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What Is Fiat Money, the Federal Reserve and Inflation?

Updated on April 14, 2022

I must admit that understanding the Federal Reserve, Fiat Money, inflation and the Central Banking industry is a complicated matter, which is why they have been so successful in their endeavors. Most people simply cannot wrap their brains around the concept of Fiat money. Fiat money is paper money that has no intrinsic value except for what the government deems. People don't know what that means and they don't understand how it affects them. Consequently, the criminals who perpetuate such a system are enabled through the majority's ignorance.


I am going to try and explain, in the simplest terms, exactly what happens when you allow a private group of people to print money and lend it to the government with interest. As if having the power to print money out of thin air isn't bad enough, the Federal Reserve actually multiplies the damage by charging INTEREST on FAKE MONEY! What a deal! Don't you wish you could do that?


Let's take this down a notch so that we can all understand what exactly is going on. Let's say you lived in a small village and in that village you were the only person who owned a printing press. You are also related to the mayor of the village. For all time the people of the village used gold, silver and copper coins for money. Eventually, the printing press was invented and you have the only one. In fact, there is actually a law that makes it illegal for anyone else in the town to own a printing press. Gold, silver and copper are heavy. Once the printing press was created someone came up with the idea that they would store your gold and silver and give you a receipt. Anytime someone came with a receipt and wanted to redeem it with gold and silver they could, including governments. The people of the town became accustomed to carrying around paper receipts instead of gold, silver and copper. Very seldom did they bother to redeem the paper money for gold, silver or copper.


Then, the mayor of the village makes an announcement one day that gold and silver are no longer to be considered money. That from now on the only thing that is to be considered money is the paper dollars that his relative prints up, because most of the villagers were used to using the paper receipts they didn't really notice what was happening. They bought and sold as usual. Not only that but the power to tax the income of the villagers was also instituted. Of course it was all for a good cause, some outside threat, to pay for the education of the villagers children (of course they never are really educated because the mayor and his cohorts do not want an educated village because then they might wise up and revolt) or for a new dam. The only person who had the power to borrow money from the owner of the printing press was the mayor.


Well, you know the old saying “Power Corrupts and Absolute Power Corrupts Absolutely”. Eventually, the mayor figured out that he could “borrow” money from the printing press owner, also known as The Federal Reserve, and he could tax the people of the village for the money borrowed. As you could well imagine, the printing press was working full steam. Eventually, with so much money infused into the village, inflation crept in. Inflation is nothing but an invisible tax on the people. When you have a limited amount of goods with an unlimited amount of paper (fiat) money chasing those goods, the prices rise to meet the demand. At the same time taxes start going up because the debt is never paid down, there is always a new crises to be met, an outside threat, an institution that is crucial to the village needs to be bailed out. The mayor and the printing press owner have so much money that it is very easy to buy off the town crier (or the press). They hire journalists to tell the people that everything is OK, that they just have to be smarter, maybe they should get a higher education so that they can get a better paying job so that they can afford the things that their parents and grandparents could afford. More debt is created with student loans. It doesn't matter that there are no jobs and even if you can get a job the tax rate is now 40% and the inflation rate is higher than ever so that the villager's actual quality of life is never better. The only people who really have a lot of money are connected to the mayor and his buddies. But the media keep telling the villagers that they just need to work harder/smarter and that everything is really getting better. The mayor (in his generosity) provides free TV to the villagers not so that they can enjoy the entertainment as much as to keep the villagers distracted and also as a way to continue to tell them through the media that everything is OK.

The printing presses are rolling like crazy and the mayor and the printing press owners are getting richer and richer, so much so that the now own everything, including all the mortgages for the homes, cars, the military, the media and the infrastructure that provides water, electricity and food to the town. They own it all! What they don't own, they tax.

The people of the village become virtual slaves over a very short time. Of course there are a few “village idiots” who try and warn the people of what is happening but they are shrugged off as “conspiracy theorists”. They live off the land, going off the grid and refuse to support the mayor and his cohorts. Eventually, they are silenced as well.


The whole ponzi scheme can be undone if the villagers would just stop supporting the money system, but the villagers are afraid, they are afraid that they will lose their jobs, friends or be silenced and never heard from again. So they continue into slavery until...eventually the mayor and his friends realize that they just don't need most of the villagers anymore. Most of them are ignorant beasts by now, unable to think for themselves, dependent upon “the system” and they decide that they might as well purge about 90% of them. They even create a monument telling the villagers that that is what they are going to do but the villagers are too stupid to understand (see The Georgia Guidestones).

All of this could have been avoided had the villagers simply understood the power of printing money, but now it was too late.

Is it too late now?

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