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Fix it already

The popular argument between the Republican faithful and the Democratic faithful rages on. The elephant fans gleefully point out Obama’s failure to fix everything like he promised. The donkey fans respond that it took eight years to create the financial mess.

The correct response is that the path to this point where destruction of our economy is all but assured began in the 1860s where the Rs and Ds agreed that four, five or more somewhat equal political parties was inferior in meeting their needs than two. With a monopoly power-sharing agreement worked out, they then went for the money.

Simplifying a bit, to the 8-year theorists I respond without granting any absolution to their partners in crime:

It is much closer to 100 years ago (1913 to put a date to it) that the US dollar was taken over by the Federal Reserve banking cartel… though significant seeds of our destruction were sown long before that.

The Bretton Woods Agreement in 1944 established the US dollar as the world currency to be used by the central banks of developed and developing countries instead of gold and silver. The benefits the signers extolled, were simplified international investment and trade. Since the US dollar was 100% backed by silver and gold, there was no apparent downside. With this agreement, the Federal Reserve found a massively expanded market for the dollars they produced.

In 1972, Federal Reserve Notes lost their legal connection to gold and silver. The 50 billion dollars then in circulation exceeded the gold and silver that was supposed to be backing it. French President Charles de Gaulle decided to convert French central bank reserves from US dollars “back” into gold but US President Nixon, knowing that would break the bank, refused payment and disconnected the two. From that moment on, US dollars have been backed by promises instead of precious metals. This was a pivotal event, most significantly in that it launched a 38-year era of unprecedented “wealth creation”.

Now the bankers who owned The Federal Reserve could print and introduce dollars without limit. The mal-investments this created are what we have been living on. Now these ridiculous ways to “earn” and spend money are coming back to haunt us. The bubble will burst. The sticky-gooey mess will cover us all.

But the bankers will be happy, cuz they have a new plan for a world currency when we all get desperate enough to give them total control. Lucky us … we get to watch the greatest show on earth.

Here’s a picture of unrestrained money printing by an unfettered private banking sector.

monetary-base-1960-2010