Topic category: Government Debt/Currency Instability
Why the dollar (Federal Reserve Note) is like Coffee and Balloons
It ain't inflation... it's theft.
When the profligate spending of the government gets to a point where raising taxes to cover printing new notes is blocked, the Fed obtains the capital for additional notes it spent by diluting all the dollars in circulation. Like cold coffee, poured into hot coffee, the cold coffee (new notes) goes up in temperature and the hot coffee goes down in temperature until they equalize somewhere between the two initial temperatures. So too the newly printed, un-capitalized (cold) dollars go up in value and old (hot) dollars go down in value to equalize somewhere in between the initial values.
Or, think of the dollar as a balloon, whose purchasing power/value depends on how much air is in the balloon.
Since the newly printed balloons have no air or value in them, the government let’s out some air from your dollar to fill up the newly printed ones. How quickly these notes go into circulation is manipulated through the Fed's control of Interest rates. The lower the rate the faster the newly printed notes are borrowed from the bank.
Another way to look at it is that the FED Note is a Promise of money or value. To promise value on new notes, the Government reneges a bit on their promise to you so they can make a promise with the new FED note. Let's say they make twice as many new Fed Notes as before. To make a promise of 50 cents on the new notes, they renege on the promise of 100 cents on your Notes and will only give 50 cents of value.
The government quickly uses the new money to pays its bills with the 50 cent dollar as though it is still a 100 cent dollar, stealing from the merchants they buy from and the Treasury Bond holders they pay off.
"What a cowntry America" - Yaakov Smirnoff comedian and actor (no wonder this isn't funny anymore). Then again this stealth thievery is what every government in the world does. Let's end it here and set a better example for the world. (after we pay back the almost twenty trillion in debt that the administration is counting on paying back with fraudulent valued dollars)
When the new dollars hit the market either from the government directly or through the banks which borrow the money from the FED, prices adjust at the same percentage that the money has been devalued. We then think there is price inflation, when really it is the reneged promise of the government to pay back yesterday's dollar's full value, reflected in the price.
Lawrence spent his career solving the problems of major businesses. He created software, business processes and systems that save millions of dollars a year and make people’s work life easier and more productive.
He was a founding partner in a company which is instrumental in streamlining the practice of medicine and helping both patients and Doctors cope with the problems created by government health care.
During an assignment on the 98th floor of the WTC in 1993, he experienced first hand Islamic Terrorists' nearly successful attempt to take down the WTC. He and tens of thousands of others were trapped in the building in darkness and choking smoke.
After the government’s whitewashing denial of the root cause of the bombing - the evil built into Islam, the deepening confusion of American values, the negative end results of unnecessary and even immoral government intervention, the deterioration of the US economy and widespread systemic government corruption and unchecked power, he founded The Society Project to provide a blueprint for restoring our unique government Of the People, not Above the people, as it has become.
The Society project is dedicated to restoring the Constitutional Republic of the United States by educating, motivating and facilitating people to act to repair our society, through the Amendment process, before our society becomes another of the world’s failures.