Bitcoin Forum

is the US Dollar..... :o  ???

14 Trillion WHAT?

It's funny, because some opponents of bitcoin claim bitcoin is a scheme, and they compare it to the US dollar and other so called "stable" currencies.

But all world currencies are based on debt, unless they are local currencies based on work or hours.

If a currency is based upon debt, then it cannot continue indefinitely, and likewise, it's collapse is guaranteed and so is the economy it supports.

The US government contracted with the Federal Reserve in 1913 to borrow credit some a foreign offshore banking cartel. Ever since then, the US has gone further and further into debt. It took 20 years, until 1933, when all the gold we held, that was placed as collateral against the borrowing of the fiat currency, was extinguished and owned by the loaning cartel banks, controlled from the Bank of England.

It's just common sense that if the central banks loan out 100 million dollars, and charge 5% interest, then, at the end of the year, 105 Million dollars must be pulled out of circulation to pay back that debt. But, whet the banksters do, is they keep the majority of that fiat currency in circulation, so they can pull out more and more debt without anyone noticing very much. The result is the same though. When that extra 5 million is given back to the banksters, people lose their homes and property because there was not enough "debt" given out by the banksters in circulation with which to pay back that interest. That's a classic ponzi scheme. Eventually the banksters own it ALL, including the people themselves.

How is bitcoin different?

Hardware must be bought, currently, in order to maintain the mining, but that hardware still has some value, even with a given period of time. Eventually it will be worthless. In this way, one could say bitcoin is similar, however the difference is the bitcoin wealth is not borrowed, it's rather "harvested" in a way that produce is harvested or gold and silver is mined. Yes, there are costs involved currently, but in the long run, when 21 million coins exist and no more are "minted", then there is no inflation that can happen and there is no debt that can accumulate from it's mere existence and circulation.

What is "money"? Is what is the question.

Currently, the money we use, is debt, not credit. If it were credit we actually created, then things may be a little different and our society would thrive instead of drowning. Credit is created with a signature, from someone who loans their credit to someone else, however, the receiver of that credit, becomes, by nature a debtor. So, generally, anytime someone creates credit, someone else borrows it, and interest in charged, we have a major problem. Unlimited debt. But the real problem lies in the fact that credit is borrowed from one central source, instead of all the various people who have skills and can hire people or create projects useful to society. Instead, we are made to turn to one central group of people, we call "bankers". That's another major element of a ponzi scheme. We are given no choice of lenders, but yet we must all pay interest, and one group of people collects it all. PONZI, PONZI, PONZI...PYRAMID!

What will keep bitcoin from becoming nothing more than a fly by night pyramid, pump and dump scheme?

All it really takes is more people to use and accept bitcoins. If people are happy with it, it will succeed. If people support it, and create software and solutions that help it grow, it will be stable and long lasting.

Will it ever die?

Possibly, but all known fiat currencies have only lasted a century at the most, so eventually most currencies go by the way side.

If it has the potential to become a pyramid and people abandon it, how will it be worth becoming involved with today?

If we can use bitcoin as a vehicle to achieve our united goals of ending the debt based slave driven monetary system, then is it really important if it fixes the entire problem and lasts forever?

Just so long as it's not as flagrant, cheap, debt based, centrally thief owned and mobster controlled Ponzi pyramid scheme as the US dollar, then it's better than what we have now.

Now if there is 14 Trillion in US Debt, backed by you and I, ....
and there are 300 million of us in the good ol USA, that makes each and every one of us accountable for approx. ...

$46,666.66

and if you buy 100 bitcoins now, for $15 each = $1500
and bitcoins become worth $300 each, you could pay off the entire value of your share of the debt.

Not that I would ever suggest doing that, or that it could be done. But it goes to show what bitcoin can do in relation to the dollar and our 14 Trillion dollar debt.

Of all the errors you have in there, somehow the extra significant digits are the most irritating.

Who cares about his errors, his views are somewhat accurate

This place needs a "bi-polar" sub forum where people like you can read posts by people like him without being mocked by the regular folk.

Let's meet in the middle. You explain in a way that doesn't make you look like a dick, and I get smarter.

I hope my post was not too confusing.
I only meant to point out that while some people are calling bitcoin a pyramid scheme, it's actually the US dollar that much closer resembles a real pyramid scheme, and bitcoin is actually much more solid, in relation to the US dollar.

Oh you...

this topic.  Nobel prize.  calling it.

No offense but Man you Americans and your math. There is so much wrong in this simple math I probably shouldn't even bother with this.

100 BTC at $300 each makes it only $30,000  not $46,666.66

if each of 300mill Americans would try to buy 100 BTC we would run out of BTC by the time 210,000th American would buy his 100 BTC when miners will be able to mine all of the bitcoins. So 299.800,000 people won't be able to pay off their part of the debt or to put it in %. You guys won't even repay 1% of the current debt. By the time we will be able to mine all the coins, you don't even want to guess what USA debt will be at.

here is the most funny part. since USD is debt and you guys will buy bitcoins with it to pay of your debt !? where excatly will all this $300 per bitcoin come from?  Thin hot air or will you borrow more from the Chinese ?

No need to be mean.

But just as addendum - by the time you're trying to buy the 21st mio bitcoin, the price will be nowhere near $300.

If you say it, it must be true.

Do let me know when that is going to happen. I love riding rallies.

USD (and other fiat currencies) are indeed giant pyramid schemes.

Moreover, they have a monopoly on pyramid schemes by effectively outlawing other pyramid schemes.

Moreover, they have an image of a pyramid on the dollar bill. I bet they had quite a rolf on Jekyll Island while deciding what to put there. Like "how many decades will it take the slaves to figure it out, while it is in front of their stupid eyes all the time, lol".

Moreover, this pyramid scheme is designed to fall eventually since it's continued existence is based on ever growing debt levels which effectively often replace real organic economy growth. The debt growth must be exponential which creates a mathematical certainty that sooner or later it stops being sustainable. As soon as debt stops growing the pyramid will collapse. This effectively and indisputably guarantees it's eventuall collapse, this is not economics it is hard math, you cannot outlaw laws of math, you cannot legislate away impossibility of sustainable exponential growth.

Comparing to this, calling Bitcoin, with it's finite inflation model, a pyramid scheme is naive to the extreme.

I missed the part where it was actually explained how the US dollar is a pyramid scheme.

how about Geithner doubling the entire national debt in just the last 3 yrs?  how about the Feds balance sheet going from 800 billion to 3 trillion in the last 3 yrs?  how about every city, town, and state in the Union crumbling under the weight of surging deficits?  how about the unemployment rate at 9%?  how about the recurring downturn in the housing mkt, the main asset of most Americans?  how about 40 million Americans now on food stamps?

i could go on and on.


btw, these are all records as in never seen before levels of economic impoverishment.

This isn't a description of a pyramid scheme as I know it.

A pyramid scheme is where someone or organisation others people the opportunity to earn commissions from enrolling others in a programme (Which has a startup cost) and commissions from their commissions resulting in an unsustainable scheme where the people at the top makes loads of money and the people at the bottom lose money.

How about a more generic definition.

Pyramid scheme is a scheme which is stable only while it is growing. Please explain how it is not applicable to debt based money.

The way I see it, the population is in debt beyond any reason and do not want to take more of it or will not be able to repay any more of it. To sustain the system and POSTPONE the deflationary collapse fed et al do their damnest to create any other debts they possibly can. As soon as no new debt can be created the pyramid will collapse.

If I am wrong please explain why.

I don't have a broader definition of pyramid scheme in mind. Maybe people do use the term in a broad sense. Why not just call the broader term "scam"?

the US housing bubble was a classic ponzi scheme facilitated by easy credit from the Fed keeping interest rates at artificially low levels, ie, printing/pumping money into the banking system.  do you disagree?

Okay I'm confused.  I understand the US Federal Government is mired is massive debt. I understand how this translates into future taxes to be paid by the populace. I understand the Fed creates money out of thin air.

But how is the USD "based on debt." I don't get that... I don't even know what that means?

The USD isn't "based on" anything. It's just a fiat currency, created at whim and a certain amount each year.  Someone please educate me :)

A ponzi scheme is not (At least necessarily) a pyramid scheme.

I suppose in a way it is a ponzi scheme, yes.

http://www.youtube.com/watch?v=Dc3sKwwAaCU

its not entirely based on debt, but the great majority of it is.

think of the Feds balance sheet which theoretically is guaranteed by the American people.  the right side, liabilities, is simple; composed of all FRN's (USD's) to the tune of 3 trillion.  BTW, it used to be 800 billion in 2007.  the left side, assets, USED to consist entirely of gold when we were on a full gold std.  hence every USD was backed by a hard asset, not debt.

when the Fed was created, both sides of the balance sheet started expanding enormously in USD terms.  the right side in FRN's, and the left side from the issuance of US TREASURIES (debt).  thus we began the unpegging to gold and replaced it with debt guaranteed by the American people.  you could think of the ratio of UST's to gold as the leverage ratio.

of course this has now gotten out of hand with the debt (UST's) vastly exceeding the gold portion on the asset side. we can't practically pay this back and hence the enslavement of the US taxpayer.

I would call fiat currencies, in particular fiat currencies that expand the monetary base/supply far greater than the increase of goods and services created, for "wealth appropriation schemes"; which with a very simplistic explanation appropriates the "wealth" of workers who receive wages in a depreciating currency, whereas bankers and the financial class do not suffer due to earning interest on the expanded monetary base/supply and thus although their "wealth" in the shape of currency also depriciates, their "wealth" is also expanded.

Yeah Vladmir I've seen this already, and am unconvinced because the premise forgets that money circulates... ie - there can be $100m of "debt" in an economy and only $10m of dollars, yet the debt can still be paid off. A dollar which pays debt is not destroyed, and continues floating around as it's traded.

And so I still think this "dollars are based on debt" concept is misleading. TREASURIES are based on debt - the holder of them relies on payment of the debt. Dollars are not based on debt - the holder doesn't rely on payment from anyone (the dollar has value in and of itself - though we know this is foolish fiat value but that's beside the point).

If I own $10,000 then I have assets of precisely that much. I am not "in debt" in any way. The fact that the Gov is in debt, and may try to tax me, is a separate issue, and doesn't suggest that dollars are "based on" debt. Basically, I think it's a misnomer... it's a  misuse of the term "based on." A gold-standard dollar is "based on" gold, in that you can trade it for gold at a set rate. A treasury bill is "based on" debt, because you can trade it for repayment of credit which you've extended.

There are a million reasons to condemn the dollar... claiming it's "based on debt" doesn't seem to be one of them, or am I totally misguided?

Maybe you are correct in that it is a misuse of the term "based on", however much of the the money supply, as opposed to the money base is created via debt. As only a fraction of the the value of the loans are held in reserve, much of of the money supply exists purely by loans exceeding the reserve. In this sense, parts of the money supply is "based on debt".

Valid point, Dennis. However, when I get a bank loan to buy a house, we know the bank creates the money at that point and credits my account with it. But when I pay the owner of the house from whom I buying, he then gets the dollars. When he has them, his dollars are not "based on debt." Nobody has a claim to his dollars except him. Properly defined, I'd say the dollars are "based on" market supply and demand for funny green paper. You could say the loan itself is "based on debt," or even that the housing industry is "based on debt," or that the US Gov is "based on debt."  All those things are true, but I think dollars are not based on anything but supply/demand.

But we can all agree Bitcoins are not based on debt, in any sense of the term.

If you can't figure out the fact that fiat based currencies are nothing but a giant monopolistic pyramid scams after all that has happened in the world, you should just crawl back into the hole you live in and just not say anything to make yourself look stupid here.

to create those dollars to allow you to buy the home, the debt in the system has to be increased by the amt of the mortgage.  those extra debt based dollars have now devalued the dollars the seller of the house received so yes, they are debt based.  in addition there is interest to be paid on those new debt based dollars by you, the new mortgage holder.

Here is why the US dollar is based in debt.

Each dollar, must be borrowed into circulation, through the Federal Reserve. When the Federal Reserve prints dollars, they are not creating wealth, they are creating debt.

If you take out a Federal Reserve Note from your pocket and read it, it states, "This Note shall be used as legal tender for all "DEBTS" public and private. It does not say, to be used "as credit" to purchase or acquire anything. It specifically states, "for all debts" public and private. Well what does this mean?

It means you can take that "Dollar" and discharge debt with it. If a debt is created, that dollar will discharge that debt, it WILL NOT PAY IT OFF, those debts are never paid off and never will be and never can be, unless or until, actual "CREDIT" is injected into the system in the form of a real person's signature which extends their own credit, instead of using a borrowed Federal Reserve Note, (Nothing but a promise to pay that debt).

You can take 5 million federal reserve notes and you cannot pay off a 1$ debt, you can only discharge it dollar for dollar.

That $20 Federal Reserve Note in your pocket is not wealth or money, it is the Prima Facie EVIDENCE that you hold debt, and you are not worth $20 Dollars, you in fact, OWE that $20, because it's borrowed to begin with, it's NOT YOUR FUCKING MONEY, it's THEIRS!!!!

Get it?

Got it?

Good!

You have bought into a mountain of lies, and that mountain of lies is a giant mountain of debt. It requires an ever increasing supply of suckers to be born into and use the fraudulent reserve notes, in order to maintain the facade called the American Dream. The American Dream, you see, is the giant pyramid scheme, it was just "too big to fail", so they never bothered to tell you about it.

I just posted your answer, in this thread.

I missed the part where it was actually explained how I "bought into a mountain of lies".

Well, I did not mean you personally, unless you don't understand the nature of debt. If you believe Federal Reserve Notes are money and not debt, then that is the mountain of lies. Well, that's the peak at least.

US Dollars are, by themselves, a fiat currency which are devalued massively by the reckless increase of the money supply.

Yes, but there is a big difference between a fiat currency and a debt based currency.
A fiat currency does not require it to be debt based, but you cannot really have a debt based currency with it being a fiat currency.

Just because government regulates it does not make it all that bad or a pyramid scheme. The fact that it is "debt based" is what makes it a pyramid scheme.

The US Treasury BORROWS from the Federal Reserve, a for profit, private corporation. Each dollar borrowed, is then a debt in anyone's hand who holds it. If it were just a fiat currency, then it would actually have value, but something that represents "debt" cannot, at the same time, have "value", unless you value debt, and the only people who value debt are the bankers and debtor institutions built up around them. Debt=Death
Mortgage=Mortuary

This makes no sense. What on earth has debt got to do with pyramid schemes?

To be honest with everyone the US monetary system is so insane I don't really want to understand it all.

People are actually buying into the dollar in hopes and knowledge that others will come into it, accumulate debt as well, eventually spend that debt with others who have accumulated debt, as therefore offset the debt of the others who bought in early.

Consumer (a) decides he wants to make money, but first he must go into debt to start a business. He becomes producer (a). He borrows debt in hopes of making enough debt to offset the initial debt, and have more debt than is needed. Then that debt can be spent. Consumer (b) then comes in and spends borrowed debt with consumer (a) and enriches consumer (a), only when that debt is paid off and there is spendable debt.

review this:

http://www.khanacademy.org/video/federal-reserve-balance-sheet?playlist=Banking%20and%20Money

and then this:

http://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab9

and then tell me if you still don't understand.

You need to explain it carefully if I'm to understand what you are saying. Are you saying that when the government puts the economy in boom mode, people will borrow to make money from others borrowing money and ultimately it's a pile of mal-investment and eventually leads to bust mode? :P

I do understand that the federal reserve prints money and then buys treasury bonds and lends to banks. And as more money is pumped into the system, the more and more money is thrown through the cycles of credit.

Don't understand this private ownership of the federal reserve and definitely don't understand the "pyramid scheme" idea still.

the Fed artificially manipulates interest rates lower by buying UST's which allows the banks to borrow from the Fed at close to nothing.  currently 0-0.25%.  this encourages these bastards to hand out money like candy to anyone with a pulse like in the subprime loan fiasco.  banks only care about getting the fees and dump the actual subprime loans on investor/ pension funds all over the world.  average people see that they can borrow cheaply and start flipping homes (Ponzi) to each other driving the price ever higher until the whole ponzi bubble explodes and lotsa people get hurt.

You can certainly call it similar to a ponzi scheme (Similar but not done in the exact same way) but not at all like a pyramid scheme.

Also, you can say interest rates are negative when you adjust them for inflation, right?

Governments right now are trying to kick start another boom period through stupidly low-interest, easy credit policies. What seems to be happening, is that it's preventing the correction from playing out correctly and causing massive inflation.

But I can't advise alternative monetary policies because the existence of monetary polices is what is causing the mess in the first place...

And people blame markets and "greed" for all the problems.

OMG!! You should just kill yourself. If you dont like fait currency then dont use them. If you use them then your a hypocrite plain and simple. People are so stupid that they will follow anything they are told. Maybe you should sacrifice a virgin.

People fail to realise that using gold or silver makes a monetaty system more manipulable. Just look at what OPEC did in the 70s and oil is far more abundant than gold or silver. If a monetary system is only backed by metals then poverty increases. Over the last 90+ years poverty has fallen. People fail to realise that a metal backed currency can not expand to meet todays global economy.

If you want to play semantics we can. Most countries hold gold and silver in their national bank. The US Federal Reserve hold billions of dollars in gold and silver that belongs to the people. Just because you cant trade your dollars for gold and silver doesnt mean that its not backed by gold and silver. Just because it belongs to the people doesnt mean you can have access the item. For example, you cant go into the mayor's office of your city and use the computer in that office just because you want to.

Most people can only see one side to this issue. They are told one thing and thats all they know. They cant think about the other side. This makes those people simple thinkers with inablity to think critically.

With fiat the governments can change the money supply whenever it chooses basically. Precious metals supply is tied to nature and the ability for people to extract it from nature.

And you never mentioned bitcoin in your argument.

You know what? You're right, US dollars have no value, they're worthless. I can't believe I never realized that before but it's so obvious now that you've pulled the scales from my eyes. Thank you, sir!

As a token of my gratitude for enlightening me, I'm going to offer you a service for no charge: send me your worthless US dollars and I'll dispose of them for you. Oh, it'll be a heavy burden, but I'm willing to shoulder it for you, brother. Imagine the peace of mind you'll feel when you're free of all that debt!

tell you what.  i'll send you my mortgage.  how's that?

from wikipedia:
"A pyramid scheme is a non-sustainable business model that involves promising participants payment, services or ideals, primarily for enrolling other people into the scheme or training them to take part, rather than supplying any real investment or sale of products or services to the public."

Yup. The U.S. Dollar's a pyramid scheme.

Sorry bud. I'm as anti-fed and anti-dollar as anyone on these forums, but I think you are confused.

When I hold $20, I hold $20. So long as it has purchasing power, it's an asset, not a debt. When I have $20, I do not OWE $20... you are speaking nonsense. The fact that someone before me borrowed $20, then gave it to me, does not pass along the debt obligation to me.

A $20 Federal Reserve Note IS money... it is just crappy fiat money and we ought to rid ourselves of it.

You have much to learn, son. Keep on it. You are almost there, but not quite.

You may CHOOSE to see it that way, but it's not the operation of the system. The system operates in an entirely different way than you are aware of.

This was not meant to be a lesson on money and debt. That's an entirely different thread.

Google "Promissory Note" and tell me how that promise to pay is any different than a US dollar, and then tell me how it has value other than as "debt".

In fact, If I were to write you a "Promissory Note" for 1 Million Dollars, and I sign it, it has as much value as 1 Million US Dollars. No shit!

you do realize that the mortgage the buyer of your house had to take out and then turn over to you in USD's increased the money supply by that exact amount and therefore devalued the USD's he just gave to you by that same proportion?

you may consider it an asset but its a depreciating asset.  which is precisely why ppl are getting rid of those same USD's in return for gold, silver, and bitcoins which are not backed by debt.

Tip: don't start your post with an insult. That was mean and unnecessary. If you're going to be insulting, you should at least be correct. You're not.


You are suggesting that a gold/silver monetary system is "more manipulable" than a fiat paper system? That is incorrect. To manipulate gold markets, you must own gold or control stakes in gold markets via options, etc. One can certainly manipulate gold markets but it would be immensely expensive to do so. Contrast this with manipulating fiat paper money markets... you must merely input zeros in your central bank computer system. It's free to do so. The US Gov't is perpetually manipulating the money system by printing dollars to purchase treasury debt (quantitative easing). The ECB is perpetually manipulating the Euro supply to buy the debt of failing member states. China is perpetually printing Yuan to help keep the currency devalued vs. the dollar to encourage exports. All these things happen constantly and yet you want to claim fiat paper money is harder to manipulate than gold and silver money?  Really?

The "billions of dollars of gold and silver" does not belong to the people, contrary to what they might tell you. It belongs to the US Gov't and/or the Federal Reserve System. The fact that you can't trade your dollars for gold and silver IS PRECISELY WHY it is correct to say they aren't backed by those metals. There is no backing of US Dollars by any commodity, period. Dollars used to be backed by gold... not anymore. Dollars are fiat... printed at whim and for the express benefit of the Federal Government and the Federal Reserve System.



On this point, you are correct.

Yes you're correct, but I am still "better off" after the sale. I have made say $300,000 in USD, but the USD money supply has been devalued in aggregate. The loss of wealth is shared by all holders of dollars, whereas the benefit of the newly printed money is me (and the bank). So I get $300,000 and perhaps that is now worth only $299,999.98 in real terms.

And yes of course dollars are a depreciating asset. They suck, and we ought to get rid of them entirely.

Let's just disregard the fact that I just revealed the bankers biggest secret in the whole world, and the one thing you are not supposed to know under any circumstances. Do not stop here, do not read or look. Move along sheeple. Move along.

not necessarily.  the other half of your tx is the house value.  typically the house price will go UP with inflation.  this is one of the "risk assets" that Bernanke is trying to push everyone back into along with stocks.  its like the fox herding all the chickens into the fox hen for the next slaughter which is why i hate Bernanke with a passion.  he has us all looking over our shoulders fearful of the next financial crisis just b/c he's trying to save his banker buddies.

so you can see how "debt backed money" only benefits the banksters b/c heads they win, tails you lose.

This thread has nothing to do with bitcoins. Admin please move this thread to the economy section !!

you're a banker, aren't you?

Yes I ignored the house part to keep things simple cause we were just looking at the dollar side.

However I do not think Bernanke is "herding everyone into housing" in order to slaughter them for his banker friends. I think he is making decisions based on flawed economic theory... he is a Keynesian, and is desperately trying to keep house prices from falling because, to him, "deflation" is the worst thing in the world. He's just a smart guy that learned all the wrong stuff, but of course those are exactly the types that end of in Washington, no? =)

No deal. Maybe you ought to read bitrebel's posts again until you understand how the US dollar is worth no more than your mortgage. Worth less, in fact, because at least the mortgage is honest about being a debt. I'd be doing you a disservice by taking your mortgage instead of your dollars... and I just wouldn't be able to sleep at night knowing I'd done that.

LOL!

Kill myself over a stupid currency? Are you crazy?
I use fiat currency because it's the only thing (except bitcoins) that I can use, because the governments force me to.

I don't see the connection you make between OPEC/oil and a monetary system being thus manipu l a  b  l  e (did I get that right?).
Over the last 90+ years poverty has WHAT? Please support your statement with a credible link, thanks.

I guess that's why the private banker comprising the Federal Reserve has NEVER allowed a credible audit of their holding of the 'gold and silver that belongs to the people'? </sarcasm off>
There is nothing 'national' about the Federal Reserve. It's owned by the richest European and (OMG, shall I really say this?) 'zionist' bankers.[/quote]

That you suggest and want to believe that it's backed by gold and silver doesn't necessarily make it so. (In fact it's not.)

If it belongs to the people, then why is it held by a private bank and never audited?
Even if it would 'belong to the people', I highly doubt it's still there. :)

Where I am now, I can go to the mayor's office and ask them if I can use their computer for a few minutes. I give myself 50% - 100% change my request will be granted, depending on who is using it. Without me claiming to be 'the owner'. :)

You know, I really agree with you on this one. And I'm sure you're one of those .  :'(

http://vimeo.com/13726978

ffwd to 1 hour and 16 minutes into the film where they talk about money...

What is the ratio of Americans that owe money compared to the ones that do not? Forget the government debt, how many Americans OWE?

Good post. It's been a while since I saw this.

I like Congressman Charles Lindbergh's quote from 1913,

"The King Bankers put into motion, in 1907, a great scheme. They had gambles and speculated on Wall Street until so many watered stocks and bonds had been manufactured...
   The King Bankers knew the condition and informed the favored of their friends of what was to come. There was to be a panic in the fall of 1907 that would be advertised as the result of our bad banking and currency laws".

Another word for Ponzi Scheme is a Ponzi Scheme and a Ponzi Scheme by any other name could be called the US Dollar.

I find this topic facinating. I wonder why everyone does not see it, and the problems with it. Maybe some do not understand how big 1 trillion dollars is...

http://img.labnol.org/di/100.gif

A bundle of $100 notes is equivalent to $10,000 and that can easily fit in your pocket. 1 million dollars will probably fit inside a standard shopping bag while a billion dollars would occupy a small room of your house.

With this background in mind, 1 trillion (1,000,000,000,000) is 1000 times bigger than 1 billion and would therefore take up an entire football field - the man is still standing in the bottom-left corner.

http://img.labnol.org/di/trillion.gif

Love it! But aren't we at approx. 14 Trillion now, with the bankers bailouts. I think it was 4 Trillion, then another 11 Trillion, right? That was after the initial 880 Billion, correct?

The only real difference I see in the pyramid scheme of the US Dollar via the Federal Reserve, and the typical pyramid scheme is the fact that pyramid schemes typically leave the bottom less fortunate late comers with a loss of money, and the US Dollar Pyramid leaves people with a loss of property, via real estate mortgages that are impossible to pay off, and car loans and small business loans.

If ALL money or , rather "debt", is borrowed into circulation to begin with, then there are always losers in the deck, they just come in later on. That's a pyramid scheme. Currently, the losers are the current generation of children who are inheriting this monumental debt, which at 14 Trillion, would be in the realm of 70 billion in interest, at least.

Ooops, I was wrong, I apologize.
Here are the REAL details.

http://www.usdebtclock.org/

The interest in 2011 is currently at 3 Trillion, 625 Billion, and it amounts to approx.

$46,440 per person, with interest at approx. $11,631 per person, AS OF THIS POSTING.

Where is all that money going to come from?

Well, by the mere nature of the system as it is currently...

IT MUST BE BORROWED!!!

so, what do we all do to deal with this major problem?


BUY BITCOINS
SELL BITCOINS
SPEND BITCOINS
DEVELOP BITCOIN BUSINESSES
ACCEPT BITCOINS FOR PAYMENT
TELL PEOPLE ABOUT BITCOINS
HELP BITCOINS BECOME MORE POPULAR
WRITE POSITIVE BLOGS ABOUT BITCOINS
CONTACT MEDIA TO GIVE POSITIVE INTERVIEWS REGARDING BITCOINS
DEVELOP APPLICATIONS TO HELP BITCOINS BECOME MORE WIDELY ACCEPTED AND USED.

For every US dollar you trade for bitcoins, you trade increasing debt for increasing wealth.

and if the US Dollar has value and is not, in fact, debt....
then, can anyone explain to me how the us debt clock http://www.usdebtclock.org claims this?


Total DEBT Per Family = $669,426
Savings Per Family = $6,979

We are wealthy because of the US dollar, correct?

If given the opportunity, I would buY the essentials...

A Life Preserver, and A Few Bitcoins, because folks....

THE SHIPS A GOIN DOWN FAST!

"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States."
-Sen. Barry Goldwater

"The regional Federal Reserve banks are not government agencies. ...but are independent, privately owned and locally controlled corporations."
-Lewis vs. United States, 680 F. 2d 1239 9th Circuit 1982

"When you or I write a check there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money."
-Putting it simply, Boston Federal Reserve Bank

"The Federal Reserve bank buys government bonds without one penny..."
-Congressman Wright Patman, Congressional Record, Sept 30, 1941

"The financial system has been turned over to the Federal Reserve Board. That Board administers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money"
-Charles A. Lindbergh Sr., 1923

"Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with a flick of a pen they will create enough to buy it back."
-Sir Josiah Stamp, former President, Bank of England

"All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation."
-John Adams

"Banks lend by creating credit. (ledger-entry credit, monetized debt) They create the means of payment out of nothing." -- Ralph M. Hawtrey, Secretary of the British Treasury

"To expose a 15 Trillion dollar ripoff of the American people by the stockholders of the 1000 largest corporations over the last 100 years will be a tall order of business." -- Buckminster Fuller

"Some [Most] people think the Federal Reserve Banks are the United States government's institutions. They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign swindlers." -- Congressional Record 12595-12603 -- Louis T. McFadden, Chairman of the Committee on Banking and Currency (12 years) June 10, 1932

"[Every circulating FRN] represents a one dollar debt to the Federal Reserve system." -- Money Facts, House Banking and Currency Committee

"We are completely dependant on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon." -- Robert H. Hamphill, Atlanta Federal Reserve Bank

"The Federal Reserve system pays the U.S. Treasury 020.60 per thousand notes -- a little over 2 cents each-- without regard to the face value of the note. Federal Reserve Notes, incidentally, are the only type of currency now produced for circulation. They are printed exclusively by the Treasury's Bureau of Engraving and Printing, and the $20.60 per thousand price reflects the Bureau's full cost of production. Federal Reserve Notes are printed in 01, 02, 05, 10, 20, 50, and 100 dollar denominations only; notes of 500, 1000, 5000, and 10,000 denominations were last printed in 1945." -- Donald J. Winn, Assistant to the Board of Governors of the Federal Reserve system

"Neither paper currency nor deposits have value as commodities, intrinsically, a 'dollar' bill is just a piece of paper. Deposits are merely book entries." -- Modern Money Mechanics Workbook, Federal Reserve Bank of Chicago, 1975

"This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President [Wilson} signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill." -- Charles A. Lindbergh, Sr. , 1913

"From now on, depressions will be scientifically created." -- Congressman Charles A. Lindbergh Sr. , 1913

and I LOVE how this one expresses my entire point about debt vs credit currency...

"There is a distinction between a 'debt discharged' and a debt 'paid'. When discharged, the debt still exists though divested of it's charter as a legal obligation during the operation of the discharge, something of the original vitality of the debt continues to exist, which may be transfered, even though the transferee takes it subject to it's disability incident to the discharge." -- Stanek vs. White, 172 Minn.390, 215 N.W. 784

and THAT'S the Federal Reserve Note for all you serious illiterate dollar loving blind santa claus believers...
who still may not believe in the potential of bitcoins

People say all money you hold is owed back by you and there are others on the thread that get confused because of this.

As far as I know is that most (if not all?) of the new money is lent out expected to return to the federal reserve central bank. If you happen to get income from the money owed back with this "easy credit", you aren't the borrower. If the money doesn't get back into the hands of the borrower than I guess what happens is the borrower borrows more, potentially new, money or they default on the debt.

What the US government does is borrow more.

Quantitative easing refers to the buying of government bonds with new money, correct? Financing government debt with credit created from thin air?

Once again, I'm not an expert on these monetary things and I'm certainly not an expert on the US system. I don't know exactly how new money in the US is spent. I don't know if 100% goes to into credit or some goes to non-repayable subsidies.

People blame markets and capitalism in themselves for the financial crisis. I think these people are stupid.

the national debt is 14 trillion but the estimated private debt is 54 trillion.

this is where everyone is getting confused.  there is small amt of currency in the system that is NOT owed back, but its only a small fraction, in fact, the Fed has a 54:1 leverage ratio. see this:

http://www.hussmanfunds.com/wmc/wmc110705.htm

"Turning to the subject of monetary policy, according to the Fed's consolidated balance sheet , the Fed now holds assets $2.87 trillion, versus $52.87 billion in capital, putting it just north of 54-to-1 leverage. "


yes in normal times.  but since 1913 the Fed has gradually relaxed this rule allowing a slow decline in the value of the USD to "help" Wall St.  the mirror image of this is inflation.  but since 2007, the Fed has ENORMOUSLY violated this rule by in fact permanently buying bad collateral (loans) from its member banks.


yes

yes again

i forgot to add that those USD's you hold are still "debt backed" in the sense that they devalue as the US gov't has to take on ever larger amts of debt to pay off its current debt.

http://www.zerohedge.com/article/fed-reverse-robin-hood

The dollars which came from someone that owed them back, isn't owed back by you. It's owed back by the borrower.


You mean it has had a relaxed policy on the repayment if loans?

You are still spouting nonsense in between your otherwise valid comments. The US dollar is not equivalent to debt. They are different things. A man with a bank account of $10,000 is NOT in an identical financial position to a man with a bank account of -$10,000. Your theory suggests that dollars=equal debt, and thus the two men are equivalent. That doesn't pass the straight-face test, let alone the more important test of reason. Dollars have value because you can exchange them for things. Will that be true in 10 years? Maybe not. But right now, they have value. They are not debt. They are assets of the bearer (but yes - depreciating assets).

Consider if the US was still on a gold standard, so that dollars were fixed to gold. The US Gov could STILL be trillions of dollars in debt, and we could still see the US Debt Clock in much the same manner. Your example is silly.

Thankfully, under a gold standard, a huge debt would encourage gold reserves to leave the country, thus curtailing the debt (this is why gov's don't like gold standards).

yes the bastard Bernanke initially said all the bad loans the Fed took from the banks in return for printed money back in 2008 were supposed to be temporary loans.  this in fact has morphed into an outright Buy and now those loans are payable by the US Treasury which means the US taxpayer.  this is why your USD is shit.  evidence of this is on the Balance Sheet of the Fed i provided above which show a big fat zero for repurchase agreements which would have been the category these bad loans would have been placed.  instead you see all those bad MBS loans in Securities Held Outright which means he made us buy them.

The US Treasury paying the federal reserve for the loans it gives out which aren't proper loans anymore.

Could it get any worse?

"your USD"

I don't have any USD. I have GBP and investments in certain securities. Looking to make investments into bitcoin with a trading algorithm I have not finished yet.

The banks that are "members" or whatever get dividends from the system right? The government stops the federal reserve from keeping all the printed money for itself and forces it to lend and relend, yet allows some profit from the system? Why doesn't the new money go into the net assets, it becomes a liability as well somehow?

I'm getting a bit confused.

The simple fact of the matter is, ...that borrower is the person who holds those federal reserve notes. Since the notes are borrowed.

You are wrong. Sorry to be the one to point it out for you.
A person who holds $10,000 in federal reserve notes, holds $10,000 in debt, and owes taxes on that sum.
A person owes $10,000 in just in deeper debt, that's all.

Person A must rid himself of his obligations in order to not hold that debt.
Person B must acquire $10,000 in debt and use it to discharge his $10,000 debt that is already owed.

Both person A and Person B are $10,000 in debt, the only difference is, Person A has the $10,000 to pay it back.

Look at it this way.....since the Rothschilds got the monopoly on central and private banking, all money created today by them, is created as a loan or extension of their credit. All governments borrow from them, through the IMF. All money used today, must therefore accrue interest which must be paid back to them. So, therefore all money today, is actually "debt".

The only way to break that cycle, is for a living, breathing, real man, to use his own signature to extend his own credit into the system. That becomes a (+) injected in, instead of a (-), which all money currently falls under. It's all debits, instead of credits. It's that simple.

Hold on, the federal reserve balance sheet has the printed money down as a liability? What the heck? I guess this is just window dressing lies?

Apparently the Bank of England also owns some of the federal reserve in the US. :O

Is this true.

The Rothschilds group makes profit on this scam?

Some people say all the profits from the federal reserve go to the Us treasury. Heh, if that were true, why make money on the US treasury just to give it back?

It gets weirder and weirder the more you look at it.

I've been looking closely at it, for nearly 20 years now. Yes, it is weird, but not if you understand it.
Most people are just not awake to it yet.

But you are saying that the US treasury doesn't take all the profits which was made mostly from the US treasury?

http://img809.imageshack.us/img809/8799/dollarpyramidscheme.jpg

look, we can't teach you the complexities of economics on this thread alone.  you will have to do alot of reading and studying on your own time if you want to understand what money is.  it takes a LONG time and this thread is getting too long too.

i would start by reading the Creature From Jekyll Island by G. Edward Griffin and then move to Mises.org for an understanding of the gold standard.

I understand gold as money. I don't understand the million complexities of the federal reserve.

listen to the Khan Academy video i posted up for you.  if you understand how the Feds balance sheet works then you're golden.

FRN's are liabilities (Right side) backed by US Treasuries (left side=assets) which are debt backed by the sweat equity of the US taxpayer.  the asset side used to be gold (hard currency).  thats all you need to know.

That is patently false. Please point out ANY law, stipulation, legislation, court order, or even an op-ed that suggests one owes taxes on money he/she already possesses. You get taxed on income, yes, but once you have $10,000 after that income taxation, it is YOURS and nobody has a claim to it.

Did Alex Jones tell you this?!

If the new money is a liability, who is it a liability to? I think it's actually a fake liability to hide the masses of new money they make. A form of window dressing. But am I right. The money is owed to the government or something? That would make it even more insane and complicated.

Goofy...the $10,000 IS THE TAX, as it must be returned to the Treasury. When it's returned, that a Tax Return.

its confusing b/c its a circle jerk.  US Treasury issues debt which is then monetized by Fed printing which means the new USD are backed by that same UST debt which the issuance of devalues the printed USD's. 

this is why the avg person doesn't understand money.

LOL and please tell me, when exactly do I need to return my $10,000 to the treasury? Which agency, or court, is going to order me to do so?

It's borrowed money. If it does not return to the Fed before you die, it's collected afterwards. Eventually, it goes back to the Fed, because it's theirs, not yours.

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(I wrote a few lines, then decided I won't bother and deleted them)



Lots of winners in this thread. Carry on.

But it's backed by the full faith and credit of the USA... That all you need to know.  What could possibly be wrong with that?

It's collected afterwards? When, and by whom?

If you're referring to taxes, doesn't that mean a gold-backed currency is also "borrowed money" since you still have to pay taxes with it?

It's an accounting system. There are no dollars in fact. There are debits and credits, and some debits are represented by those FRNs. If one is burned, or destroyed, the system adjusts itself, because at the end of the day, all accounts are "zero".

The fact that you have been left with a few of those pieces of paper is not an issue. One day they will be spent, and when they are spent, they are headed back to the Federal Reserve.

Second point, the gold question.
No, the congress, authorized to coin money, would use the gold to back the fiat currency, making it somewhat stable and insured. Currently, the public Treasury borrows from the private fed.


Wiki
A double-entry bookkeeping system is a set of rules for recording financial information in a financial accounting system in which every transaction or event changes at least two different nominal ledger accounts.

The name derives from the fact that financial information used to be recorded using pen and ink in paper books - hence "bookkeeping" (whereas now it's recorded mainly in computer systems) and that these books were called journals and ledgers (hence nominal ledger, etc.) - and that each transaction was recorded twice (hence "double-entry"), with the two transactions being called a "debit" and a "credit".

It was first codified in the 15th century. In modern accounting this is done using debits and credits within the accounting equation: Equity = Assets - Liabilities. The accounting equation serves as an error detection system: if at any point the sum of debits does not equal the corresponding sum of credits, an error has occurred. It follows that the sum of debits and credits must be equal. --

(Federal Reserve Keeps a Double Entry Bookeeping system)

So, in other words, you have no answer? You said those dollars are "theirs, not yours"... except you never actually have to give them back. You can spend them, giving them to someone else, and they don't have to give them back to the Federal Reserve either. "If it does not return to the Fed before you die, it's collected afterwards"... over a period of decades or centuries, as they change hands over and over and over and a fraction of them are paid in taxes each time (just like they would be if they were backed by gold).

Don't you think it's a little dishonest to throw around loaded phrases like "borrowed money" and "theirs, not yours" when the actual meaning you have in mind is so tame?

You are either uneducated about money or you are arguing for the sake of argument. I'm done trying to help you understand.

http://lonerangersilver.wordpress.com/2011/04/11/u-s-treasuries-ponzi-scheme-ex-pboc-official/

U.S. Treasuries ‘Ponzi scheme’: ex-PBOC official
April 11, 2011
From Market Watch
By Chris Oliver

HONG KONG (MarketWatch) — A former adviser to China’s central bank said on Monday that China should have retreated from the U.S. government-bond market and instead allowed the yuan to appreciate more freely, warning that U.S. sovereign debt was akin to a giant Ponzi scheme, according to a newswire report that cited an editorial on Caixin Media Group’s website. Yu Yongding, a former member of the People’s Bank of China monetary-policy committee and now a member of a state-run policy group, said allowing appreciation of the yuan against the U.S. dollar under a free-floating currency regime would have reduced China’s need to acquire U.S. Treasuries. He likened the U.S. Treasury market to a “giant Ponzi scheme,” arguing that Federal Reserve buying of Treasuries has artificially kept bond prices high, but that they would eventually fall to levels which reflected fundamentals of the U.S. economy.

http://www.businessweek.com/investing/insights/blog/archives/2008/12/ponzi_nation.html

Ponzi Nation
Posted by: Matthew Goldstein on December 14, 2008

Wall Street trader Bernard Madoff allegedly defrauds the rich and famous out of tens of billions of dollars. Minnesota businessman Tom Petters allegedly fleeces hedge funds out of $3.5 billion. And socialite New York lawyer Marc Dreier may have duped some hedge funds into giving him hundreds of millions of dollars for an apparently bogus real estate scheme.

All of these scams are big and all appear to be some kind of Ponzi scheme, designed to take in money from new investors to pay-off earlier investors. A Ponzi scheme is one of the oldest financial frauds around. And many are referring to the Madoff caper as the biggest Wall Street fraud ever.

But derivatives consultant Janet Tavakoli may be onto something. In a note to her clients, she says the biggest Ponzi scheme of all may be the one that brought the world financial markets to its knees. And that’s the scheme that united Wall Street bankers with mortgage lenders in a bid to funnel more and more money into the market for supbrime homes loans. She says the packaging of iffy home loans into securitized bonds that could be sold to insitutional investors—many of them relying on borrowed money—was a system born to fail.

“The largest Ponzi scheme in the history of the capital markets is the relationship between failed mortgage lenders and investment banks that securitized the risky overpriced loans and sold these packages to other investors—a Ponzi scheme by every definition applied to Madoff,” says Tavakoli. “These and other related deeds led to the largest global credit meltdown in the history of the world.”

About a year ago, BusinessWeek made a similar point in an article about the two Bear Stearns hedge funds that collapsed in June 2007 and helped spark the credit crisis. The story focused on a novel type of collateralized debt obligation that the managers of the Bear funds used to tap funding from money-market funds. The CDOs which were widely copied on Wall Street helped fuel the market for these esoteric securities, along with the underlying housing boom.

In that article, BusinessWeek likened the new market that the Bear funds helped inspire a pyramid scheme. Or, as Tavakoli says, a Ponzi scheme.

One of the hallmarks of a Ponzi scheme is an investment vehicle that generates consistent, steady returns. That’s what discourages investors from pulling too much money out of the fund—the event that ulimately causes a Ponzi scheme to collapse. One reason so many wealthy people showered money on Madoff is that his fund generated predictable returns—rain or shine.

The Bear funds similiarly generated steady and stable returns before the bottom fell out of the subprime mortgage market. In the final months before the Bear funds collapses, Ralph Cioffi and Matthew Tannin scrambled to find new investor money and other sources of funding. This past summer, federal prosecutors charged Cioffi and Tannin with deceiving investors about the health of the funds and actively discouraging investors from pulling their money out.

Cioffi and Tannin were the first Wall Street executives charged in the financial meltdown. Now you can add Madoff’s name to that list and more are sure to follow. One thing the credit crunch is unearthing are lots of long running scams. Just as money has dried up for legitimate businesses, there’s no money to keep the Ponzi machine going.

Posted Comment -
Reader Comments
Karl
December 14, 2008 2:06 PM

Maybe the biggest Ponzi Scheme in the world is simply the United States of America!!!! Look at our stock market, as an example! One year ago today the Dow closed at 13,340. It's now at about 8,650, but that's with OVER $200 BILLION that the FED injected into the Banking System earlier this year BEFORE the $700 BILLION was even a reality!!!! Now, the $700 BILLION grows another $100 BILLION to equal $800 BILLION! And don't forget about China's $500 BILLION that they have/HAD in Treasury bonds! Is it still there? Did they take it out? What about China's other $1 TRILLION that they had invested in the USA, besides the $500 BILLION in Treasury bonds? Did they take it out of the USA? Perhaps the entire U.S. economy is, and HAS BEEN, the biggest PONZI SCHEME in the WORLD? We'll soon find out when '4th QUARTER RESULTS' are posted in January! That's when the TRUTH should all come out!!! Go Harvard!!!!! Go BusinessWeek!!!!! P.S. If investors go to "cash-in" their stocks, 401K's, IRA's......in January & it's NOT there, then the U.S. economy WAS nothing but a PONZI SCHEME, correct? I hope I'm wrong & all is well in the USA, but I'd hate to have money invested in the stock market right now. 90% of all those 401k's & IRA's are invested in the stock market!!!! Say a PRAYER that all is well. Happy Holidays!
Vince
December 14, 2008 2:30 PM

Yes Karl, the us economy is a ponzi scheme. It's also refered to as the Capatlist, boom and bust theory. Some people get rich, most are left eventualy to defend for themselves. Then the process starts all over again, after you have a recession or depression like we are now entering.
Chuck Gaffney
December 14, 2008 2:40 PM

Let's not forget to add Social Security and College Tuition to the list of Ponzi schemes
Carl P
December 14, 2008 2:45 PM

....And many are referring to the Madoff caper as the biggest Wall Street fraud ever.

Are you sure?

One could argue the CDS driven financial crisis resulting in the $1 trillion government bailout, is a bigger Ponzi scheme. Taxpayers (new investors) are funding the exit of old investors - except Goldman Sachs - they are doing just fine.

Anybody out there still want to privatize Social Security?

Its not a Masonic, Illuminati or Skull and Bones conspiracy, lets not be silly. As my father's Godfather would say; Its just business.
Michael
December 14, 2008 2:51 PM

One thing that should be done to prevent these ponzi schemes is to enable individual investors to buy and sell stocks directly; and to declare most of these "investment funds" illegal.
c
December 14, 2008 2:57 PM

us dollar = ponzi scheme no doubt about it.

dollar bills = just worth their recyclable value in my opinion. poj
Ace
December 14, 2008 3:45 PM

The Mark Mitchell article posted here is a hack conspiracy drivel SPAM shtick ran by a group in Utah funded by a rich loon.

Mark is a paid "reporter" lapdog for the wild eyed "Worst CEO Ever" nominee Patrick Byrne of Overstock.com

Tread lightly at that link, they have a bad habit of cyberstalkng folks.
Ching Fu
December 14, 2008 3:58 PM

I agree with Kari that the whole USA is a ponzi scheme. It's surprising that the US institutions and government has managed to 'censor' these info away from the public. Since 1970s when USA stopped backing the US Dollar with gold, they started the biggest ponzi scheme ever - printing money without limit by forcing oil to be traded in US dollar. Getting countries of the world to invest in the US by both carrots and sticks. Who are the investors? Countries like Japan, China, Singapore, etc who invest in US Treasury bills who will one day find them to be worthless. In 2006 the Fed decided to stop revealing M3 data abt the economy - I assume they are printing even more dollars now! The US dollar is not backed by gold. It is backed by the US military hence you have Iraq and possibly Iran as they have all threatened to trade oil in other currencies. But how long can you go on defending the dollar this way? It is a matter of time. Right now the United States is already bankrupt. Its investors (Japan, China, etc) are in a catch 22 situation cos if they decide to pull out their Treasure bills, the value will plummet like no tomorrow and the whole world, including their own economies, will be in a mess. NO ONE HAS A CLUE WHAT TO DO.

Now do you agree that that is the biggest ponzi scheme ever?

http://www.onlinemoneytip.com/make-money-news/11-trillion-dollar-ponzi-scheme/

The $ 11 Trillion Ponzi Scheme
January 10th, 2009

Recently the world was hit by another major financial bubble, the $50 billion loss of investors money by Madoff’s Ponzi scheme. And everybody was amazed by the enormous amount of money that was inolved, and lost. Now I’d like to tell you about a $11 Trillion Ponzi Scheme.

By the way, a Ponzi scheme, being a socalled pyramid scheme, is defined by the wiki as:

    A Ponzi scheme is a fraudulent investment operation that pays returns to investors out of the money paid by subsequent investors rather than from profit. The term, “Ponzi scheme,” is used primarily in the United States, while other English-speaking countries do not distinguish colloquially between this scheme and other pyramid schemes.

Now usually those investors are attracted by a high percentage of return. But here I’d like to focus on the main part of the definition: ‘returns … paid by subsequent investors rather than from profit’. With Madoff’s fraud an amazing 50 billion dollars puffed away in thin air.

Well, I’d like to tell you about a Ponzi scheme where almost 11 Trillion dollars will evaporate very, very soon. And the ultimate crook that is capable of such an outrageous, mindblowing, world destroying amount of throwaway money is called … (drumroll) … the United States of America!

Believe me, this isn’t a linkbait article, this is about information that you usually do not read about in regular media. Firstly let me point out that the debt of the USA is rising at an enormous ratio, especially the last few (do I hear Bush?) years. Although that may still sound familiar.

Here is a link to the Wiki article about the US national debt. But you’d better look at the graphs on this page, where you can see what happened since 2002: the debt has risen from 6 trillion to almost 11 trillion dollars (01082009). The actual, current amount can be seen at the national debt clock site.

Owners of the US National Debt

In the graph above you can see who owns which portion of the US national debt. There are a lot of small owners, 22.7% are foreign (international) owners and over 40% is owned by the Federal Reserve. Of course a debt should be backed up by reserves and or by profits. But the US have no ‘profits’. Almost every year there is a deficit, which means spending exceeds revenue. And so the US debt grows.

But hey, what about the Federal Reserve, I hear you say? The Federal Reserve is a banking system, with twelve regional Federal Reserve Banks located in major cities throughout the nation acting as fiscal agents for the US Treasury. Now the US Treasury has assets (securities) in worth of 835 billion dollars. But. Over 80% of those securities are owned by foreign investors, i.e. that’s loaned money (bonds etc.). Those investors get a yearly return paid by the interest.

You see how my analogy of the 11 Trillion Ponzi Scheme fits into all of this? Eleven trillion dollars of US national debt are backed by 167 billion (835 – 80%) of direct securities. And no profits. And an ever growing ‘army’ of investors. The US needs to lend (print?) more and more money to pay those foreign investors their interest. And to pay the 60% of investors that own the US national debt their interest. And what would happen when those (foreign) investors want their full investment back? The total collapse of the US and the US dollar!

So why is the dollar still such a relatively strong currency? Well, the main reason is because crude oil is paid in US dollars. The whole world is backing up the dollar, because the whole world lives on crude oil. For their cars, for plastics, for paint and for a whole range of products made out of crude oil. And this is part of the technical details of the US Ponzi Scheme, which you can read about in this interesting article and this very interesting video about how this came to be.

Be amazed!

http://presscore.ca/nbg/index.php?entry=entry100925-174453

The United States was destined to fail under the Federal Reserve’s pyramid scheme.

Sep 25, 2010

The $1 forgery called the Federal Reserve Note - Above the pyramid ANNUIT COEPTIS: the latin phrase means “our enterprise”, our “conspiracy” or “our pact”. The bottom of the pyramid MDCCLXXVI. This is Roman numerals for the date 1776. It allegedly commemorates the founding of the Illuminati (plural of Latin illuminatus, “enlightened”) by Adam Weishaupt on May 1st, 1776. Below this is the phrase NOVUS ORDUS SECLORUM - means “New Order of the Ages”. The official interpretation is that the imprint of a pyramid represents strength and durability. It’s incomplete because so is the work of building the nation. The eye in the triangle is the all-seeing eye of providence.

A pyramid scheme is a non-sustainable business model that involves promising participants payment primarily for enrolling other people into the scheme, rather than from any real investment or sale of products or services to the public. Pyramid schemes are a form of fraud.

Look at the back of any US Federal Note. Yes I didn’t say US Dollar because the US Dollar doesn’t exist. On the back, in clear view of everyone is a pyramid. The US currency was set up to fail by the bankers of the Federal Reserve Banks. They clearly and arrogantly state their true intent for the United States. They have modeled the US government finances after a pyramid scheme.

A successful pyramid scheme combines a fake yet seemingly credible business with a simple-to-understand yet sophisticated-sounding money-making formula which is used for profit. The Federal Reserve prints worthless Federal Reserve Notes and sells them to the US government, with interest. The Federal Reserve prints fake US dollars. That is to say that they print fake copies of a non existent US dollar and they swamp the word US dollar with Federal Reserve Note in order to assume credibility. Interest on a $0.00 value is always $0.00 yet through their elaborate and very illegal pyramid scheme they always make money on interest charges on a service and product that has absolutely no value.

The essential idea is that a “con artist” the Federal Reserve makes only one payment. To start earning, the Federal Reserve has to recruit others like him who will also make one payment each. The Federal Reserve gets paid out of receipts from those new recruits. They then go on to recruit others. As each new recruit makes a payment, the Federal Reserve gets a cut. They are thus promised exponential benefits as the “business” expands.

Such “businesses” seldom involve sales of real products or services to which a monetary value might be easily attached. In a pyramid scheme the “payment” itself may be a non-cash valuable. The Federal Reserve Note has $0.00 value and the service provided by the Federal Reserve Banks are illegal which makes their printing service a $0.00 value. In return for the fake and worthless illegal forgery the United States government gives the Federal Reserve Banks the peoples’ real value assets like property and precious metals like gold and silver. To enhance credibility, most such scams are well equipped with fake referrals, testimonials, and information. The United States Federal Reserve Act is such a credibility. The Act illegally gives credibility to the worthless Federal Reserve Note by declaring it legal tender for “all” trade. The Act made the United States government willing accomplices in this pyramid scheme.

The flaw is that there is no end benefit. The money simply travels up the chain. Only the originator (sometimes called the “pharaoh”) and a very few at the top levels of the pyramid make significant amounts of money. The amounts dwindle steeply down the pyramid slopes. Individuals at the bottom of the pyramid (those who subscribed to the plan, but were not able to recruit any followers themselves) end up with a deficit. This is also clearly shown on the back of the worthless forgery called the Federal Reserve Note. In the worthless forgery of the US dollar the top of the pyramid is separated intentionally from the rest of the pyramid. Only the Federal Reserve Banks make any money and they are represented by the top of the pyramid - referred to as the capstone. The capstone is not joined with the Pyramid. This is suppose to mean that the plan is not complete. Some believe that only when a New World Order is established upon all nations and a world leader is enthroned will the plan be complete. George HW Bush specifically referred to the New World Order in a speech before a Joint Session of the Congress on the Persian Gulf Crisis and the Federal Budget Deficit on September 11, 1990. “A new partnership of nations has begun, and we stand today at a unique and extraordinary moment. The crisis in the Persian Gulf, as grave as it is, also offers a rare opportunity to move toward an historic period of cooperation. Out of these troubled times, our fifth objective—a new world order—can emerge;”

The Federal Reserve controlled banking system is the main pyramid scheme and the original pyramid scheme in the United States. Obama started a new pyramid scheme called the Heath Care Reform Bill. The con artist, Barack Hussein Obama, started the scheme by committing the US taxpayers to paying into the scheme with $940 billion over ten years. The $940 billion bill issued to the US taxpayers was suppose to reduce the deficit by $143 billion over the next decade ( a decade is ten years). Do you see the fraud here? Obama is saying to the American people that if they want $143 billion to pay off a debt they will pay 650% in interest or $940 billion. And you though your local bank or credit union charged too much interest on your mortgage and car loans. Which would you agree to; 7% interest on a mortgage for a house that you will eventually own or 650% interest for something that can never be paid out in full or owned. The deficit reduction is and will always be $0.00. The deficit was automatically added another $940 billion with the strokes of a pen by Barack Hussein Obama. Obama defrauded $940 billion from the US taxpayers.

To ensure the pyramid scheme succeeds Obama is forcing every single American to pay into his pyramid scheme. Under the health care pyramid scheme, by 2014 most Americans would be required to have health insurance or pay a fine. Employers are forced to provide coverage to their workers, or pay a fine of $2,000 per worker. Obama had no intention on fixing the health care problem - the out of control price gouging from the pharmaceutical industry and corporate controlled health care industry. Obama doesn’t care about the health of nation. Obama and his co-conspirators in Congress only care about the health of their secret off shore bank accounts.

Obama, Congress and the Federal Reserve bankers have robbed the people. The Federal Reserve Note pyramid scheme has now collapsed. The scheme’s debt got too big and the United States government cannot raise enough money from new taxpayers to pay the debt owed to earlier taxpayers, and as a result millions of Americans have lost their jobs, their homes and their hard earned money.

http://one-simple-idea.com/M3MoneySupply.htm

M3 Money Supply: The Great PONZI Scheme (The Fiat-Funny-Money-System)

Have you ever played the game of Monopoly ?
Imagine that one player can print all the money they want.
Before long, that one player will own everything, and everyone else is broke or in debt.

The nation is swimming in debt:  about $57 Trillion nation-wide debt (as of the end of year 2007) has never been worse (ever), including as a percentage of the GDP ($13.86 Trillion in year 2007).
The government and Federal Reserve (a quasi-government controlled / privately owned bank system) are printing fiat-funny-money (7please watch the 47 minute video) out of thin air, and then try to lend it to everyone possible, flooding the mail with credit-card applications to everyone (and their pets and children too, literally).   Some people will fail to repay their loans and the banks then confiscate real assets, turning paper money printed out of thin air into real assets.  The value of the money erodes year after year.  A U.S. Dollar from year 1950 is now worth less than 11 cents.  Ever heard of compound interest?  It's the same for inflation.  At only 4.5% inflation, $100 becomes $81.75 in only 5 years.   Inflation is another contributing factor to falling median incomes and the shift of most wealth distribution to a mere 1% of the total U.S. population (with 40% of all wealth in the nation; up from 20% in 1976).
 

     
YEAR    MONTH    M3 MONEY     Per Year
           ($Billions)    
1950    12    $135.00    
1959    12    $299.70    $299.70
1960    12    $315.20    $15.50
1961    12    $340.80    $25.60
1962    12    $371.30    $30.50
1963    12    $405.90    $34.60
1964    12    $442.40    $36.50
1965    12    $482.10    $39.70
1966    12    $505.40    $23.30
1967    12    $557.90    $52.50
1968    12    $607.20    $49.30
1969    12    $615.90    $8.70
1970    12    $677.10    $61.20
1971    12    $776.00    $98.90
1972    12    $885.90    $109.90
1973    12    $985.00    $99.10
1974    12    $1,069.90    $84.90
1975    12    $1,170.20    $100.30
1976    12    $1,309.90    $139.70
1977    12    $1,470.40    $160.50
1978    12    $1,644.50    $174.10
1979    12    $1,808.70    $164.20
1980    12    $1,995.50    $186.80
1981    12    $2,254.50    $259.00
1982    12    $2,460.60    $206.10
1983    12    $2,697.40    $236.80
1984    12    $2,990.60    $293.20
1985    12    $3,208.10    $217.50
1986    12    $3,499.10    $291.00
1987    12    $3,686.50    $187.40
1988    12    $3,928.80    $242.30
1989    12    $4,077.10    $148.30
1990    12    $4,154.70    $77.60
1991    12    $4,210.30    $55.60
1992    12    $4,222.60    $12.30
1993    12    $4,285.60    $63.00
1994    12    $4,369.80    $84.20
1995    12    $4,636.30    $266.50
1996    12    $4,985.50    $349.20
1997    12    $5,460.90    $475.40
1998    12    $6,051.90    $591.00
1999    12    $6,551.50    $499.60
2000    12    $7,117.60    $566.10
2001    12    $8,035.40    $917.80
2002    12    $8,568.00    $532.60
2003    12    $8,872.30    $304.30
2004    12    $9,433.00    $560.70
2005    12    $10,154.00    $721.00
           
YEAR    MONTH    M3 MONEY     Per Month
               
2006    (JAN)  1    $10,242.80    $88.80
2006    (FEB)  2    $10,298.70    $55.90
Look at year 2001/2002 (above).   M3 Money supply increased by $917 billion in only 1 year !
Between year 1950 and 2005, M3 Money Supply increased from $135 billion to $10.15 trillion.

That's a factor of 75.2 ! 

But, the nation did not become 75.2 times wealthier in 55 years.
The population grew from 152 million in 1950 to 298 million in year 2005.
That still does not explain the increase of the M3 Money Supply by a factor of 75.2 .
What happened was a whole lot of new money was printed since 1950.

Our money system is a PYRAMID scheme, and all PYRAMID schemes collapse, eventually.

Here's how it works (they don't teach this in any public schools).
The Federal Reserve loans money (with interest) to member banks (which charge more interest).
Up to 90% of each new bank loan is money created out of thin air.
But it gets worse.
For each dollar re-deposited into the fractional (9:1 ratio) bank system (a closed loop monopoly bank system), 9 times more new money can be created out of thin air.
Depending on the size of each loan, that PYRAMID scheme can continue until 90 times more money has been created out of thin air.  However, the bank is required to have 10% of their loans in reserves.

For example, let's say the bank has $1111.11 in reserves.
That means the bank can make a loan of 9 times that initial $1111.11, which is $10,000.00 .
90% of each subsequent deposit can then be used for another loan of money created out of thin air . . .

    (001) 90% of that $10,000.00 can be loaned again, to create a new loan of $9,000.00
    (002) 90% of that $9,000.00 can be loaned again, to create a new loan of $8,100.00
    (003) 90% of that $8,100.00 can be loaned again, to create a new loan of $7,290.00
    :               :               :                :                  :                          :
    (088) 90% of that $1.16 can be loaned again, to create a new loan of $1.045
    (089) 90% of that $1.045 can be loaned again, to create a new loan of $0.94
    :               :               :                :                  :                          :
    (131) 90% of that $0.013 can be loaned again, to create a new loan of $0.011
    (132) 90% of that $0.011 can be loaned again, to create a new loan of $0.01
    _______________________
    TOTAL SUM = $99,888.89 (of money created out of thin air from initial $1111.11 in reserves).

Thus, from the initial $1111.11 in the bank reserve, $98,888.89 (98.89% of $100,000.00) of more new money could be created out of thin air.
 
But it still gets worse, because a LOAN = PRINCIPAL + INTEREST.
But the bank creates only the PRINCIPAL for each new loan.
So, where does the INTEREST come from?
One of several things must happen:

    create more new money to delay the collapse of the PYRAMID (such as the recent government $152 Billion economic stimulus package in FEB-2008). However, this creates more inflation.
    those with money must spend more money to allow more new money to be created out of thin air.
    increase productivity.
    increase products and/or natural resources (e.g. oil, steel, etc.) to sell to other nations to bring money back.
    the wealthy share their wealth (not likely to any significant extent).
    increase taxes on the wealthy (however, if the wealthy are taxed too much, they might up and move their wealth and businesses to another country).
    increase productivity via increased population.
    increase productivity via illegal immigration (cheap labor).
    reduce taxes to encourage more spending.
    reduce interest rates to encourage more spending (but this creates more debt).
    the government prints up more new money and gives it back to people to stimulate more spending (such as the $152 Billion proposed in FEB-2008).
    foreclosures.
    plunder pensions and other systems (e.g. Social Security surpluses).
    the PYRAMID finally collapses when there is finally too much debt and inflation to delay the inevitable collapse.

It is a PYRAMID scheme, and all pyramid schemes eventually collapse.
As time goes on, this problem can only get bigger and bigger.
The only thing stopping the collapse of this pyramid is a short time-lag by creating more debt and printing more money.
But that time-lag is shrinking every day, as the ability to repay debt becomes more difficult.
Debt will grow larger and larger.
The time it takes to finally collapse fools people.
Printing more money to delay the collapse will make inflation get worse and worse.
It could take decades or centuries, but the inevitable collapse is a mathematical certainty.
Eventually, the debt and inflation will become impossible to deal with.
We will not be able to create more debt to create more money.
We will not be able to spend our way out of the collapse.
We will not be able to print (money) our way out of the collapse (due to inflation).
We will not be able to immigrate our way out of the collapse.
We will not be able to procreate our way out of the collapse.
We will not be able to increase productivity enough to avoid the collapse.
We will not be able to tax (or un-tax) our way out of the collapse.
Look at our current situation and results of this PYRAMID scheme:

    $20 Trillion nation-wide personal debt,
    $10.7 Trillion National Debt (as of Dec-2008),
    plundered pensions (PBGC pensions are $450 Billion in the hole),
    rising foreclosures,
    rising bankruptcies,
    rising unemployment,
    pressure to raise taxes for those that have money (i.e. the wealthy),
    pressures to increase illegal immigration to increase productivity and growth (cheap labor),
    stock market and real-estate bubbles and volatility,
    the M3 Money Supply $135 Billion in year 1950 to $10.15 Trillion by year 2005.
    inflation; a 1950 U.S. Dollar is now worth less than 11 cents,
    the pressure to spend and borrow (i.e. numerous credit card applications in the daily mail),
    bank fees (i.e. to increase reserves for more loans; the banks receive the interest),
    the U.S. Dollar falling against all major international currencies,
    and now, the recently proposed $152 Billion economic stimulus package (proposed FEB-2008) with more created out of thin air, will increase the time-lag to prevent the collapse of the PYRAMID scheme, but it is only a short-term solution and will make things worse, long-term.

For anyone who thinks it is bad now, they haven't seen anything yet.
But this is not taught in public schools (see 47 minute video), and probably not in any universities either.
All of the above are the many manifestations of unchecked greed, and there will eventually be painful consequences for most people when the PYRAMID scheme finally collapses, as all PYRAMID schemes always do.
 
The SOLUTION - Reform the Monetary System:

    The federal government controls the monetary system.  It shall create the money it needs, interest free.  It shall control the money-supply.
     
    The federal government shall prohibit usury (interest) by government and member banks (under-cutting anyone else who lends money with interest).  If a lot of interest is bad (i.e. usury is immoral), how can a little interest be good? If inflation is bad, how is a little inflation good?
     
    This creates a stable money supply with the flexibility for small fluctuations.  If inflation is too high, some money in circulation can be removed. If there is deflation, or the population increases, the government can create and spend some money.  If they do a bad job of it, the voters know exactly who to hold accountable. Currently, the Federal Reserve is a quasi-government controlled / privately owned bank, and the voters have little (if any) control over it.  Why would people borrow from a bank (with interest) when they can borrow from the government, interest free?  Thus, there would be little (if any) usury.  Usury, predatory lending, and other manifestations of unchecked greed and the other numerous negative side effects would be greatly reduced.  If properly managed, without profit and usury as a motive, the U.S. currency would become superior to any other world currency.
     
    Theoretically, if managed responsibly, with the central bank in control of the monetary policy (instead of a quasi-government controlled/privately owned bank system), there may be no need for any tax system.  That is, inflation and deflation would affect everyone's money an equal percentage.  Of course, such a vast change in the monetary and tax systems would require new ways of thinking about money, interest, borrowing, taxation, and monetary policy, and there are many (e.g. politicians and bankers; a.k.a. puppets and puppeteers) that will resist such changes.  Since this way of funding the federal government is unlikely any time soon, the least we can do now is to greatly simplify the current, ridiculously complex and regressive tax system (e.g. make it fairer flat 17% income tax on all types of income above the poverty level).
       

The nation is facing many pressing problems, now culminating simultaneously. 
But irresponsible incumbent politicians within government are ignoring the voters and our many pressing problems as they grow in number and severity. 
One major problem is a dishonest fiat-funny-money-system (please watch the 47 minute video).
Education is required.
No  reforms are  possible  until  there  is,  first,  a  fundamental  change  in  government:

RECOMMENDATION:

    Stop  Repeat  Offenders.

    Stop  Re-electing  Irresponsible  Incumbent  Politicians.

    If in doubt, Vote 'em Out !

Notable Notes and Quotes:

    "U.S.A.'s balance of payments deficits is so strong and irreversible, that we must accept that at some future date there will be a run against the U.S. Dollar. Probably the kind of disorderly run that precipitates a global financial crisis." - Dr. Paul A. Samuelson, Nobel Prize Winner in Economics, year 2005.

    "The government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the tax payers will be saved immense sums of interest. The privilege of creating and issuing money is not only the supreme prerogative of government, but it is the government's greatest creative opportunity. - Abraham Lincoln, assassinated President of the U.S.

    "Whoever controls the volume of money in our country is absolute master of all industry and commerce . . . and when you realize that the entire system is very easily controlled one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate." - James A. Garfield, assassinated President of the U.S.

    "The process by which banks create money is so simple that the mind is repelled." - John Kenneth Galbraith, Economist

    "Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of sovereignty of Parliament and of democracy is idle and futile . . . Once a nation parts with control of its credit, it matters not who makes the nation's laws . . . Usury once in control will wreck any nation." - William Lyon MacKenzie King, former Prime Minister of Canada (who also succeeded in nationalizing the Bank of Canada).

    "We are grateful to the Washington Post, the New York Times, Time Magazine, and other great publications whose directors have attended our meetings and respected the promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during those years. But the world is now more sophisticated and prepared to march towards a world-government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the National auto-determination practiced in past centuries." - David Rockefeller, in an address to the Trilateral Commission meeting, 1991.

    "Only small secrets need to be protected. The big ones are kept secret by public incredulity." - Marshall McLuhan, media "guru"

    In 1913, the struggle for a better monetary system was lost when President Woodrow Wilson signed the Federal Reserve Act, giving the privately owned international banking cartel the power to create the United States money. Later, Woodrow Wilson stated: "I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world, no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men. - Woodrow Wilson, President of the U.S. 1913-1921.

    "Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when the speak in condemnation of it." - Woodrow Wilson, President of the U.S. 1913-1921.

    "Fiat money is the cause of inflation, and the amount which people lose in purchasing power is exactly the amount which was taken from them and transferred to their governments by this process." (G. Edward Griffin, "The Creature from Jekyll Island")

    "A fiat monetary system allows power and influence to fall into the hands of those who control the creation of new money, and to those who get to use the money or credit early in its circulation. The insidious and eventual cost falls on unidentified victims who are usually oblivious to the cause of their plight. This system of legalized plunder (though not constitutional) allows one group to benefit at the expense of another. An actual transfer of wealth goes from the poor and the middle class to those in privileged financial positions." (Congressman Ron Paul (R-TX), "Paper Money and Tyranny")

    "When the President signs this bill [converting to a fiat-money system], the invisible government of the monetary power will be legalized . . . the worst legislative crime of the ages is perpetrated by this banking and currency bill." (Charles A. Lindbergh, Sr. 1913)

    "Whoever controls the volume of money in any country is absolute master of all industry and commerce." (Paul Warburg, drafter of the Federal Reserve Act)

    "Permit me to issue and control the money of a nation and I care not who makes its laws."  (Mayer Amschel Rothschild)

    "Centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly." (Fifth plank of the Communist Manifesto, 1848)

    "Ideologically, [sound money] belongs in same class with political constitutions and bills of rights." In the name of civil liberty and civilization itself, the Fed should be abolished. (Ludwig von Mises).

    Senator, Warren G. Harding, who was elected to the Presidency in 1920, said in a 1921 Congressional inquiry that the Reserve was a private banking monopoly. He said: "The Federal Reserve Bank is an institution owned by the stockholding member banks. The Government has not a dollar's worth of stock in it." His term was cut short in 1923 when he mysteriously died, leading to rumors that he was poisoned. This claim was never substantiated because his wife would not allow an autopsy.

    In 1993, Senator Bob Kerrey  promised to support President Bill Clinton's Budget Plan, if Clinton would appoint a Committee to study the condition of the American economy. The President established a 32-member bipartisan committee and in August, 1994, they issued their report. According to the committee's findings, by the year 2012, unless drastic changes are made, we won't even be able to pay the interest on the national debt. Knowing this, the federal government has allowed the trend to continue, almost as if they're trying to run our economy into the ground. It seems obvious that the destruction of the American economy will eventually be a result of trying to keep people in deep debt, and financially enslaved.

    In a letter to Edward M. House (President Woodrow Wilson's closest aide), dated November 23, 1933, Franklin D. Roosevelt said: "The real truth of the matter is, and you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson."

    "I sincerely believe ... that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale." (Thomas Jefferson)

    "Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money." (Daniel Webster)

    "All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation." (John Adams)

    "There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose." (Lord John Maynard Keynes (1883-1946), renowned British economist).

http://www.globalresearch.ca/index.php?context=va&aid=11600

The Wall Street Ponzi Scheme called Fractional Reserve Banking
Borrowing from Peter to Pay Paul

by Ellen Brown

Global Research, January 3, 2009
webofdebt.com

Cartoon in the New Yorker: A gun-toting man with large dark glasses, large hat pulled down, stands in front of a bank teller, who is reading a demand note. It says, “Give me all the money in my account.”



Bernie Madoff showed us how it was done: you induce many investors to invest their money, promising steady above-market returns; and you deliver – at least on paper. When your clients check their accounts, they see that their investments have indeed increased by the promised amount. Anyone who opts to pull out of the game is paid promptly and in full. You can afford to pay because most players stay in, and new players are constantly coming in to replace those who drop out. The players who drop out are simply paid with the money coming in from new recruits. The scheme works until the market turns and many players want their money back at once. Then it’s game over: you have to admit that you don’t have the funds, and you are probably looking at jail time.

A Ponzi scheme is a form of pyramid scheme in which earlier investors are paid with the money of later investors rather than from real profits. The perpetuation of the scheme requires an ever-increasing flow of money from investors in order to keep it going. Charles Ponzi was an engaging Boston ex-convict who defrauded investors out of $6 million in the 1920s by promising them a 400 percent return on redeemed postal reply coupons. When he finally could not pay, the scam earned him ten years in jail; and Bernie Madoff is likely to wind up there as well.

Most people are not involved in illegal Ponzi schemes, but we do keep our money in accounts that are tallied on computer screens rather than in stacks of coins or paper bills. How do we know that when we demand our money from our bank or broker that the funds will be there? The fact that banks are subject to “runs” (recall Northern Rock, Indymac and Washington Mutual) suggests that all may not be as it seems on our online screens. Banks themselves are involved in a sort of Ponzi scheme, one that has been perpetuated for hundreds of years. What distinguishes the legal scheme known as “fractional reserve” lending from the illegal schemes of Bernie Madoff and his ilk is that the bankers’ scheme is protected by government charter and backstopped with government funds. At last count, the Federal Reserve and the U.S. Treasury had committed $8.5 trillion to bailing out the banks from their follies.1 By comparison, M2, the largest measure of the money supply now reported by the Federal Reserve, was just under $8 trillion in December 2008.2 The sheer size of the bailout efforts indicates that the banking scheme has reached its mathematical limits and needs to be superseded by something more sustainable.
Penetrating the Bankers’ Ponzi Scheme

What fractional reserve lending is and how it works is summed up in Wikipedia as follows:

    “Fractional-reserve banking is the banking practice in which banks keep only a fraction of their deposits in reserve (as cash and other liquid assets) with the choice of lending out the remainder, while maintaining the simultaneous obligation to redeem all deposits immediately upon demand. This practice is universal in modern banking. . . .The nature of fractional-reserve banking is that there is only a fraction of cash reserves available at the bank needed to repay all of the demand deposits and banknotes issued. . . . When Fractional-reserve banking works, it works because:

    “1. Over any typical period of time, redemption demands are largely or wholly offset by new deposits or issues of notes. The bank thus needs only to satisfy the excess amount of redemptions.
    “2. Only a minority of people will actually choose to withdraw their demand deposits or present their notes for payment at any given time.
    “3. People usually keep their funds in the bank for a prolonged period of time.
    “4. There are usually enough cash reserves in the bank to handle net redemptions.

    “If the net redemption demands are unusually large, the bank will run low on reserves and will be forced to raise new funds from additional borrowings (e.g. by borrowing from the money market or using lines of credit held with other banks), and/or sell assets, to avoid running out of reserves and defaulting on its obligations. If creditors are afraid that the bank is running out of cash, they have an incentive to redeem their deposits as soon as possible, triggering a bank run.”

Like in other Ponzi schemes, bank runs result because the bank does not actually have the funds necessary to meet all its obligations. Peter’s money has been lent to Paul, with the interest income going to the bank.

As Elgin Groseclose, Director of the Institute for International Monetary Research, wryly observed in 1934:

    “A warehouseman, taking goods deposited with him and devoting them to his own profit, either by use or by loan to another, is guilty of a tort, a conversion of goods for which he is liable in civil, if not in criminal, law. By a casuistry which is now elevated into an economic principle, but which has no defenders outside the realm of banking, a warehouseman who deals in money is subject to a diviner law: the banker is free to use for his private interest and profit the money left in trust. . . . He may even go further. He may create fictitious deposits on his books, which shall rank equally and ratably with actual deposits in any division of assets in case of liquidation.”3

How did the perpetrators of this scheme come to acquire government protection for what might otherwise have landed them in jail? A short history of the evolution of modern-day banking may be instructive.

The Evolution of a Government-Sanctioned Ponzi Scheme

What came to be known as fractional reserve lending dates back to the seventeenth century, when trade was conducted primarily in gold and silver coins. How it evolved was described by the Chicago Federal Reserve in a revealing booklet called “Modern Money Mechanics” like this:

    “It started with goldsmiths. As early bankers, they initially provided safekeeping services, making a profit from vault storage fees for gold and coins deposited with them. People would redeem their "deposit receipts" whenever they needed gold or coins to purchase something, and physically take the gold or coins to the seller who, in turn, would deposit them for safekeeping, often with the same banker. Everyone soon found that it was a lot easier simply to use the deposit receipts directly as a means of payment. These receipts, which became known as notes, were acceptable as money since whoever held them could go to the banker and exchange them for metallic money.

    “Then, bankers discovered that they could make loans merely by giving their promises to pay, or bank notes, to borrowers. In this way, banks began to create money. More notes could be issued than the gold and coin on hand because only a portion of the notes outstanding would be presented for payment at any one time. Enough metallic money had to be kept on hand, of course, to redeem whatever volume of notes was presented for payment.

    “Transaction deposits are the modern counterpart of bank notes. It was a small step from printing notes to making book entries crediting deposits of borrowers, which the borrowers in turn could ‘spend’ by writing checks, thereby ‘printing’ their own money.”

If a landlord had rented the same house to five people at one time and pocketed the money, he would quickly have been jailed for fraud. But the bankers had devised a system in which they traded, not things of value, but paper receipts for them. It was called “fractional reserve” lending because the gold held in reserve was a mere fraction of the banknotes it supported. The scheme worked as long as only a few people came for their gold at one time; but investors would periodically get suspicious and all demand their gold back at once. There would then be a run on the bank and it would have to close its doors. This cycle of booms and busts went on throughout the nineteenth century, culminating in a particularly bad bank panic in 1907. The public became convinced that the country needed a central banking system to stop future panics, overcoming strong congressional opposition to any bill allowing the nation’s money to be issued by a private central bank controlled by Wall Street. The Federal Reserve Act creating such a “bankers’ bank” was passed in 1913. Robert Owens, a co-author of the Act, later testified before Congress that the banking industry had conspired to create a series of financial panics in order to rouse the people to demand “reforms” that served the interests of the financiers.4

Despite this powerful official backstop, however, the greatest bank run in history occurred only twenty years later, in 1933. President Roosevelt then took the dollar off the gold standard domestically, and Federal Reserve officials resolved to prevent further bank runs after that by flooding the banking system with “liquidity” (money created as debt to banks) whenever the banking Ponzi scheme came up short.

“Too Big to Fail”: The Government Provides the Ultimate Backstop

When these steps too proved insufficient to keep the banking scheme going, the government itself stepped up to the plate, providing bailout money directly from the taxpayers. The concept that some banks were “too big to fail” came in at the end of the 1980s, when the Savings and Loans collapsed and Citibank lost 50 percent of its share price. Negotiations were conducted behind closed doors, and “too big to fail” became standard policy. Bank risk was effectively nationalized: banks were now protected by the government from loss regardless of risk-taking or bad management.

There are limits, however, to the amount of support even the government’s deep pocket can provide. In the past two decades, the bankers’ lending scheme has been kept going by an even more speculative scheme known as “derivatives.” This is a complex subject that has been explored in other articles, but the bottom line is that more dollars are now owed in the derivatives casino than exist on the planet. (See Ellen Brown, “It’s the Derivatives, Stupid!” and “Credit Default Swaps: Derivative Disaster Du Jour,” www.webofdebt.com/articles.) 

Attempting to fill the derivatives black hole with taxpayer money must inevitably be at the expense of other essential programs, such as Social Security and Medicare. Interestingly, Social Security and Medicare themselves are in some sense Ponzi schemes, since earlier retirees collect their benefits from the contributions of later workers. These programs, too, may soon be facing bankruptcy, in this case because their mathematical models failed to account for a huge wave of Baby Boomers who would linger longer than previous generations and demand expensive drugs and care through their senior years, and because the fund money has have been drawn on by the government for other purposes. The question here is, should the government be backstopping private banks that have mismanaged their investment portfolios at the expense of workers contractually entitled to a decent retirement from a fund they have paid into all their working lives? The answer, of course, is no; but there may be a way that the government could do both. If it were to nationalize the banking system completely – if the government were to assume not just the banks’ losses but their profits, oversight and control – it might have the funds both to maintain Social Security and Medicare and to provide a sustainable credit mechanism for the whole economy.

Replacing Private with Public Credit

Readily available credit has made America “the land of opportunity” ever since the days of the American colonists. What has transformed this credit system into a Ponzi scheme that must continually be propped up with bailout money is that the credit power has been turned over to private parties who always require more money back than they create in the first place. Benjamin Franklin reportedly explained this defect in the eighteenth century. When the directors of the Bank of England asked what was responsible for the booming economy of the young colonies, Franklin explained that the colonial governments issued their own money, which they both lent and spent into the economy:

    “In the Colonies, we issue our own paper money. It is called ‘Colonial Scrip.’ We issue it in proper proportion to make the goods pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one. You see, a legitimate government can both spend and lend money into circulation, while banks can only lend significant amounts of their promissory bank notes, for they can neither give away nor spend but a tiny fraction of the money the people need. Thus, when your bankers here in England place money in circulation, there is always a debt principal to be returned and usury to be paid. The result is that you have always too little credit in circulation to give the workers full employment. You do not have too many workers, you have too little money in circulation, and that which circulates, all bears the endless burden of unpayable debt and usury.”

In an article titled “A Monetary System for the New Millennium,” Canadian money reform advocate Roger Langrick explains his concept in contemporary terms. He begins by illustrating the mathematical impossibility inherent in a system of bank-created money lent at interest:

    “magine the first bank which prints and lends out $100. For its efforts it asks for the borrower to return $110 in one year; that is it asks for 10% interest. Unwittingly, or maybe wittingly, the bank has created a mathematically impossible situation. The only way in which the borrower can return 110 of the bank’s notes is if the bank prints, and lends, $10 more at 10% interest . . . . The result of creating 100 and demanding 110 in return, is that the collective borrowers of a nation are forever chasing a phantom which can never be caught; the mythical $10 that were never created. The debt in fact is unrepayable. Each time $100 is created for the nation, the nation’s overall indebtedness to the system is increased by $110. The only solution at present is increased borrowing to cover the principal plus the interest of what has been borrowed.”

The better solution, says Langrick, is to allow the government to issue enough new debt-free dollars to cover the interest charges not created by the banks as loans:
“Instead of taxes, government would be empowered to create money for its own expenses up to the balance of the debt shortfall. Thus, if the banking industry created $100 in a year, the government would create $10 which it would use for its own expenses. Abraham Lincoln used this successfully when he created $500 million of ‘greenbacks’ to fight the Civil War.”

National Credit from a Truly National Banking System

In Langrick’s example, a private banking industry pockets the interest, which must be replaced every year by a 10 percent issue of new Greenbacks; but there is another possibility. The loans could be advanced by the government itself. The interest would then return to the government and could be spent back into the economy in a circular flow, without the need to continually issue more money to cover the interest shortfall.

The fractional reserve Ponzi scheme is bankrupt, and the banks engaged in it, rather than being bailed out by its victims, need to be put into a bankruptcy reorganization under the FDIC. The FDIC then has the recognized option of wiping their books clean and taking the banks’ stock in return for getting them up and running again. This would make them truly “national” banks, which could dispense “the full faith and credit of the United States” as a public utility. A truly national banking system could revive the economy with the sort of money only governments can issue – debt-free legal tender. The money would be debt-free to the government, while for the private sector, it would be freely available for borrowing at a modest interest by qualified applicants. A government-owned bank would not need to rob from Peter to advance credit to Paul. “Credit” is just an accounting tool – an advance against future profits, or the “monetization” (turning into cash) of the borrower’s promise to repay. As British commentator Ron Morrison observed in a provocative 2004 article titled “Keynes Without Debt”:

    “[Today] bank credit supplies virtually all our everyday means of exchange, and this brings into sharp focus the simple fact that modern money is no longer constrained by outmoded intrinsic values. It is pure fiat [enforced by law] and simply a glorified accounting system. . . . Modern monetary reform is about displacing the current economic paradigm of ‘what can be afforded’ with ‘what we have the capacity to undertake.’”5

The objection to government-issued money has always been that it would be inflationary, but today some “reflating” of the economy could be a good thing. Just in the last year, more than $7 trillion in purchasing power has disappeared from the money supply, including wealth destruction in real estate, stocks, mutual fund shares, life insurance and pension fund reserves.6 Money is evaporating because old loans are defaulting and new loans are not being made to replace them.
Fortunately, as Martin Wolf noted in the December 16 Financial Times, “Curing deflation is child’s play in a ‘fiat money’ – a man-made money – system.” The central banks just need to get money flowing into the economy again. Among other ways they could do this, says Wolf, is that “they might finance the government on any scale they think necessary.”7

Rather than throwing money at a failed private banking system, public credit could be redirected into infrastructure and other projects that would get the wheels of production turning again. The Ponzi scheme in which debt is just shuffled around, borrowing from one player to pay another without actually producing anything of real value, could be replaced by a system in which the national credit card became an engine for true productivity and growth. Increased “demand” (money) would come from earned wages and salaries that would increase “supply” (goods and services) rather than merely servicing a perpetually increasing debt. When supply keeps up with demand, the money supply can be increased without inflating prices. In this way the paradigm of “what we can afford” could indeed be superseded by “what we have the capacity to undertake.”

Ellen Brown developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest book, she turns those skills to an analysis of the Federal Reserve and “the money trust.” She shows how this private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her earlier books focused on the pharmaceutical cartel that gets its power from “the money trust.” Her eleven books include Forbidden Medicine, Nature’s Pharmacy (co-authored with Dr. Lynne Walker), and The Key to Ultimate Health (co-authored with Dr. Richard Hansen). Her websites are www.webofdebt.com and www.ellenbrown.com.

Notes

1. Kathleen Pender, “Government Bailout Hits $8.5 Trillion,” San Francisco Chronicle (November 26, 2008).
2. “Federal Reserve Statistical Release H.6, Money Stock Measures,” www.federalreserve.gov (December 18, 2008).
3. Robert de Fremery, “Arguments Are Fallacious for World Central Bank,” The Commercial and Financial Chronicle (September 26, 1963), citing E. Groseclose, Money: The Human Conflict, pages 178-79.4. Robert Owen, The Federal Reserve Act (1919); “Who Was Philander Knox?”, www.worldnewsstand.net/history/PhilanderKnox.htm. (1999).   
5. Ron Morrison, “Keynes Without Debt,” www.prosperityuk.com/prosperity/articles/keynes.html (April 2004).
6. Martin Weiss, “Biggest Sea Change of Our Lifetime,” Money and Markets (December 22, 2008).
7. Martin Wolf, “‘Helicopter Ben’ Confronts the Challenge of a Lifetime,” Financial Times (December 16, 2008).

Ellen Brown is a frequent contributor to Global Research.  Global Research Articles by Ellen Brown

It's much easier for bankers and con artists and agents to argue with a lone person or two on a forum, but try arguing with a half dozen articles that all say the same thing from a half dozen different perspectives, from a range of years, gathered from across the internet.

There are a couple simple laws of the universe and when you begin to work with them, in harmony, the universe works much smoother.

e=mc2
US dollar decline = Bitcoin gain

The dollar is the hot potato. You don't want to be the last one holding it.

Likewise, it's much easier for credulous fanatics to cite half a dozen articles from conspiracy-theorist web sites than to argue against hundreds of articles, books, speeches, etc. saying something else from hundreds of different perspectives, over a range of decades, gathered from real life. And it's much more comforting to tell yourself everyone who disagrees with you is uneducated, trolling, or an enemy agent than to face the possibility that you're wrong.

2 major stock crashes, one huge ongoing housing crash, gold and silver surging and being the #1 investment during the last 11 yrs suggests that he's on to something.  oh i forgot to mention the wealth disparity being the highest since 1929.  you know what happened after that...

Why are people stupid -> http://www.washingtonpost.com/wp-dyn/content/article/2010/01/11/AR2010011103892.html

Firstly it says the federal reserve has earned money. There is no "earn" involved at all. It says the federal reserve has made money for the US treasury. The federal reserve makes most money from the Us treasury in the first place, no? The printed money is not considered an asset. It plays no role in profits down on paper. The interest on the bonds are considered profit. The treasury pays interest on the bonds... just to get it back later after paying off the running costs of federal reserve (Including nice salaries I bet)?

The media thinks this is "protecting tax payers"? How?

It's strange because with it's bond buying scheme using new money, it's just giving the US government time. Extending debt with new money. I guess the interest is there to pay for the costs of the federal reserves and any excess is just returned.

Someone has said on here the federal reserve has been relaxed with loan repayments, has it allowed the US treasury to not repay all of the new money?

If the new money is just repaid and relent constantly wouldn't the federal reserves balance sheet show a lot more money?

nice, i never thought of it this way even tho i knew this fact.  now i learn something from you.

if you back out 30000 ft and take an overall look, how can the Fed "earn" money to pay interest?  its impossible!  they just sit at their desks and move money around, nothing productive.  the interest they return to the US Treasury is pittance anyway and more symbolic.  

US taxpayers, OTOH, have to use their sweat equity to pay off the massive debt owed to the banksters.

if you need more evidence, look at Greece.  the banksters sharks are demanding the sale of islands like Santorini to keep their game going even tho US and Greek citizens bailed their asses out of the mess they created in 2008.  its sickening.

You are a typical prototype victim of state propaganda that randomly assigns the label 'fanatic' on a lot of people in order to be sanctioned by the greater public to invade their countries. And now, once you've adopted that label, you are applying it to your own countrymen, serving again not your own interests, but that of the same people that blinded you in the first place.

'Real life' has shown how the economy goes bust time and again due to the manipulations of the bankers and for their profits only.
You fail to see and/or accept that you're lied to through a large state-and-commerce-run propaganda machine.
And now that you don't (want to) know your history, you're doomed to repeat it.
Nothing new under the sun.
Sleep well.

how do you know he's a victim?  for all i know, he's a bankster/perpetrator.  we've got those guys crawling around here trolling routinely now, IMO.

Good to know I brought some ideas to you.

Before this thread I did already know the federal reserve bought out government bonds with new money and such. It's just the details really and some comments confused me but mainly as a misunderstanding. For example it appeared to me at first people where suggesting the federal reserves profits were given out to private owners but this was only a misunderstanding I think.

On here -> http://www.federalreserve.gov/releases/h41/current/h41.htm

It says "Federal Reserve notes outstanding". What does that mean? Is this notes yet to be produced or something?

thats the actual cash/currency floating around the world.

http://www.research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=EXCRESNS&s[1][range]=5yrs

this is where all our bailout money is going...

didn't the banks say they needed all this bailout money so that they could continue lending?  bastards....

and to add salt to the wound, f*ck wad Berspankme is paying interest on these excess reserves out of our pockets so the banks are assured a return.  this encourages even less lending!  these are all NEVER SEEN BEFORE maneuvers to guarantee bank bonuses and looting.

And the rest is deposits, so the amount of notes is $2,885,778,000,000? To the nearest million. Almost 3 trillion federal reserve dollars.

But there is also the legacy (Shall I call them?) dollars still around, no? US Money supply is shown to be about 9 trillion dollars. Apparently that's the full figue (M2).

NO.  the deposits are cash held in the accts of the banks, aka, excess reserves as in the graph i put up.

this is bailout money GIVEN to the banks in exchange for all the crap loans they lent out pre 2007 that went bad.  instead of forcing them to eat it and go BK to clean out these bad actors, Berspankme said NO, "my buddies can't be allowed to go BK".  we'll just dump this shit onto the American taxpayer.

What happens to the rest of the federal reserve notes?

They aren't all liabilities then?

985,788 is the total FRN's in circulation.

But that's not the total in existence, is it? Thats what the federal reserve banks do not hold in any form. The deposits section isn't about FRNs are they? The total number is 1,144,078,000,000?

And my question is, where does the 9 trillion dollars come from? Obviously if you include all the federal reserve notes in existence, it doesn't cover this, so there are dollars from the past. It is my understanding only federal reserve notes are produced as USD today but not so in the past was it?

as far as i know it is.  i think its their best guess as to the total out there including those issued in the past.

the Deposits are computer digits held at the Fed for the banks.

I believe they are held in EFT or Electronic Funds Transfers. Like 80% - 90% of the money supply is EFTs. Only a small portion is held in FRNs, or Federal Reserve Notes.

And this money is kept of the balance sheet which explains why the balance sheet doesn't show the many trillions of dollars that has been made over the last 40 years?

So what happens to this money. Can anyone explain. This money isn't owed back to the fed? Where does it go?

no, its all there.  compare it to 2007 when total assets was 700 billion.  now its close to 3 trillion.

It's still owed back to the Feds. Could be in the CAFRs.

There are hundreds of accounts that fluctuate constantly, in the municipalities of the counties. They are called CAFR accounts, or Comprehensive Annual Financial Reports. These accounts hold hundreds of billions of dollars, but they are off the books in many ways. When they are looked at carefully, money appears and disappears in them all the time.
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Site:LRP:Walter Burien/CAFR Another Aspect Of The Control Paradigm

Walter Burien/CAFR Another Aspect Of The Control Paradigm by Leslie R. Pastor

Wikipedia has Destroyed ANY Reference to Walter Burien

    http://newresearchfindingstwo.blogspot.com/2010/06/walter-burien.html

There is a concerted effort to destroy Walter Burien, his identity, his record, and his work. Please take note of his biography. Wikipedia, which is supposed to be a universal people based information tool, has become a disinformation target.

    http://cafr1.com/BIO.html

GOVERNMENT OWNS IT ALL BY INVESTMENT

    http://cafr1.com/

According to Walter Burien your State, Local and Federal Governments are keeping two (2) sets of Books, thereby hiding the truth from you, the taxpayer. Secretly, Governments have taken over the entire (complete) investment portfolio of the nation, while showing you the taxpayer, they are in need of your tax dollars to maintain themselves.  

So where do the $$$Trillions$$$ of Dollars go to, from those 'investments,' I asked Walter Burien recently, via a private phone conversation?

Walter Burien, by nature is a skilled (trained) investment strategist, having a nomenclature that is difficult at best to follow, but I will extrapolate from our recent conversation: "Governments by law are not allowed to own more that 5% of any financial entity, but they get around this by sharing their resources, and then pooling their influence." A State is comprised of municipalities, towns, cities, counties, each of which are allowed to own 5% of a financial entity (stock in a company, corporation, financial institution), thus enabling them collectively, to actually control those investments absolutely, (select, elect, nominate, members of the board of directors) thus weaving together a fabric of control that extends (soup to nuts) not just financially, but politically as well. This is fundamentally, absolute control, over the entire fabric of life.

In essence, these (hidden) oligarchs control, every aspect of the machinery and mechanism of everyday life of every "citizen" living within our state and local governments. They accrue all the benefits of control, while those being ‘controlled’ have to work to maintain the very controls being used against them.

Back in the 1980s Walter Burien discovered a significant (hidden) anomaly, a fact so serious, that if revealed would awaken the righteous indignation of every living man, women and child on the American continent. His discovery, revealed a hidden strategy, run by oligarchs, who using the machinery of government, surreptitiously siphoned off the wealth of the people of the United States, under the color and guise of capitalism, which in reality is "state" capitalism, used by these self-serving oligarchs, for their own hidden agenda and secret purposes, known only to themselves. The American middle class was forced to fund, these activities, via their taxes, and their labor. Property taxes were used to fund and finance their strategy of control over those being taxed, primarily, while sales taxes, and user fees (tolls and licenses) added more funds for private investments, enabling a lifestyle, that far surpassed the fiefdoms of all of the empires previously recorded in modern history. Additional funding was extracted from the people, via mandatory (by law) funding via insurance fees, (homes, cars, liability, life, and now via Obama, health insurance). The other side of the equation of control, prevented the average American, those funding these extravagant investments, from benefiting from the ownership of those investments, via the control of all stock market transactions by a little known company directly under their control. This information was deliberately withheld from the people of the United States, so that the strategy of such control could continue unabated and unencumbered.

http://www.criminalgovernment.com/docs/rel/BurienPost1.html

Comprehensive Annual Financial Reports (CAFRs)

Report on CAFR Research by: Walter J. Burien, Jr.

Introduction

Walter Burien Jr. worked as a Wall Street Commodity Trading Advisor (CTA) for fifteen years, but now resides in Arizona.   According to Mr. Burien, every state, county and major metropolitan city is keeping two sets of books. One set (the ‘Budget’) is commonly available and tracks each governmental entity’s casts and tax revenue.   The Budget is the financial record that’s seen by the public and used by politicians to justify new governmental services and higher taxes.

However, there is a second set of books (called the Comprehensive Annual Financial Report, or CAFR) which is virtually unknown to the public but contains the real record of total governmental income.  According to Mr. Burien, although the Budget gives an accurate account of government costs, only the CAFR gives an accurate account of government’s income.

LINK TO: City, County and State CAFRs Available for Downloading

For example, while a particular state budget might report receiving $20 billion in taxes (just barely enough to sustain its $20 billion in costs) - the CAFR might reveal the state’s real income is in the neighborhood of $60 billion - three times as much as reported on the budget. If these allegations are accurate, the particular state could stop charging all the taxes we are familiar with and, not only survive but, either double the amount of reported government services or give every citizen a huge tax rebate.

The implications are mind-boggling.   The CAFR's reveal that the world is so different from what we are led to believe, so much more corrupt than suspected, that we are left with three choices, either; 1) government agrees to end the deception and stop overtaxing us, or 2) the American people agree to accept their status as slaves, or 3) both sides refuse to agree and precipitate a shooting revolution. The issue is that big.

Are Mr. Burien’s allegations correct? How could any governmental entity dare to routinely overcharge its citizens by 200%, underreport its income by 2/3rds, and knowingly press for higher taxes based on an inaccurate budget? Worse, how could such a fraudulent system become widespread among all states, counties, cities and the Federal Government?

LINK TO:  A  101 CAFR learning site

Those who have made efforts to verify Burien's research indicate that the conclusions drawn by Burien are probably correct. For instance: The State of Alaska and the city of Anchorage both use Budget/CAFR accounting systems that conceal a ‘breathtaking’ difference in reported revenue. Another researcher in Wyoming claims that a comparison of his state’s budget  and CAFR also support Mr. Burien’s arguments. In every case, there are two sets of books and the income reported on the budget is millions or billions of dollars less than is reported on the CAFR.

These verifications of Burien's research and findings lend credence to his allegations.

What follows is an amalgam of statements or implications raised by Mr. Burien in various interviews.

Mr. Burien reports first discovering the CAFR report in New Jersey in 1989, when he helped start and incorporated a New Jersey tax protest group called "Hands Across New Jersey."   While involved with that group, Mr. Burien read in the state’s Annual Budget that the total cost of all public services was $17 billion and the "net available" (the money on hand to pay all bills) was $24.6 billion. But then he asked the first question the IRS asks in any audit: "What are the gross receipts?"   He added the figures from various state government sources and came up with about $44 billion and began to wonder how the state could have $17 billion in costs, $24.6 billion in cash on hand, and $44 billion annual income? The numbers didn’t add up, so he began to dig deeper.

Because his father had been Personnel Manager for the State Treasury for four years, Mr. Burien understood how to get around in the various government departments.   The state Director of the Budget was on vacation, so Mr. Burien called one of his lowest level assistants and said, "I’m working on a report for Richard [the vacationing Budget Director] and I need all the figures on the autonomous agency accounts, interest accounts, investment accounts." The assistant said, "Ohh, you want the CAFR."   This was the first time Burien had heard of the CAFR but he said, "Yes" and the assistant mailed it to him.

The 1989 CAFR showed that New Jersey had liquid investment funds (cash) of $188 billion of which; common stocks worth $70 billion, $10 billion in loans made by the state due from public and private corporations, and $14 billion in insurance company equity participation.   The little state of New Jersey, which admitted to less than $25 billion in annual income on its budget, reported $188 billion in cash, stocks, loans and equity participation on its CAFR. According to Mr. Burien, "On that day, I learned the definition of syndicated organized crime." Keep in mind that most of the revenue and investments from the 21 counties, hundreds of cities, municipalities, school districts, state financial authorities, pension funds, and 69 enterprise authorities, all of which put out their own CAFR or Combined Financial Statement are not inclusive with the state’s revenue and investments. Totals here when looking at composite New Jersey government figures is well in excess of 1.8 Trillion dollars. Yep you heard that right 1.8 trillion. Divide that figure by the population of New Jersey to see the per capita share of the wealth.

So why are the taxes in New Jersey some of the highest in the country? The answerer is; Power corrupts, absolute Power corrupts absolutely. Mr. Burien keeps emphasizing to the public that they, the public, left the VAULT door open, and those sharp little crackers said thank you very much. The problem is that most (95%) of the public responds with, “Vault, what vault”. With this well entrenched attitude of naivety by the public in place, those sharp little crackers now have even stopped saying thank you very much as they plunder the wealth in their unabated efforts towards the building of their own empires within the corporate structure of Composite Government.

The scam worked something like this: Anything that was a cost or expense for public services (the traditional side of the Annual Service Budget, such as the Department of Transportation, health and welfare, etc.) was reported on the Budget where public taxes primarily paid 100% of the bill for those services.   That was $17 billion.     NOTE: The examples shown are for New Jersey, but apply across the country in varying degrees.

However, any governmental agency that was a profit center (the Port Authority for New Jersey, the New Jersey Turnpike, and investment accounts, etc.) that generated no-tax revenue was "restricted by statute from being reported in and benefiting the Annual Budget.   Why? Because the state legislature passed laws to prevent reporting the income from investment or venture profit centers on the Budget.   Instead, income from these profit centers was disclosed only on the CAFR or other financial reports referenced in the notes of the CAFR.

But that disclosure was not immediately apparent.   For example, when Mr. Burien looked for New Jersey’s 1989 "gross cash receipts" in the CAFR, he found the figure buried on page 174, under the "Waste Water Treatment Trust Fund."   It showed the amount of the total cash receipts (Cash Additions) for 1989 from all state agencies, departments and sources was $86.799 billion.   In other words, New Jersey State Government from “all sources” was grossing $87 billion to provide $17 billion in public services as seen in the openly represented “Annual Service Budget”.   New Jersey citizens were paying $5 for every $1 in services they received, and the state was pocketing the other $4 as "profit."

When breaking down the true revenue income, the most important revelation was that only one third of the states income came from taxes, fines and fees. Two thirds of state governments income came from “Other Sources” with no direct tie to the publicly known budget. When looking at the openly disclosed “Budget”, which each year continued to grow at a runaway pace, here ever expanding taxation primarily covered the expenses.

The CAFR also reported the state owned $32 billion in common stocks - but this figure was footnoted.  The footnote revealed that the stocks were valued according to their original purchase price, not the current market value.   In other words, if the state bought a stock in 1968 at $1.25 a share and it’s worth $300 a share now, they still report it on the CAFR as worth $1.25 a share.   Burien determined that the true market value for the "$32 billion" in stocks reported on the New Jersey CAFR was actually about $70 billion.

But Mr. Burien goes further - he claims that the dual system of books is not unique to New Jersey, but also common among the over 54,000 local government corporate entities operating within all fifty states.    Moreover, he claims the dual accounting system used ten years ago in New Jersey was created in 1946 through an organization by the name of GFOA (Government Financial Officers Association) and is the primary local government accounting structure being used today.

For example, "In 1987 Arizona’s annual service budget reported $2.8 billion in revenues but the state’s 1987 CAFR reported total cash receipts of $3.1 billion, a mere $300 million difference."

"However, in 1997, Arizona reported an Annual Service Budget of $5.5 billion while the State’s CAFR (printed by the Auditor General’s Office) showed total gross cash receipts of $17 billion.   That’s a difference of over $11 billion.   In just ten years, Arizona had caught up to New Jersey in that both states’ annual budgets reported less than one-third of the actual gross income seen in the states’ CAFRs.

"CAFR and “Combined Financial Statement” reports indicate that the composite totals for all government (Federal, state, county and city) ownership of publicly traded stocks exceeds $32 TRILLION (53% of the total ownership of all listed stocks from ALL exchanges), $8 TRILLION in insurance company equity (should we be surprised by high priced mandatory auto insurance or unaffordable health care?) and $5 TRILLION in Bond Surety Escrow Accounts for future liability of existing or potential debt.

Governments use Bond Surety Escrow Accounts to evade that pesky little rule that government should not operate at a "profit."   That is, government should not impose more taxes than it actually uses to run the government.   By designating tax revenue that exceeds operating costs as "Bond Surety Escrow" for future liability, government avoids calling excess revenue a "profit" and is thereby enabled to continue to enrich itself at public expense.

To illustrate the potential for abusing "future liability payments," consider the New Jersey plan in the 1950s to build the New Jersey State Turnpike and Garden State Parkway Authorities.   The state asked voters to approve a $7.5 billion bond to construct the turnpikes.   The state explained that these turnpikes would be operated as toll roads by the bondholders until the $7.5 billion bond was paid off - but the bondholders could not operate the toll roads at a profit.   Once the bonds were repaid, the turnpikes would revert back into the state’s Annual Budget as a normal cost/revenue item.   The public voted Yes.

Over the following years, the state sometimes alleged that the toll revenue from operating those turnpikes failed to cover their operating expenses, and so additional bonds were passed to fund the turnpikes.   As a result, in 1990, the total bond liability still owed for the turnpike had grown to $14.5 billion.   But guess how much was in the ‘Bond Surety Escrow Accounts’?   $38 Billion!   Enough to repay the original $7.5 billion bonds almost four times!

How could that happen?   Say the toll road made a $400 million profit for the year and the scheduled payment on the $7.5 billion bond was $100 million.   The state made the $100 million payment but kept the extra $300 million in a Bond Surety Escrow Account which generated substantial annual dividend returns for ‘future liability payments.’    Although they kept the $300 million, they did not declare it as an asset but wrote it off as a line item payment.   In other years, even though they made a profit, they’d allege that they lost money and therefore floated more billions in bonds. (Guess who pays?)

The bottom line is that New Jersey and other local government entities are collecting hundreds of billions of virtually unreported dollars from “Other” operations.   The motivating factor is not public welfare, but control of those billions.

Mr. Burien not only alleges that the dual accounting system exemplified by CAFR is not only used by all fifty states, but also by all counties, cities and the Federal Government itself.   If Mr. Burien’s allegations are correct, they comprise the most damning indictment of big government yet seen.   In sum, Mr. Burien implies that our government is in fact a criminal enterprise bent on oppressing Americans by extorting several times as much tax revenue as it spends on public services and using the majority of those extorted revenues to enrich, empower and enlarge government at public expense.

Mr. Burien contends that the inner circle of the individuals controlling the top wealth of this structure, have the attitude toward the public of; Keep the Chipmunk (the public) running on the treadmill, as through trickle down economics, just enough revenue is supplied to keep the chipmunk running at optimum efficiency as the top inner circle controlling parties tap off 80% of the energy produced by the treadmill.  The key words here are “Optimum Efficiency” and by the definition of what the public has allowed to happen as they left the vault door unintentionally open, the true final effect of forced labor and subservience by unrestrained takeover.

According to Mr. Burien, although the public is absolutely ignorant concerning CAFR, the primary cause for that ignorance is not the politicians but the mainstream media. When Mr. Burien first discovered the CAFR reports in New Jersey in 1989, he went on radio 101.5 FM in a live 45 minute interview.   Two days later, that radio station was threatened with losing its license and was almost shut down.   CAFR had become another example of - "third rail journalism" - any reporter or media outlet that touched the issue would be silenced or driven from journalism.   As a result, there’s been a total mainstream media blackout on disclosing CAFR reports. For over twenty five years the directors and CEOs of the primary syndicated media organizations both print and broadcast, were sent state CAFR reports each and every year, as they maintained a blackout towards the simple mentioning of the report.

Mr. Burien reports the discovery of the fact that New Jersey State Judges are vested in a personal retirement guarantee of $5,000,000.00, per judge, after they serve as judges for one year.  Federal district court judges did not have a retirement or pension plan do to the fact that they were appointed for life. Being appointed for life they received their full paycheck and benefits for life.  Do you need anyone to spell it out for you?   Would a New Jersey State or Federal District Judge allow an attack on the squirreled away $Billions and jeopardize his entry into $Millionaire$ status?   The inner circle gets the gold!!

Later, Burien learned that the New Jersey official in charge of discrediting his CAFR discoveries was a former reporter (Harvey Fisher) who’d been appointed Assistant State Treasurer - even though he had no former financial background.   Burien investigated his background and learned that as a reporter he made $35,000 a year. But as Assistant State Treasurer he made $65,000 a year - plus a Carte Blanche expense account of $125,000. !????????

Burien claims this was not an aberration: "I knew there was a state data search department under the Department of Treasure Personnel division which tied all agencies and departments together.   I called that department and asked for a data search on all key level directorships and supervisory positions for all budgetary or autonomous agencies, and they came up with some 3,400 names from several administrations.   Almost 1800 of these Directors were former editors or reporters!   It is a virtual certainty that many of these appointments were payoffs for the journalists’ previous "cooperation" in spinning or silencing stories to suit government.

If you conduct a comparable search in other states, you may find a similar symbiotic relationship between government, editors, and reporters. The more money held and generated by an agency, the higher the percentage will be. If so, the media’s "liberal, pro-government bias" may run much deeper than anyone has imagined, and the ‘military-industrial complex" described by President Eisenhower in the 1950’s may have been replaced by a  "media-bureaucracy-banker complex" in the 1990s.

Therefore, Mr. Burien recommends that once you analyze your state’s Budget and CAFR reports, you insist that your local news mainstream media (TV, papers, radio) raise the "Public Awareness" by reporting the difference between the composite "total of cash receipts from all agencies, departments, investments, etc." and the "actual total composite revenues held or controlled." Mr. Burien started with national disclosure of the CAFR and the structure behind it on June 8th 1998.  In 1999, GFOA and GASB (Government Accounting Standards Board) changed the accounting requirements for local governments within the Combined Financial Columns of the CAFR from; All revenue, income and investments being shown, To;  All revenue, income and investments being shown that were necessary to meet obligations and liabilities of that local government.  This change in accounting is substantial. The good point here for disclosure is that you can look at a pre 1999 CAFR report, 1997-95-93, etc., and spot large drops in revenue from post 1999 reports in comparison with pre 1999 CAFR reports. With this being done, you now know to ask and look for the accounting of those revenues taken off the balance columns of the CAFR. Read the notes of the CAFR carefully.

If your local media refuse to publicize your state’s CAFR, they may be cooperating with a criminal agreement which has effectively silenced public disclosure of the CAFR reports for over forty years.   However, once Americans know how much money is out there, where it’s coming from and where it’s going - the government’s and the inner circle’s game will be over.

Any media that refuses to make immediate mention of the CAFR report should be publicly and aggressively boycotted.   Media exposure is the jugular vein of the evil and corruption.

A video produced in December of 1999, by Mr. Burien, entitled: The Biggest Game In Town, is available and is set up for airing on your Public Access or local TV stations. Mr. Burien, in this video introduces a program that could lead to the final elimination of taxation in this country with a possible dividend return to the public by and through the restructuring of the principle of operation of government by public mandate in making the public the direct beneficiary of the wealth. The information on the video is a must see for every American.

Actually I don't know that, but in my 'first contacts' I'm uncurably mostly naïvely assuming people are good  :-\

awesome

Can someone show evidence of the hidden revenues in these CAFRs. I looked through them and found one PDF (A lot of them are restricted :o) that did show the actual loss through some investments to be about 5 times lower than on the budget. No real big finds. Anyone can direct me to something?

Also, is doesn't answer my question about what happened to the new money the federal reserve made which isn't all down as liabilities on the balance sheet.

I thought the federal reserve took over the money supply in 1971 or near that time. Since then a lot of new money has been made. More than just about a couple of trillion dollars. Or am I really wrong?

The US operates in Bankruptcy, since 1933, approx. The entire banking system operates in bankruptcy. I cannot explain all the details to you, personally. I am not that knowledgeable about the inner intricacies. What many people refer to are the illusions or the sleight of hand tricks or the name game.

There are important points to understand.
The US operates in bankruptcy.
All Federal Reserve Notes represent borrowed money, or "debt".
The accounting system, being double entry, allows for zero balance at the end of the day on all books.
There are only credits and debits.
Debits are the main vehicle we use to function in the monetary system today.

That doesn't really explain anything at all. The new money created isn't all on the balance sheet. So why? What happened to the other money?

And this proves the dollar has no value and is "theirs, not yours"... how? Sure seems like you're just blaming every problem you can think of on the nearest scapegoat.

You, on the other hand, fail to see and/or accept that the problems you complain about were actually much worse before that system came into being. Kind of like insisting that since Vioxx caused heart attacks, modern medicine is a sham and we should go back to spells and bleeding.

"...it's much more comforting to tell yourself everyone who disagrees with you is uneducated, trolling, or an enemy agent than to face the possibility that you're wrong."

Thanks for proving my point!

so answer me this.  how is it fair to the avg American that one special interest group, bankers, have control of the printing press?

I see something else. And that is the state of Dakota which runs its own bank, not a private bank which they have to borrow from, and they are doing well, very well. So problems are not necessary at all when a state runs its own bank, instead of let the money be supplied by a 'private entity', to state it friendly.
And don't start about the very profitable 'modern medicine'.
Aye! You just did! Your bad luck :)
So, to quote Hypocrates: "Let the food be your medicine and the medicine your food" and you will need a lot less of that 'modern medicine'.
Or to quote a 12 year old speaker on TED: "You can pay the farmer, or you can pay your doctor, the choice is yours."
Newcastle University research for instance recently showed that diabetes 2 can be cured, mind you: definitively cured, by a simple diet alone.
Did any doctor tell you that already? No. Yet this was already well known and frequently pointed out by so called 'alternative medicine', but utterly rejected by 'modern medicine' as 'unscientific', 'anecdotical', or with that other show-stopper: "No proof has been found to support these statements."
No, it's not always the majority that is right. And majority may even be wrong more often than you think, as by definition it's the masses that are easily manipulated by propaganda.

Ok, nice ranting.
Now, what are your arguments?

It's not only unfair, it's unconstitutional.

Mr. 2001 only responds here and there with generalizations and accusations.  i've spent the greater part of this thread arguing with facts, figures, graphs, tables, references, videos, etc and yes, my interpretations of these facts.  but i point to very specific facts and attributes of what i am arguing and interpret from the heart and as honestly as i can but all i get back from this ass is generalized criticism and straw mans.

he's a troll with an agenda and if you want to respond Mr. 2001 answer my questions in a timely manner and i will answer yours but only in a continuous debate where i can pick you apart.

So no evidence for the CAFRs and no proper explanations for what happens to most of the US money supply or if the money supply stats are faked too high for some reason?