REAL MONEY

Notice anything unusual about the five dollar bill shown? At the top of the bill it says that this is a "United States Note". Before the assignation of President Kennedy, all

U. S. money was like this. Afterwards, and from then on our money was " Federal Reserve Notes".

A coincidence, probably but a lot of things changed then including a re-run of the New Deal, called by Lyndon Johnson: "The Great Society"- a monumental give-a-way and power grab by the federal government. Deficit funding, War on Poverty and another war in a foreign land. To afford all of this we needed more money and the Federal Reserve accommodated us by 'printing' more of it.

The Constitution states that only the government can coin money, so they got around this restriction earlier by contracting with the Treasury to print the bills. When people refer to inflating the currency by 'printing money' they mean creating money by bookkeeping procedures at the Fed. Actual amounts of currency in circulation doesn't

change much.

Paper currency originated with receipts for gold in storage by "goldsmiths". Gold and silver was and always has been "money" or a store of value used in place of barter in exchange for goods and services. Since precious metals are heavy and bulky to carry around, these receipts of paper found favor as exchange mediums. No one cared

because their was gold in back of the paper. Goldsmiths were succeeded by banks who stored customer's gold and issued bank notes which were backed by gold in their vault.

Bankers, being the greedy creatures that they are, soon figured out that they could issue or loan out more notes than they had in gold storage, which was a slick way to

make more profit. This worked because only a small percentage of their depositors

would claim their gold at the same time. EXCEPT for runs on the bank where many

would come at the same time to claim their deposits. This was the RISK and was resolved by the bankers by fostering off on the unsuspected masses the Federal Reserve System, a banker's bank [central bank] , privately owned who could come to the aid of overrun failing banks by issuing money to the endangered banks. Sounds good. Even had the name 'Federal', but not in fact federal, but private.

The crises of the Great Depression provided the reason for the Fed to have custody of the nation's gold hoard. Government in their wisdom with the bank holiday and citizen's gold confiscation assured that the Fed would have control of all of the gold

and that unlimited paper could be freely substituted [fiat money]. At the end of WWII,

the U. S. had reportedly 75% of the world's gold. There has been no public published audit of the gold stored at Ft. Knox and other depositories since 1954, and won't be if the Federal Reserve masters have their way, so no one except a privileged few know how much gold we have today.

Financial writers are quick to blame President Nixon for going off the gold standard

and letting the $ find it's own value on the world's currency exchanges. Actually it was a de facto event, since by then most of our gold reserves were spent or owed to foreign nations. We simply did not have enough gold left after gold loans [ sales] and issuing Special Drawing Rights [SDRs] to pay our creditors. When France and other foreign

entities demanded gold in payment, the jig was up.

The magic of the Federal Reserve and fiat currency is that governments corporations and people could spend more than they earned by the creation of more money in the Treasury and the banks.

The increase in money supply or inflation has been almost 100% since 1913. A dollar

will buy about a 1913 penny's worth today. Because dollar inflation and price inflation has been gradual except for a period in the 1970's. People have not objected to the watering down of wealth. Most wages increased with cost of living adjustments plus

real estate climbed in price each year.

Comes now the financial crises of 2008. Real Estate prices are falling, wages are dropping, and pensions are becoming suspect The dollar is no longer considered good as gold, the' full faith and credit' of the U. S. is no longer thought worthy. Gold is increasing in price. Actually gold is not more valuable, it's value does not change, dollars are declining in value. People are looking to gold as a safe haven and rejecting dollars as a store of value. The fiat money scheme is coming to its

inevitable end. It is 2 minutes to midnight and Cinderella's coach is turning into a pumpkin.

With Love and Kindness,

THE HATMAN