Quotes About The Federal Reserve And Central Banking

Our last post, “It Is Now Mathematically Impossible To Pay Off The U.S. National Debt“, has created a ton of controversy and has generated over 100 comments so far.  Much of the discussion has been about the role of the Federal Reserve and how they create money and debt.  The truth is that the Federal Reserve system is a very complex subject that is very difficult to get a handle on.  One thing that the Federal Reserve is NOT is a government agency.  In fact, it is about as “federal” as Federal Express.  It is a private central bank designed to make money for the people who created it.  In fact, the Federal Reserve was the culmination of an effort by the international banking elite to force a permanent private central bank on the American people that began all the way back during the days of our Founding Fathers. 

But don’t just take our word for it. The following are famous quotes about the Federal Reserve and central banking from past presidents, congressmen and other notable historical figures….  

“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

It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”
-Henry Ford

“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

“The Federal Reserve banks are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this nation is run by the International bankers.”
-Congressman Louis T. McFadden

“The real truth of the matter is, as 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.”
-Franklin Delano Roosevelt

“As soon as Mr. Roosevelt took office, the Federal Reserve began to buy government securities at the rate of ten million dollars a week for 10 weeks, and created one hundred million dollars in new [checkbook] currency, which alleviated the critical famine of money and credit, and the factories started hiring people again.”
-Eustace Mullins

“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

“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

“We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it.”
-Congressman Louis T. McFadden in 1932

“The few who understand the system, will either be so interested from it’s profits or so dependent on it’s favors, that there will be no opposition from that class.”
-Rothschild Brothers of London, 1863

“While boasting of our noble deeds were careful to conceal the ugly fact that by an iniquitous money system we have nationalized a system of oppression which, though more refined, is not less cruel than the old system of chattel slavery.”
-Horace Greeley

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

“…the increase in the assets of the Federal Reserve banks from 143 million dollars in 1913 to 45 billion dollars in 1949 went directly to the private stockholders of the [federal reserve] banks.”
-Eustace Mullins

“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

“Whoever controls the volume of money in any country is absolute master of all industry and commerce.”
-James A. Garfield, President of the United States

“A great industrial nation is controlled by it’s system of credit. Our system of credit is concentrated 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 world–no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men.”
-President Woodrow Wilson

“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and it’s issuance.”
-James Madison

“I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a monied aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs.”
-Thomas Jefferson

“The money powers prey upon the nation in times of peace and conspire against it in times of adversity. It is more despotic than a monarchy, more insolent than autocracy, and more selfish than bureaucracy. It denounces as public enemies all who question its methods or throw light upon its crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.”
-Abraham Lincoln

“Give me control of a nation’s money and I care not who makes it’s laws”
-Mayer Amschel Bauer Rothschild

Are you starting to get the picture?

The Federal Reserve is at the center of a controversy over central banking that has been around since the very beginning of the United States.  But unfortunately, the Federal Reserve system is so incredibly complex and the American people of today are so uneducated that the vast majority of people out there simply do not even understand enough about what is going on to get upset about anything.

But that is changing.  An increasing number of people are starting to wake up.  Instead of thinking that “we’ll get this debt under control if we could just get the right person in the White House”, more Americans than ever are realizing that it is the Federal Reserve that is the root of our debt problem.

As always, we welcome you to leave a comment with your opinion about the Federal Reserve.  We read every single comment that gets left on this site, and we actually learn a lot from reading them.

We also encourage you to follow us on our daily news website, The Most Important News, which features the best collection of alternative news stories that you will find anywhere.

It Is Now Mathematically Impossible To Pay Off The U.S. National Debt

A lot of people are very upset about the rapidly increasing U.S. national debt these days and they are  demanding a solution. What they don’t realize is that there simply is not a solution under the current U.S. financial system. It is now mathematically impossible for the U.S. government to pay off the U.S. national debt. You see, the truth is that the U.S. government now owes more dollars than actually exist. If the U.S. government went out today and took every single penny from every single American bank, business and taxpayer, they still would not be able to pay off the national debt. And if they did that, obviously American society would stop functioning because nobody would have any money to buy or sell anything.

And the U.S. government would still be massively in debt.

So why doesn’t the U.S. government just fire up the printing presses and print a bunch of money to pay off the debt?

Well, for one very simple reason.

That is not the way our system works.

You see, for more dollars to enter the system, the U.S. government has to go into more debt.

The U.S. government does not issue U.S. currency – the Federal Reserve does.

The Federal Reserve is a private bank owned and operated for profit by a very powerful group of elite international bankers.

If you will pull a dollar bill out and take a look at it, you will notice that it says “Federal Reserve Note” at the top.

It belongs to the Federal Reserve.

The U.S. government cannot simply go out and create new money whenever it wants under our current system.

Instead, it must get it from the Federal Reserve.

So, when the U.S. government needs to borrow more money (which happens a lot these days) it goes over to the Federal Reserve and asks them for some more green pieces of paper called Federal Reserve Notes.   

The Federal Reserve swaps these green pieces of paper for pink pieces of paper called U.S. Treasury bonds. The Federal Reserve either sells these U.S. Treasury bonds or they keep the bonds for themselves (which happens a lot these days).

So that is how the U.S. government gets more green pieces of paper called “U.S. dollars” to put into circulation. But by doing so, they get themselves into even more debt which they will owe even more interest on.

So every time the U.S. government does this, the national debt gets even bigger and the interest on that debt gets even bigger.

Are you starting to get the picture?

As you read this, the U.S. national debt is approximately 12 trillion dollars, although it is going up so rapidly that it is really hard to pin down an exact figure.

So how much money actually exists in the United States today?

Well, there are several ways to measure this.

The “M0” money supply is the total of all physical bills and currency, plus the money on hand in bank vaults and all of the deposits those banks have at reserve banks.  As of mid-2009, the Federal Reserve said that this amount was about 908 billion dollars.

The “M1” money supply includes all of the currency in the “M0” money supply, along with all of the money held in checking accounts and other checkable accounts at banks, as well as all money contained in travelers’ checks.  According to the Federal Reserve, this totaled approximately 1.7 trillion dollars in December 2009, but not all of this money actually “exists” as we will see in a moment.

The “M2” money supply includes everything in the “M1” money supply plus most other savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).  According to the Federal Reserve, this totaled approximately 8.5 trillion dollars in December 2009, but once again, not all of this money actually “exists” as we will see in a moment.

The “M3” money supply includes everything in the “M2” money supply plus all other CDs (large time deposits and institutional money market mutual fund balances), deposits of eurodollars and repurchase agreements.  The Federal Reserve does not keep track of M3 anymore, but according to ShadowStats.com it is currently somewhere in the neighborhood of 14 trillion dollars.  But again, not all of this “money” actually “exists” either.

So why doesn’t it exist?

It is because our financial system is based on something called fractional reserve banking.

When you go over to your local bank and deposit $100, they do not keep your $100 in the bank.  Instead, they keep only a small fraction of your money there at the bank and they lend out the rest to someone else.  Then, if that person deposits the money that was just borrowed at the same bank, that bank can loan out most of that money once again.  In this way, the amount of “money” quickly gets multiplied.  But in reality, only $100 actually exists.  The system works because we do not all run down to the bank and demand all of our money at the same time.

According to the New York Federal Reserve Bank, fractional reserve banking can be explained this way….

If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money ($100+$90+81+$72.90+…=$1,000).”

So much of the “money” out there today is basically made up out of thin air.

In fact, most banks have no reserve requirements at all on savings deposits, CDs and certain kinds of money market accounts.  Primarily, reserve requirements apply only to “transactions deposits” – essentially checking accounts.

The truth is that banks are freer today to dramatically “multiply” the amounts deposited with them than ever before.  But all of this “multiplied” money is only on paper – it doesn’t actually exist.

The point is that the broadest measures of the money supply (M2 and M3) vastly overstate how much “real money” actually exists in the system. 

So if the U.S. government went out today and demanded every single dollar from all banks, businesses and individuals in the United States it would not be able to collect 14 trillion dollars (M3) or even 8.5 trillion dollars (M2) because those amounts are based on fractional reserve banking.

So the bottom line is this….

#1) If all money owned by all American banks, businesses and individuals was gathered up today and sent to the U.S. government, there would not be enough to pay off the U.S. national debt.

#2) The only way to create more money is to go into even more debt which makes the problem even worse.

You see, this is what the whole Federal Reserve System was designed to do.  It was designed to slowly drain the massive wealth of the American people and transfer it to the elite international bankers.

It is a game that is designed so that the U.S. government cannot win.  As soon as they create more money by borrowing it, the U.S. government owes more than what was created because of interest.

If you owe more money than ever was created you can never pay it back.

That means perpetual debt for as long as the system exists.

It is a system designed to force the U.S. government into ever-increasing amounts of debt because there is no escape.

We could solve this problem by shutting down the Federal Reserve and restoring the power to issue U.S. currency to the U.S. Congress (which is what the U.S. Constitution calls for).  But the politicians in Washington D.C. are not about to do that.

So unless you are willing to fundamentally change the current system, you might as well quit complaining about the U.S. national debt because it is now mathematically impossible to pay it off.

***UPDATE***

It has been suggested that the same dollar can be used to pay off debt over and over – this is theoretically true as long as the dollar remains in the system.

For example, if the U.S. government gives China a dollar to pay off a debt, there is a good chance that the U.S. government will be able to acquire that dollar again and use it to pay off another debt.

However, this is not true when debt is retired with the Federal Reserve.  In that case, money is actually removed from the system.  In fact, because of the “money multiplier”, when debt is retired with the Federal Reserve it can remove ten times that amount of money (and actually more, but let’s not get too technical) from the system.

You see, fractional reserve banking works both ways.  When $100 is introduced into the system, it can theoretically create $1000 as the example in the article above demonstrates.  However, when that $100 is removed, it can have the opposite impact.

And considering the fact that the Federal Reserve “purchased” the vast majority of new U.S. government debt last year, we have got a real mess on our hands.

Even if a way could be figured out how to pay off all the debt we owe to foreign nations (such as China, Japan, etc.) it would still be mathematically impossible to pay off the debt that we owe to the Federal Reserve which is exploding so fast that it is hard to even keep track of.

Of course we could repudiate that debt and shut down the Federal Reserve, but very few in Washington D.C. have any interest in doing that.

It has also been suggested that instead of just using dollars to pay off the U.S. national debt, we could use the assets of the U.S. government to pay it off.

That is rather extreme, but let us consider that for a moment.

That total value of all physical assets in the United States, both publicly and privately owned, is somewhere in the neighborhood of 45 to 50 trillion dollars.  Of course the idea of the U.S. government “owning” every single asset of the American people is repugnant to our entire way of life, but let’s assume that for a moment.

According to the 2008 Financial Report of the United States Government, which is an official United States government report, the total liabilities of the United States government, including future social security and medicare payments that the U.S. government is already committed to pay out, now exceed 65 TRILLION dollars.  This amount is more than the entire GDP of the whole world.

In fact, there are other authors who have written that the actual figure for the future liabilities of the U.S. government should be much higher, but let’s be conservative and go with 65 trillion for now.

So, if the U.S. government took control of all physical assets in the United States and sold them off, it could not even make enough money to pay for everything that the U.S. government is already on the hook for.

Ouch.

If you have not read the 2008 Financial Report of the United States Government, you really should.  Actually the 2009 report should be available very soon if it isn’t already.  If anyone knows if it is available, please let us know. 

The truth is that the U.S. government is in much bigger financial trouble than we have been led to believe. 

For example, according to the report (which remember is an official U.S. government report) the real U.S. budget deficit for 2008 was not 455 billion dollars.  It was actually 5.1 trillion dollars.

So why the difference?

The CBO’s 455 billion figure is based on cash accounting, while the 5.1 trillion figure in the 2008 Financial Report of the United States Government is based on GAAP accounting. GAAP accounting is what is used by all the major firms on Wall Street and it is regarded as a much more accurate reflection of financial reality.

So needless to say, the United States is in a financial mess of unprecedented magnitude.

So what should we do?  Does anyone have any suggestions?

***UPDATE 2***

We have received a lot of great comments on this article.  Trying to understand the U.S. financial system (even after studying it for years) can be very difficult at times.  In fact, it can almost seem like playing 3 dimensional chess.

Several readers have correctly pointed out that when the U.S. money supply is expanded by the Federal Reserve, the interest that is to be paid on that new debt is not created. 

So where does the money to pay that interest come from?  Well, eventually the money supply has to be expanded some more.  But that creates even more debt.

That brings us to the next point.

Several readers have insisted that the Federal Reserve is not privately owned and that since it returns “most” of the profits it makes to the U.S. government that we should not be concerned about the debt owed to it.

The truth is that what you have with the Federal Reserve is layers of ownership.  The following was originally posted on the Federal Reserve’s website….

“The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations – possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.”

So Federal Reserve “stock” is owned by member banks.  So who owns the member banks?  Well, when you sift through additional layers of ownership, you will ultimately find that people like the Rothschilds, the Rockefellers and the Queen of England have very large ownership interests in the big banks.  But there are so many layers of ownership that they are able to disguise themselves well. 

You see, these people are not stupid.  They did not become the richest people in the world by being morons.  It was the banking elite of the world who designed the Federal Reserve and it is the banking elite of the world who benefit the most from the Federal Reserve today.  In the article above when we described the Federal Reserve as “a private bank owned and operated for profit by a very powerful group of elite international bankers” we may have been oversimplifying things a bit, but it is the essence of what is going on.

In an excellent article that she did on the Federal Reserve, Ellen Brown described a number of the ways that the Federal Reserve makes money for those who own it….

The interest on bonds acquired with its newly-issued Federal Reserve Notes pays the Fed’s operating expenses plus a guaranteed 6% return to its banker shareholders. A mere 6% a year may not be considered a profit in the world of Wall Street high finance, but most businesses that manage to cover all their expenses and give their shareholders a guaranteed 6% return are considered “for profit” corporations.

In addition to this guaranteed 6%, the banks will now be getting interest from the taxpayers on their “reserves.” The basic reserve requirement set by the Federal Reserve is 10%. The website of the Federal Reserve Bank of New York explains that as money is redeposited and relent throughout the banking system, this 10% held in “reserve” can be fanned into ten times that sum in loans; that is, $10,000 in reserves becomes $100,000 in loans. Federal Reserve Statistical Release H.8 puts the total “loans and leases in bank credit” as of September 24, 2008 at $7,049 billion. Ten percent of that is $700 billion. That means we the taxpayers will be paying interest to the banks on at least $700 billion annually – this so that the banks can retain the reserves to accumulate interest on ten times that sum in loans.

The banks earn these returns from the taxpayers for the privilege of having the banks’ interests protected by an all-powerful independent private central bank, even when those interests may be opposed to the taxpayers’ — for example, when the banks use their special status as private money creators to fund speculative derivative schemes that threaten to collapse the U.S. economy. Among other special benefits, banks and other financial institutions (but not other corporations) can borrow at the low Fed funds rate of about 2%. They can then turn around and put this money into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the taxpayers, just by virtue of their position as favored banks. A long list of banks (but not other corporations) is also now protected from the short selling that can crash the price of other stocks.

The reality is that there are a lot of ways that the Federal Reserve is a money-making tool.  Yes, they do return “some” of their profits to the U.S. government each year.  But the Federal Reserve is NOT a government agency and it DOES make profits. 

So just how much money is made over there?  The truth is that we have to rely on what the Federal Reserve tells us, because they have never been subjected to a comprehensive audit by the U.S. government.

Ever.

Right now there is legislation going through Congress that would change that, and the Federal Reserve is fighting it tooth and nail.  They are warning that such an audit could cause a financial disaster.

What are they so afraid of?

Are they afraid that we might get to peek inside and see what they have been up to all these years?

If you are a history buff, then you probably know that debates about a “central bank” go all the way back to the Founding Fathers.

The European banking elite have always been determined to control our currency, and that is exactly what is happening today.

Ever since the Federal Reserve was created, there have been members of the U.S. Congress that have been trying to warn the American people about the insidious nature of this institution. 

Just check out what the Honorable Louis McFadden, Chairman of the House Banking and Currency Committee had to say all the way back in the 1930s….

“Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders.”

The Federal Reserve is not the solution and it never has been.

The Federal Reserve is the problem.

Any thoughts?

OOPS! – U.S. Government Unemployment Numbers Have To Be Revised Because They Were Off By Almost One MILLION!

What a mess! We all knew that U.S. government unemployment numbers were off, but this is ridiculous. It is now being reported that the U.S. may lose 824,000 jobs when the government releases its annual revision to employment data on February 5th.  How in the world could the original figures be so far off?  The truth is that U.S. government figures have been getting more and more out of touch with reality each year.  Government bureaucrats have been monkeying with the “definitions” of unemployment and inflation for decades, and at this point the figures they give us mean little to nothing.  For example, the U.S. government has been telling us that the unemployment rate in the U.S. is somewhere around 10 percent, while everyone knows that the “real” number is somewhere in the neighborhood of 20-22 percent.

But one thing is for certain – unemployment is going up.  The Labor Department announced on Tuesday that unemployment rose in 82 percent of U.S. metro areas during the month of December.

For those keeping score at home, that is not good news.

And all of this unemployment is starting to create huge social problems.

According to a new study from America’s largest food bank operator, the number of Americans in need of food aid has jumped 46 percent in just the last three years.

A 46 percent increase in hunger in just 3 years?

What is going to happen when the economy really collapses?

So is life good for anyone right now?

Oh yeah – life is really good for the companies that the U.S. government bailed out.  In fact, it was just reported that AIG was scheduled to distribute about $100 million in bonuses to its employees on Wednesday.

AIG is giving out about 100 million in bonuses while hunger and unemployment throughout the U.S. are rocketing into the stratosphere – is anyone else disgusted by that?

The truth is that the whole system is failing and we are headed for an economic collapse.  The U.S. economy is in a slow death spiral, and it is only a matter of time until the U.S. dollar implodes.  Ron Paul is warning about that in the video posted below, and he also says that when the dollar does collapse that it could cause a total breakdown of law and order in American society….

What in the world are the American people going to do when the crap really does hit the fan?

Things haven’t even gotten really bad yet and yet Americans are already more doped up on antidepressants than anyone else in the world.  In fact, Americans, who make up about 6 percent of the population of the world, consume approximately 66 percent of the world’s supply of antidepressants.

What a sad nation we have become.

Really, really hard times are on the horizon, and the vast majority of Americans simply do not have the capacity to handle them.

What a mess.

The 2010 World Economic Forum In Davos, Switzerland – Is Our Economic Future Being Determined By A Bunch Of Elitists On The Other Side Of The World?

If you went out on the streets and asked average Americans what the “World Economic Forum” is, how many of them do you think would be able to tell you what it is?  Not very many.  But it is one of the most important international economic organizations in the world.  It is a non-profit foundation that holds a meeting for world power brokers and key executives from 1,000 of the world’s most powerful companies every year for five days in Davos, Switzerland.  You can kind of think of it as a much larger and much more public Bilderberg Group.  The meetings this year were held from January 27th to January 31st, and there was such little coverage in the American media that you would think that the meetings were of little importance.

Even though we hear very, very little about the World Economic Forum in the U.S. media, the truth is that key global economic policy decisions are made each year at Davos, and often new global initiatives are launched during the meetings.  For example, the Global Health Initiative was launched by Kofi Annan at the World Economic Forum in 2002.  This year, the Bill and Melinda Gates Foundation decided to announce at the World Economic Forum that the foundation will commit $10 billion over the next 10 years to help research, develop, and deliver vaccines in poor and developing countries.

The theme of this year’s meetings was “Rethink, Redesign, Rebuild”, and most of the attendees seemed to recognize that the state of the world economy is not good.  In fact, Spiegel is reporting that the message coming out of the World Economic Forum was that 2010 was going to be a “terrible” year for the world economy.

But why is there such little coverage of such an important global conference in the media?

After all, past attendees of the World Economic Forum include Ban Ki-moon, Condoleezza Rice, Gordon Brown, Hamid Karzai, Queen Rania of Jordan, Shimon Peres, Al Gore, Bill Clinton, Bill Gates, Bono, Tony Blair, Angela Merkel, Dmitry Medvedev, Henry Kissinger and Nelson Mandela.

Very big names gathering each year to make very big decisions about our economic future – shouldn’t that be newsworthy?

But the truth is that the American press mostly ignores the World Economic Forum for the same reasons why it mostly ignores the Bilderberg Group.

The reality is that the elitist global organizations that make the real decisions don’t want us to realize how important they really are.

We aren’t supposed to understand that global policies that impact us all are made on a global level by unelected global elitists who care very little about you and I.

If you do not know about the World Economic Forum, you need to find out.

After all, they are making decisions that are going to affect your future.

The Endless Debt Spiral: Barack Obama Proposes A 3.83 Trillion Dollar Budget For 2011

What would happen to your household if it spent $9,000 every single month but only brought in $6,000 every single month?  Well, you would quickly accumulate a massive amount of debt that you would very soon not even be able to pay the interest on.  You would probably have to end up declaring bankruptcy.  So if it is not okay for your household to spend like this, then why is it okay for the U.S. government to do it?  On Monday, Barack Obama unveiled his proposed budget for 2011.  It calls for 3.83 trillion dollars in spending, and it projects a deficit of 1.3 trillion dollars.  In other words, one out of every three dollars that the U.S. government would spend under Obama’s proposed budget would be borrowed.

In a statement about his proposed budget, Obama warned that we need to start thinking about controlling spending….

“We simply cannot continue to spend as if deficits don’t have consequences.”

That is very true.

We cannot continue to spend as if deficits don’t have very serious consequences.

And yet Obama is doing it anyway.

Not that Bush was much better in this area.  Under George W. Bush, federal budget deficits absolutely exploded.

But now Obama is taking things to an entirely new level.

Obama’s proposed budget anticipates $5.08 trillion in deficits over the next 5 years.  Those projected deficits are 35 percent higher than the White House projected just 12 months ago.

But the truth is that they are still numbers straight out of fantasyland.

Why?
Because Obama’s budget is based on economic assumptions that are outrageously optimistic.  Just check out these numbers that Obama’s budget is based on….

*Obama’s budget projects that the U.S. economy will grow at a 3% rate in 2010, and then will grow by 4.3% in 2011 and 2012.

*Obama’s budget projects a 1% inflation rate in 2010, and inflation rates of less than 2 percent for the rest of the decade.

*Obama’s budget projects that the unemployment rate will remain at 10% in 2010 and then will decline to about 5% by the end of the decade.

So basically the White House expects the U.S. economy to miraculously recover and to grow at a robust pace with super low inflation and super low unemployment for the rest of the decade.

What in the world are they smoking over there?

And even with these incredibly rosy projections, they are still forecasting massive federal deficits for the rest of the decade.

So what if things don’t go so smoothly?

The reality is that the U.S. economy is simply not going to recover.  For a comprehensive look at why this is true, please read our previous article entitled “Economic Black Hole: 20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover” which goes into great detail about the problems facing our economy.

How bad are the deficits going to be if the U.S. economy really goes down the tubes?

That is such a frightening scenario that it is hard to even think about it.

Meanwhile, the watchdog in charge of monitoring the U.S. government’s $700 billion bailout program says that TARP is simply not working.

In his recent quarterly report to Congress, special inspector general Neil Barofsky said that TARP has basically completely failed to boost bank lending and has basically completely failed to halt the spread of foreclosures.

So why did we spend all that money if it isn’t doing any good?

After all, Obama promised that if we helped out Wall Street, they in turn would be more than happy to help out “Main Street”.

But a funny thing happened.

The banks decided to hoard the cash.

In fact, the Treasury Department reported earlier this month that the 22 banks that got the most aid from the government’s various bailout programs have cut their small business loan balances by $12.5 billion since April.

So they are not even lending as much money as they used to.

Ouch.

It seems that very little of what the U.S. government is trying to do is working these days.

But at this point there is not much that can be done.

As far as the economy goes, there are basically two choices.

#1) The U.S. government could try to cut spending and balance the budget, but that would cripple the economy and it would potentially send unemployment soaring to Great Depression levels.  The U.S. would experience a deflationary depression that could take decades to recover from.

#2) The U.S. government could try to stimulate the U.S. economy by borrowing even more money than before and by cranking up the debt spiral that our financial system is based on one more time.  Of course this could very well result in the complete destruction of the dollar and the complete destruction of our financial system, but it is the choice that would keep life in the U.S. somewhat “normal” at least for now.  This is essentially the choice that the Obama administration and the Federal Reserve have chosen.

Because of the gigantic mountain of debt that our society has accumulated, there really are no other alternatives.  We can try to put off the inevitable for a while, but the truth is that we will either be facing a deflationary depression or a hyperinflationary nightmare in the years ahead.

All indications are that the Obama administration and the Federal Reserve are pursuing policies that will lead to a hyperinflationary nightmare.  They are hoping that all of this government borrowing can crank up the debt spiral the U.S. economy is based on one more time.  But ultimately this is only going to lead to hyperinflation and the destruction of the dollar.

When a loaf of bread costs ten dollars a whole lot of people are going to be really pissed off, but it isn’t as if many of us haven’t been trying to warn you.

It simply was not realistic for the American people to pile up the biggest mountain of debt in the history of the world and to think that there would not be very serious consequences.

There are going to be very, very serious consequences.

We did this to ourselves and the fallout is going to be very, very painful.

New Wise Foods

The U.S. Senate Votes To Pile 1.9 Trillion Dollars More Debt On To Our Children And Grandchildren

On Thursday, the U.S. Senate voted to raise the U.S. government debt cap by another 1.9 trillion dollars.  This is another 1.9 trillion dollars that our children and grandchildren will have to pay interest on for the rest of their lives.  The U.S. national debt is rising at a rate that is so reckless and so catastrophic that it threatens to destroy the entire U.S. economy.  It is now becoming apparent that we have created a financial hole that is probably mathematically impossible to get out of under the current system.  Average Americans are becoming increasingly angry at the U.S. government for getting us all into this colossal financial mess.  In fact, one very strongly-worded letter to Barack Obama from a 95 year old World War 2 veteran is causing quite a stir all over the Internet.  More people than ever are waking up and are realizing the the United States is headed in the wrong direction and has been for a long time.

But what else can the politicians do?  If they quit all this reckless spending it would devastate the U.S. economy in the short run.  In turn, the voters would be even more determined to vote them out of office.  So, for their own job safety the politicians in Washington have got to try to stimulate the economy with massive amounts of government money. 

But all of this government spending is only making our long term problems much worse.  Yes, the U.S. government has been able to partially “stabilize” the U.S. economy in the short term by pumping trillions in “bailout” and “stimulus” money into the financial system, but by doing so they are making our long term problems far, far worse.

The U.S. government has piled up the biggest debt in the history of the world and it is increasing at a speed that is absolutely frightening.  What we have done to our children and grandchildren is completely immoral.  We have piled up the biggest credit card bill in all of human history and now we are dumping it on them.

They are going to have to spend the rest of their lives paying interest on the mess that we have made.

What a wonderful gift to future generations, eh?

When Reagan took office, the national debt was already a national crisis, but it was only about one trillion dollars.

Now the U.S. Senate has authorized an increase up to 14.3 trillion.  Just look at what we are doing….

 

How in the world can we ever justify what we have done to our children and grandchildren?

Honestly, how can we possibly look them in the eyes and tell them what we did?

It has been this generation that has flushed America’s financial future down the toilet.

Is anyone else out there getting upset about this?

What this generation has done to future generations is so cold and so wicked and so immoral that it is hard to find words to even describe it.

We throw around words like “billion” and “trillion” so much these days that it seems like they have almost lost their meaning.  Do we actually realize how much a trillion dollars is?  It is such a massive amount that words do not actually do it justice.  To get a really good idea of what a trillion dollars is, just watch the illustration in the short video below, and then ask yourself how we could possibly do this to future generations…. 

What Is He Up To Now? George Soros Declares That Gold Is Now “The Ultimate Bubble”

What in the world is George Soros up to now?  At the 2010 World Economic Forum in Davos, Switzerland Soros recently made the following statement: “When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold.”  So is Soros trying to scare people away from gold?  The truth is that the price of gold did rise about 40 percent last year.  In the current economic environment, there has been a flight to safety as nervous investors have flocked to precious metals such as gold, silver and platinum.  But are these bad investments that are overvalued right now?  Not at all.  The truth is that gold and silver are just about the only things that have held their value over the past 100 years.  An ounce of gold could buy you a really nice suit 100 years ago and an ounce of gold can buy you a really nice suit today.  But now that it is starting to come out that there could be massive reserves of gold and oil in Haiti, we should expect the ongoing manipulation of the precious metal markets only to intensify.  The truth is that the big dogs like Soros want everyone else to get out of gold and silver so that they can swoop in and get more for themselves.

If you are looking for a bubble, you don’t have to look any farther than the U.S. stock market.  Remember all of that “bailout” money and “stimulus” money that the U.S. government injected into the economy?  Well, it didn’t help you much, did it?  Nope.  So where did it go?  It went to pumping up Wall Street.  In a recent article, Bob Chapman did a great job of explaining what is happening….

Liquidity is not flowing into the economy it is pouring into Wall Street to aid and abet more speculation, which has sent the Dow from 6600 to 10,700.

That is why some analysts are calling this a “jobless” recovery.  They think that because the stock market has gone up we are having a recovery.  But it is a lie.  The reality is that the stock market is experiencing a “sucker’s rally” and all the insiders are busy selling their holdings off into that rally as Chapman explains further down in his article….

It should be noted that insiders are selling into the never-ending rally, and mutual funds have very little money flow coming into the funds. That, of course, is our government at work manipulating the market. Just last week insiders bought $18 million worth of shares and sold $419 million.

But let’s not just blame Wall Street.

They are not the only ones responsible for the mess that we are in.

The truth is that we have all made bad choices.  We have all bought stuff made in China for years and years just because it was a few cents cheaper.  We knew that it would put some of our neighbors out of work eventually but we didn’t care as long as we could save a buck or two. 

All we cared about was the lowest price.  In fact, for decades the U.S. government made obscenely lopsided trade deals with foreign nations (that were very much not in our favor) just so that we could get cheaper goods for the American consumer.  We were told that anything that was good for the “consumer” was good for the economy.  “Free trade” (or in other words, other countries getting to send us all the cheap stuff they wanted to) was going to be the solution to all of our problems.

But it wasn’t.

Instead, we found out that there was a very high cost to those low prices.

In his excellent article entitled “The Wal-Mart Model of Self-Destruction: Lowest Prices, Always”, Charles Hugh Smith captured the high cost of our obsession with low prices beautifully….

The propaganda of marketing has so hollowed out American culture that most citizens cannot recall a time that “Consumerism” wasn’t the unofficial religion of American society. And what is the First Commandment of “consumerist religion”? The lowest price is all that matters.

Quality doesn’t matter; we’re going to move/throw it away anyway.

Who made it doesn’t matter. The idea that you might pay more to keep your neighbor employed is akin to worshipping the Devil: all that matters is the lowest price.

The sad thing is that many of you who are reading this article will keep running out to bloated globalist retailers like Wal-Mart just to save a few pennies.  It doesn’t matter that their stores are filled with cheap garbage made in virtual sweat shops all over the globe and that Wal-Mart has probably decimated a large percentage of the local businesses in your area since they moved in.  But on the bright side, they do pay slightly over minimum wage and they do provide part-time employment for many of the people in your area.  Perhaps you can get a job with them when your job gets shipped overseas too.

The truth is that we all need to quit being “consumers” and we all need to start participating in our communities once again.  Instead of supporting a big global chain that takes all of the profits out of your local community, why don’t you go visit the struggling small business down the street instead?  Instead of pumping your cash into the giant shell game known as the stock market, why don’t you help a family member start a business or put it into something real like gold and silver instead?

We are all supporting the current globalist system by putting money into their banks, by investing in their stocks and by endlessly shopping in their stores. 

Imagine what would happen if we all suddenly decided to stop.

Do NOT follow this link or you will be banned from the site!