by Jorge Herrera

Created on: August 28, 2009   Last Updated: September 02, 2009

In order to offer my 2 cents' contribution on this writing contest, I want to take us back to 1913. In that Infamous year, the Federal Reserve System and the IRS were created. I will be referring to documented information from "The Creature of Jekill Island," an outstanding book written by G. Edward Griffin. The Federal Reserve does not belong to the Federal Government; it is a private for-profit hybrid corporation comprised of 12 regional hanks and with some government input, but the real members (owners) are super-rich bankers and individuals from the U.S. and Europe. Tthe main purpose of this creature is to subdue America and profit from its conspiracy using its main tool...debt.

Now considering the information I just stated in the prior paragraph, we can look at the many times the Federal Reserve has been a part of all the economy booms and busts since its approval by Congress: the market crash of 1921; Great Depression of 1929 to 1932; depression of 1939; recessions of 1953, 1957, 1969, 1975, and 1981; Black Monday Market Crash of 1987, and so forth. We have a big problem now; it is our monetary system that is funded on debt, and it is controlled by the Federal Reserve System, which has been given the power by Congress to create money out of thin air.

Let's see how this works. Whenever the Government wants to run a program, it needs funding for that program, so if there is not enough in the budget, we think the Government would raise taxes to obtain the necessary funds, but then the citizens will cry and complain. To avoid that, Government turns around and creates Government bonds that the Federal Reserve buys with money created out of nothing ( pretty good business, huh?). This way, Government gets the funds for the program, the Federal Reserve makes a profit and we citizens do not complain. But it is not that easy; all this borrowing, all those bailouts to the big banks and corporations too big to let them fail cause inflation. It is the most unfair tax since it affects mostly the low-income population, and it is the one tax nobody can escape from.

Inflation is created by the increase in the amount of fiat currency (paper money worth nothing and backed by nothing, no precious metal backing; just backed by the not- so-good credit of the USA now). If the amount of currency grows but there is not increase in circulating value of the money supply, then all those additional pieces of paper are available to buy the same amount of goods. Therefore, we have to use more money to buy the same things, and this causes devaluation of our money.

So momentarily we feel that the new injection of money creates prosperity, but once the new money (created out of nothing) runs out, then it becomes more difficult to cope with the cost of living since everything goes up due to the fact that Government has to raise taxes or cut services to cover the ever-increasing debt using ever devaluating dollars. With national debt in the trillions now and rising, the effect in quality of life of the average American citizen will be devastating. Some of you might remember that no too long ago, the wife could stay home to take care of the kids and the house. Now not only the wife, even the kids have to work to make ends meet.

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