The Beginning Of The End
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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?

  • Bart

    Has there ever been a time in history when money in circulation equalled or exceeded all credit/debt – I doubt it. As long as there is one person willing to extend credit to another you are going to have this imbalance.

    The big problem we just went through with the credit bubble was that the central banks lost control of the money supply. This led to a global credit bubble, which popped when there was a run on Lehman’s bank because the credit markets froze (largely due to an inability to price risk).

    A run on the bank is when people have a money preference and pull out all their cash. This used to result in liquidity crises like 1907 when the British demanded we pay all our debt in gold. Now, the FDIC pays out on bank runs or the Fed does. We just went through the largest liquidity crisis in history and the Fed handled by doubling the assets on their balance sheet they created trillions in reserves. More importantly this “debt” that is the credit that was extended has 0% interest attached, so as the economy stabilizes the debt-service shoudl be pretty easy.

    You’re right that in our system when we create money we create debt. I prefer direct money creation where Congress creates money to pay for infrastructure and that’s how we expand the money supply.

  • Blade

    Bart…is your last name Simpson by any chance? If I have ten bucks and loan you five there is still ten bucks in circulation!! Hellooo! It is when I go to the printing press and print up another fiver like I just lent you and stick it in my pocket so I still have ten that is the problem!!

    In 1835, under President Andrew Jackson, the US Federal Budget was balanced and the National Debt was paid in full. This has never happened since. This fine man did not appreciate Rockefeller and his fellow printer schiesters!! Get some history knowledge Bart, then you might be smart enough to grow some backbone instead of sounding comically loony!

  • Josh

    Who exactly do we owe all this money to? Let them try and collect it. Worst case we stop spending trillions of the defense budget. Honestly people can’t realize the whole monetary system is scam to turn as all into slaves and deny us much as possible so that New World Order can use all as much output as possible for their own designs.

  • RIck M.

    The problem isn’t the lending or borrowing. i.e. if I borrow a cup of sugar from my neighbor, they don’t expect to have a 5-pound bag returned to them as payment.

    Yes, there WAS a time that money exceeded the debt, it was when the people worked to save for what they purchased, or loaned it without interest. The issue that makes the banking system so very flawed is that they loan money (or a percentage thereof) that was entrusted to them to others with the interest collected from all parties making use of the original individuals actual deposit.

    While one could argue that this is a reasonable thing to do; which it was only slightly less corrupt in intention when there was REAL money, EG: Gold or silver, on hold; the fact that the depositors are now depositing federal reserve notes (which are counted at face value – already fractionally inflated) to be loaned using fractional accounting. THIS is what causes the so-called debt bubble.

    The process cannot go on indefinitely, just as any pyramid or ponzi scheme… sooner or later the whole thing falls apart because there aren’t sufficient real funds to support the illusion.

    The author here is absolutely correct, there isn’t enough “money” to repay the bankers, so the eventual collapse of the entire system is inevitable. Since the debt was incurred against treasury bonds, the only way to repay it now is with REAL PROPERTY since we don’t have real reserves to back it. In essence – they will own everything as it becomes nationalized to cover the increasing debt.

  • Catch-22

    Um, yeah, I agree that we ignored the Constitutional requirement BUT: If we now were to somehow close down the Fed, would you really want to turn over the power of money creation to the current congress? I cannot imagine letting the 535 economically-ignorant party hacks devise a sound replacement. I fear for our republic.

  • ebeye

    It’s ALWAYS been impossible to pay off the “debt”! The interest has to be created, which is more debt! The only way to eliminate it is to repudiate the Federal Reserve and it’s claim of debt upon the people, then revert to either a nationally derived currency, or simply allow any form of currency to be used.

  • http://www.ivamu.com/ Ken

    The Future of Money has been re-invented.

    http://www.ivamu.com/

  • Garynils

    The creature from Jeckyl Island has now officially sealed the fate of ALL future generations of Americans. The really scary thing about this financial meltdown is the historical precedent that has benn established. What is the favorite remedy that corrupt governments use when faced with economic collapse? That’s right. War!
    Philippians 6-12.

  • Russ L. Smith

    So they “doubled their balance sheet” which means that everything lost 50% of it’s value, or every dollar became 50 cents. That will make paying off the debt twice as hard.

  • http://public.bay.livefilestore.com/y1pBYC7LsIJdYJCF7FAACTvi68sBZMj3b0C3RiwLFnFEtBJIbeI17lMu8SB6t2Zdv8-gSQw27jEjwTqpQjGc6GX7w/self-timed%20dad%20-4.JPG Don Robertson

    Yes, it is very alarming the sort of things mathematics can point out. But do not start throwing your money out the window for the wind to catch and take away.

    There is absolutely nothing in the Universe that can be described EXACTLY by mathematics. Why not? Because there are no two things anywhere in the Universe that are so perfectly alike, we can add them 1+1 and say “2” describes these things to every extent possible.

    The American dollar is still coveted by more people on this planet than any other currency.

    Not one in a 100 people reading this post have ever seen a Yuan, a Euro, or even a Peso. Not one in a thousand has one in their pocket!

    I live right on the Canadian border. The Canadians come over here to shop because milk is like $6.00 a gallon in Canada. They come over here to buy gasoline, and fill up five gallon containers they take home in their trunks.

    And on the other border? The Mexicans, and the South Americans crash the border gates to get in.

    The strength of an economy can be measured by the amount of currency that can be floated WITHOUT all that currency causing such inflation that buying power is destroyed.

    You can spend dollars in every country in the world.

    The dollar bill is the currency even the Iranian street vendors -hoard in their mattresses.

    The big economic problem right now is deflation. And it’s a wonderful problem to have, if you have money in the bank, or even if you just have a job.

    The reason for the deflation is, not everyone does have a job.

    The credit economy is the culprit. Put your money in the bank. Leave it there. That’s the best advice anyone can give.

    Forget the debt. No one is asking to have it paid off. No one ever thought it would be paid off.

    Believe me, there are a lot of gold bugs today who are licking their wounds from this pop of their bubble. Expect it to get worse for them too. You cannot spend gold at the local hardware store.

  • Jim

    Keep a written journal of these days and your perception of them. What you knew and what is. They will be a window into darkness and why.

  • Truthteller

    Turn the Fed into an actual department of the Federal Government or amalgamate it with the Treasury. Money can then be issued without interest having to be paid to a private bank. At one stroke, a large part of the current debt can be removed as the debt owing to the ‘former Federal Reserve’ would be cancelled. Or is this too simple an idea?

    • Mr. Universe

      It is an excellent idea, i can just see a hole in it though, if we were to impliment this plan, whats to stop the government from collecting the debt from it’s citzens??? just wondering very, very good plan though.

      Simple solutions are often the ones that are the most overlooked

      Sincerely
      Mr. Universe
      I am watching…

  • WOLF

    Why the Fed & The National Debt Are Illegal
    http://home.iae.nl/users/lightnet/creator/nationaldebt.htm
    This Awareness indicates that you must understand that when the Federal Reserve bank, the privately owned Federal Reserve bank, was given authority to print Federal Reserve notes instead of the Treasury Department writing the Treasury Notes as directed by the U.S. Constitution, these Federal Reserve notes were not printed to be given out to the economy, in the way as the Treasury Notes of the Treasury Department. Rather, they were loaned to the U.S. government and then circulated into society, and society was required to pay back interest on the IRS notes and that amount of interest accumulated to the point of approximately 5 trillion dollars at this time (Revelations of Awareness newsletter issue no. 430 1994), to where, if everything in the United States were sold, half of the debt would still be owed.

    This Awareness indicates that the Treasury Department has the potential for totally denouncing the Federal Reserve debt of 5 trillion dollars because it was illegal in the first place. The Treasury Department in the U.S. Constitution is the only proper way of financing the nation; Congress, operating the Treasury Department has the right to mint and coin money, and set the value thereof.

    This Awareness indicates that in this fact, the Federal Reserve was never given any such a right, even with the vote of the Congress, because Congress did not have the right to relegate its obligations to the Federal Reserve, therefore the entire debt of five trillion dollars, because it was illegal in the fist place, is not forcible in a technical sense.

  • MisterMoney

    Inflation is the plan!

    The debt can be repaid in cheaper dollars, so these politicians think, when the dollar drops in value, and they are able to raise more taxes at higher levels. But this only works if wages and earnings raise in tandem with inflation.

    For example, if sales tax is 6%, and I buy a can of beans for a $1.00 I pay 6 cents in taxes. When inflation hits and that can of beans now costs $3.00, I pay 18 cents in taxes. And my higher wages or salary move me up in the tax brackets, so I pay more taxes on the inflated dollars, as do corporations.

    The politicians will never say it, but that is the plan, just inflate this debt down to zilch, public be damned.

  • Rob

    Bart,

    I applaud your attempt to explain the situation… but it sounds like you are reciting a Economics 101 text book, and no offense intended, it would seem that you are not entirely knowledgeable of the facts.

    Your post is entirely ignorant of the politics behind money.

    What lead to our current situation? Your statement that the central banks lost control of the money supply is over simplification, at best, ignorance at worst. Over the past two decades, at the behest of powerful interest groups and lobbyist, Congress dismantled and restructured the then existing regulatory restrictions that protected the economy from the text book situation which you described. And the result? It was predicted many years ago… screamed from the mountaintops for anyone to hear. But no one paid attention. Technically those vested with the power to create law don’t actually break the law. When the regulation and rule of law are manipulated, the eventual outcome of those changes are predictable. Knowledge is power. Ignorance is misfortune.

    As for runs on the bank… your illustration is a far cry from anything other than an illusion. While it is true that banks do not carry ready reserves of Cash on Hand to cover the cumulative balances of their accounts, the monies of the accounts themselves are properly recorded in the banks ledgers. Customers would not need to demand the balance in full, in cash. They could demand a cashiers check, or they could simply walk into another financial institution of their choosing and write a draft or check to transfer their monies from their old bank to their new institution. In the event of a bank failure, the proper action would have been to let the bank fail, at which point its assets would have been seized by the government, it deposits covered (to an extent) by FDIC, and then liquidated or managed in probate to recover losses on behalf of the injured parties. No Bail Outs would have been required. But there would have been a full accounting and investigation of corruption, mismanagement, maleficent, etc. Instead TARPs and Bailouts were appropriated and the monies were used to pay up to 100% on the dollar to the banks themselves, and subsequently the looting and pillaging of America began.

    Let there be no doubt that our current economic crisis is very real, far from over, and deliberately engineered. What are the short and long term implications? As for credit and liquidity, Wall Street is flush, but Main Street has dried up. TARP funds and various bailouts have been used, not to extend credit to Main Street, but rather to starve out the middle class, small and medium businesses, local banks and middle America so that those whom have access and control of credit may buy up practically anything and everything of value for pennies on the dollar. Classic and textbook “Grapes of Wraith” Economics 101, where the Barons and Tycoons of Industry run rough shod over desperate peoples in tough times. The gains are privatized and the losses are socialized.

    As for the long term implications… Doubling the money supply with 0% interest devalues the dollar and lends itself to several carnations of inflation, which may only be offset by artificially dampening cost of infrastructure and labor. In other words, importing cheap labor and exporting manufacturing and industry. Ring any bells? Ironically this only excelerates the phenomena.

    Ultimately, this incomprehensible level of debt may only be solved one of two ways, if not both: 1) The yielding and merger of the American dollar into a new hyper national or international financial union, or 2) Negotiation or Eradication of Debt via the Conquest of Wars and Treaties. Hmm… have you been watching the news lately? G8 What? U.N. / IMF / World Bank are doing what exactly? What treaties have been pending on the horizon? Pray tell me, what exactly were the goals of The Project for the New American Century and the Council on Foreign Relations? Please tell me that you are at least somewhat familiar with the organizations that advise and create the policies that our Congress reviews and our President enacts as policy?

    Bottom line: this is an engineered crisis with but one ultimate goal. Not merely the consolidation of wealth, but a consolidation of Power. The Federal Reserve itself has undergone consolidation. And Wall Street. And Main Street. And soon… as we continue marching towards globalization via Conquest and Treaty and the expansion of Power… Our National Sovereignty.

    And although I most certainly agree with you and applaud you on your preference for direct money creation where Congress creates money to pay for infrastructure to expand the economy, alas, there too you have unwittingly overlooked or intentionally omitted several key details.

    Although Congress does have the constitutional authority to mint coin and regulate the value of domestic and foreign monies, and does stimulate the economy with monies spent on militaries, infrastructure, and commerce, it ultimately can not and should not be responsible for insuring our economy. That said, for better or for worse, with our burgeoning debt our prosperity is being washed away.

    Debt is slavery. Expanding the money supply with fiat currency is a devils game. The only thing that truly generates wealth is labor and resources. You can not exploit resources without access, be it public or private, to land. Be it beef, beans, or bread, or be it lumber, steel, silver, or gold, without land the supply to resources is severed, and with it the capacitance for manufacturing and industry are also severed.

    We could easily transform our fiat money supply into that of one based entirely upon industrial and agricultural commodities, in addition to gold, silver, and other precious metals. But there in lies the crutch. Energy. For mining and harvesting, refinement and manufacturing, and for transportation.

    What, pray tell, has our current economic crises entailed? Hmm… Land, I.e. Real Estate. Commodities and Industry, I.e. Main Street and Jobs. Energy, I.e. oil, gas, coal, and electricity. Financing, I.e. Credit, cash, and liquidity. What exactly have been several of the key issues facing most people these past several years?

    Do you see the pattern yet. Do you recognize the cause, the reaction, the solution? It is NOT simply a matter of the central banks losing control of the money supply. It is about consolidation of financial and political power. Period. Once anyone realizes that, they will be better able to cope with the difficulties at hand and work towards regaining their financial footing, and hopefully, eventually, return to being financially independent.

    When you are ready to set aside that primer for Economics 101 and start learning how things really work, I will be not only applauding you, but cheering you on.

    Best wishes.

  • Jason Seagraves

    It is not “impossible” for the national debt to be paid off. It could theoretically be paid off without inflation, in fact. It would just take time.

    If the money creation was halted, for example, the debt could be paid off over a very long period of time in the following manner:

    1. I am taxed $100.
    2. The government uses my $100 to pay down the debt to China.
    3. China uses this $100 to buy a product from my company.
    4. My company is taxed on this sale.
    5. The government takes that tax money and gives it to China, again, etc., etc., etc.

  • bob

    Improbable, but not impossible.

    United we stand!

  • Tom Dennen

    SOME BROAD NOTES ON THE HISTORY OF MONEY (Without the complicated detail).
    by Tom Dennen, author of ‘Grand Theft, Planet or Heidi’s Free Bar & Grill’ – (free on the Internet).
    Most of this is probably deliberately scattered all over the Internet, and, if one just looks around a bit, people like me can pretend we have connected some dots.
    (There is, incidentally, nothing in here about the role Switzerland played in the years under scrutiny.)
    BUT:
    *Study the ancient goldsmiths’ discovery of fractional lending and usury.
    *Read Book Six of Tacitus’ “Annals of Rome”.
    *Read “The Great Reckoning” by James Dale Davidson and William Rees-Mogg.
    *Consider the fact that you spend twenty of the most productive years of your life paying off a mortgage (deathcage) bond.
    *Wake up. This might help:
    “Apocalypse” is a Greek word meaning “the lifting of the veil between you and God,” (or Knowledge or Reality).
    “The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin … Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again … Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in … But, if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit. ”
    Sir Josiah Stamp, director of the Bank of England and the second richest man in Britain in the 1920s, speaking at the University of Texas in 1927.
    “In a dark time, the eye begins to see,”
    Theodore Roethke.
    “CAPITALISM IS A SYSTEM THROUGH WHICH WEALTH IS REGULARLY TRANSFERED (STOLEN) FROM THOSE WHO CREATE IT TO THOSE WHO ARE ALREADY WEALTHY, WHILE THOSE WHO CREATE IT ARE KEPT UNAWARE OF THE THEFT BY ‘THE MATRIX’ ” – t.d.
    “All wealth is created by work.” – Adam Smith.
    It’s becoming clear to many more people every day how the ‘matrix’ – the system – works, and how the Internet is the leaky bucket out of which the truth (Apocalypse) is flying and the leaks – like Ellen Brown, Rense, What Really hAPPENED ET AL, are hopefully out of control.
    Since the early goldsmiths discovered fractional (reserve) banking, (created money out of thin air) and introduced predatory lending, they have been thrown out of every courntry they set up in, after which those countries returned to resource-based economies and went through several decades of economic recovery.
    Until the sixteenth century, in Holland.
    Then and there, when the goldsmiths were discovered plying their usurious debt / lending system, the already wealthy government and merchant classes simply joined them in the first full “collusion among corporatocracy, authoritarian government, controlled media and education.” – Fascism. (Global Research).
    Add bankers to that conspiracy and you have the recipe for the last three hundred years of fiscal theft through market manipulation by ‘The Establishment’, The ‘Elite’, the ‘Illuminati’ or the “Rothschild Family’, take your pick, but once government was in on the scam, the wealth that the lower and middle classes created by work was harvested every fifty years or so.
    Holland was, I believe, the site of the first experiment in money market manipulation by this collusion of classes.
    ‘Tulip Mania’ is regarded as seriously silly season stuff among some debunkers, but which today is also a generic for an ‘out-of-control’ Bull Market.
    The thing is, it was for keeps.
    ‘Tulip Mania’ is a controlled boom situation; controlled by those who run the Great Wealth Shift every generation, starting with the South Sea Bubble crash in 1720.
    This set of conclusions is largely gathered from a monetary history according to James Dale Davidson and William Rees-Mogg: Every fifty years or so since the South Sea Crash, financial markets have peaked – and exactly nine years later, crashed – followed by a depression during which, bracketed by expensive wars, vast amounts of properties have been foreclosed and the ‘masters’ transfered huge amounts of the wealth accumulated by the working class – “all wealth is created by work” (Adam Smith) – who were left to starve.
    Just like today.
    THE SHIFT IN WORLD ECONOMIC PREDOMINANCE
    “All long-term credit cycles end with asset crashes in the markets of the leading economy. Measuring from crash to crash the dates of the modern credit cycles are as follows:”(starting with the South Sea Bubble)
    Span Duration
    1720 – 1772 52 years
    1772 – 1825 53 years
    1825 – 1873 48 years
    1873 – 1929 56 years
    1929 – 1990 61 years
    “The crashes and resulting depressions appear to be less intense and traumatic when the end of the cycle does not coincide with a shift in world economic predominance.” – The Great Reckoning, James Dale Davidson & William Rees-Mogg, 1993.
    Recent benchmarks are Common Cause:
    1907 Financial Panic
    1913 The privately-owned American Federal Reserve (FED) System Created
    1929 The Great Depression – (Nice work, FED and Benjamin Shalom B. is returned to office!!)
    1933 Theodore Roosevelt’s Executive Order 6102 outlaws owning gold
    1934 Gold Reserve Act freezes gold at $35 per ounce
    1971 United States abandons gold standard
    1974 U.S. citizens allowed to own gold
    2009 Gold exceeds $1100 per ounce
    The depression following the 1990 crash is fully upon us and the consequences are global because we are in the middle of the biggest shift in world economic predominance.
    We will not see the end of it for a long while – all we will see are futile reports of the transfer of huge amounts of money to the banking cartels and hear their stories of ‘green shoots’ and ‘recovery’.
    Until people are back to work there is no recovery.
    The essence of fiscal control is not race, religion or nationality but just a passion for control over other humans.
    SOVEREIGN MONEY
    Both Lincoln and Kennedy were assassinated after introducing sovereign currencies, which were quickly removed from circulation after the killings.
    What happened to Schwartzenegger’s IOUs? They were de facto sovereign currency paid back on maturity by the state at a 3.75% interest.
    (It took the entire western world including Russia, incidentally, to crush Hitler who had also introduced sovereign money against the web of banking debt).
    When the directors of the Bank of England asked what was responsible for the booming economy of the young American colonies, Benjamin Franklin explained that the colonial governments issued their own money, which they both lent and spent into the economy:
    “In the Colonies,” he said, “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.” (Wikipedia)
    One of the most significant – and Apocalyptic – leaks is Ellen Brown’s book, ‘Web of Debt’ along with the Global Warming lies now out in the open.
    The Bilderbergs / governments / banks / merchants / landowners / fake scientists / Big Pharma and the rest are now too big not to fail at keeping their secrets.
    Solution?
    This will set us free:
    Return to resource-based economies.
    Do not borrow unless it’s from a state, county, city or people-owned bank that does not charge interest.
    Gather together and itemize all the resources of your community and learn to barter.
    Keep your wealth to yourselves. – you created it.
    Above all, don’t listen to snake oil salesmen like Obummer and Al Bore who are just stealing while callously killing your children for money.
    (Required reading: http://www.lexrex.com/enlightened/articles/warisaracket.htm
    Tacitus, “The Annals of Rome”, Book Six).
    (Optional: http://whatreallyhappened.com/WRHARTICLES/grandtheft.php)
     
    THE BUSINESS OF BANKERS IS WAR, SO:
    “I am as intolerant of imperialistic designs on the part of other nations as I was of such designs on the part of Germany. The choice is between two ideals; on the one hand, the ideal of democracy, which represents the rights of free peoples everywhere to govern themselves, and, the ideal of imperialism which seeks to dominate by force and unjust power, an ideal which is by no means dead and which is earnestly [sought] in many quarters still.” U.S. President Woodrow Wilson, July 1919
    “Fight and kill the disbelievers wherever you find them, take them captive, harass them, lie in wait and ambush them using every stratagem of war.” The Qur’an (9:5), Islam’s holy book
    “We are fighting them (the terrorists) over there so that we won’t have to fight them here at home.” Former U.S. President George W. Bush.
    “I, like any head of state, reserve the right to act unilaterally if necessary to defend my nation.” U.S. President Barack Obama, December 10, 2009
    “When the tyrant has disposed of foreign enemies by conquest…and there is nothing to fear from them, then he is always stirring up some war.” Plato, ancient Greek philosopher (428/427-348/347 B.C.)

  • Truthteller

    Ken, have checked out the IVAMU site. What happens if this ‘golden paper money’ is burnt to extract its gold content in the way that gold coins used to be ‘clipped’, which was the reason why gold coins gave way to coins of base metal content?

    (There may be a solution contained in Thunderhawk’s views in this forum: http://www.democracyforum.co.uk/economy/70530-can-we-live-without-money.html)

  • http://www.cashbull.blogspot.com SF Mechanist

    One word: velocity

  • Glenn Peters

    This article articulates the money supply methodology using fiat currency fairly well, but it omits the one aspect that all such criticisms do: time. It is disingenuous to mis-match securities to day zero. Asking for every dollar loaned over widely varying periods of maturity to be immediately returned is nonsensical. To put it in microeconomic terms, an individual on a $50k salary who borrows $200k, will pay about ~$1.4k per month over 25 years @ 7% pa. Were the borrower asked to repay the entire sum TODAY does that mean the borrower is insolvent? No. The borrower has 25 years of income, which if NPV’d at a 7% discount rate, shows the borrower is quite solvent. If these data sets for US debt are to be put in their correct perspective, GDP must be summed for the same period at the debt, or its average maturity. To present the debt as a fraction of one year’s GDP only is just bad math. Yes, I’m an economist, and yes I used to work for a bank :)

  • http://www.bibocurrency.org marc

    The article is correct in its assumption but the explanation is not complete. To understand perfectly how the system works and why it is inherently unstable go to http://www.bibocurrency.org and read the bibocurrency rationale.

  • http://www.razorlip.com marcelino

    Depressed and now have a headache before starting my day, thank you! :) great post.

  • web ether-net ideas

    1. Eliminating the Fed is not going to happen. JFK tried and look where he ended up.
    2. Ever since government stopped guaranteeing $$$$ with gold – $$$ have no real value, its just paper with very nice pictures.(the value is based on believe, good faith, call it what you want)
    3. The debt national debt vs.currency in circulation/treasuries/etc everything is connected/ the amount of currency + fed % rates moderate inflation/ but at the end it doesn’t really matter/ money is created on the computer screens now, and we see printed currency only in the evens like bailout (which by the way wasn’t the first one, probably not the last either)The rest is being recycled..
    4. Catch-22 – congress is a bunch of puppets directed by the corporate sponsors (donations, donations, donations) or otherwise purchased just like in the mall.
    5.IVAMU???? is this a joke idea? the only sensible and logical thing to do would be denationalization of money – anyone interested in what it is – read DENATIONALIZATION OF MONEY -ARGUMENT REFINED BY F.A. HAYEK. (as to practicality it would have to be applied, like every theory, but it makes sense)
    6. To control society you don’t need debt – but ignorance, and fear factor (but there is no 50K to win)
    7. someone mentioned WWIII on the discussion board, “i wonder where would it take place this time” because last two did not touch USA (oh yeah Pearl Harbor)could prevent it, but there had to be some excuse just like 9/11.
    8. dont have this one
    9. i like to see both side of the stick, and i would really like to see the other one….
    10. Ups i did it again, 1913, 1920-30,1984 ups 1987, 2007-09-…ongoing. craps 2012 uuuuuuuu pt. 6

  • web ether-net ideas

    o just remembered nr.8 – global warming – or should i say climate change – or should i say natural change scientifically proven. I think i remember reading something about orbital changes and distance that the earth changes – similarly to 4 seasons

  • Jemolina

    If you lend a cup of sugar you expect to get back something more than the cup of sugar, to make up for the fact that you’ve incurred a cost in going without the sugar and risked it never being returned.

    Money is not required for repaying debt, so the premise of the article is bunk. Suppose the debt is to China, for the supply of a billion t-shirts, 200 million microwave ovens, etc. To repay the debt the US has to create a billion t-shirts, 200 million microwave ovens etc (plus interest) more than it consumes. The important bit is that the debtor’s production must be more than its consumption.

    Now introduce money into the equation and start from zero cash in the US. The US has assets such as mining rights, so they can sell something to a dollar holder for cash. The cash can be used to repay debt, or it can be invested in productive activities which generate a profit. The tipping point for a country being or not being able to repay its debt is not related to the money supply. What you need to look at is the relationship between productivity, consumption, assets, debt and interest rates. Current and future generations of Americans need to (a) produce more than they consume to make up for the past generations which consumed more than they produced. Or they can (b) reject the inequitable system and default. Or they can (c) embrace the inequitable system and use the world’s largest military and most brainwashed population to go on a global pillaging spree in the name of freedom. My money’s not on (a).

    Remember, when a debt is repaid with money it is the debt which disappears, not the money. The money continues to circulate so a penny can pay off an infinite amount of debt.

  • Trent

    Lol barts a moron, sound like he gets his “information” from mainstream media. Like listening to an exact recording of the “news” on national tv. Wake up FOOL, youve been had!

  • Greg

    One major flaw in the argument. Your right on how the money supply works and expands, but your forgetting that money is still just pieces of paper floating around. They really do not have value. Our goods and services are what really has value. How would it be mathematically impossible to pay back our debt with our goods and services when our debt has not yet even reached the dollar amount of all goods and services we produce in 1 year. Not even one year worth of our goods and services (GDP) would be needed to pay the debt back. We have had much higher debt in the past comparably. This is if you actually look at our debt compared to GDP. This is like you would look at your own debt compared to your income in your household. If my debt was equal to my income this year, I might be very worried, but it’s not the end of the world.

  • http://www.socialism.nl jos boersema

    Hi, the founding fathers of the USA also said (iirc) that the people needed to be educated. For ppl (like me) who are not professionally in banking the money issue (in full) can seem complicated. I think that for sufficient political oversight #1 thing for a new system must be simplicity. Only what is simple people can understand, only what people can understand they can inspect, police & keep righteous.

    What do you think of this system: a Gov issued fiat, legal tender law, fit for debt, and taxes payed in it. Now the money will work as money in exchange. Then a central gov owned bank as the infrastructural backbone, with collective accounts for banks (privacy from gov). Retail account & savings account services banks who are prohibited to lend out a single dime (inspected by gov), by law prohibited to lend anything. Then a separate mortgage & consumer credit sector, also heavily policed by gov. By law nobody can resell a loan to a third party. Then a third sector which handles business upstart & expansion credit, these investments are in the form of plain loans and can neither be traded to third parties.

    It is my understanding that this third sector has to be dominated by political will of the people, to prevent that sector from growing up those tiranical and corrupt corporations the USA founding fathers may have talked about.

    The money would then be spend into circulation and taxed out of it, the government never lends a single coin from anyone (only taxes). As a rule the (next) government never pays back loans, so that future govs won`t be able to get credit either …

    I`d say this is simple, what people expect too. To round it off: international businesses are prohibited henceforth, and politics rules on import/export tariffs to protect its markets and industries out of long term self interest (at a cost to global economic effeciency). This program also requires the government to be a faithful true democracy … …

    Is this something, if not why ? I personally don`t believe in gold / silver money that much. (Sorry to post such a long comment.)

  • Bud Selig

    The reason the status quo exists is because of ignorance. Politicians, Bankers and the “Elite” rule because the sheeple can’t grasp what is going on and are complacent slaves oblivious to puppeteers manipulations. Our “Leaders” in this country are only in control of the destiny of our nation to the extent that they are allowed. If the sheeple were able to peek behind the curtain the revolution would already be upon us. “taught” (in congress) and the president If the government is able to keep

  • http://www.youtube.com/watch?v=SdF056ZfGM4 Earth Died Screaming

    What we are seeing is the last and greatest betrayal of the American people. Next stop, serfdom.

  • Margo

    Okay people, let me make this simple. CHINA owns us. Technically, at any moment, they can say – we want our money. And guess what? We can’t pay it. You know HOW we can pay it back though? Obviously not with our money…. (it’s worth nothing) We don’t have enough gold. But we do have real estate…. Yep, they can collect our collateral… Our precious land. And guess what else? The Chinese are COMMUNIST. SO, I guess our freedom IS for sale– Is there ANYONE out there with ANY kind of economic sense? Because this Congress and this administration are KILLING us (or at least SELLING us!)

  • http://www.fonepays.com/ TimJowers

    Josh,
    The money is owed to yourself and other Americans. Social Security money has been wasted and effectively funded Wall Street Bonuses this year and last year. Same for other liabilities (medicare!). So, when you portend the money will not be paid back then you are correct. The only problem is the losers are working Americans. Not Billionaires. Not Congress persons. Not the FED or their posse for sure! Fractional banking is a simple system to steal from those who produce value and give to those who control the printing press. Very simple. Very effective. (BTW, the legal limit in the UK is 666 fake credit bubble pounds to every actual pound on deposit. At least one bank made it up to 66 to 1 in 2008.)

  • Big M

    The debt is phony, and the people of this country didn’t sign anything agreeing to pay off loans that didn’t go to them.

    Each state legislature should immediately declare its independence from the brothel in DC, confiscate every military base within its borders (they paid for them, didn’t they?), start their own state banks, COIN their own money, and tell the criminals in DC to pound sand. The CONstitution isn’t legally binding on ANYBODY, and never has been, which means that the criminal syndicate calling itself the federal government has neither legitimacy nor legal authority.

  • http://www.fonepays.com/ TimJowers

    Here’s how I see it:
    Fractional banking is a simple way to steal from those who work. For every $1 you earn from working, they print $1 or so for themselves; so, no matter how hard you work, you will never get ahead.

    Josh, Its actually worse than you portend. The theft is from each American in the way of Social Security, Medicare, etc. That money has been stolen and is gone.

    “Fractional banking” is criminal. It is a way for those who do not work to reward themselves and take from others. Imagine if you offered auto insurance to all your friends and neighbors. What if one had a wreck and asked you to pay? How is this any different than what AIG did? The difference is they control the government and can take from the taxpayers. You cannot. The same for the FED. Imagine if you borrowed money from all of your friends and family to the point you borrowed $10,000 but you only really had $100. Well, that’s fractional banking. To make it worse, imagine if you never even had the $100 in the first place but your brother had given you an IOU for it – even though he himself was broke! That’s how the Federal Reserve Banking System works. Its a simple con job on trusting Americans. And it has destroyed the USA.

    (The legal limit in the UK is 666 to 1. One banks was leverage 66 to 1 in 2008. They are all probably higher now since the derivatives markets are back in the stratosphere.)

  • http://www.fonepays.com/ TimJowers

    Glenn Peters,

    Do you have any idea what GDP is? Step out of the box and think about it for a minute! GDP is a measure of “tax ability” NOT productiveness. I’m sure you know how its components but others should look it up. Its good for a laugh and a cry. Anyone who quotes GDP as having any meaning to value of a country’s workforce and value of th country’s working people is either brainwashed, on the take, or ignorant of the facts.

  • Mockan

    The Elites “solution” to this problem was always for the Elites to move their financial operations to countries that still have wealth not yet appropriated, formally dissolve the USA Constitution, dissolve USA sovereignty, and make the US military the official enforcement arm of the United Nations (that is what Elites in control of the UN have wanted to protect “their” wealth, and prevent any other countries from threatening their power and control). The actual solution is going to be global rebellion against the Elites, denial of validity of all their ownership contracts, their apprehension, and execution. All assets will be returned. There will probably be some form of globalization, but not run by criminal organizations.

  • Spencer

    I believe there was a president who went against the norm and began printing U.S Notes – but he was killed soon after.

    I’d say what’s missing from the article is that the US debt (including unfunded liabilities) is over 100 Trillion. Like the Romans, they promised much more then the state could deliver to their overly vast military and other government run organizations.

    Though I don’t know how much I disagree with fractional reserve. Lending permits new companies to exist, you might even say that the west is so well developed because of its lending system…..but that’s just a thought, not a statement

  • Spencer

    strike last comment – he addressed unfunded liabilities in an update

  • Ted

    Thank you Obama, Pelosi, Reid, et al for further adding to the debt by their socialist system of entitlement!!!!!!!

  • PBS

    Cash in circulation can exceed debt/credit. Yes. How? whn people start putting more money under the matresses and not in Bank

  • Sleuth51

    What is the value of real estate owned by the government? How much of that could be sold and leased back to cut the debt by, say, 60%? There must be all kinds of hidden assets that the Ruling Class don’t want us to know about. What if we cut our defense budget to $100 billion a year, cut all foreign aid… daydreaming. What a bunch of crocs we have in Congress. Go Green, Recycle Congress. SERFDOM Or FREEDOM.

  • wayne

    The federal reserve did not lend us any money. They lent us paper. Pay them back with reams of paper. If their paper is worth something just because they say it is then so is ours. They aren’t God; they’re just a bank.

  • Jim Hatfield

    Here’s some solutions and suggestions:

    1. Setting up local currencies in your own town or city

    http://www.newrules.org/retail/article/new-deal-local-economies

    2. Tangible bartering for services and supplies within your community-keep it local

    3. Get back to farming-organically-support your local farmer’s market or participate.

    4. If you have to spend money, don’t spend it on the big corporations-give it to the local guy (even if its a little more expensive).

    5. Stop participating in what the establishment wants us to participate in. The U.S government/ world banks/the UN/the Fed/the Media-> ALL IN BED TOGETHER-THEY DON’T CARE ABOUT US!!!

    Watch:

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

    http://www.youtube.com/watch?v=VebOTc-7shU

    6. Buy commodities-seeds, food, precious metals…GET OUT OF THE DOLLAR!!!

    http://www.theinternationalforecaster.com/

    7. Make and invent your own energy and money saving ideas-> Google: “Suppressed Energy Technology”

  • WeOweWho?

    Who do we owe money to? We don’t owe ANYBODY a dime. The money is created as a means of exchange and tender. That is what the CONSTITUTION states.

    What the filthy, lying FED is doing is tacking on their MONEY-CHANGER fee. And we all know WHO the money changers are. They want to live a life of EXTREME wealth without having to work for it.

  • Bob

    All this debt… who made profit from it and why??? I paid my house twice its value because of interests, but the money I was lent by the bank was pure invention from the bank… they did not have the money they lent me ( they legally need to have 10% ) of what they lend and the rest is AIR but I have to pay them interest on that AIR. It seems that the problem is the thiefs of the banking system and the Federal Reserve … and whoever profits from the interests on inexistent money… are the very persons who are taking the world’s economies hostage (some form of real slavery). The Federal Reserve + the banking system is THE problem.

  • http://www.nygulag.wordpress.com Dara

    Ace post – here’s more on the Federal Reserve/Rothschilds who also own the Bank of England and set the Gold Standard.

    Lincoln also stood up to them – end of Lincoln.
    Jackson, being a canny Ulsterman survived many assassination attempts.

    Hamilton was allegedly the Rothschild’s inside man who tried to set up a Bank of America similar to their Bank of England.

    They make their Banks and establishments appear to have Government status, and own 50% of the world’s assets.

    the dynasty started with goldsmith Amschel Meyer who nailed a red shield to his door and called himself Rotschild. The House has bankrolled most major wars and profited handsomely therefrom. Not for all their fortune would I want the blood of one soldier on my hands.

    Apparently five TRILLION dollars disappeared in the first week of the bankers bailout…and another 4.8 billion since…?

    The Obama Deception
    http://www.youtube.com/watch?v=eAaQNACwaLw&feature=fvw

    http://www.youtube.com/watch?v=USGSOViaulc rothschild and american history

    http://www.youtube.com/watch?v=CkzFbKeK5kM&feature=related
    Who are the rothschilds

    http://www.youtube.com/watch?v=8F4IGwuKdUQ&NR=1 Rots vs people econs

    http://www.youtube.com/watch?v=8F4IGwuKdUQ&NR=1 Rot econs 101

  • Cody

    The problem that is not addressed here is not money creation, which through fractional reserve banking gives banks the power to create credit from nothing. The real problem is interest. When the money supply is expanded via fractional reserve banking it creates more money to be injected into the money supply. However loans also charge interest. Only the money created for the loan contract or principal is actually distributed in the money supply. The money to pay the interest is not created in the money supply, thus creates a system of perpetual inflation. This is a lose-lose situation for the person taking the loan for not only does the amount of money in the money supply not even exist to pay off the interest, but the original loan that was taken devalues the money we already have. This means that not only are bankruptcies inevitable, but everyone is taxed subversively via inflation.

  • OSKR

    It’s sad read about how certain people on this blog try to make others feel IGNORANT because of thier lack of knowledge on the subject. This is a place where people from all over come in and pitch in their thoughts and opinons about whats happening to our corrupt financial system. This not to see who is the brightest in financial analysis and to see who is good about historical facts. so do us a favor the next time u post something dont make remarks about how dumb someone is in regards to the situation because honestly, its only shows how full of BS you really are.

  • web ether-net ideas

    how about we go back to barter system???? i was arguing with one of my economy teachers that barter system was actually efficient… the argument was: how can you value a dozen eggs, or something of that sort… well for one person a dozen eggs can be worth a pound of flour, for other gallon of milk, another would provide a service like a roof repair or something. You bargain and come to a mutual understanding of your product/service value, at the same time the product/service might be worth more/less in a different situation. But then again modern economists disagree due to inability of disregarding those “modern unified rules” of value…. but that’s what the real barter system is about there is not prescribed value to anything you make it your own… (and actually this system has been proven by the guy who exchanged a paper pin for a house- check out this story)

  • Bystander

    Saying money doesn’t have any value is a ridiculous claim. If you really believe it i will be more than happy to come to your house and relieve you of your excess paper. The value of anything is the result of supply and demand. The demand for US dollars derives from the laws mandating they be accepted for all debt public and private. The supply results from the government putting money in circulation. Where supply and demand meet we find the value of something. Paper money has no more or less inherent value than gold or anything else. You can’t eat either, both will fail in getting you to work or sheltering you or your family. There value is determined largely by the rules and mores of society. Money from our laws, and gold from the fact that people like shinny things.

    I have no problem with the Fed, actually i trust the fed alot more than i trust the (current) congress, president, and alot of people. Our problems are big, but not insurmountable. We don’t have to worry about paying off the national debt immediately, instead simply balancing the budget would do alot, since with economic growth a constant nominal debt value will decrease as a percent of our economic if the economic is growing.

    The problem is geting the economy to start growing. And in order to do that we need to create a friendly environment for business. Another tough, but not impossible thing to accomplish.

  • Get Real

    United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coins are not legal tender for debts. (31 USC Sub IV Ch 51 Sub 1 Sec 5103)

    Unfortunately for The Fed they screwed up when they passed The Federal Reserve Act and failed to void the ability of Treasury to issue its own non-debt-bearing currency which is also legal tender. It requires only an executive order to implement

  • Joe Blow

    The mounting debts are deliberate and are but a tool to take this country from the American citizens. Furthermore, this discussion ignores the effect of crude oil on banking and money. A comprehensive discussion includes the effect of the petrodollar system on our currency. With that, we should include the impact of holding more crude oil within our borders than all the other proven oil reserves on earth. Here are the official estimates:
    – 8-times as much oil as Saudi Arabia
    – 18-times as much oil as Iraq
    First, investigate the Williston Basin, more commonly referred to as the ‘Bakken.’ It an area stretching from Northern Montana, through North Dakota and into Canada. It contains over 500 billion barrels of oil. Also, since 2006, it’s been common knowledge in the oil industry that 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world. It holds more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction. In four years of high oil prices none has been extracted and nearly all of us are unaware of its existence. These oil assets are coveted by the international banking cabal and the largest multinational industries because in a world reliant on crude oil, oil can be used as currency between nations. The size of ours guarantee global predominance. Currently the major multinational banks are colluding to take this wealth from the American citizens. They are in the process of creating a spectacular economic collapse of our fiat dollar system. With it will come a tremendous drop in our standard of living. This means more than resorting to “Hamburger Helper” instead of filet mignon. It means increased infant mortality rates and decreased life expectancy. Afterwards we will surrender our constitutional government and our natural resources for the promise of regaining some modicum of our standard of living and relative affluence. All the while we would possess the means and the resources to pay the debts they incurred for us, enormous though they may be. Sad to say it, ladies and gentlemen, but control of our government has been taken from us and now we begin to pay the price for letting it happen.

  • web ether-net ideas

    Bystander_ why don’t you then start printing your own money and see where that takes you. Any country’s currency in order to have any value has to be backed up by something. That is why it is called legal tender because the idea of paper money is simply made up and works just as IOUs (of sort). When US used to have the gold standard- US currency was backed up by the gold bullion, which had value. But after president Nixon ended Brentton Woods act and eliminated gold standards US currency is backed by empty promises and the believe that US is GOOD FOR IT.

  • Bankdog

    The point isn’t that the dollar isn’t worth anything. ($.04) The point is that there arent enough dollars in the collective US to pay off our gov’ts current debt load. And for those of you that trust the fed, may I suggest that you read “the Creature From Jekyll Island”. Or, research what they were up to in 1987 with the creation of Credit Default Swaps and the repeal of Glass-Steagall Act of 1933 in 1999. These were two MAJOR dominoes that fell and put us in the financial situation that we’re in today. Congress and the Treasury are both in the back pocket of the fed. And Goldman Sachs is their favorite recruiting grounds. Support HR 1207. Call your congressman/women and tell them to vote yes.

  • brewd

    Fact is if you’re not part of the rich elite you are screwed. The best strategy is to not have any children so they don’t have to live in the coming misery and stuff.

  • Michael

    The bumblebee can’t fly either, but it does.

    Your article does not take into account that the nation was actually much more in debt during World War II.

    Gloom and doom, sensationalistic statements do not help *anybody*.

  • Wyatt Junker

    Solution? Get rid of government. Maybe 70% of it. Keep national defense.

    Immediately stop all payroll taxes into the system right now. Do a very slow drain back to those people who paid in their entire lives with an apology that the government will never do that again, ever, under threat of individual sate secession. Let people keep what they earn.

    Hold a Con Convention with an agenda that Congress must always balance its budget every year with third party audits held up by private sector and publicized with fact checks made available for all to see.

    Medicare can be reformed by ending the entitlement for those paying in now. Bring competition back into the system by letting providers compete across state lines. Handicap trial lawyers and ambulance chasers by introducing a large tax on any judgment issued by a court against businesses. Why? Because businesses are our bread and butter, literally our very survival. We need to become grateful again for businesses who provide jobs rather than stigmatize them as greedy organizations. They create earnings. They create jobs. Not government. Therefore they get special rights as risk takers.

    Incentivize corporations with tax holidays or do a fair tax which would essentialy end corporate tax rates and would compete for coporations to come back to the US, theoretically repatriating their assets back to the country, by some estimates of well over $100 trillion in assets.

    Talk about a jobs bill!

    The current regime has no clue.

  • http://None Tim

    Time for them to legalize marijuana. That move alone would save them millions. Then, they take it over. Grow it, sell it, tax it. Problem solved.

    Why are they so stubborn about this anyway?

  • BK

    There is a huge hole in the reasoning.

    >The Federal Reserve swaps these green pieces of paper for pink pieces of paper called U.S. Treasury bonds.

    Correct.

    However, the Federal reserve turns over all its profits back to the treasury. So there really is no interest being paid to the Fed.

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

    Who is the government going into debt with? Oh, that’s right. Itself. All it is doing is stuffing a piggy bank full of dollar bills with IOU’s and then taking out actually currency.

  • Mark

    Money, itself paper, gold, feathers whatever is simply bizarre. Animals must think we’re nuts and if life exists outside of earth they must think we’re nuts as well.

    Tons of plants and animals but if you don’t have paper (in our case) you starve?

    lol, this insane system will be laughed at thousands of years from now. It’s so ridiculously stupid.

  • I didn’t vote for Obama

    How can anyne in their right mind have faith in our Congress,the Democrats or the person in Washington

  • ethanallen

    Get Real you are correct. The authority for the federal gov’t to issue banknotes still exists. However consider the fate of the last president to issue United States Notes rather than relying on Federal Reserve Notes. None other than President John F. Kennedy.

  • Anita

    A man named Larry Burkett who had a financial radio program some years back on Christian Radiowrote a book called “The Coming Economic Earthquake” which covered the subject very well. He saw this coming when there was hardly a sign of it anywhere, and now it is here.

  • Tea

    Here is why your logic is faulty. If it’s impossible to pay off the national debt, then how was it possible to create the debt? Wouldn’t your same logic apply to prove that it is *impossible* to get us in debt his far?

    You make a good point, but all you are showing is that it’s impossible to pay off our national debt instantly (as in within a second). And nobody is proposing that anyway;)

    Money gets recycled, like air. As long as have some trees around, we’ll never run out of oxygen. If …. that is ;)

  • http://www.myspace.com/anthonymascia Anthony Mascia

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

    Well I tried to look at all the comments and I may have missed it… Did you see the words “treason” or “traitor” anywhere yet? Without prosecution(s) for this crime it will be difficult for the other suggestions — many good — to take place. State & local level actions hold the most promise.

    My suggestion then is pray to God for his mercy on our Country. This is our most powerful weapon.

  • Luke

    Declare the US as Bankrupt and not pay off the debt…
    Alternativly…
    1. Refuse monetary policy to get as screwed up as it has been.. for if the interest rate on money was 15% about 8 years ago.. the national debt wouldnt have gotten so high…the international value of the US dollar would have reflected its interest rate better and hence MORE loaning more difficult…
    Funny what a war in Iraq can do…
    2. Stop a trade debt… so money can come in from other countries and hence pay the debt…
    Why do you think Barak Obama just recently asked china to buy product from them?
    IE…
    START EXPORTING with a low valued dollar and a higher interest rate… hence paying off debt…
    3. Take up taxes and stop voting in politicians that claim they can solve the problem without bringing it up…
    More is in a movie IOUSA which is alittle better than my descriptions above….
    Fractional banking isn’t THE problem… ie 100 = 1000… it is simply a stupid way of handling money… the money has to reflect the assets better thats all… ie… 100 dollars in a society needs to = about 100 dollars of product (including labor products like a lawyer or something) in trade to buy it with…
    With all ratios that it has gotten this bad… hard times lie ahead… as everyone loves to repeat…

  • John

    @Bystander, the point regarding value of the USD is that is comes out of nothing. Certain people can press a few computer buttons and create hundreds of billions of dollars. If one person has the power to create hundreds of billions of dollars out of thin air, then what can the true value be? What work was done or product/service sold in order to productively create this new money? None. The value, the true value, is nonexistent. People value dollars because of faith and trust in the government which says they have value. The same government that prints the money out of thin air.

    The difference with gold as money, the reason why the founders of the United States mandated that only gold and silver were money, is that gold or silver cannot be created out of nothing by government bureaucrats. When governments are unable to create money out of thin air then they have no choice but to live within their means. But, governments living within their means equates to less interest income for the bankers…

    Another point about gold, it has an extremely long and successful track record as being accepted as money, for more than 5,000 years. All fiat currencies, of which the USD is, in the history of the world (aside from our current group of fiat currencies) have failed. Fiat has a very bad historical track record. Gold, well, as JP Morgan once stated to Congress in 1913, “gold is money and nothing else.”

  • http://troyounce.blogspot.com Troy Ounce

    OK, why not for some famous US solutions:
    1. Instigate a few wars and supply all countries/factions involved with US weapons. BIG profits!
    2. Increase heroin production in Afghanistan and make young people in Eastern Europe/Asia drug dependent. Who cares? Big Continuous Profits!
    3. Abolish the US$ and start another currency. Start over again. Foreign debt? Pooff, Gone!
    4. Just manipulate the gold and silver price upward instead of downward. What about US$ 51.000/Oz? Your advantage with only a few telephone calls to some Wall Street Banks: 8,133.5 (MT; US gold reserves) x 1000 kg x 32,15 = 261,5 Million Oz. x US$ 51,000 = US 13,3 Quadrillion. Debt: Pooff, gone!

    History has learned to be very cynical to believe the US will have the balls to confront their problems. Most probably they will find an easy way out: bomb the problems into oblivion, let other people pay for their debt or create another paper illusion.

  • http://web.me.com/heli1/Gein/weblog/ Hetty

    It appears to me the crisis was caused by the US, that is the Federal Reserve. What happened was that the risks were sold abroad as derivatives, so foreign banks have to suffer as well as US banks.
    Actually, we are in the same boat, all over the world. I don’t think it is fair to let the people, whether in the US, Greece, Iceland, Portugal or wherever, suffer for the unfair system of debt creation.
    We need some bright ideas and political clout to get rid of this debt in the best way for the people. We know that debt is as fictional as money created by the banks, so something must be possible in this area.

  • http://FrankensteinGovernment Frankenstein Government

    Excellent article. Pretty factual despite all of the nanny naysayers.

    Therein lies the rub. Money is illusory and does not actually exist. It is a debt instrument. As long as people “believe” the unbacked and fiat currency of the US has value-then it does. Perception is truly reality. The problem is that folks are beginning to figure this out. Like China and the Middle East.

    Abolish the voracious middle man-Federal Reserve. Print our own currency. Be a patriot. Vote libertarian.

  • GulagCentral

    Everybody needs to get all the credit cards they can…run the limit to the max and don’t pay on them. Stop making mortgage payments. If you are self employed stop paying your quarterly income taxes. Of course nobody will do this because they are scared to lose their littole possessions. But if we did the country would grind to a halt pretty soon. Then see where the chips fall.

  • Karl

    I predict we end up going the way of barter, via an unofficial currency like Argentina’s credito. That, or we go back to seashells. Gold & silver are too valuable to be a currency again. We’ll always have money though.

  • Mike

    First, (as Get Real pointed out) the Federal Reserve and its fiat note are unconstitutional. Only congress has the power to coin money. Simple, argument over. “Coin” was deliberately used as the Founding Fathers recognized the dangers of paper money, and coins were used for many years. Paper bills were created to facilitate large transactions, but the bills were tied to gold redeemable at a quantity of grams of gold.
    The fact is, our Federal reserve not is not redeemable for anything. Nixon cut that tie. So, our money has ties only to Federal reserve assets, which consist of failed mortgage securities, to the tune of 2 trillion.

    Other countries are unloading their stockpiles of US currency for gold bullion from the IMF. Foreign banks are trying to get to 30% US currency reserves, down from 65%.

    Bystander has drank the kool-aid and I am going to increase your choco rations to 30grams next week! The Fedreral reserve issues currency, not the government. Gold and silver have been used as money for thousands of years, so their established value is not in question whatsoever as a money.

    DO the smart thing and diversify some of your investments into precious metals and get in to dividend paying foreign stocks that have little to no ties to US interests.

  • GG

    The answer is pretty obvious, and simple….

    The US will default on it`s debt.

    It will probably offer to pay China/Japan/etc their parts of the debt (which I belive is actually a pretty small part of the overall debt), but the rest will be defaulted.

    There, problems solved (and new problems created!)

  • Ed Simple

    Me? I’m renouncing my citizenship and moving to Switzerland. :-)

  • Jim

    I won’t even begin to list the ways in which the article is dead wrong. A complete waste of time. If you’re buying what this article is selling, you should look elsewhere for an education on how these systems work. The author doesn’t know.

  • Don

    OK – First of all, the FED actually creates very little money in our fractional monetary system. In normal markets there is $800 Billion of US Treasury Notes (a debit entry) that has been moneterized into Federal Reserve Notes (a credit entry). Due to the enormous one-time (hopefully) money needs stemming from the fall-out of the credit crisis, the FED has mushroomed its balance sheet to approximately $2.3 Trillion from the aforementioned $800 Billion. This quantitative easing was necessary due to interest rate considerations, not because there was not enough money. Simply put, if the US Treasury had to issue a Trillion or so more in US Treasury Notes overnight, the interest rates would have sky-rocketed which would have put the chances for a recovery into the remote range. Moreover, the author implies that the FED is controlled a group of elites that and are absconding the money they make. This is only remotely true. The FED is independent of the US Government, so politics stay out of the banking sector. Moreover, the great majority of the money generated investments on the FED’s books from US Treasuries, and now, Fannie Mae or Freddie Mac paper is simply given back to the US Treasury. If that was not the case, you can be certain the Bernanke would not be re-appointed as FED Chairman by a vote of Congress.

    Secondly, the majority of our money is created when banks make loans. When a banker makes a loan, he must retain a capital ratio of around 8%. My sense is that the author is inter-changably treating this 8% requirement as the approximate 10% reserve requirement that the FED has in place. When a bank makes a new loan it is debit on its books and the credit is a deposit into the borrowers account. Somebody has to clarify to me how money has been lost in this transaction. Say the loan is for $100,000… well, $100,000 is credited to the borrower, so how there a loss of 10%? When you borrow $100,000 from a bank, do you only receive $90,000 as the author seems to be implying? For EVERY DEBIT on the books, there is an equal CREDIT, unless the loan is not paid back. Of course, that is why an 8% capital requirement is in place, so that the loan loss can safely be offset against the bank’s capital.

    Thirdly, the money supply is tight right now because banks have been contracting their balance sheets. This is being done by tightening credit standards. When less credit is being issued by banks a contraction in the macro money supply occurs. Likewise, when banks make loans, their balance sheets are made larger on both the asset and liability side (deposits or money) of their books and the macro money supply is expanded.

    Fourthly, part of the reason that the macro money supply is not expanding is due to loans losses that banks are taking due to the lack of supervision regarding the subprime debacle. When banks lose money, they very naturally become hesitant to make news loans that could result in further losses. Moreover, the loan loss means they have less capital and will have trouble maintaining the 8% capital requirement if they continue to make more loans, thereby expanding their balance sheet. A natural contraction occurs. That is what the FED is trying to partially offset by expanding its balance sheet, so the whole system does not implode. However, in context of the entire money supply, an extra Trillion on the FED’s balance sheet is relative peanuts.

    Fifthly, the real threat to the US’s money supply is trade imbalances. When the US imports more goods and services than it exports, the difference is made up by selling them our debt. Again, all the money created via the fractional monetary system has a debit and a credit… they equal. However, when foreigners end up owning our money because we traded it for goods and services, we do end up with less domestic money than we have debt. And, if that money does not eventually come back to the US in the form of trade surpluses we will not have enough money to pay our domestic debt with. However, the money did not somehow disappear. The debits still equal the credits. The problem is the foreigners have become our creditor and we are the debtors.

    Sixthly, debt based monetary systems are inherently dependent upon the money continuing to circulate. When people become scared and start hording money instead of keeping a healthy amount of it in circulation, there will be a lack of money to service debt. It is not unwise to save money, but when the macro savings rate is high enough to result in a contraction of economic activity, we will have a debt servicing issue.

  • RIPITUP

    GET REAL

    It may be legal tender. But under the US Constitution it IS NOT legal MONEY. So what two things are legal money under the constitution of the USA?

  • steadystevs

    A little at a time, the American public has been decieved into thinking that worthless paper is “money”. What is needed is a return to a Consttutionally based monetary system.
    End the Federal Reserve,repudiate all debts to the banksters and sieze the assets of the financial oligarchy as reperation for the deception. As for foriegn goverments, send the spineless politicians as payment.

  • Terry Numbnut

    So the US govt owes the Federal Reserve? Who says the US govt has to pay the owners of the Fed reserve? What army do they have?

  • http://none bob kasner

    Every fianical consultanr and economist should be asked if the have read.THE RISE AND FALL OF THE GREAT POWERS AND THE DEVIL FROM JEKAL ISLAND if they haven’t they should not be allowed to comment on the economy or Federal reserve.
    best
    bob

  • http://- Rogan

    Funny thing is, 8-9 years ago, things such as “federal reserve system” and “elite international banking cartels” would of been called a conspiracy theory.

  • Economicon

    This whole situation is retarded. Why don’t we just invade China and make it ours and then they can’t own us anymore. With all of their factories and land we can pay off our debt way faster. At all, actually. I can’t believe you haven’t thought of this already.

  • PleaseExpalin

    “We could solve this problem by shutting down the Federal Reserve”

    So why do we not do that? Is there any real practical problem with that, or is it just an ideological issue?

    • Admin

      Just look at how much trouble they are having just trying to get an audit of the Federal Reserve right now….

  • Glenn Peters

    Tim Jowers

    Yes, I’ve quite aware of what constitutes GDP. You might be surprised to know just how GDP is calculated in your country (I’m not an American BTW). Did you know that if you earn $100 and then spend that $100, your national accounts show GDP to be $200? But I digress. The point of my response is the the basis of the original article is deeply flawed, by virtue of comparing existing debt (which is repaid over time) with only one year’s GDP. The issue is that the internet is overflowing with ‘experts’ who for the most part gain their knowledge from web-sites and unattributed statements from others who are equally ignorant. The statements then get parroted by others and become conventional ‘wisdom’. Just because experts disagree doesn’t mean every Tom, Dick or Harry’s argument is equally valid. Just look at some of the rambling, incoherent, conspiracy-theory laden responses here; Dennen’s reponse being a great case in point. People, get an education, read BOOKS not just damn web-sites and don’t believe every so-called ‘expert’ who trots out a bunch of stuff that seems to sound right.

  • Anon

    The only solution is to go back to the gold standard. We don’t necessarily have to use gold, but there has to be some sort of physical asset that we can use as the cap for how much we can spent. That way if we need to pay back our debts, we can use the gold (or whatever assets the standard is based off) to pay back that debt. Simple, efficient, tolerable.

  • oldtimer

    This article is ridiculous, or has a different definition of “mathematically impossible” than a mathematician does. As one example:

    You see, the truth is that the U.S. government now owes more dollars than actually exist.

    And when the US Gov’t pays a dollar towards reducing its debt, does that dollar get removed from circulation?

    Of course not, it *circulates*. It’s what happens to money in an economy.

  • Bronco

    So, the question that puzzles me is – why China is giving us the money instead giving it to its own people whose living standard is way lower then ours?

  • Danno

    It’s the end of the world as we know it.

  • http://www.wvwnews.net Alex

    People do not want gold because it is a “shiny object”…and no, you cannot “eat your gold”!

    What gold is is a store of value. While there is some fluctuation in true value due to the occurrence of a depleted vein of ore, the most common reason that the price goes up or down in any given period is due to the strength (or weakness)of the paper currency used to buy it.

    I bought a certain number of gold American Eagles (1 oz. each) when the spot price of gold was under $300/oz – Oh, how I wish I had mortgaged the house and bought MORE! The spot price for 1 oz. American Eagles closed at $1121.50. My return in approximately 10 years would have been around 400%! Top THAT, Wall Street!

    But I didn’t buy it for speculation – I bought it to PRESERVE the money I worked hard for.

    If the economy crashes and your beloved Federal Reserve Note becomes as worthless as a German Deutchmark between the years 1917-1921, you will see the folly of keeping your wealth in paper dollars!

    No, you can’t spend gold at the hardware store or at Wal-Mart but when the dust clears and a new currency replaces the failed one, I have enough gold to buy all the Amero’s or Euro’s or whatever currency I will need.

    When people refer to people who hold this mindset as being “gold bugs”, you can rest assured those people probably make money by peddling paper “investments”.

    So what’ll it be? Value based on a metal that requires labor and investment in order to be extracted out of the ground? (And has been prized as true wealth since before Biblical times?) Or value based on printed paper. Something that a private group of elite bankers manipulate the value of?

    Choose wisely!

  • http://windowslive dermeval vianna

    As say general De Gaulle(1970), about the end of Bretton Wood sistem, now we have a painted paper to govern the world…

  • http://shrinkerbabe@yahooo.com Kate Jensen

    It is clear that the first step is to stop any additional debt. The boat is almost full of water, stop the increase so a plan can be made to reduce what is already in. As people can not find jobs and have time on their hands bartering will become more common, they will trade work or items for things of survival.

  • Neal

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

    Am I missing something here? http://en.wikipedia.org/wiki/Federal_reserve says that the Fed is not owned and is not private and is not for profit, which is what I recollected.

    This destroys the credibility of the article for me.

  • woot

    you have just enough info to be dangerous – try to increase your rational thought.

    one quick point because i’m in a hurry:

    saying it’s “mathematically impossible” is a misnomer. if you have no money for deposit (but a good job) and buy a $30k car with a loan, (as soon as you buy it the car is worth $20k or less), so you have a $30k debt and now only $20k in assests. is that “mathematically impossible” to repay? no. you promise to pay it with your _future earnings_, which is what the entire debt system is based on.

    this completely refutes your point 2:
    #2) The only way to create more money is to go into even more debt which makes the problem even worse.

    no, the other way is to _work off the debt_. luckily, the government is spending on infrastructure and education so the people will be able to produce enough to pay off that debt. oops, sorry, no, they’re spending on wars. my bad.

    the issue isn’t debt, it’s what you spend the money on!

  • Rampart

    Dear “Bystander” – gold has been money for 5,000 years. It is a reliable store of wealth because it can’t be printed out of thin air. If you think fiat currency is as good as gold, I refer you to recent events in Zimbabwe and Argentina. Good luck holding on to your bits of printed paper… perhaps you can use your FRN’s for building fires like this woman from the Weimar Republic.

    PS – the “demand” for federal reserve notes came as a result of the Breton Woods agreement. At the time that document was penned, our dollars were in fact backed by gold. Since abandoning the gold standard, foreign governments have little reason to hold the FRN in reserve.

  • Mark

    Incorrect. Interest payments are about 4% of GDP. Kick that up to 5% of GDP and the debt would be paid off over time.

    “You see, the truth is that the U.S. government now owes more dollars than actually exist”

    That is the nature of debt: there is always more debt than money, except in very primitive economies. Even on the gold standard that was true.

  • John Sawyer

    The government can still issue money in the form of coins. Maybe we should all pay for things with a lot of loose change!

  • PleaseExpalin

    Glenn Peters,

    No-one has answered my question above. You seem very knowledgeable. Would you like to answer my question please?

    The article says

    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. But the politicians in Washington D.C. are not about to do that.

    My question is

    If it does solve this problem, so why do we not do that? Is there any real practical problem with that, or is it just an ideological issue?

  • 3-D

    There is no way to fix it now and no way out. The best solution is to hunker down, let it all burn down around you as social disorder asserts itself, and try to come out alive. If you do, you’ll be a part of rebuilding the country, this time hopefully NOT under control of bankers with specific unchangeable parts of the Constitution that EXPLICITLY FORBID handing the money supply over to private banks of any kind.

  • David Smith

    JFK has already signed an Executive Order for the issue of debt free Treasury Notes and the Notes were printed and ready to go into circulation when he was killed. His Executive Order is still legally in effect but no one has had the courage since then to implement it. Immediately after they killed him, and he was not the 1st President to be killed for this reason, the newly printed Treasury Notes were destroyed. The President we now have like many before him are owned by the owners of the Federal Reserve (House of Rothschild) or their agents (George Soros etc.). If these people finally get kicked out of our country and the chance is slim because the American People will probably never understand or care about the financial system since these very same people control our minds using many methods but mainly through television, they will probably remotely militarily destroy what little remains of our economy, society, and country that they were not able to destroy while here. They will destroy it out of vengeance and desperation because it is their nature to destroy. The U.S.A. is not the only country they control against the will of the majority of it’s people. They hate the U.S. Constitution because it is based on God’s Laws and because we have been a Christian society. Still though, I believe that forgiving them for destroying us physically is the right thing to do. I’m not sure though if I will be able to follow through on my belief if some day I find my back up against a wall. It seems like that day is quickly approaching for most of us. Why do all of the JFK documentaries present every possibility of who did it to confuse but none ever mention this one fact?

  • Brophanity

    @web ether-net ideas

    your ideations of a barter system are ok, but it really doesnt make sense to “trade” anything. If you just gave people what they needed from what you were producing, and they just gave to you as needed from what they produced, things would be a lot easier. If you understand there is no real need for money, then it shouldnt be a big stretch to see that people would be happier if they only took what was necessary, and then only more than that as long as it didnt deprive others

  • Glenn Peters

    PleaseExpalin asked:

    Does shutting down down the Federal Reserve and restoring the power to issue U.S. currency to the U.S. Congress solve this problem, if so why do we not do that? Is there any real practical problem with that, or is it just an ideological issue?
    ============================================
    There are several questions here and assumptions within them. In theory, central banks are independent bodies, such as in Norway, Australia etc. In practice in the USA, the power of the Federal Reserve to issue currency is already in the hands of Congress, via the majority of the incumbent party and therefore, the President.

    Issuance of currency theoretically dilutes the value of extant currency, but as there are other world currencies traded and the US being the reserve currency, this distorts its value internationally. Domestically the picture is somewhat different. What we are seeing now in the domestic US economy is debt deflation. In the next few years, the US debt may likely be eroded due to increasing price inflation. In other words, inflation will reduce the debt over time, in the same way that fixed mortgage payments of 15 years ago are less a hit to your wallet today than they were in 1995. That’s good for the external debt to other countries, bad for your buying power domestically. If the USA can improve its international competitiveness by selling more to ther countries than it buys, it will have the income to reduce its debt over time. The big question is, can it do this? The emerging markets are there, in India and China. But costs of production, mostly labour costs are too high. The US will simply have to reduce its standard of living (paying its workers much less) to viably produce the goods that other countries want to buy. Printing more money and domestic consumption based upon credit isn’t the answer. If this fails, the USA’s currency value will plummet, and wars have been fought over less than that.
    I hope this answer helps.

  • Robert Little

    If you are serious about a solution, there is one from ancient times that did quite well.
    Declare a year of jubilee every 50 or so years.

  • tanstaafl

    With fractional reserve banking, total debt will always exceed the money supply; there’s no need to plagiarize an economics textbook to explain this “feature” of the modern banking system.

    It’s interesting to read about the fellow who was abused by his bank because he paid interest on his mortgage. I guess that his bank held a shotgun to his head and forced him to take the mortgage.

    One can outlaw fractional reserve banking. It would be much harder to get a loan or a credit card and interest rates would be much higher. An there would be much higher fees for checking accounts.

    The recent financial crisis would still have occurred even if fractional reserve banking were outlawed, since the main problem occurred in non-banking institutions such as AIG.

    Here’s an idea–the government can cut spending (Medicare and Social Security, mostly) and raise taxes (say, to their levels in 2000) to balance the budget.

  • web ether-net ideas

    @Brophanity
    That is the idea… i might have stretched the explanation too much, but that is exactly what i had i mind…. then again this would not work = read greed = people

  • web ether-net ideas

    @PleaseExpalin

    David Smith just explained this to you, but there were few more posts about it before as well.
    people that have tried it
    Lincoln,JFK
    and if i’m not wrong president Woodrow Wilson was on the right track but he chickened out=(lived) and created FED

  • Niels

    @David Smith

    I agree with the first part of your post, but I think the second part is not true. The US Constitution is not based on God’s laws. The USA have been founded as a nation which provides freedom of religion to all it’s inhabitants. The government itself was not intended to be religious itself.

  • Freemon SandleWould

    The sooner the US Government defaults on its debt the sooner democracy can start recovering from being pimped out by left wing inclinations inherent in all people.

    Running on your own money within budget is a personal and public virtue.

  • http://guitarlots.com GuitarLots

    I hope the whole thing blows up, and the economy tanks. I am so tired of scrapping for every dollar I can earn, while people who cheat the system are rewarded.

    California and the entire U.S. has become one big welfare state with entitlement programs designed to make people lazy, uneducated and dependent on the states and Fed. Gov. Not to mention they can’t think for themselves.

    When people don’t utilize their right to vote, and the ones who do vote go with emotions instead of facts you end up with Obamma and an Opra Winfrey type of culture.

    Maybe it would be more productive to hold a seance with a crystal ball and govern like that. At least that’s what Congress thinks.

    We’ll just tax everybody and the problem will just vanish like a ghost. Only problem is that it’s going to get a lot worse in 3 years after half of the mortages held by Fannie go into default. Good luck NAR, hope you can convince people it’s a great time to buy in 2 years.

  • joris voorn

    Very interesting article! I’d love to read more about it and everything you wrote is true.

    Why would we need money on this planet anyway?
    We all should work for the benefit of the whole planet!

    I will never understand that someone born on a planet has to EARN & PAY money to live on it. “Idiocracy” if You ask me

    It’s not like you have a choice to go somewhere where money does not exsist.

    It’s sad people, we have to wake up and start living completley different.

    All people have the right to be happy all of their lives!

  • http://SipseyStreetIrregulars.blogspot.com Patrick Henry

    @”Btophanity” – You said “…your ideations of a barter system are ok, but it really doesnt make sense to “trade” anything. If you just gave people what they needed from what you were producing, and they just gave to you as needed from what they produced, things would be a lot easier. If you understand there is no real need for money, then it shouldnt be a big stretch to see that people would be happier if they only took what was necessary, and then only more than that as long as it didnt deprive others

    Right.

    You know, I was thinking – we could really shorten this great idea of yours into something simple and catchy!!

    What about…

    OH! I got it!!

    From each according to his ability. TO each according to his need.

    Is that about it?

    Listen: I’m not sure if you’re just an idealistic moron or a true commie (not that there’s any substantive difference).

    Let me make myself perfectly clear. Like my namesake, I have one basic catch-all creed: Give me LIBERTY, or give me DEATH! Millions of my ancestors died to pass on a legacy of Liberty to me, my children, their children and so on.

    Given the slightest opportunity, If forced, I’ll see the “death” passed on to those who would deprive me and mine of our G*d given rights to Liberty. I see no difference between slavery to a communist system, slavery to an out-of-control government or slavery in fact to some “owner” — I’ll die on my feet before I live on my knees, and I’ll count it a blessing to have been able to do so – so long as I can take at least one would-be tyrant with me.

    These are strong words, but you’d be amazed at the amount of restraint I’ve shown in using them – you really don’t want me to get explicit about how I REALLY feel.

    Sure – you’ll write me off as some un-enlightened neanderthal, and you’ll be as wrong as you are about everything else.

    For the first time in the history of our race on our planet, a Government was instituted which gave the people power over their Government. We’ve trusted too much for too long, and it’s been nearly dismantled under our very noses, but it’s not done yet.

    There are literally millions of Citizens (not “subjects”) like me. We surround you – and you’re not smart enough to see it.

    In 1941 Admiral Yamamoto sagely opined that he feared he’d awakened a sleeping dragon.

    We too are awakening – and we’ll not go quietly.

    We are your neighbors, your police, your soldiers, sailors and airmen. WE are the ones who provide you the freedom to undermine our Republic from the inside – but we’ve had about enough.

    You really need to learn what we’ve learned: To shut our mouths and get busy preparing for what may (likely MUST) come.

    Keep pushing.

    If you think our reaction to the Japanese was something, just wait until you finally force us to take back our Republic.

    God help us – and God Save Our Republic!

    Patrick Henry

  • Jake

    Am I wrong, but since the Fed can ‘loan money’ and collect 6%… and since they can ‘create money out of thin air’ – this is more than just a decent return…

    They are getting paid interest on thin air…

    well, maybe it costs a bit to actually print money… but they can also create ‘digital’ money out of thin air with a bookkeeping entry and voila, they are making 6% on NOTHING…

    Thieves

  • http://www.axiomaticeconomics.com/montagne.php Victor Aguilar

    Edward Flaherty has already addressed the idea that any monetary system subject to interest ultimately terminates itself under insoluble debt in his rebuttal of Jaikaran’s book, The Debt Virus:

    Jaikaran’s main warning is that if we wished to repay all the debt, we would be unable to do so because of the shortage of money. But why would we wish to retire all the outstanding debt in the economy? Loans and bonds have a variety of maturities and only the most remarkable synchronicity would have them all, or any appreciable portion of them, come due at once.

    Remarkably, the Austrians conceded to Montagne his third premise. He quotes a Ron Paul supporter: “While an interest based monetary system eventually breaks down because of greed, corruption and the intractable problem of insoluble debt, there is no reasonable alternative.”

    Leaderless youth! Paul has given these kids no guidance, only bumper sticker slogans. They let Montagne’s labor theory of value go unchallenged, conceded to him the kernel of his theory, the “intractable problem of insoluble debt,” and then beat on him with a sponge. “Math cannot predict human action!!!”

  • Ronald

    With mathematically impossible to pay off the debt, you’re missing an all-important tiny little word ‘currently’. It’s mathematically impossible for me to pay off my mortgage now. That’s no problem, and neither is that fact in and of itself for the US government. I’m not saying they’re not in really nasty trouble though.
    And let’s see… Let me find a couple of examples of exactly *why* a central banking system is “independent” of it’s government, and why you shouldn’t start printing 12 trillion dollars to lose the debt

    Weimarer Republik, ca 1925
    Starts printing huge amounts of notes to do just what you propose.
    Result: Hyperinflation, destabilising government and a complete collapse of the economy. This all stopped only when they released a completely new currency, hard-backed and stable enough to earn trust.

    CCCP / Russia, circa 1985-2000
    Remember that? The Soviet Union? That centralist communist state with no independent central bank? Those guys who printed money when they needed it? Fat lot of good it did them. It didn’t resolve anything, it made inflation much worse, it crippled their capability to effectively govern the financial markets and it completely wasted their economy. This was only stopped when Jeltsin did a shock-introduction of a completely new currency.

    Zimbabwe, circa last year
    after an inflation of 231.000.000% (although economists admitted this figure was by then purely academic) and printing presses being unable to keep up, everybody in Zimbabwe now trades in… well, not Zimbabwean dollars, that’s for sure. By the time you get on your bike to the grocery store your suitcase of money is worth less than the rags you’re wearing. But hey, by that time 25kg’s of more money are waiting for you next day! All freshly printed.

    Of course in all these cases the money printing was far from the only cause. But in all cases it ended really really disastrously. Two government collapses and a world war disastrously.

  • http://www.vardai.org/ Vardų Reikšmės

    Exactly!

    “….
    well, maybe it costs a bit to actually print money… but they can also create ‘digital’ money out of thin air with a bookkeeping entry and voila, they are making 6% on NOTHING…

    Thieves

  • http://fskrealityguide.blogspot.com FSK

    I’ve written about this on my blog. I call it the Compound Interest Paradox. I’ve also heard it referred to as the debt virus.

    This is a very confusing subject. The details of the monetary system were made complicated on purpose, by the banksters, to cover up their crimes.

    Summarizing, new money is only created when someone borrows. However, only the principal is created and not the interest payments. The result is that society as a whole is in a deeper and deeper debt hole. In order to prevent the scam from collapsing, you need every-increasing inflation.

    During a recession/depression, you need cheap interest rates and deficit spending by the Federal government to keep up inflation. That’s why the Fed Funds Rate is 0.25% while real inflation is 20%-30% or more.

    The banksters profit by printing and spending new money. That’s why Wall Street is making record profits while the rest of the economy is in a severe recession/depression.

    All taxation is theft. The inflation tax is an evil tax, because it steals your savings and accumulated labor. Economic power is concentrated in the hands of the banksters, who print and spend new money.

    It’s a tough mental shift. Taxation is theft. Government is one big extortion racket. The USA has an unfair monetary system.

    People who have received brainwashing as an economist are hostile to this idea, because they can’t realize they’ve been conned.

  • David Smith

    @Niels

    Most aspects of the U.S. Constitution are based on principles that are found in the Bible like righteousness and justice. It sure changes things when what I meant is said in a better way doesn’t it? I did not say that the Constitution endorses or mandates any religion, and thank God it doesn’t because I wouldn’t want to do all that jail time. Also who would qualify to be the Judge and Jury and how come they’re not doing time also? I incorrectly wrote: They hate the U.S. Constitution because it is based on God’s Laws and because we have been a Christian society. What I meant to write is completely different: They hate the U.S. Constitution because it is based on God’s Laws, and they hate the U.S because we have been a Christian Society. Maybe inadvertently I was correct….would they have hated the Constitution if we had not been a Christian Society?

  • David

    A well regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.

  • Peter Pan

    When we reach the breaking point…we just don’t pay. Why? Because we can’t.

    The Federal Reserve has to take a pay cut and lessen their tight grip on the reigns. They take a loss that they won’t feel anyway because it’s only cyber money at this point.

    They have a vested interest in keeping everybody but themselves working and don’t want a new system. Unfortunately, the slavery continues. Until they can tighten the reigns again. Then it’s just more of the same.

    The solution is always education. If the majority of us remain ignorant and can’t imagine a better monetary system then we are forever stuck in this mire.

    How do we get the majority of “us” to clue in? That’s a tough one.

  • BrainDrain

    The basis for this article is propaganda and ignorance.
    The most obvious solution was not even mentioned:
    Sell Alaska to China (and make sure Palin is there while it happens). That’s what smart people call solving two problems with one stone.

  • web ether-net ideas

    we dispute different points of view here, but only one thing is true… we are all only pawns in the great scheme of things where only few play the real game of chess…. and no matter how hard we protest, no matter how mad we get, no matter how many great ideas we all come up with, NOTHING is going to change … because in all actuality until society is greedy, envious and ignorant we will never have peace… Today over 50% of world population lives on less than $3/day, 80% of that fraction on less than $2/day and about 1.3 billion $1/day… CAN ANYONE HERE EXPLAIN TO ME if 50% of world population lives in poverty and only 1% of world population has 95% of worlds wealth, how come we even bother discussing this little predicament of economy we are currently in, which by the way is part of the economic cycle, and do not discuss how to change the former??? <rhetorical…… just think about it

  • PleaseExpalin

    I see. Thanks Glenn Peters

  • Xin

    you guys do realize that the reason Federal Reserve still exist today does not mean the government don’t want to shut it down.

    It is only because the president was elected by the money from these bankers.

    and if the president wants mess around with the system (eg. shut it down), then they could well be the next JF Kennedy…and all the murdered presidents before him…

  • animal_x

    i heard the 2nd amndmnt was actually a reference to state militias, and not to individuals…

  • animal_x

    …also, didn’t the US dollar use to say something to the effect of “redeemable for its value in gold”, or something, and then they took that off, something to do with a bank scandal in the 30’s or 40’s. You could go to the bank and trade your notes in for the gold, but then that got squandered away, so after some shifty legislation and then a makeover on the dollar bill, no one ever speaks of it anymore….

  • http://ramblings.ajaxed AJ

    What happens if the debt keeps increasing and eventually just goes so far out that whatever is done, it just cannot be repayed? So what happens to the US, the US government and the American folks?

  • Ctchrisf

    Makes you really hate Mr. Regan doesn’t it.

    http://zfacts.com/p/318.html

  • Jayman

    @Patrick Henry, what are you on about? “God Save Our Republic”??? It was this stupid republic and your ilk who borrowed up to your friggin ears that’s landed it in this sh*t. When it comes time to payback you wanna talk tough? I presume you thought all the money you got was free money, right? Get an education, pal!

  • John Harsh

    The Fed was the brainchild of Paul M. Warburg, brother of Max Warburg of the German & Belgium banking dynasties, and representative of the Rothschild banking cartel. He wrote a book in the 30’s about the origin of the Fed. It turns out that one of the primary purposes of the Fed was ‘TO TRANSFER ANY LOSSES THAT THE BANKS INCURRED TO THE AMERICAN TAXPAYER”. Sound familiar?

  • Howard Fore

    You say 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. But isn’t it regularly audited by the GAO, part of the US Government?

  • Sagire

    The reason they don’t actually do that is because it would be a complete disaster! Don’t believe everything that you’re reading in this article without doing further research. So they can’t pay it back right now? Well that was NEVER the plan. Businesses along with governments take on debt and expect to keep it and it’s NOT always a bad thing.

    The reason you don’t want to give the power to create money to congress is because you are then allowing politions and not economists to affect the economy. You want the money supply to be in the hands of people who’s job is not affected by people’s votes and can make decisions based on acedemic research rather than public opinion. Just reading these comments shows me how bad of an idea it would be to allow the public to have any say in the control of money.

  • Painesright

    Fun fact (not):

    One trillion (just ONE) is $1 per SECOND for 32,000 YEARS!

    Tragically, we are just now worrying about our housing burning down, but only AFTER we have thoroughly doused it with gasoline and tossed a torch on it.

    Too late, game over.

  • http://www.buyerbeaware.blogspot.com David Jeremiah

    Whatever the High and Noble intents of the US Government to get into debt, everything must have limits, as the debt was reasonably under control until 1990. However, when there is a 20 year record of exponential borrowing – culminating in a Crisis and after that still NO REGULATION, we can postulate that US is struggling to reign in a runaway horse just as the British Empire in 1945, and the Russian Empire in 1990. US has over stretched its capability. Like a elastic band, the economy can be stretched, but even that has a limit and that limit has been reached. http://www.buyerbeaware.blogspot.com

  • Marc

    @web ether-net ideas

    You have to attack on all fronts, not just one. People aren’t poor and hungry because they “don’t have enough food”, it’s because their governments are corrupt. Get to the root, otherwise its a perpetual waste of time.

    Also, great article btw.

  • Phil

    For those who want to know more about how the Federal Reserve has been created and why we need to get rid of it:
    Read the Creature from Jekyll Island
    Or, listen to this 1 hour audio lecture by the author.
    http://video.google.com/videoplay?docid=-8484911570371055528#

    Also, congress is controlled by the Fed since they give them plenty of money for the election.
    Ah, the nice work done by the evil lobbyists.

  • Chad

    The past is the past, so the international bankers have bankrupted america. Well we know it’s happened before and will happen again.
    Do you think the solution will be a new currency?
    thus devalueing the old dollar?
    No dollar… no dollar debt problem… TA DAAA !
    That seems like the logical solution to me. therefore I urge people to purchase gold and silver with those federal resertve notes they all love so much and worship.

  • Dan

    I think we are missing a fundamental monetary concept here.

    This might be a silly question, but if the economy of a country collapes, doesn’t its money become worthless?

    And if the money becomes worthless (i.e. nobody wants it or trusts it), who cares who has it?

    In otherwords, what good would it do the Federal Reserve (system, subsidiaries, etc.) to own all the papar money in the world, if nobody wants it or will use it?

    All money, even gold, has to have value to the recipient, or it is a worthless medium of exchange.

    All the ‘rich elite bankers’ (or whatever or whomever) would be impoverished overnight if their money became worthless because nobody wanted it, trusted it or used it.

    This is a two-edged sword.

    First of all, they have a vested interest in not letting the system collapse or their paper wealth will dissappear also.

    On the other hand…

    If they manage to use the money to get control of substantial tangible assets and power before the money collapses, they won’t need the paper money anymore anyway.

  • web ether-net ideas

    @DAN
    whoever has the wealth at this point, it doesn’t matter what currency they hold, its the power that counts that comes with it… so yeah all the dollars you hold would make you a penniless but for those “elites as you describe” it would like misplacing $100, ….

  • BL

    Being pretty good with mathematics, I can see that ultimately the Fed system the US is presently using cannot be sustained, especially if the investment bankers are greedy and our politicians are corrupt (that simply accelerates our demise). The question is, “How do we make a viable currency system?” The problem as I see it is that we (the US and the world) requires a currency system that has to represent the world’s wealth in some way, have high intrinsic value, and is relatively easy to transport and store. Gold has represnted such a commodity for many years because it was pretty, scarce and would not corrode. Silver has become a competitor to gold because it is also pretty, somewhat scarce, but has a lot of practical industrial uses (e.g., great conductor of electricity, etc). But there is simply not enough of it or gold to cover all the world’s currencies. What I propose is not a new concept. Some guy came up with it way back in the 1960’s. Mine lots of uranium ore and make it into metal coins (they have very low radio activity which can be shielded by a thin coating of a coating of metal or even plastic or ceramics. The uranium would have the intrinsic value of the energy it could potentially produce in a nuclear reactor (after some additional refining and centrifuge work to concentrate the reactive uranium isotope to ~3% or so). People would not necessarily hold the coins (probably would not want or need to), but nations could put out an appropriate amount of paper money with these coins as backing (and coins could be redeemable if necessary). Such an inventory of potential energy is now, and especially in a thousand years or so, will be very important when humanity has to go underground with its inventory of nuclear reactors to survive the next ICE AGE (you bloody global warming nuts). Such a coinage backed currency system is what I call real long term intrinsic value (i.e., it will save humanity!!).

  • Julius

    This is just not true. Imagine the government getting money through taxes, paying a little debt off and using the rest for projects etc…

    Where does the money go? Back to the people, who will spend again which results in more taxes for the government.

    Like that you can pay debts off theoretically every year with money cycling back to you.

    It is a simple concept to understand and it’s interesting noone has pointed that out yet…

    • Admin

      Julius:

      That is true for some of the debt, but when the U.S. government retires debt with the Federal Reserve (which owns about half the debt) the only way that money gets back into the system is if the U.S. government borrows it from the Federal Reserve again.

  • p1

    I have 2 quick questions:

    1] What if you dont pay them back, every country is in debt , so in reality if every country starts paying their debt .. they borrow from some1 else and cycle continues. What happens if you dont pay , debt is after all a number ?

    2] Why not work hard, start manufacutring and create value, if sugar cane becomes sugar , doesnt it add more value to economy .. this one takes time but once millions start doing it together the results can be significant .. thats how an individual pays his debt .. by doing more work .. shldnt a country do that by creating value rather than borrowing money from anywhere ?

  • Saul Wainwright

    The truth is that if all money was paid back, if all debts were paid back that is, then there would not be enough money to actually do so. No one ever creates the interest. The interest is tacked onto the money in circulation. All money is created through debt, that is how we create capitalist money. We will need to find another way of creating money if we don’t want to be caught in this conundrum.

  • Rob

    Fear not my fellow Americans, we soon will be rid of the real problem (the current administration and congress) and be steered toward the conservative ways and away from the existing greedy morons. Bless God and America.

  • LNR

    Might as well keep going with it; seeing as it has not changed thus far.

    Although these articles are informative they’re always going to be uselss because as people we’re too ignorant and stupid. How sad is that?

  • jim sadler

    Since the Federal Reserve is not part of the US government would not we be free to issue and entirely new currency and let the Federal Reserve sink into the mire thus eliminating our national debts? After all if the debt is in dollars and the Federal Reserve bank backs the dollars but the US does not how do the people lose?

  • Anon

    jim sadler: I cannot speak to your question on the federal level, but you can on a local level, sure. In fact, take a look at what the Village in NYC has been doing with their own form of local currency.

  • wayne

    for those of you who are asking if it can be fixed the answer, mathmatically speaking, is pretty simple really http://www.perfecteconomy.com

  • Mark

    There’s a simpler way to understand the reality here than looking at the technical specs of the FED: Examine the systematic outcomes of the financial structure. Just look at the GINI coefficient for the USA over the past 100 years or so. The GINI measures “wealth inequity.”

    You will see that the rich are getting far richer at an accelerating rate, and the poor are getting far poorer also at an accelerating rate. Wealth is being vacuumed upwards at an alarming rate of increase. Since this movement of wealth is a byproduct of the financial system itself, you can easily conclude that the system must be “rigged.” Plumbers are not becoming lazier as hedge fund managers become more industrious, labor-wise. It is an effect of the rules of the system.

    The rules in the broadest sense are set by the FED and the Treasury – which are now more or less one institution wholly owned by Wall Street. (Behind Wall Street then lies your Rothchilds and Rockefellers and such)

    The GINI is the absolute best “big picture” tool you can use in understanding the structure and slant of the US economy.

  • Eileen H

    Since the Federal Reserve board members have their hands in the US politicians pockets, and the US politicians are not interested in changing this situation (as they benefit financially), the way for this to end is by the US defaulting on their debt and then it won’t be advantageous for our politicians to use the Federal Reserve as our money lender.

    I think this is what US Americans are avoiding feeling. They don’t want to see anything unsettle whatever savings they have in US banks. I just don’t see another way around than getting rid of the US dollars created by debt to the Federal Reserve.

    As to how an individual can make any difference, is by ruining the effect that such a climax of events would have on them and their relations. Either with a basket of currency account or by turning cash into actual resources (and paying down all debts).

    If it is safety and security you crave, then don’t trust US politicians for advice.

  • Jason

    A few presidents have tried to dissolve the Federal Reserve. Does anyone know who they were and what happened to them?

    • Dave Schumacher

      I believe Andrew Jackson broke up the banks around 1850. There was an attempt on his life that failed. Then JFK signed an executive order I believe in June 1963 to have the US print notes called United States Note(s). He was assassinated 5 months later, and LBJ rescinded JFKs executive order. If I remember correctly the executive order was 11110….

  • Heal the world….

    I think most of them now understand that the US has the debt problem and the Fed is like the aching tooth.

    It will be really helpful if you can make some videos and upload on youtube on how its mathematically impossible to pay off the US Debt.

    As they say a 10mins youtube video is better then 1000 pages of blog.

  • Heal the world….

    American people….arise and awake…you don’t have much time on your hands….

    Things are going to turn much worse as the days go by. And the government has already fired all the bullets. Only one is remaining…. to PRINT MORE MONEY.

    Save your country, Americans…save your country….for God’s sake and for the world’s sake. And most importantly for your own sake!!!

  • Ian Mathers

    There is a solution to central bankers, but it’s rather drastic.

    http://www.guardian.co.uk/world/2010/mar/18/north-korean-executed-currency-reform
    Pak Nam-gi killed by firing squad after currency reform worsened markets

    The chief of the Central Bank in North Korea botched their reform…..and was executed by firing squad.

    In the US, the failed and corrupt bankers go on speaking tours.

    http://www.msnbc.msn.com/id/10878253/ns/business-financial_times/
    Fed chief could command six-figure fee for speaking engagements

    Former Chairman of the Federal Reserve Alan Greenspan “….could charge as much as $150,000 for a single U.S. appearance…”

  • Paulette

    To Jason (March 16th)
    I understand that there has been three presidents who tried to stop the Federal Reserve. The last one was JFK. He had money printed up by the Treasury (according to the Constitution) A few months later he was dead and all the money was burned. The other presidents also ended up dead. There is a central bank in every major country (except Muslim countries) that control the money of the world. They have set it up for a world wide financial collapse to put them in control of the world. Many of the financial experts expect this to happen this summer. The purpose of the bailouts was NOT to “save” America, but to put us so far in debt to the Fed that they own us now — thanks to the politicians. There is no such thing as a “safe” bank. Your only hope of survival is in storing up supplies, investing in silver and gold and praying that God will lead you in the right direction. Good luck!

  • Susan

    @Jason President Andrew Jackson did not renew the charter for the 2nd Central Bank of the United States. Yes, we have had 2 Central Banks before the Federal Reserve, both were closed and we can close the Federal Reserve. See Monetary dot org also see WebOfDebt dot com and TheMoneyMasters dot com

  • Sam

    Clarification, it became mathematically impossible to pay it off a few years ago. Yet I see WALL STREET types want to say NOW instead of THEN.

  • Shelby

    This was a very interesting blog, helped me understand a lot more than what i knew beforehand. This is obviously an issue today that most people don’t know much about.

  • http://australiadebt.org AustraliaDebt.org

    Hey. You may not be aware of this, but Australia is virtualiy on the cusp of a massive debt fueled property crash! The stats are as follows: 1200 Billion AUD$ of private debt mostly in mortgages and 158 billion AUD$ gov debt, all this for only a small population of 22 million people.

  • cassiusking

    coins are not issued by the Fed – they are issued by the Gubmint – Dept of Treasury.

  • http://s1.zetaboards.com/Imperial_Politics/index/ Sir Vincent

    >>>Very interesting article! I’d love to read more about it and everything you wrote is true.

    Why would we need money on this planet anyway?
    We all should work for the benefit of the whole planet!

    I will never understand that someone born on a planet has to EARN & PAY money to live on it. “Idiocracy” if You ask me

    It’s not like you have a choice to go somewhere where money does not exsist.

    It’s sad people, we have to wake up and start living completley different.

    All people have the right to be happy all of their lives!<<<>>>What happens if the debt keeps increasing and eventually just goes so far out that whatever is done, it just cannot be repayed? So what happens to the US, the US government and the American folks?<<<<

    Ever heard of a serfdom? We're already there.

    It doesn't really matter what we do if we cannot protect our freedoms as human beings. People need to be SELF-educated and vigilant in spirit, as our forefathers had insisted. Then, once every state fails or secedes, we can hit the restart button.

    But unless that happens, we're doomed to repeat the past. We'll become nothing more than a serfdom.

  • BK

    How about US taxpayers sale good part of US real estate. Let if China asks US to let 10 millions Chines to immigrate in USA in return of some write off? Or some other option. US bought Alaska from Russia, why does US can not sale Alaska to China for few trillions?
    May be China can ask for more influence in US politics or let them buy businesses which employ enough Americans to have political clouts! Which may result into changes in law in Chines favor! Think, why does Israel get so many special goodies from US taxpayers?

  • Tbonz

    Why not simply tax the profits of the Federal Reserve, oh, to the tune of 100%. I am sure that there are reasons that this won’t work as I am not as educated as most of the commentators on here, but it is just a thought.

  • William

    Join those who are enlightening their friends and neighbors about the fact that the politicians take an oath to uphold the Constitution but ignore it. There is no authorization among the powers enumerated by the Founders in ARticle 1 Section 8 for the creation of a central bank, e.g. Federal REserve SYstem.

    http://www.campaignforliberty.com 231115 and growing
    http://www.YALiberty.org on over 170 campuses so far

    we intend to replace politicians with those who will keep the oath, abolish the Fed, restore the gold standard to prevent the govt from inflating the currency ever again, repeal Medicare, Medicaid and Social Security which are taking America to insolvency and backruptcy.

  • http://www.beggarz.wordpress.com Adam Cassidy

    Dead on and concise analysis of the bloated demon sucking upon the flesh of each and every person in the world that is ‘The Fed’.

    These people are building the Apocalypse – it is slavery by other means, and worst of all, it is NOT WORKING.

    Nice try, clowns – but you’re about to crash and burn, and take humanity with you in your vanity and avarice.

  • Dave

    Looking at a point in time of US Dollars in physical existence + having to pay off all debt at once is a fallacious way of looking at this issue. Not to say that there isn’t a serious issue at hand–because there is.

    First of all, eliminating all US debt should not be the goal. US debt (in the form of US Govt bonds) is an important investment vehicle to individuals and other governments and serves many other purposes that I won’t go into here.

    The goal should be: to contain debt by covering the interest on debt plus managing the principle to a minor fraction of GDP.

    One method for doing this is the following: The government were to cut expenditures such that they ran a surplus of total interest + $x and then applied that surplus to the interest and $x of principle each year… eventually we would hit the % of GDP target and be done.

    BTW- all the money the government collects and then redistributes through medicare/medicaid/social security, etc. is NOT retired and therefore can be repaid to the government in a future period in the form of taxes. Only the interest and principle owed to the Fed is retired.

    Make sense?

  • Eric

    After reading this article (or whatever it technically is) I realized how little I knew, and how little the the public knows, about the banking and debt issue we’re currently in. And in my current state of new enlightenment, I’ve realized something.

    From everything said in the article, and along with most everything that people said in the comments, I’ve realized one thing: all humans are capitalists at heart. We’re all competitors. Humans have a base instinctive need to compete with and surpass one another, create hierarchies to cement their positions above the weak, and ensure that no one can usurp their power.

    This observation doesn’t directly relate to the money issue primarily, but if you break it down enough, this is what it is. Though probably complex and difficult, I do not doubt that there are ways to solve the current debt issue. However, the problem is, the people in charge (the wealthy and the politicians) don’t want to solve it. Because if we keep to this system, everything will eventually collapse, and they’ll hold all the power. The same goes for most banking systems in the world. It was flawed to begin with, but it was built to be that way.

    Again, maybe I’m breaking this down too much, but I just see the whole thing as another way for people to obtain power and “rise” above the weak. It’s a basic human need to compete. And so far, money and finance is the most effective and deceptive means of accomplishing this.

  • TedL

    As long as our overall economic output (GDP) is strong, we’ll have a – at the very least – a satisfactory economic outlook. If our capacity to repay the debt– even if we don’t actually repay it — ever drops significantly, then we’re in trouble.

    In other words, there are no indications that the doomsday scenario some of you have in your head will ever play out.

  • http://sirjorge.com/blogx sir jorge

    we had a good run

  • backhoebob

    The fact that the constitution states that only congress can print $ makes the fed and its charter a fraud. Meaning that the US Gov can legally walk away from any of the fraudulent dealings that have transpired.

  • http://www.ivamu.com/ Kenneth Lowndes

    Someone asked if this is all a joke.

    Nope.

    It is all for real.

    The IVAMU can easily replace the doom and gloom of the Illegal Private Monoply on the production of money for use by the USA.

    It is our time to repudiate this phony monopoly money system.

    It is all a major con job, but the IVAMU? It is for real.

    http://www.ivamu.com/

  • http://Theeconomiccollapse Dang

    Actually you are wrong, you could pay off the debt to the zero amount. And it would only cost just 2 trillion to do so. And it is legal way to do it. An wouldn take along time to do. Talking here matter of days. Iam talking here for the u.s. gov to actually come up with 20 trillion dollars to pay the deby off. Yes the gov could have 200 trillion dollars but still couldnt actually pay the national debt off. Only because some off the the people holding the debt wouldnt want to sell it. This would actually take along time to do. Any way here is the so simple answer for the u.s. gov to come up with 20 trillion dollars to pay the debt off. All it needs is 2 trillion dollars. It could print this, make a loan from the social secerty bank. Or even put some gov items for collateral. Some air craft carriers, spaceshuttle, the gold in fortknox, anyway we will say the get 2 trillion dollars in there hands from all this through bank loans an the deal is almost done now. Once this money is in the gov hands. All that is needed now is to but this money into reserve banks. Then legally the banks now can loan out $20 trillion dollars. This is called fractional reserve banking. for every 1 dollar the bank has in it it can loan out 10. An now the banks federal resreve banks can now pay off the national debt 15 trillion dollars an still have money left over. An also with all this money injected into the world the economy would take off to the moon.

  • http://debtconsolidator1.com Marc The Debt Elimination Guy

    I think we reached the point of not being able to pay our debt back a while ago. It does not matter the FEd has a solution, monetize the debt and print money to buy it. That doesn’t work either.

  • http://debtadviceexperts.net John

    People look at the debt and don’t consider the total unfunded obligations which have been estimated to be 75 to 100 trillion or more. There is no way we can grow our economy to pay those debts and sooner or later the day of reckoning is approaching.

  • Rene

    This goes to something I’ve been wondering about: It is not just the government that prints money. Every time a credit card gets issued we are adding to the money supply. And this goes on without the government regulating how much credit the credit card companies issue. Consumers spend “dollars” but they were not issued by the government or the Federal Reserve, credit card companies issued them, or banks.

  • skinnykid

    The Federal Reserve runs the country, not our government.

  • Jet Graphics

    Dollar bills are not dollars.
    Not only that, but they’re variables – not constants.
    All measurements in “dollar bills” are suspect.
    Dollar bills are NOT money, by law.
    The Federal Reserve has not lent any money to Congress – merely extended credit – at usury.
    The almost 14 trillion DOLLAR public debt is IMPOSSIBLE to repay, by law.
    It would require 700 billion ounces of gold, stamped into coin.
    World wide supply is estimated at 5.5 billion ounces.
    At current mining rates, assuming that the gold existed, it would take 87,000 years to mine enough to pay off the debt only if it was frozen right now.
    WE BE DOOMED.

  • muedog7

    i want to present an idea what would happen if every American citizen 18 and over were to save up ten thousand federal notes and pay it to the government as a kind of tax??? wouldn’t that decrease the national debt by 25% and what if we continued to do that

    or what if 90% of American citizens got out of personal debt and stopped using their credit cards to fuel their destructive habits??? wouldn’t more money be available to pay the federal reserve back their notes and then we could just get rid of them???

    or even still if the majority of American citizens started investing their money into shares of the federal reserve to earn profits from it which would then be taxed and would pay the debt off faster???

    these are just thoughts no idea if any would work but i do think that there is a solution out there somewhere to getting our country out of debt we just haven’t found it yet…

  • Richard

    Dear all,

    I still don’t get what will happen to population of USA if the natioanl debt will increas to the level, on which nobody would lend money to US. Does it mean that USA must rely on its own produced goods then (like USSR back then)? And will it lead to hunger or poverty ?

  • Paul

    Great Comments from Everyone. The Federal Reserve is a private Corporation….and pays no tax on their profits….think about it. Why not tax the profits made by the Federal Reserve?

    • Eric

      The Fed returns its profits to Treasury, which means all their profit is taxed, after a fashion.

      • Michael

        You are an idiot. They only relinquish what THEY say their profit was. In 2008 THEY said it was only $22 Billion. LMBO, that would be less than .02 of a PERCENT. WAKE THE HELL UP!!!

        • joe

          I’m with you 100%

        • Tim

          Speaking of idiots, can you think of any reason bank income would be down in 2008? Any reason at all? Talk about 15 second attention spans…..

  • http://www.missiontoisrael.org Ted R. Weiland

    “Nowhere does Yahweh’s law provide for government borrowing, and it limits private debts to seven years (Deuteronomy 15:1-11), resulting in the following blessings:

    ‘At the end of every seven years thou shalt make a release. …Every creditor that lendeth ought unto his neighbour shall release it…. Only if thou carefully hearken unto the voice of YHWH thy God, to observe to do all these commandments which I command this day. For YHWH thy God blesseth thee, as he promised thee: and thou shalt lend unto many nations, but thou shalt not borrow; and thou shalt reign over many nations, but they shall not reign over thee.’ (Deuteronomy 15:1-6)

    “In ‘The Nature of the American System,’ R.J. Rushdoony described the illusion of a balanced budget under the United States Constitutional government:

    ‘…although politicians may promise a balanced budget, they are more likely to gain the power they desire by increasing debt, for in a debt-free country, the citizenry is strong and the civil government is limited. In a debt-ridden country, taxes increase, liberties decrease, and the civil government, increasingly less responsive to the will of the citizenry, increases its own power over the people even as it vastly enlarges the power of the invisible government over all.'”

    For more, see Article 1: Legislative Usurpation

  • Rick

    The article gave the solution at least twice — abolish the Federal Reserve and restore the ability to print money to Congress, per the Constitution. In the same sentences they also gave the reason why this is not happening — Congress is unwilling to do so. Yes, a few presidents who tried to restore the ability to create money to the government all wound up dead. However, it is a lot easier for the bankers to kill off one president than 535 Congressmen. So the real solution to the national debt is to replace 535 unwilling incumbent Congressmen with 535 who will follow the Constitution and abolish the Federal Reserve. The best way of doing this is to nominate Constitutional citizen candidates who will challenge the career politician incumbents in the primaries. An organization exists to do exactly this — visit http://goooh.com and sign up to become part of the solution.

    • Michael

      I agree Rick, but if we took back control THEN printed money to pay off our debt, we would be on the hook for the entire amount owed even the amount owed to and due to corrupt businesses and dealings. On the other hand, if you print lots of money then pay off the amount , the FED and all of their minions will fight tooth and nail for their money that will be owed in interest. This has WAR written all over it!!!

  • kenneth

    Maybe I am not intelligent enough to understand all that the author described in his article. I can, however, do simple arithmetic and, if we owe (i.e., the National Debt) $15 Trillion, and there are 309 Million of us, that comes to $48,543.69 each. So, theoretically, Congress could assess a special, one-time tax of that amount on every single one of us, and, voila, the problem is solved. Of course, most of us would not be able to come up with $48K and I do not know how to get blood from a turnip. I will work on that problem next week. Ironically, one way to “help” would be to ENCOURAGE illegal immigration, since the more people, the less each of us would “owe”. So, open up the borders and “y’all come”.

    • Mr. Universe

      Offset the amount of $48,543.69 based upon total household income, so say some one who makes millions a year make them pay….we’ll say $100,000 and some one who makes $10,000 a year make them pay $100, the idea you have is an excellent idea, we just need everyone to agree to it and if history is any judge, I have my doubts that the totality of the american population (i.e. Every man, woman, child, imigrant, politician, actor(ess), etc.) will agree on this.

      But if we few here can come up with a plan here in this article, and devise a way to get people to hand over money from their pockets to pay off our national debt then it is our duty to help our nation.

      Sincerely

      Mr. Universe

      I am watching…

  • Anna

    Who owns controlling interest in the Federal Reserve?

    1. Rothschild Banks of London and Berlin
    2. Lazard Brothers Bank of Paris
    3. Israel Moses Sieff Banks of Italy
    4. Warburg Bank of Hamburg and Amsterdam
    5. Lehman Brothers Bank of New York
    6. Kuhn Loeb Bank of New York
    7. Chase Manhattan Bank of New York
    8. Goldman Sachs Bank of New York.

    • Steve614

      Sounds like a lot of Jewish names on your list. I’m sure that’s a coincidence, of course.

    • Dave B.

      Does it matter who they are? The point is that the institution as a whole must be abolished.

      Lay off the David Duke and you’ll be just fine…

    • WILLARD

      The Rothschilds were the ones who financed the First World War, so devastating in death and destruction but ever so profitable to the winners, Britain and France. Their being blamed by the Germans for the loss of the war and ensuing economic disaster was completely justified. They played a major role in the criminal reparations forced upon Germany, providing a major issue for the rise of the Nazis. We have our own version of this crime family-the federal reserve. It outlived its usefulness long ago and needs to be put out of our misery!

    • Mr. Universe

      My main question is why do foriegn banks have any hand in this at all? We not the colonies anymore yet we are still holding englands hand like a grown man with wife and three kids holding his mothers hand and never going anywhere without his mommy….

      Excuse my phrasing of this it was the only way i could think to express my point, i do not mean to offend anyone and if i have done so i sincerely appologize.

      • OldPhart OutIn TheDesert

        I only noticed this article, Mr. Universe, but let me attempt to explain how foreign banks are involved.

        (I would strongly recommend reading ‘The Creature from Jekyl Island’ by G. Edward Griffin. It’s eye-opening!) I’m going to give the really simple, low class explanation (not due to you, but due to me…I’ve read a lot of this history and I get some confused). Bear with me.

        The Fed was established, from inception in 1913, with foreign bank involvement. That carried through until we got the Bretton Woods agreement that established the US dollar as the world reserve currency based on our remarkable hoard of gold reserves. Over time, under Bretton Woods, various nations deposited their gold with us in exchange for dollars to use in trading. The Bank of England was one that had significant reserves of gold and they became a powerful trading and military ally.

        In 1971 Nixon took us off the gold standard and we went on a ‘faith based monetary system’…in my opinion it was misplaced faith. When we did that, we basically ‘stole’ the entire worlds gold that we had in our possession at that point.

        Ownership of stock in the FED is pretty much like any other ownership, if you meet the qualifying conditions. You may purchase stock in a foreign company just as any other person or organization can purchase american stock. The FED’s ownership restrictions make sure that the only ones that can own are the highest of the elite or the highest national banking system for the various companies.

        To my impression, to qualify to own FED stock you would need the assets of an entire planet to be considered.

  • Steve614

    Seems to me if we abolish Social Security and Medicare the government would be obligated to repay me and millions of other people the money we have all paid into those systems, right? I wonder what that would cost…

  • Sean Damron

    This article is a mix of fact, fiction, and conspiracy theory. Yes, the national debt is tremendous and it is impossible to pay it off in the short-term, as that would require the government to borrow money, leading to inflation. In almost every case, government borrowing is bad. It leads to inflation and growing debt makes debt maintenance a larger and larger part of the budget. The rest of the article is a bit wacky. It says that the Federal Reserve Bank is owned and operated by elite international bankers for profit. The Fed is owned by its member banks and they enjoy a 6% return on their stock, which can’t be sold or traded or used as security for borrowing. In return, the member banks must keep a mandated fraction of their deposits with the Fed. Yes, these banks might include foreign ownership, but they don’t really exercise any power. The article equates increases in the money supply due to government borrowing (which is bad) with increases in the money supply due to economic growth (which is good). We certainly would be in bad shape if we were operating with the same money supply we did a century ago. The insanity of the article can be summarized in this passage, “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.” The Fed has fueled economic growth in this country. Blaming the Fed for government spending is silly. Government borrowing transfers wealth to foreign entities, not the Fed.

    • janus

      Although you’d posted this comment months ago, i still thought it necessary to respond to its misinformation. One statement made by you, in particular, which stood out to me is where you state “The Fed has fueled economic growth in this country”. What’s your meaning of the term growth relative to monetary policy. In respects to the Fed, it is literally impossible to produce growth from debt – which you should know are Federal Reserve notes. If anything, all that it has actually produced is the illusion of growth:Inflation.

      However, if I’m wrong in any of this, please do contend with a better argument.That is, if I AM in fact wrong about this.

      • Me

        Indeed you are wrong.

        Debt can be bad and hinder growth but there are instances when lending can be good for growth.

        Consider an entreprenuer that wants to build a factory that will take raw materials and add value to them transforming them into cheaper and better quality products for building stronger warmer drier homes resulting in health benefits.

        The entreprenuer does not have the funds to proceed with the factory and so he borrows the money from the bank who has “created” the money through debt.

        It is quite possible that the debt be paid off over five years and the value added to the economy through increasing resources, making materials cheaper, promoting healthier homes is greater than the amount that was borrowed.

        The borrowing can stimiluate growth – not just by increasing the amount of money in circulation but by allowing investment of tomorrows funds today in a way that improves the value of both tomorrow and today.

        Such borrowing can also go bad. Lending on trends and overstimating the worth of an asset that one is lending against whether that be a tangible asset like a house or a promise of repayment. When the debt goes bad it can put everyone in a worse position today and tomorrow.

        Responsible lending promotes growth and is driven by a desire for mutual ong term benefit in which risks are carefully calculated and mitigated.

        Irresponsible lending promotes recession and is driven by short term selfish gain on both the part of the lender and the part of the borrower and a higher interest rate is the only mitigating factor of any perceived risk.

        • Luke

          Have you tried to borrow any money lately? Banks are not lending money. Why is that? I will just bet it is because the Fed has driven down interest rates and the banks are waiting for them to go back up. How is that for growth? I am on a fixed income. I can not get squat in interest on a CD. In the meant time the Fed prints, driving down the value of the dollar. That does not help a person who is on a fixed income. All of this caused by the Fed. I could rant on but I think you get my point.

    • Michael

      Dumbs^&%,
      Do you realize that the reason we have such an increase in the U.S. Money Supply, other than to compensate for increase of population, is DUE TO INFLATION that is NECESSARY only because of the INFLATION of the money supply???????? Read up and study your history or you are doomed to repeat it!
      Your friend,
      End the FED

  • http://jussmartenuf.blogspot.com/ Jussmartenuf

    The Bureau of Engraving prints the money, not the Federal Reserve. The Fed is owned by private banks, here is a link to that fact. http://www.factcheck.org/2008/03/federal-reserve-bank-ownership/

  • Paul

    Half the debt is owed to ourselves so let’s not worry about that part. Plus if you got the debt back down to half of GDP, no-one would be concerned. Easy to do if you really wanted to. Cut Govt spending across the board by 8% a year. Every program treated the same so there are no arguments (including Congressional salaries and benefits).
    In 5 to 6 years you would have a balanced budget at which point you do not have to cut anymore, you just freeze it. At the same time a sales tax is introduced at 2% on every single transaction in the country. No exceptions. If it’s part of GDP, it counts.
    All proceeds go to pay down the debt.In less than a generation you would pay off half the debt or 7.5 trillion dollars. Sales tax is retired at that point.

    • Dave49

      Problem. Once you have a tax, you never get rid of it.

    • Luke

      Half the debt is owed to ourselves so let’s not worry about that part.
      What about the people who have purchased those “T” Bills and government bonds. I guess we just forget about them also.
      And sure we can give the blood sucking leeches a 2% tax increase so they can pay down the debt and then we can do it all over again just as soon as they spend us white eyed again.
      Cut government spending 8% a year across the board. Good luck on that one.
      Bottom line fiat money will not survive. As a matter of fact no fiat money has ever survived in the history of the world.
      Why will it not survive? Politicians have to please the masses with money or they will be looking for a new job in short order. Now if they raise taxes in order to do that then again they will be looking for a new job. So what do they do? They just print and print and that is why fiat money will do a swan dive sooner or later.

  • notcrazy

    ya’ll crazy.

  • Dave49

    Spending will not be cut, as politicians see this as cutting their own political throats. In my view, the system will just have to collapse. If only they weren’t so corrupt, and let the failures fail so that successful businesses could take them over and get rid of the corrupt ones, we would not be in this mess. But the corrupt ones buy the Presidency for the successful candidate. There is no solution to corruption. And no where to find an honest candidate, given our system.

  • virgo1982

    I don’t get why the US Government can’t collect $20 from the 150,000,000 people that file taxes. That would be $3,000,000,000. I’m thinking that could take a nice chunk out of the National Debt. Who’s really going to miss $20.

    • http://na Peter

      $3,000,000,000??? Wow, 3 whole billions. That is one quarter of one tenth of one percent or .025%. Barely a scratch. If we did that every year for 4000 years that would just do it, assuming no new debt… great plan.

      • Luke

        Can you believe these people? No wonder we are bound for destruction. LOL

  • ustudy

    Actually there were four presidents. Ronald Reagan attempted to establish the Gold Commission, for that, he was shot. He didn’t support the Gold Commission again.

    The Central Bank will not go quietly. The massive amount of damage and ruination these bankers can inflict is beyond belief, but it has to be done. The money supply cannot be increased further without collapsing the dollar. Not to worry, the Bankers are ready to roll out the world currency. If we think we have problems now…

  • JimpalaSS

    There aren’t 150 million people in the US that pay taxes. You think they will pay 20$. Remember, 10% of the people pay 90% of the taxes.

  • Marty

    Mathematically impossible?

    Something is wrong with that. Hey man, the household debt today is within a trillion dollars or so of the national debt; I’d say that every one of whom financed that debt expects to be paid back.

    So why should I who still hold some of the national debt in US Savings Bonds not expect to be paid back?

    Mathematically impossible is an absurb position to take.

    • Luke

      Then lets all just wait and see if this debt is ever paid off. I giving 1000/1 odds that there is no chance of that ever happening. Check this little problem out. World wide there are 700 trillion in derivatives. That is $100,000 for every single person on the earth. You know the unregulated derivatives. Let that one come crashing down and see where we end up. I’m giving 1,000,000,000/1 odds that we can not bail that one out.

      • american

        when i die my debt simmply is written off and nobody really has anything to say about.let the company called usa die.we can then start a new company.

  • http://non-existent Robert Brossard

    I ONLY READ THE FIRST FEW PAGES BEFORE THIS ARTICLE BEGAN TO LOOK A PROPAGANDA PIECE FROM PEOPLE OPPOSED TO DEBT. USUALLY DEBT IS SEEN IN A RELATION OF TIME TO INCOME IN ORDER TO BE UNDERSTOOD RATIONALLY. I MIGHT BUY A $1000,000.00 HOUSE ON AN INCOME OF ONLY $10,00.00 A YEAR. BUT THE IDEA IS THAT GIVEN TIME I WILL BE ABLE TO REPAY THE DEBT. DEBT MUST BE SEEN OVER TIME, NOT AS A RATIO OF MY CURRENT DEFICIT SEEN IN THE CONTEXT OF MY CURRENT NET WORTH.
    ROBERT BROSSARD

    • david

      It’s important to read the whole message :) What he says is that debt cannot just be printed away in our system, because the act of doing so creates more debt with interest. also that due to fractional reserve banking every amount paid back means times 10 taken out of the economy. Okay I like your spirit, just be sure to read the whole thing :)

    • Brian

      True, I also have a home that represents a much larger amount than my annual income. Of course, I’m not spending 40% more than I make every year either. I also don’t have any unfunded future obligations that will add to my annual outlay and increase my borrowing needs. See the whole board.

  • Lucas marrone

    America is absolutely f****d, I’m so glad my government (British) cut spending straight away the only problem is that when America goes bust the whole global economy will come to a stand still and this is not right. American people need to rise up against their totally incompetent politicians, I still can’t believe no prosecutions have been bought against the people who stated the2008 downturn. And still the yanks haven’t apologised to the world for that. What we will see over the coming years is america losing it’s AAA rating and pushing debt higher we will see America losing it’s position as biggest economy on earth and we will witness the meteoric rise of Germany. I hate to admit it but the Germans are clever toerags. The allies bought them to their knees twice in the last century yet german engineering is the best around german exports are second only to china does anyone know just how enormous the german export Market is??? me being a Brit it makes my blood boil just how strong they are news out this week about german unemployment reaching a 20 year LOW! While countries all over Europe are still trying to steadily grow germany are as strong as a wind turbine. This would not have been the case if Britain wasn’t forced by AMERICA to give up our empire. The yanks have shot themselves in the foot and I’m afraid it’s going to cost the global economy dearly yet again. You can start by bringing the CEOs of Lehman bros like Richard fuld, Ben bernanke

    • Jason

      America has already lost its AAA rating. it happened late last year

    • SGT Saunders

      Lucas,
      The United States didn’t force you to give up your Empire. India threatened to back the Japanese in WWII if Great Britain didn’t agree to give the India independence after the war. After the war, your own people punted Sir Winston and put the Labour Party in charge. You did it to yourselves, buddy.

    • Mr. Universe

      The only reason the global economy would come to a standstill if america went belly up is simply this, and this is something i have observed over the years, The world is dependent upon the United States soley, because of a few facts:
      A. We bring business to failing countries and nations
      B. We throw out millions of Dollars to feed, cloth, and shelter starving nations
      C. World stocks are traded mostly in OUR market
      D. We hold 76.6% of all the gold in the world, most of which was given away by other nations as a thank you to our nations assistance
      E. Not like the brazen giant of greek fame, with conquering limbs astride from land to land. Here at our sea-washed, sunset gates shall stand a mighty woman with a torch, whose flame is the imprisoned lightning, and her name Mother Of Exiles. From her beacon hand glows world-wide welcome; Her mild eyes command the air-bridged harbor that twin cities frame. “Keep ancient lands, your storied pomp!” cries she
      With silent lips. “Give me your tired, your poor. Your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me, i lift my lamp beside the Golden door!” – Emma Lazarus All those who can’t stand their home nations come to us to be free more so than they could have ever been in their home nation.

      These are only a few of the reasons why the world will fall if the U.S. falls.

      Though the United States is but a young pup in the history of our world, we came up fast, we came up strong, and we grabbed the reigns when the rest of the world let them fall.

      And in the unfortunate events of world history a saying stands out like a sore thumb and rings true in every single nation on the globe including yours Lucas:

      Absolute Power Corrupts Absolutly

      Sicerely

      Mr. Universe

      I am watching…

    • Michael

      Lucas,
      Sorry to say but you are ********************** anyway with the Euro and the other lazy s.o.b.’s in Europe :/ Just saying!!!

  • Lucas marrone

    And Glen Hubbard who all profited from your last demise. Start a political party that is not motivated by greed, rally the people aswell as educate them let them know how they are getting skanked also bring prosections against the men named especially mr.fuld!!!! And also tell that daft president of yours to grow some balls like our prime minister david Cameron who has grown a pair and stood up to the eurocrats.

    • http://na Peter

      Obama is a piece of garbage who hates America and is enjoying it’s collapse. We have the Tea party but no viable candidates. Ron Paul is tryng to get on the Republican ticket but the media HATES him and so does his party. The only reason he is still in it is because of his grass roots supporters. We are hoping to pull off a miracle. But that is only one branch. The congress is still crap…

  • Fox

    You guys have a few pieces of pieces from a massive, massive puzzle.

    The Rothschild and 13 bloodlines have chiseled history in their own images (much as they are continuing to do our futures).

    So here goes, a few pointers.
    1. yes the fed is owned by bankers, well run by bankers from those banks (good eh) Rothschild created the fed and the first American bank and has (allegedly) killed of every American President that has stood in his way and mentioned “gold or silver standard” (but then who says gold or silver is a precious metal – (i mean you cannot eat it!).

    2. Britain is FAR from out of the woods – guess who owns the Bank of England – it’s not the public!
    and guess where ALL the money is owed? (someone with assets of $300 Trillion) Rothschild.

    – so why don’t we stand up to him? “they” own the police, the armies the governments, the politicians… basically society!

    3. Three countries without a Rothschild central bank (for now) — wait for it… SYRIA, IRAN and CHINA…

    4. These families are responsible for all wars, WWI, WWII and WWIII, they have secret meetings in Bildersberg and Bohimien Grove to facilitate this dastardly plan….
    don’t believe me? research, the one thing they fear is the internet, it is all out there, the real history, who REALLY owns Israel (and it is the Palestinians.. part of Persia you know)

    Time to wake up and smell the coffee beans, i for one am fed up of being a slave for the rich.

    P.s – sorry about the name, do you really think i am daft enough to write this and use my real name… RIK CLAY – YouTube.. do it!

  • Russel

    The Best way I sense in resolving this issue, is (a) to levy a Surcharge for every Payment made to Federal Reserve say 1%.
    (b) tax all the Shareholders for any transaction in transfer of funds @ 1%.
    (c) Put a clause that no funds of Federal Reserve can be transferred out of the country, and in doing so twice that amount will be reduced from the principal debt.
    (d) Government bonds purchased by the Federal Reserve as Institutional buyers will be given 1% lower interest than Individual/Corporate buyers.
    (e) Keep track of all investments by these so-called Federal Reserve Shareholders Cash flow and levy additional surcharge of 1% on those transactions.
    (f) put in a legislation that for every 500,000$ of money borrowed, 1 individual will be additionally employed by Federal Reserve with Salary not less than 75000$ p.a.. This employee will start paying tax of approx. 25000$.

    (g) Many more points which cannot be listed altogether in this post.

    These will start draining money out of the Federal Reserve and back into the economy. And in a span of approx. 15-20 years, Federal Reserve debt can be nullified.

    Your views will be highly appreciated.

    Regards/Russel

  • http://www.wealthmoney.org Ayrlahn Johnson

    Good article. Here is some feedback. Too much emphasis on the Federal Reserve. The reality is the vast majority of money is created by the lending process of private commercial banks. When money is loaned, new (checkbook) money is created, when the loans are paid back, the (checkbook) money is destroyed. In the meantime the money to pay the interest is never created. Theis means we will always be in debt and there is no way to every pay back the debt and there will always be losers in the economy through no fault of their own. We will never get out of debt in this system because all money is debt. If no one (government, business or individuals) borrows any money, there will be no money to carry on commerce. The only solution to the problem is to somehow create some debt free and interest free money. Congress could easily do that but not only do they seem unwilling to do that they have shown themselves to not even understand the problem much less understand a solution. The good news is that we do have a solution that will work at the State level. In Minnesota we have introduced a Bill (Senate File 65 and House File 610) that will create money debt free and interest free through State Chartered Banks to fund transportation projects in the State of Minnesota.

  • http://plus.google.com Lauretta

    People open your eyes, this whole world is a conspiracy and nothing can or will be done unless and until the individual gets fed up and starts fighting back. We need to become the enlightened people we once were and do things that are morally good for us. We need to get back to our basic rights and freedoms and back to living off the land instead of depending on others to do for us. As one of the founding fathers said, you can not give up freedom for security because you will have neither.

  • rick

    This stuff scares me. I wish I could go somewhere and hide. The rich get richer, the poor get poorer. No wonder the world would like to see us fall. We just can’t give up,I’ve got another 30 years of life left. Please God save us!!!!

  • Patrick

    Ron Paul anyone?
    ——————————
    Best Plan of action, Education..
    Spread this info, learn more on the subject,
    and maybe one day it can change YOU Know when there isn’t a bunch of uneducated, Government supported bum’s voting for more free money, food and health care and pigs fly….. lol
    just kidding… honestly though only one way to change this, Education and the sharing of Knowledge on the subject is the only way .. PEACE OUT… LOVE YOU All………

    • BobTrent

      What? The “gov’t. supported bums” are at least 47%. I think that’s probably an understatement. What about all the nonproducers: soldiers, gov’t. officials? Not just welfare bums. Social security recipients: welfare bums, too. The FICA/SECA taxes they paid were spent long ago. Their handouts come out of people who are paying FICA/SECA taxes now. Plus, O’Bama said last year that as of Sept 30, 2012, the SS payouts exceed the FICA/SECA taxes received. That means that SS has started sucking on the general fund teat.
      Gotta get O’BamaCare going to get rid of the useless eaters (especially of medical care). Hope they don’t get around to the bedwetting kids very soon.

  • michaels

    yes,the rich,powerful,politicos love the money and will do anything to keep and steal it from the public.problem is the voters have been dumbed down and love their pleasures more than educating themselves even a small bit so we continue to elect dubious candidates in big money’s pockets.a bad scene and no good can accrue from it.public in Greece got lots of benefits and politicos there grew their debt so now riots.only integrity,hard work can overcome

  • Robert Stehli

    Sad, I imagine that these banking elite will continue to skuttle the Eurozone countries one at a time by lending them money that dosn’t even exist, and sabotaging their industries, as they put their bankers in charge of them. Then they will turn on us. Before they take us down they will probably try to use our military mite to subjugate any countries that have resisted their control. In the end the people of the world counted as their cattle. These banking elite seem to have left no stone unturned. They own most of our politicians, and our mass media. Their banks have opened their vault doors to both Romney and Obama. Either way they win! You have to admire their genius. By the way, since their minions control our education and information, and they are working feverishly to control the internet: I would say our chances of getting out of this one are slim.

  • Me

    This article seems to continuously claim that the only way to repay debt is to increase money.

    What is debt and who do we owe it to?

    Most of it is owed to the future. The banks do not simply take that $100 and arbitrarily lend out $1000. They lend against value whether that value be tangible assets or a realistic promise to pay based on a history of earning.

    That $900 that is lent out represents value not just in existence today but also in existence over the coming years. It is borrowed from the future.

    We are effectively taking money from tomorrows expected wealth and spending it today.

    This can be disastrous if greedy lenders overestimate the value of tomorrows wealth. Or if self entitled borrowers spend tomorrows money because they do not want to wait and save their money.

    On the flip side lending out more money than actually exists right now can be extremely positive as it can fuel growth to an extent that was not otherwise possible. If the lending is used to increase the amount of resources and significantly add value to the economy it can be a very good thing. Thus lending can be very good if it increases the value of tomorrows economy by more than what was borrowed from it.

    It is right to try to scare people but you need a call to action – people should ask themselves, am I borrowing productively? Is your borrowing going to be used to directly add significant value to tomorrow’s society or does your borrowing simply allow you to buy today what you want to pay for tomorrow? You are the economy all of you. It’s easy to blame fatcats, bank owners, politicians, reserve bank or whatever but their power is only perceived power and they know it. The real power has and always will lie in the hands of the people, most of them are just too fat lazy selfish and stupid to do anything about it. Does that apply to you too? Ask yourself that next time you want to buy something on credit.

    • BobTrent

      It’s all fantasy, folks. The “money” is “created” out of “thin air” (more like a vacuum). The debt is imaginary just like the money units that it represents.

    • Steve

      I think the point of the article is that the debt can never be paid off, not that at some point in the future it can be. I’m not sure how one could estimate what a minimum payment would be on total debt, but if you could, my guess is we’re starting to get dangerously close to that number as compared to money in existence. If there isn’t enough money in existence to pay even the minimum, then it doesn’t matter how much value someone views what you do with the borrowed money.
      It is a corrupt and irresponsible system in which those at the top of the Ponzi pyramid are guaranteed a living while the rest of us have to fight each other for the few dollars in circulation to pay them back. Sometimes becoming homeless, starving and foregoing education in the process.

  • Gregory Heald

    Yes I have a thought. I am really good at what I do but, banking is not what I do. So, call me stupid but, it seems to me the simple soulution here is always the hardest one. Screw the banking elite like they have been screwing us for so long with a banking scam that has cost the US trillions and destroying the nation. Borrow all the money we can from the Federal Reserve while are credit is still good. Then pisss on them. Default on the loan. Simple.

  • Gregory Heald

    Bankrupt the Bastards. Surely they are smart enough to cover for this event which happens all the time. The banks cover for it in the interest rates. The Banking Elite should have accounted for this. So screw them borrow all we can and stick it up there ass for a change. Be like the movie Trading Places. Bet Congress doesn’t have the balls to pull this off!

  • Gregory Heald

    Let me get this straight. The Federal Reserve is a Private Bank. We cannot audit there books. We borrow money from them when we need it, and they charge us interest on our own money. And they have the templates and can print our money whenever they want to? Is that about right?

    ARE YOU ************* KIDDING ME! SCREW THROWING CONGRESS OUT OF OFFICE. JUST TAKE THEM OUTSIDE AND SHOOT THERE DUMB ASSES.

    • BobTrent

      Very brave of you to encourage me to do it. You do it, big mouth.

  • https://sites.google.com/site/thegreatstatedivorce/ Charles La Rue

    Hello,

    I’me a retired aerospace system engineer. I became interested in honest money and the Federal Reserve system thirty years ago. This recent recession has fired up my imagination. I believe that I’ve come up with a win win solution. Will you please look at my blog? I’ve love your comments.

    https://sites.google.com/site/thegreatstatedivorce/

    Sincerely,
    Charles La Rue

    • R G

      Hi Charles,

      Read “the great divorce”, very intriguing.

      One question… How do propose to make your plan attractive to “regular” Americans and Washington DC politicians specifically, since DC politicians will be deprived of their source of money to waste on nonsense like giving money to Pakistan, who hates us and doing studies on the speckled snout lizard…

      How do we fund federal programs we want to fund like military spending, etc.? RG

  • Mr. Universe

    I just did some calculations, I took the total amount of gold held by the world which is ~30,807.6 tonnes, then the current price of gold per oz which is ~$1,642.1 multiplied that by 32,000 to get total price per tonne which is ~$52,547,200 per tonne, and then I finally multiplied ~$52,547,200 per tonne by ~30,807.6 tonnes and got the total figure of…Drum roll please….
    A measly $1,618,853,118,720. Still not enough to pay off the national debt.

    so to recap the equation goes like this:
    $1,642.1 x 32,000 oz = $52,547,200 per T x 30,807.6 T = $1,618,853,118,720

    Now the reason I bring up gold is that is the base of our monetary system here in the United(for the moment) States of America, that little peice of paper is supposed to represent an equivalant amount in gold, unfortunatly like was stated in the article, we have a “Fractional Reserve Banking” system so the amount of paper money we have is far beyond the limited supply of gold that is held in reserve and the amount of positive intrest (meaning the amount that the dollar is stretched via Fractional Reserve Banking) basically blows that number out of the water.

    Just because we aren’t useing a trading and battering system anymore doesn’t mean that we still don’t, for lack of a better phrase, think about the chicken.

    In other words we are still trading the chicken for the cow only the chicken is represented by a slip of paper that says One Chicken(one dollar).

    The numbers I have given will of course fluctuate on a daily or even hourly basis but this is just my interpretation of todays numbers that I have found.

    I hope that this makes sense to at least one person.

    Sincerely

    Mr. Universe

    I am watching…

    • Michael

      Mr. Universe,
      WHAT YEAR ARE YOU LIVING IN???? We have not been on a gold backed currency for 40 FREAKING YEARS NOW!!! There is no connection between gold and our currency now, none, zilch, nada, non!!!! Study your history, and especially economics in history or you are DOOMED to repeat it!

  • MistaBluMagic

    Hmm. If we are in an impossible to beat financial crisis why would money lenders keep
    lending money?
    For example lets say you lent someone 1 million dollars and they ended up failing
    their investments costing them their job and home. Would you give it back ? And lets say you did give it back and they ended up trying it again but again they failed costing them even more debt. would you give it back ? Whats the point of lending out large amounts of money if you wont get it back? Wheres the win? Do they plan to build a system where they eventually get their money back whether its fair or not “to we the people “? I guess this is where they finally whip out the New World Order.

    • Michael

      Helllooooooooo,
      They are loaning based on fractional reserve lending!! That means the minimum they loan out is based on 10 times the amount of YOUR deposit into their banks! That is the MINIMUM! So lets say in their bank some one has deposited $100, that means if they are at the maximum level of reserve requirement (they have a low credit rating), then they can loan out $1000. Now most likely they are paying you about 1% on your money ANNUALLY! They are charging 11% average on that money they just lent back out. So they are making more than DOUBLE and its not even their own money they are lending to everybody. Do you see where they really do not have a reason NOT to lend???

  • Tim

    I just read a report that only 85 million people actually pay Federal income tax….Low income familys 22% of soccial security etc don’t pay
    income tax.. So 16 Trillion in Debt divided by 85 million equal $188,000 owed per paying taxpayer We would have to pay $6200 extra each year in taxes
    for 30 years to pay off debt..That assumes balanced budget now…We have the richest country in the world in natural resourses and hard working
    people we can solve this problem by working together and rebuilding our great heritage

  • Marty

    There may be a way to put a dent in the debt and reduce it! If federal and state governments would grow, harvest, and sell trees it would raise revenue. At the least it would help pay interest on the debt.

  • Lee

    More conspiracy theories. Just because you can read something online doesn’t make it true. Her Majesty the Queen does Not profit from the Fed in any way shape or form, the so called Elite do not own Americas Fed or Britains Bank of England. No private individuals do. There are no dividends paid to the share-holders who merely exist as a requirement of law. Poor Rothschilds get blamed for everything all because of the Napoleonic era buy outs, true enough but they’ve never been that smart since and were shut out of the British establishment since.

  • http://yahoo.com Jess

    I do believe what is being said in this article, but only to a certain point.

    The issue lies in a combination of things. First thing first I want to point out if anyone has not noticed but if you decide to buy anything made out of plastic, wood, metal, rubber, pretty much anything other than food, IT IS MADE IN CHINA. Who is the most financial stable country? You guessed it! CHINA. When it comes down to toys, containers, anything other than specialized items america buys it from other countries, like china, mostly china. I know that everyone in this country may not have the best math skills, but I know everyone knows when you subtract something and dont add anything back to it, it gets smaller or in the case of the United States debt, it gets bigger.

    We will not be able to get out of debt until we start selling our products to other countries, in mass quantities. When we stop recieving products from other countries. The United states have to change FREE TRADE to NOT FREE TRADE. If the United States stops excepting inports and charge high fees for inports it becomes more feasible to build our own products. When we build our own products and make toys for our children we create jobs to employee americans. If we continue to take in chinas products it obviously will continue to get much worse. I make it a point not to buy anything from china. It is really hard to do and at times gets expensive. In some areas it is impossible like phones and cameras, especially after Kodak went out of buisiness.

    So really what it comes down to is, WE, OURSELVES, are CRASHING and PUTTING oursevles into more DEBT. If we the people do not start turning it around, nothing will change. The government isnt doing it for us. We need to start doing it. I am trying to start my own buisiness and it is really really hard, especially with only buying american.

    By American! There are many companies right now struggling because of the government. We need to help them out. Stop buying American Eagle and buy American Apparel. Instead of Dickies, buy All USA. We have options and we have to take the tougher option sometimes to make our country in a whole, Better. We will start creating jobs slowly on our own.

    • Chris

      I think you’re missing the whole, “more money owed than actually exists” part.

    • dyssiden

      How about this; the US announces its intentions to categorically scale back on its Free Trade Agreements, and starts imposing tariffs on certain imports…. over time this tariff will rise. In return, China will want to dump the US treasuries…. unless somehow the Chinese believe that somehow the US $ will always hold its value against the remnimbi.

  • Curtis

    3 Words, The Venus Project. I’ll let it speak for itself.

  • charles

    whats the problem?
    Just take care of your own butt.
    make sure you have cash or something under your bed.
    US will go bankrupt…
    so big deal.
    just be happy and maybe you will get to know your neighbours.
    The world is really laughing at the US, its stupidity, and political forums.
    its had one of the greatest armed forces but has never paid for it, how superficial is that?
    What goes up must come down.
    China will probably come down in 50 or 60 years. Muslims after that….
    just nature taking its course. A whole nation with its head up its A&&.

    • BobTrent

      If you have guns and ammunition you can make the Preparedness people share their foodstocks with you, or if they are not compliant just shoot them. Of course if everlyone had only guns and ammunition and no hoards of supplies, this idea wouldn’t work.

      • Mike

        Come try take my food and the last thing that passes through your body will be lead.

  • William Blair

    It is called – being sold into bondage by liars, thieves and traitors. Fed only by a false security of social structure: the slave, the taskmaster and the aristocrat.

  • Boston

    I don’t understand how when the debt is about 16 trillion and all of the physical assets are worth 65 trillion it won’t pay off the national debt, I know I didn’t get the message right.

    BTW Im a tenth grader, I’m just trying to understand

    • unknownn

      they would have to sell our land and everything the us owns to get 65 trillion

      • miaminative305colombia

        exactly, now let’s give the foreign countries all the states we’re not using. Did you know Wyoming, Vermont, Delaware, South Dakota, Alaska, and North Dakota don’t even have a population of 1 million people. Meanwhile New York CITY not the state the CITY has 8 MILLION people living there. Let’s give the foreign countries all those states and a couple others the U.S. isn’t using.

        • General Wrath

          Vermont will be its own country again, also, I hope that is a joke comment because it is really dumb.

        • Vermontwillfuckyouup

          Not using? Vermont is broke just like the rest of the country. Just remember Vermont was one of the first colonies of the United states so we most likely made you whatever dipshit state you’re living in now.

    • Chris Shupe

      16 trillion is the official figure for the national debt, but it leaves out unfunded liabilities. If you include all the money that the US government owes the people for Medicare and Social Security (which are considered debt by standard accounting rules), that number grows to 65 trillion. The estimate here is that if everyone in the country sells every physical position he owns and gives that money to the government, it will amount to a total of 45 to 50 trillion (which probably doesn’t even take into consideration the enormous drop in prices that would result). Thus we’re still short 15 to 20 trillion.

    • NoBrainer

      American Fellows:
      Work harder, spend less. Then you will have surplus! Gradually, the deb will be paid off!

  • Trent Pettison

    A government created “money supply” can never go broke. That’s why gold and silver certificates became “legal tender.” A food stamp and welfare check is too. As long as people accept paper in exchange for real goods from this Santa Claus government all is well … until it takes a wheelbarrow full of it to buy a loaf of bread.

    If you don’t think it can happen, ask a southener who saved his Confederate dollars thinking the South would rise again. Should of hung onto his gold if he had any because that’s what was really needed.

    Historically, democracies last about 200 yrs. give or take and this one is getting mighty near the end of it’s rope. It never fails and a dictatorship follows. Yes, it’s a grim outlook but look at the bright side. A new democracy will emerge over time that may have acquired the wisdom to understand the weakness of human nature and lead it’s way out of the dark side of arrogance.

    • Liberty Felix

      Aren’t the Confederate Artifacts holding more value than our currency…. I would have thought as historic antiquities they would show something.

    • Anon

      Care to name the source you have used to cite the 200 year lifespan of democracies, and name several examples?

  • http://twitter.com/earthwormdot EarthwormdotGen

    The numbers are not the real issue: when it comes to
    practicalities, and ignoring moral values, what matters is what happens. While
    moral values have high value to me, in the following discussion I assume that
    the characters involved have no moral values.

    Let’s say we have two countries, Country A and Country B: each country has $1
    trillion.

    Let’s assume that each country’s strength is directly
    proportional to the wealth it owns.

    Country A borrows $500 billion from Country B.

    For 30 years, Country A develops its military and becomes
    stronger than Country B. However, due to interest, Country A now owes a
    staggering $20 trillion to Country B.

    Country A doesn’t want to pay the debt, so it just launches (and wins) a war
    against Country B.

    What matters is what happens: if nothing important really happens (yet) due to the debt, then using the assumptions, the debt doesn’t matter much (yet)
    The end.

  • Food for Thought..

    I think all the countries in the world should get together and neutralize their debts… Like, every country has debts. So what I mean by that is: say the US owes France… 3 million dollars (just go with it), and France owes the US… 2 million dollars. If France were to pay off their entire debt to the US, we would just turn around and give it right back to pay for our debt. So just cancel out the smaller number. Now, France doesn’t owe anything, and the US owes a much smaller amount of 1 million dollars. Now, I know those numbers were very wrong, but I just think if everyone worked together, we’d could maybe… i dunno, lessen the blow, I guess?

    • Ryan

      The problem is the countries owe each other very small amounts compared to what they owe the central banking industry. The Federal Reserve is the one who is owed all of the money, and they don’t pertain to any particular nation. These are the Rothschild, the Rockefellers, etc. The thirteen elite bloodlines.

    • BobTrent

      The banksters have orchestrated the murdering of hundreds of millions of people just in the last century. Think a few officials or presidents can stand in their way? Ask Abe Lincoln and John Kennedy about that.

  • Ryan

    Basically, when the central banking creates a dollar, they loan it to the United States at, for example, 6% interest. Therefore, they created a dollar for us, and we owe 1.06. The extra six cents do not exist. Since the money system isn’t backed by silver or gold as it used to be, it isn’t worth anything. The money is only paper. Paper is very cheap. A dollar is only worth a dollar to someone who sees that as it’s worth. Gold and silver are actually worth something. But the central banking system took gold and silver out of our money decades ago so they could control our money. Anyways back to my thought, if we owe 1.06 and only have one dollar, as we continue to borrow money from the federal reserve we will continue to go further and further into debt. As the interest compiles and multiplies on top of itself, we find ourselves in an enormous problem.

    • BobTrent

      Gold and silver as currency sound good as having intrinsic value. But past experience shows that the international moneychangers can suck the gold out of a country that relies on it as currency and bring that country “to its knees.” When the British were buying tea and other goods from China, the Emperor insisted on being paid in silver (and gold). He had no use for trade, for as he put it, China was an ancient civilization and was perfectly capable of manufacturing anything needed or wanted by the Chinese people right there in China. Britain was sucked almost empty of its silver. So the British, who controlled the Indian opium manufacture, smuggled vast quantities of opium into China, receiving payment in the silver they had paid the Chinese, doing great harm to the Chinese people. When the Chinese government and patriots resisted, the British and other western dope pushers invaded China. The Boxer Rebellion was one instance of Chinese resistance to abuse by western merchants and their governments.

  • Josh

    Zeitgeist the movie. Solution a resource based economy

  • collin

    The debt is mathmaticly impossable to pay because the intrest is not created ! and that is fraud ! The banks have a license to counterfiet ! So all out of thinn air debt is null and void! under fraud ! Everyone should keep all property they have out of thinn air debt on ! If we let the banks get ANY of it is like coming home and catching a thief robinig your house and letting them keep what they have loaded in the truck!!! This can only end two ways #1 the banks forclose on the world and own almost everything and become our TOTAL slave masters ! Or we void the debt and keep our property that WE worked for!!! the bankers did not work for the so called money! And this would boost the economey like never before and we go back to what made america the greatest country in the world FREEDOM and The United States Constitution FOR America! And it only allowes gold and silver as pament of debt! The banks hate gold and silver because the cant create it out of thinn air!!! And dont believe the lies about there not being enough of it!! rite now if you worked for a 1oz silver coin per hour that would be $30+ dollars But dont take my word do your own research!!

    • BobTrent

      All your (land/real estate) property is pawned by the counties in which it lies as security for the bonds that every county and municipality has issued.
      You are a feudal tenant, not an absolute owner, despite the meaningless phrase “in fee simple” in the deed. Where do you think the land came from in the first place? God created it and the government stole it from whoever occupied it before the present system took it over.
      You got it as the successor to a gang of thieves and murderers who killed, subjugated or drove out the previous gang of thieves and murderers.
      I know a little about this as my ancestors were many of the aforesaid most recent gang of thieves and murderers.
      It’s the way of the world.

  • California

    Couldn’t we just go to war with china and North Korea and sell there land

    • BobTrent

      Um, China is chock full of Chinese, who still remember how the western nations, including the United State, have treated China. They just might not be real welcoming to anyone who actually came and attempted to take possession. “North” Korea is claimed by the Republic of Korea (“south” Korea), who might get testy about it.
      Are you ready to sacrifice the entire Left Coast of the US for the conquest of China?

  • Gonzo

    The Federal acts that created the U.S. Federal Resurve System states, The U.S. Congress can at any time buy back the Federal Reserve for the sum of 450 milion dollars. Which seemed unfeesable in 1913 when it was writen, but at current its not such a large sum. Not considering the yearly proffet is more than 9 Billion a year, after they pay themselves their take. And as of current, no one knows what they pay themselves. They won’t allow anyone to see the books, never have done so ether. So, in essentce The Federal Reserve, owns the U.S. Government, and all of the people too.

    • BobTrent

      Where will the US get the $450 mil in cash that isn’t borrowed from the FED? Print a US Note for $450 million and give it to them? Both presidents who ordered the issue of interest free paper money were quickly shot in the backs of their heads and the US Notes taken out of circulation.
      Where will you find the politicians who are brave enough to take on the international banksters who own the FED and most of the rest of the world’s central banks?

  • Ben

    This is possibly the dumbest opinion on how money, banking and the economy work and offers no better alternative to the way any of what’s described works. I feel stupider that I found this webpage.

    • Steve

      There are plenty of books available that discuss solutions. I’m certain you are not very intelligent on how money, banking and economics work, otherwise you wouldn’t feel so stupid after reading this article.

  • BobTrent

    Paper and ink. And now, electromagnetic zits in computer memory banks.

  • marvin nubwaxer

    this is absolute wacko scare tactic bs. what are they selling here? gold? bitcoin? survivalist supplies, bunkers and guns?
    by the way, the usa owns assets of at least $65-120 trillion, but this site is also a right wing extremist propaganda port to bash obama.
    booga booga.

    • Flint Stone

      Obama doesn’t need any help bashing. He’s doing a great job all by himself.

    • Steve

      You give liberals a bad name. This isn’t a new problem and has existed under both parties. Although it is reasonable to ask what someone gets out of you reading an article, if they were selling one of the things you mentioned, do you think they really did a good job, seeing as those things aren’t mentioned at all?
      Please state where you came up with your figure of $65-120T in assets.

  • marvin nubwaxer

    it’s a federal presidential republic. unfortunately it has also become a corporate/military empire and all empires in history have crumbled out of existence sooner or later.

  • Scott

    You are correct. The Constitution prohibits the states from making their own money in Section 10, “No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts;

    In Section 8, the U.S. Congress has this power, “To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
    and also, “To borrow Money on the credit of the United States;

    Why has Congress borrowed money for the last hundred years instead of coining our own money? Don’t you think the borrowing method will lead to the ruin of our county eventually? The debt cannot be paid off. As more and more money is borrowed and put into circulation via the fractional reserve system the dollar will become almost worthless.

  • miaminative305colombia

    Mathematically impossible? That’s not what the foreign countries are saying. Give them the middle states of America. There. Now everyone can be happy and America will become more diverse than ever before.

  • Kara Oneil

    If they are afraid, and they are, since they are saying it will cause financial disaster to have an audit, we need the audit. That means, we have no money in our country. That means, if every person in the United States went to the bank to get their money out, the banks would not be able to handle it, that means the money is gone. Period.

  • Kara Oneil

    Why if they are a private business, are they exempt from taxes? They are making more money than anyone in the world.

  • Remus

    Hi there,

    Great article. I had no idea of the magnitude of the debt :)

    However, I think there might be another solution. The way a country can make money is either by attracting it from other countries (e.g. exports), or by exploiting its natural resources.

    So, if the US Gvt. could stop burrowing money and use what it produces to slowly pay the debt to the Federal Reserve Bank, it could, theoretically pay up the debt in time.

    However, this assumes that things could go smoothly for the economy and that the US would not be forced to borrow any more. Unfortunately, in practice things don’t work that way. Every couple of years, a financial crisis hits and they have to borrow even more money. Now, who has the incentive for that to happen? :)

    • Steve

      Exporting more than importing can work, but all it does is make the other country go further into debt. Exploiting resources also won’t work without either a foreign country buying it all, and therefore going further into debt, or if we as citizens borrow money to pay for the resources. Doesn’t solve the problem.

  • Austin

    The Fed has employees right? If we prevented the Fed from printing anymore money; interest rates would rise, people would deposit more money into the banks. The banks would pay off some of their debt to the Fed. The Fed would have to pay it’s employees with some of that payment, the money re-enters the system and the Banks can pay off more debt to the Fed, repeat. Of course as long as the Fed can keep printing, banks will keep borrowing and we’ll keep going further and further into debt.

    • Steve

      If the Fed stopped lending, then the money supply would shrink as debts are paid off. Not every dollar that is paid back to the Fed is paid to their employees.

  • JDCrimson

    I run a bank (dont own the bank) and I can sum up what you have stated very simply. If you go back and read your Bible you will find often that slavery and usery (interest) are often mentioned in tandem. Interest is a form of willing and self-inflicted slavery. Every time you borrow from someone else or a bank you are effectively enslaving yourself to work harder for longer to pay that interest. Its that simple.

    If everyone including the government was to pay off all of its debt – really the only commerce left would be for the bare necessities (food clothing and shelter). It would take hundreds of years but after a time we would return to an agrarian society such that you reach a balance in that you live off what you (meaning you as a citizen or the government can generate internally to provide for you) can produce off the land. We will eventually get there anyway (although we wont see it in our lifetime) because we will eventually consume all of our resources to produce electricity and provide transportation.

    If the Fed is owned as you say it is and I wont dispute that; there are only 2 ways to combat it –

    1) The citizens of society who have debt must work their way out of debt and resist the urge to re-enter into debt and live within one’s means. Once you are debt free you are no longer in enslaved. Remember that feeling you got when you paid off a debt? That feeling of burden lifted off.

    2) Once you are debt-free you must contribute a portion of your surplus to charity in helping those less fortunate become debt free either through gifts or barter for work.

    As citizens consume and incur less debt – debt levels decrease and this filters up to the government who more surplus to repay the Fed. The Fed retires the bonds and the funds are taken out of the system. The Fed’s profit goes down because of no interest is being paid.

    Whether its you, the Fed, or China only those who are debt free are truly free. If you are debt free, you are merely using money for convenience.

    The best economic and banking system would be consist of –

    1) Excise taxes that merely tax the transfer of goods and service (basically a fee to the government for participating trade to fund the government and provide protection under the law). This fee is paid on every transaction. Theoretically, if you charged 1 penny (regardless of the amount of the transaction) on every economic transaction occurring in the US in a given year – it would generate about $5T in revenue about equivalent to what our annual budget is currently. Add another penny to that transaction for the state’s portion. You eliminate the need for income taxes and value taxes. Given the small rate (1 penny) there is less incentive to avoid the tax and less need to audit its collection. A vastly more efficient system. Simply the more you engage in trade the more you pay into the system.

    2) Banking would convert to a fee system (which is already happening) providing you an account to store and transfer money out of. If you are debt free this is basically a convenience fee for using the bank’s gateway to the commerce system. In the absence of demand for debt, banks must charge fees to remain open for business.

    Society once functioned pretty well without copious amounts of debt – it can again if there is enough commitment to do so.

  • Justin Bowerman

    It always was impossible. Its designed that way, go look up “fractional reserve lending” and read up on how banking really works, and then you can post stuff like this.

  • Joe

    Why does this article not once mention Capitalism as the problem?

    • KCTed

      Because true capitalism is not the problem. It’s the crony capitalism (rigged game) that’s destroying us.

      • Steve

        I would argue that capitalism does play a part. It leads to planned obsolesence, for example, that has nothing to do with crony capitalism.

  • General Wrath

    Obama!!!!!!!

  • commonsense

    you think this is a problem. look at home mortgages. the money does not exist until you sign the paper work, that monetizes the “note” the money comes from the fed to a special account in your name you didn’t even know you had. then with smoke and mirrors you pay back about 2.5 time what you borrowed. now thats a scam.

  • Matthew Blach

    I honestly agree. I think it’s time for the federal reserve to be audited. Lets see just how much we have been unknowing of for these long years.

  • concerned American

    Let our government officials pay it off after all they made it with allthey control with stocks ,oh and our money also.just look at what they make ,you think they will use obamacare for medicaluse of their own?

  • http://www.facebook.com/shawn.schaitel Shawn Schaitel

    I think it should also be noted that Louis McFadden was a well known anti-Semite and supporter of Adolf Hitler and he believed the completely fabricated Protocols of the Elders of Zion were true. and those protocols purported to describe a Jewish plan for global domination by subverting the morals of Gentiles, and by controlling the press and the world’s economies.

  • Sam Kulumani

    Not sure if this writer ever studied any economics in school or University. Every manufaturing or business borrows more money they have in their bank accounts; similarly every home owner in the USA has a mortgage and car loans more than her earns in ever year (equal to the GDP of a nation!). The mortgage or loan is given based on the credit worthiness of the individual or the nation to repay. That is why no one lends money to Ethiopia or Yemen or Afghanisthan?! So the salary you make as an individual for 30 years is taken inot consideration to reapy your mortageg for 30 years which most repay earlier. So is the USA, its capacity to generate the revenue. This argument of blaming Federal Reserve to print notes on our own without any connection to the earnning capacity was done by Idi Amin decades back in south Africa losing the value of its currency in Ugancy worthless than a toilet tissue. I can not teach this write any economics in my cooments but he can read and learn before spitting garbage as if he knows what he is talking about!

    • Steve

      Borrowing money in itself isn’t a bad thing. It’s the overdependency on it that is. In our economy, in order for us to survive it requires depending on banks forevermore. Further, having every citizen holding a mortgage isn’t necessarily a good thing, especially since it means some are going to default. Plus, if a homeowner has a mortgage, then it’s not really his home, but the bank’s.

  • l m

    yes they r criminals and need to be put in jail for treason I have the real money that every country needs and wants it is the currency of jesus Christ the true and loyal king of the world and it it worth more than all the filthy corrupt satanic paper that the luciferians own and when jesus returns which is very soon I will establish his currency around the world and there will be no debt

  • Martin Price

    The bankers have created the illusion of value with a fradulent monetary system positioning themselves to obtain what is of true value; land and resources through default. The system ensures the bankers make vast amounts of profit with other peoples labor/fiat currency while the host country appears solvent. The deal gets even sweeter for them when the host country becomes insolvent by design. Thats when they reposses tangible assets like land and resources for which the US has great amounts of oil, gas and coal. These resources are their target which is why there are wars and why Obama refuses to use the resources of our land to the benefit of the US population. They are being saved for the big default but the 2nd amendment must be dealt with first.

    You may find this hard to believe but usury has been a plague to mankind throughout history. The people of the world have been deceived for 1000’s of years.

    They even did a test run on public reaction by repossesing millions of homes through fraudulent mortgages.

  • Jimmy Yost

    So, most of these posts are from two or three years ago. So, I assume if I post something here it will end up in the scole hole of time, just like these hundreds of old posts. I would like to add one thought however, which is this: The law allows for individuals to declare bankruptcy, so why not the government?

  • ceonwulf

    There is no such thing as a National Debt!

  • George_Costanza

    If the TDO total debts and obligations exceeded 222 Trillion a few years back, that means we are waiting for WW3.
    That means the US needs to attack Russia before their S-500 anti-missile system is operational-which should be in 2018.

  • Raggedy Ann

    So let’s sell Bing or Google. They’re both worth trillions.

  • harrydunn

    Just form a new national bank which would supercede all former banks and banking systems. The old money would be void and the new national bank would print money and replace the money in the former bank accounts of it’s citizenry. The new banks would mail out consolidary letters to the people that invested in the old banking system, and then we can just start out at zero again, just like we as citizens do when we over-stretch out limits and have to start over.

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