A change of money
Nov 24, 2018
When the Federal Reserve Bank was chartered in 1914 following the Federal Reserve Act in December of 1913, Congress gave up its power to create money and gave it to “the experts,” the big banking interests. Throughout the late 1880’s the big political fight was about keeping control of the nation out of the hands of the bankers. In 1913 the banks won; the people lost.
Instead of the US Treasury creating money as needed and spending it into circulation without debt, the Treasury now had to borrow it into circulation. There was a fixed amount of money in circulation at the time, and with a growing population and economy, more money was needed to keep the economy running smoothly.
Taxes could fund the government, but taxes took money out of circulation, creating a shortage for the people. The only way to make up for this was to borrow from the Fed (at interest) and spend the money into circulation. To pay back the loans, more money needed to be created out of nothing, borrowed from the Fed, and spent into circulation. That, of course, follows the classic definition of a Ponzi scheme.
The Federal Reserve system was set up to enrich the bankers in the short run and to implode in the end, after the people and the nation itself were so far in debt that they could not pay back their loans.
We are nearing that point today. We actually reached that point in 2008, but when the Fed lowered interest rates to zero, it bought us some time. In fact, banks and corporations increased their debt load by borrowing more, since they could afford zero interest rates. But more recently, the Fed began raising interest rates again, and now the increased level of debt is becoming a problem again.
The Federal Reserve Board talks about a “neutral” rate of interest, where the rate neither harms nor benefits the economy. That is their supposed goal, although they seldom find themselves at that neutral spot. Either the rates are too low, causing a spike in debt and inflation, or the rates are too high, causing recessions and bankruptcies.
In 1980 the Fed raised interests to about 18 percent to find that “neutral” spot. Actually, they went above it, causing a recession.
In 1987 the Fed raised interest rates to 10 percent to find that “neutral” spot. They caused another recession.
In 2001 the Fed raised interests to 6 percent to find that “neutral” spot. Another recession occurred.
Now the Fed’s projection of the “neutral” spot is about 3 percent.
Do you see a pattern here? As time passes, the “neutral” spot is lower and lower. In other words, the economy is going further and further into debt, and so the economy cannot handle higher interest rates before it collapses.
We are now near the “neutral” point once again, and the Fed is thinking that it will raise interest rates when it meets December 18-19. The talk has been about raising interest rates twice more in 2019, but that remains to be seen. Given the economic rumblings, I suspect that if the Fed raises the interest rate even one more time, they will once again bankrupt a lot of corporations, run many more people out of the housing market, and crash the economy.
Given the fact that the Fed has never stopped raising interest rates until they caused a recession, I doubt that this time will be any different. They never seem to know where the “neutral” rate is until they go beyond it and cause a recession. When the crash occurs, they slap their foreheads and say, “Oh, there it was!”
In my opinion, they know exactly where the “neutral” rate is, but their purpose is to foreclose on property and sell it to the bankers for pennies on the dollar. It’s bad for the banks but good for the bankers. Banks are just the tools by which money is siphoned to the bankers. In fact, all corporations are just tools to enrich those who control them.
Right now there are some very large corporations that are teetering on the brink of bankruptcy. They are already insolvent, but one more rate hike will probably push them into filing for bankruptcy. General Electric is one, Sears is another. In less than two years, GE’s share price has dropped nearly 75 percent. Sears has been scraping bottom for even longer. It is only a matter of time before these corporations implode or are bailed out by the government.
In Europe Deutsche Bank is on the brink as well. They are not directly affected by the Fed here in the USA, but its shares have been dropping even with the Euro’s ongoing negative interest rates.
Then there is the long-term problem of the Spanish, Italian, and Greek banks, which have long been technically insolvent. If any of them go down, it will affect the entire Eurozone, because they are all tied together.
The bottom line is that we should be aware of the big financial picture, even if we do not know or understand all of the details. It appears that the Fed is intending to crash the economy in 2019. It may well be that one more rate hike in December will be the trigger once again. We are, after all, ten years past the bank crisis in 2008. Historically, we are due for another recession, though this has been postponed in the past two years by the Trump policy.
This will not be just another recession. The problem is systemic. The idea of the Fed itself is ending. What we know as Mystery Babylon is funded primarily through the Fed. From the standpoint of Bible prophecy, it is time for Babylon to fall. Prophecy and history are coming together. The Fed will not simply collapse. It will be replaced by a new system.
My guess is that Trump will nationalize the privately-owned Fed and cancel whatever debt is owed to this bank. If the US government cancels all of the debt (bonds) held by other countries, it could easily trigger wars. Likewise, there are many US corporations and citizens who hold US government bonds. These bonds, at least, would have to be monetized—perhaps telling everyone to cash them in for the new form of money. That would keep money in circulation but remove the interest-bearing debt notes attached to each Fed Note.
Rumors have it that the new monetary system will be gold-backed. Even if the gold actually exists in Ft. Knox (which I doubt), the price of gold would have to skyrocket in order to have enough to back the amount of money needed in circulation just here in America. It could be done, but the problem will not be solved unless the Treasury nationalizes the Fed and eliminates the need for the Fed’s debt note that we now use. Then we will need to see a different form of money established that is a store of labor (energy), not a store of debt.
By itself, gold will not resolve this problem. The underlying problem is not a lack of backing but the interest that is attached to every Fed note. Only when the debt is eliminated from money will the problem be solved.
One way or another, money needs to return to being an asset, rather than a debt note. It needs to represent positive wealth, not negative wealth (debt). I do not know if the government has the power to do this, because the bankers have controlled the governments of the world for a long time. But one way or another this will be done just because the time is ripe for Mystery Babylon to fall.