and the problems it has caused
Suppose the government decided to increase everyone's wealth by a fixed percentage ... say, 10%? Here the result would be a fair distribution of the new "wealth" resulting in no net effect. However, everyone would oppose the increase because it would require that everyone increase prices and wages as the wealth made it way through the economy, i.e. it would just be an unnecessary hassle. Hence, no one proposes this particular idea.
Lastly, suppose that the federal government gives only those with lots of money ... lots more money ... thereby increasing their net percentage of the wealth through no effort of their own. Who would howl the most? Would the average American howl? Would you howl about it? If so ....
Why aren't you howling?
For this is exactly what is being done on a daily basis by
"The Federal Reserve Bank of the United States of America"
This is their business. And why do they give money selectively to the rich? Because they are more responsible than you ... or I. They know best how to use that money to serve the nation's interests. Only they can create jobs so that people like you (and your wife... since the 1960s or thereabouts) can work 40 hours per week to send Johnny to school ... so he, can come home to an empty house ... after being educated (but not tooooo educated) to become a work-serf just like mom & pop.
And if you're really lucky, you might even get to become a servant to those rich people ... in their homes!!!
You could be a house nigga'.
If you are unsure of whether you are on the above rich-list or not ... hmmm ... just answer this simple question. Do you own any US Treasury Debt Instruments ... thousands of dollars worth? If not ... you be duh house nigga'. Those to whom the interest on the national debt is paid (for the above debt instruments) are the owners of the house in which you may aspire to work.
The injection of heroin
Bankers are some of the best scam artists around. They rival the Three Card Monte guys on the streets of New York in their hustle and knowledge of the finer points of their particular scam. Bankers have special knowledge and jargon so as to confuse their depositors and everybody ... they are "responsible" conmen. They aren't like the Ponzi Scheme showboaters. They are much more sedate and they are nothing if not patient and discrete. They are in for the long haul. And what a haul it is. It's the biggest "eco-scam" in history ... far, far, far bigger than any Mafia don ever hoped to become even in his wildest dreams.
What they do is ...
Charge you higher interest on money they don't have which the government loans them at small interest. Then they sit on the constant profit stream generated by the difference between the two percentages ... and smoke their stogies. If people default on loans (credit cards, etc.) they just jack up the percentage on everybody else to cover the loss (like the insurance business). The stream is as endless as a rhino's urine in the springtime. As long as there are people who are willing work at something constructive to actually support the civilization ... they can suck profit from their most excellent scam.
The modern scam began centuries ago when bankers discovered that people would accept a piece of paper (debt instrument) as money instead of solid gold. As a result bankers who stored real gold in their vaults started giving out more credits on that gold (loans) than they had gold to back it up. I mean, if they had 100 pounds of real gold in the vault ... they loaned out, say, 1000 pounds of gold ... on paper. After all who's to know? You trust your banker.
This scam proved not to be useful in the long run. When people got scared by rumors they heard, the subsequent run of the bank by all the depositors of the gold (who trusted the bank) resulted in the end of the bank and sometimes of the bankers. Hence, other schemes were devised more subtle and smaller in scope so that more could be gotten away with over a longer period of time. That is, people will allow you to steal their money ... if ... you don't steal too much too quickly. If you have lots of customers, you still make huge profits and don't risk tar & feathering.
The way the scam currently works is two-fold ...
The first mechanism is that the Federal Reserve Board, under the auspices of the government, determines what percentage of the deposits held by banks is to be held in "reserve" against the normal daily functions of the bank. And ... the government guarantees these deposits against runs with the Federal Deposit Insurance Corporation ... which doesn't have enough money to cover runs ... but, what the hell, nobody cares about that ... these deposits are backed by the
Now, this is the cool part. It's a little involved so pay attention. If the government says the bank can loan out 80% of your deposits but must keep 20% in reserve, that's what they do. Then the 80% is taken out in loans and re-deposited into other accounts in other banks. So, the loan becomes a deposit ... of which 80% can be loaned out again. There is a multiplier effect. First, it's 80% of $1000, then 80% of the re-deposited $800 ... then 80% of a re-deposited $640 ... then 80% of a re-deposited $512 and so on ... till you reach a mathematical limit. In practice, it's not as smooth but eventually you have a small percentage difference resulting in a huge amount of money being created in the form of electronic data (they don't even bother with paper anymore). So, the banks have created for them by the system, huge amounts of funny money ... artificial bucks to loan out to all the suckers who want to get in on the action.
Here's the present percentage breakdown as pasted from the internet ...
The Monetary Control Act (MCA) of 1980 authorizes the Fed's Board of Governors to impose a reserve requirement of from 8% to 14% on transaction deposits (checking and other accounts from which transfers can be made to third parties) and of up to 9% on nonpersonal time deposits (those not held by an individual or sole proprietorship).
Well, I guess the reserve rate can't go much lower for savings accounts, eh?
But this is only the first half of it. Banks can borrow money from the Federal Reserve. This is what is meant when the newspapers say, "The Fed increased the funds rate by a quarter percent today". This is the lower rate that the Fed charges to member banks for more cash it can then lend to you at that higher rate. Let's say it's now 5% and you have a credit card that you pay 16% on. 16 minus 5 = 11% ... this is called ... the "rakeoff". Of course, the 5% is only on the initial loan made to a particular bank.
And ... when you borrow the money and spend it on something frivolous (like that emergency appendectomy that your insurance only pays 50% of, after the $2000 deductible) ... the docs deposit it in the bank where the afformentioned multiplier effect makes more funny money for other banks to loan out and profit from. This multiplier effect, funny money doesn't carry any interest, so it's just a freebie for the bank ... make it a straight 16% rakeoff (or whatever) for that part.
As the money supply increases (by that multiplier effect and loans from Fed to banks) ... inflation becomes a problem (more money chasing the same goods and services). But if the Fed can keep it low enough ... it can go on and on and on ... because ... it's OK to steal people's savings accounts by debasing the currency ... provided you do it slowly enough. Then nobody howls ... and eventually nobody has a savings account anyway so ... whudafuc ?
Instead of money in the bank we have negative money in the bank in the form of credit debt ... cool. It works for me.
The inflation rate is always compounded continuously so that it's, say, 4% of the money supply today and then 4% of the increased money supply later. You know the drill here. It feeds on itself ... like an addiction ... it no longer makes us feel good ... but ... we ... just ... can't ... stop.
Thus, the National Debt grows ... how?
Well, the Fed is called a "layer of culpability" which the politicians have installed into the scheme so that they can have somebody to pin the blame on when it goes bad. When designing a con, always remember to put your fall guys in ... before ... you start the scam. That way, while the mob is chasing them, you can get clean away with the loot without any tar or feathers on your ass.
Well, people buy these bonds sold by the treasury and horde them for "the future" ... because ... they get interest ... on their money that the treasury then loans to the Fed ... to loan to the member banks ... which gets multiplied by a huge factor ... allowing banks to loan lots more money to you ... so you can pay them the default rate of 30.95% on your credit card ... when you can't pay the rent ... because you no longer have a savings account ... because you are a no good lazy Mexican or other "___place ethnic name here___" .... because inflation makes savings a fool's investment ... so you ain't got no money ... in the long run.
But in the long run ... we'll all be dead ... so ... whudafuk?
All the excess money is soaked up by people who invest in their country's future buy buying treasury (government) securities (bonds,etc.) ... hmmmmm ... like rich people and foreign countries looking for a safe investment that's backed by the full faith and credit of the American people (you who do the constructive work that contributes to the actual maintenance and furtherance of civilization). Oh, yeah ... you have to pay the interest on the debt incurred by those bonds (the National Debt) ... issued to the rich people and foreign countries ... to soak up the extra cash in the money supply ... that the Fed loaned to the member banks ... which got multiplied and re-deposited again and again ... so that you could get more credit to pay your rising income taxes ... to pay for the interest on the above national debt.
Well, you wouldn't want to default on the
Would ya? ... whuduhfuc ... Continued ...