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Sunday, July 29, 2018

Theft comes in many forms




By Bob Livingston

Theft comes in many forms.
The most obvious occurs when a thug sticks a gun in your face or a knife in your back and demands you hand over your wallet or when a burglar enters your property and absconds with your valuables while you are away.
It also happens much more covertly. A person or a business may commit fraud. One of the greatest fraudsters of all was Bernie Madoff. His scheme made Charles Ponzi’s look like penny-ante poker.

Ponzi offered investors an opportunity to earn profits of 50 percent to 100 percent by buying discounted postal reply coupons in other countries — primarily Italy — and redeeming them at face value in the United States.
Like all pyramid schemes, promised profits materialized for initial investors. Because of that — along with a favorable article about his scheme printed in the Boston Post — new investors were flocking to his door at such a pace that he was raking in $250,000 a day. But he was paying initial investors with money from his new ones. The scheme collapsed, costing his “investors” $20 million ($237 million in today’s dollars).
Madoff’s scheme involved computer programs creating phony trades and manipulated account statements. He later told investigators that he was depositing client money into a bank account rather than investing it and paying clients who wanted to cash out with money from the new deposits. Estimates of his total fraud range from $17 billion to $65 billion, depending on who is estimating.
Government/banker paper money (now mostly computer symbols) is just another Ponzi scheme, a system of organized theft. Paper money/credit was created to transfer wealth to the government/banker establishment without payment. Every new dollar put into circulation dilutes your dollars and your imagined savings. But the process is so slow. When coupled with a steady saturation of propaganda about our high-sounding democracy, few people ever catch on.
The crowd has been dumbed down. Even most bank employees don’t understand they are engaged in theft. They, like most of the rest of Americans, don’t understand and they don’t care as long as they have bread and circuses.
Fractional reserve banking is a government-approved Ponzi scheme. Banks hold only a fraction of your money in an account, and they do not have reserves on hand to cover all the debt owed them by their customers and all the savings customers have deposited. In other words, banks are bankrupt, except for their ability to “create” money.
Here’s how the Federal Reserve explains it:
The fact that banks are required to keep on hand only a fraction of the funds deposited with them is a function of the banking business. Banks borrow funds from their depositors (those with savings) and in turn lend those funds to the banks’ borrowers (those in need of funds). Banks make money by ch…
Here is what else the Fed says about reserve requirements:
Reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities. Within limits specified by law, the Board of Governors has sole authority over changes in reserve requirements. Depository institutions must hold reserves in the for…
Those reserve amounts are set by complicated formulas depending on the net transaction amounts of the bank in question. Based on the formula, a new bank can open with a small amount of invested capital, have zero net transaction accounts (no money on deposit) and immediately “lend” up to $9.3 million by simply creating new money on a computer.
In a column he wrote in 1995, the late economist and author Murray N. Rothbard explained a bank’s operation this way:
I set up a Rothbard Bank, and invest $1,000 of cash (whether gold or government paper does not matter here). Then I “lend out” $10,000 to someone, either for consumer spending or to invest in his business. How can I “lend out” far more than I have? Ahh, that’s the magic of the “fraction” in the frac…
So let’s say that you borrow $200,000 at 5 percent interest on a 25-year note from the bank mentioned above (the one with no money on deposit) to buy a house. You make a monthly payment of $1,169.18 to the bank in the form of your mortgage payment. By the time you have paid off your loan, you have paid the bank a total of $350,754.02. In other words, the bank has now profited to the tune of $350,000 from you on money that never existed. And should you have defaulted on your loan, not only would you have lost whatever money you had paid prior to the default, the bank would own your home outright through a repossession.
The Federal Reserve (which is neither a federal agency nor does it hold any reserves) works this way, by “lending” money to other banks, through either a mark on a ledger sheet or by computer transfer. Real money never changes hands.
But rather than create actual wealth (except for themselves), central bankers, as money creators, always destroy the currency. This is inflation. Inflation is not rising prices, which most people are led to believe. Rising prices are a symptom of inflation, not the cause. Inflation is an expansion of the money supply, i.e., the creation of money out of thin air.
So how does inflation steal your wealth? It is the perfect crime. It is as simple a concept as supply and demand. With more money chasing fewer goods, more and more money is required to make a purchase. And if you put your money in a certificate of deposit in the bank that pays less interest than the rate of inflation, then your bank savings lose money. It is like pouring water into milk. The more water you pour, the less milk is left.
Everyone is hurt, particularly those on a fixed income. The more money that is spewed out, the more worthless each one of those paper dollars is. In the past 100 years, the dollar has lost 96 percent of its value. Put another way, it now takes more than $25 to buy what would cost $1 in 1913.
Since your pension or Social Security comes in U.S. dollars, what happens during a period of hyperinflation as we certainly expect to occur as a result of the massive Fed money-printing adventure? It loses value because it is nominal dollars, not real money (dollars) like precious metals.
Social Security represents a “debt” of the federal government. Governments get rid of “debt” by inflating it away (printing more money).
In short, the government can and will kill the Social Security liability by inflating it away. Ditto for savings.
A study of monetary history shows that hyperinflated currency destroys the purchasing power of savings accounts and Social Security.
That is why I recommend you preserve your labor, your savings and retirement with gold and silver in your possession. Precious metals don’t pay interest, you say? This is conventional thinking backed by the paper money myth.
Gold and silver are the only real money in existence. They are real money as well as intrinsic wealth. Moreover, gold and silver appreciate in purchasing power as paper money depreciates. That is your real interest. All understanding of hard money has been lost down the memory hole of the fiat paper world money regime.
Look at it this way. If you had taken two silver half dollars and a $1 bill in 1964 and placed them in a box for safekeeping, what would they purchase today?
With the silver coins you could buy about $12 worth of goods or services, say seven gallons of milk or six loaves of bread. With the dollar you could buy only $1 worth of goods. So which is real money?
I love my country, but I hate my government. I know that my government and my country have been stolen by the money creators.

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