Paid cash. Never bought a new vehicle before, always drove junk. Learned to do my own repairs. The Dealer did everything they could to get us to finance the purchase. Nope. The salesman phones and offers us deals on another new vehicle, even to test drive something. Nope.
We have a wonderful tenant who is saving for a house. I charge her just $500 per month for a 5 year old cottage which covers our insurance and taxes. She is a family friend. I want to help her buy that house. She makes a lot of money operating heavy equipment but last year she took off 10 months from work, and this year she already has a vacation booked for Mexico. hmmmm. We’ll see what happens? It’s up to her.
The kicker is reading about all the folks demanding a ‘Debt Jubilee’. A do over with a blank slate to erase their debts. Crazy times.
Great comments, Paul! Lots of wisdom in them. Thanks for sharing them with everybody here.
I too keep trying to educate folks I know. But they just tell me that I have been saying the same thing for years. They laugh and keep trusting the system. I try to tell them that PM are not an investment, but insurance. They claim they understand insurance, but just don’t buy into physical ownership and possession of gold and silver. At some point I just give up explaining this. I told a friend, imagine burying a thousand dollars in paper currency and 1000 in silver. This gets dug up by your grandchildren or heirs. What is the paper going to be worth? There are plenty of stories of people finding physical gold and silver, which is worth a nice surprise. My honeybee tells me she looks better in jewelry and to stop burying PM in the ground. I can dig that. Lol.
I feel your pain, CO2. Most of my relatives’ eyes just glaze over when I try to explain how the system works – or they look at me as if I am bat shit crazy. So I pretty much just keep my mouth shut now. I figure those who are truly interested, can read my blog.
debt based system is not sustainable. Yet whole world is using this strategy. I believe we cannot seperate ourselves from this debt based system as it is everywhere.
Nobody can fully separate themselves from the system thanks to legal tender laws. But you can still protect yourself by holding at least a portion of your wealth in real money – physical gold and silver – as that can never implode or suddenly become worthless.
People don’t understand their own credit card debts, and bank accounts. They don’t even care to learn about the government fraud.
The real scam started in 1967 when the government got Saudi Arabia to price oil in US Dollars. It allowed the government to spend with abandon. Saudi Arabia is in serious discussions to end the petrodollar. That alone will cause things to implode.
The politicians know it will implode. They figure they’ll be dead or out of office when it happens.
The petro-dollar is, for all intents and purposes, already dead.