I realize that a lot of people are getting tired of the drama queens making predictions that sound more like decrees. I’m talking about phrases like this: “World digital currency is coming and they will be able to control us.” I am tired of it too. So, I may have tuned out too much to quote it exactly, but you get the point. I can understand tuning out from the drama, but we need to pay attention to some things or we will pay dearly. Just because there are drama queens does not prove there is not a problem.
I did not pick the title for the drama; I picked it to describe the situation. Many people do not understand bank runs, currency or debt, and throughout history, many people have suffered because of that. Many people think they understand these things, but they need to make sure. I can tell you my economics classes in college only taught me the wrong things others believe. Most economics classes are based on Keynesian economics and even though most economists think that way, as usual, a lot of people can be wrong at the same time. That is why I wrote the article that mentioned the book Extraordinary Popular Delusions & the Madness of Crowds by Charles Mackay. The book shows numerous times when a lot of people have been wrong at the same time.
There are multiple views on bank runs. Some talk show hosts have said things like, “They want you to take your money out and be the blame for the banks failing, so don’t do it.” Well, shouldn’t we make our decisions based on what is best for us? Maybe the banks should fail. Just because the Federal Reserve Act has been operating since 1913 does not mean it should. How do you know it is working? What proof has anyone provided that things would be worse without it? Also, many people have no savings at all. What money they have in the bank is only there until they spend it. It barely lasts until they get the next paycheck, or now days, direct deposit. That includes corporations that have high payrolls and are just cycling currency.
Before you run on the bank, you need to figure out what you are running for and what exactly is in the bank. Most people do not understand the concept of money. As the book Extraordinary Popular Delusions & the Madness of Crowds shows, people need to know what is failing. What is failing becomes important to avoid the harm from the failure.
Get out what people call cash and take a good look. You should get out a law dictionary and start reading the definitions of the words on the Federal Reserve Note. See if you can find the word money on it. I once gave a speech on negotiable instruments and took a rabbit trail to explain that a Federal Reserve Note is a negotiable instrument. The law professor started hitting me with questions and then said, “You are right, but you are the only one in the room who understands this, so move on.” After class, we started talking and he explained that as a corporate lawyer, he was required to put in the contracts that if the value of money changed, the contract changed. The important part of the definition of negotiable instrument is: “an unconditional promise to pay on demand or at some future time a fixed amount of money to ‘bearer’.” The important part of the definition of money is: “a standard means of exchange and valuation.”
Why this matters is if you put 1 dollar that buys a loaf of bread in the bank and get back 2 dollars that each buy a slice of bread, you lost your money. You lost money even if you do not know it. Which is worse? The bank shuts the door and tells you only get half of your $100.00 deposited there, or the government inflates the currency to bail the banks out, and you get $100.00 that buys what $25.00 used to buy. If you ran to the bank before this all happened and converted that dollar to something that held its value, neither thing happened to you. People like to say gold, but the point is you want to be able to buy more, not less, with the dollar, regardless if it is in the bank or in your pocket. A side of beef in the freezer may hold value over the next year better than gold. It all depends on what happens.
Here is an extreme simplification that describes our economy. Two of us sit down to eat a pizza cut into 12 slices. Two government workers walk into the room and tell us because of COVID no one was allowed to make pizza. They cut the pizza into 24 slices, tell us they doubled the pizza supply and take 12 slices of pizza and leave us with the other 12 slices. Instead of being well feed we leave the table hungry.
This is actually what has been happening. However, it has been happening in a more complicated way. It has to be complicated because most people would not let the two people stealing half the pizza make it to the door. That is why in many of my articles I try to simplify the complex. You need to know what really happened.
During the 2008 financial collapse, a common claim was people bought houses they could not afford. Some may have. However, as people were turning their houses into cash machines, the cash was losing value with every loan that was made. Instead of them getting more money, think they were getting smaller pieces of the pizza. They bought a house that took a certain percentage of their income to buy. A certain percentage paid the gas to go to and from work. A certain percentage bought food. If one dollar that used to buy a gallon of gas, now buys a ¼ gallon of gas, their budget gets hurt. Currency that loses its value is a pay cut few people know they got.
Imagine if instead of blaming the 2 people that stole half the pizza, the 2 people still at the table blame each other. They argue that if a Democrat took the pizza it was bad, and claim they should vote for a Republican. Maybe they argue that it is better for a Republican to do it because it keeps the World Economic Forum from doing it. The argument may sound different but that is basically what it is. They keep changing the arguments so you do not figure out what has happened.
Digital currency is their way of talking half your pizza without coming into the room. This constant bickering of how we should be robbed needs to stop. It is going to stop because a civilization cannot function with a large parasite class taking most of the economy while producing nothing. Most of the billionaires got their wealth because of the currency manipulation, not because they produced something. Regardless, if people keep letting them steal their pizza, eventually they starve. An economy where very few people produce and a lot of people consume does not continue forever. How it stops and who gets hurt is what we will eventually find out. I will leave how not to get hurt for another article.
