Jul 27, 2011

The current discussions over the debt crisis are certainly heated, but neither side is addressing the real causes of the debt itself, which has now reached crisis proportions.

We would have no national debt if it were not for the Federal Reserve Act of 1913. That Act gave the power to create money to a new institution called the Federal Reserve Bank, owned and operated by very wealthy private bankers. That one Act meant that as the economy increased, and more money was needed to "oil the machine," new money had to be borrowed into existence AT INTEREST, instead of the government creating it for itself with no interest.

It only stands to reason that if the Fed has a monopoly on the creation of money, and if they only create it as an interest-bearing LOAN, then these private banker "elite" have their own money tree.

Last week it was revealed that the Fed loaned $16 Trillion to foreign governments and corporations recently. Some congressmen complained that they were giving away "OUR MONEY." No, they did not. The Fed created $16 Trillion out of nothing and loaned it out at interest. That money did not come from the American tax payers. Bernanke was not re-circulating old money, but creating new money that had not previously existed at all.

The problem is not the $16 Trillion loan. The problem is that they have been given the right to create money out of nothing, which properly belongs only to the American people themselves.

If I retain the monopoly on the right to make pencils, and I loan you 10 pencils, but require that you repay me with 11 pencils, we have set up the conditions for a default. How can you repay 11 when only 10 are in existence?

Not to worry, though. There are others who want to borrow 10 pencils, and soon I have loaned out 10,000 pencils. So it is relatively easy for you to find 11 to pay back in a year. The problem is that now the debt is 11,000 pencils, when there are only 10,000 in existence.

This is a Ponzi scheme on a grand scale, because the system works only as long as more and more people are borrowing pencils. But eventually, over the years, there is a debt of 14 Trillion pencils to repay, and 500 Billion of them have to be repaid each year. The only way to stay ahead of the game and to avoid default is for more people to borrow another 500 Billion pencils to make up for the loss. Otherwise, soon there would be no more pencils in the world, and the debt would still be enormous.

That is where we are today. The Democrats want the government to borrow more newly-created pencils from the Fed, but that only increases the debt and kicks the can down the road until the next repayment has to be made. The Republicans want to stop the borrowing and just pay back the Fed all of the pencils that the government has borrowed.

The Republican plan would remove hundreds of billions out of circulation each year and would cause an economic collapse almost immediately. It is a self-imposed austerity measure that would shrink the "pencil" supply and cut way down on the number of "books" that could be written.

The Democratic plan buys a little more time before the inevitable economic collapse occurs. But because the people owe so much, they are in no position to ask the bank to create more pencils for them. So the government has to make up the difference. But the government's pencil-borrowing ability is being overwhelmed by the sheer magnitude of the shortage. In spite of borrowing trillions of pencils each year, they have barely been able to keep up with the shortage.

Hence, we have a sustained unemployment rate. The rate would have gone up much higher if they had NOT borrowed so many pencils to stimulate the economy. And yet, every pencil that they borrowed must be repaid with more pencils than were borrowed. So the hole is now far deeper than it was a few years ago.

So we now have two solutions to the problem. Tweedle-dee proposes taking pencils from John and Sally to continue its pencil-dispensing to those in need of pencils. Tweedle-dum proposes to put John and Sally on an austerity program to limit the number of pencils available in the economy, in order to keep their vow: "Read my lips: No New Pencil-grabbing."

Somehow, the government "sacred cow" is the doctrine that we owe the Fed a lot of pencils. It is as if the Fed bankers spent a lot of time and energy working to make pencils--when, in fact, they created them by the stroke of a pen. The government could have done this itself and spent the money into circulation WITHOUT INTEREST.

Why do we owe the Fed anything? The solution is:

1. Nationalize the Fed, so it is truly a FEDERAL Reserve.
2. Convert all Fed Notes (i.e., debt notes) into real interest-free money.
3. Convert all bonds to real money, except those held by the Fed itself. All of their bonds should be confiscated by the US Treasury and cancelled out.
4. Declare a Jubilee. Everyone now owns their own homes and cars, and there are plenty of empty homes for the homeless. (Private loans may be compensated by the government.)

Chaos? Yes, of course. Bad? Only for the Fed and its owners. As the tower of Babel falls, there will certainly be some chaos. But the alternative is to live in its shadow as perpetual slaves of men unknown to us living in ivory towers.

So while Tweedle-dee and Tweedle-dum fight over their different solutions to the debt crisis, keep in mind that neither solution will work in the long run. The Democratic Plan would last longer, but would put the people in greater bondage through taxes. The Republican Plan would cut taxes and reverse the flow of money from the Stimulus packages from recent years. This would cause the greatest Depression ever seen on Planet Earth.

There is a third solution, if anyone is interested in God's view. Most people know nothing about it, having never studied biblical law. Even Christians have been taught to despise the law, and hence, they seldom study it and hardly ever understand the little that they read.

But this is the plan that will win in the end. The Babylonian system has been unsustainable, and the seeds of its own destruction were sown at its very beginning. Bankers thought that they could take over the world, with usury as their weapon of choice. But at the pinnacle of their success, they will fail through arrogance and pride. The great Stone will crush their toes at the appointed time.