Tuesday, November 24, 2009

In God We Trust

I'm not here to preach today. Well, maybe I better take that back. I do want to persuade you of something. But we're not going to talk about religion. Unless you consider having faith in fiat a religion. I would call that having faith in False God's. If the dollar is your almighty god, than Pilgrim, I am here to convert you. Having faith in the dollar is not going to save you when hyperinflation hits.

You can pray all you want. Attend services every Sunday if you desire others to worship with. The dollar has already lost 96% of its purchasing power since the creation of The Fed in 1913. The purchasing power of that remaining 4% is rapidly eroding as well. Singing hymns of praise is not going to slow the decline. Brother Tim can lead the choir in all four verses of "In a Strong Dollar, I Believe" and it won't make any difference.

So put away your hymnals, and stow your blind faith. Pastor Ben has been telling you all a pack of lies. Harsh words, sure. I can tell by the way you're recoiling in the pews that you don't want to hear this sermon. But sometimes The Truth hurts. Our nation is bankrupt. Our money is worthless. When it will happen, I can't tell you. But soon, in the near future, we'll be lighting United States currency - instead of newsprint - to start a fire.

If the Federal Reserve Note were a religion, it would have to be considered a cult. One of the definitions for that word is: followers of an unorthodox, extremist, or false religion or sect who often live outside of conventional society under the direction of a charismatic leader. United States citizens a sect? Could be. Outside of conventional society? What's conventional about living amidst a morass of rampant crime, while sinking into a cesspool of moral decay? Under the direction of a charismatic leader? Last time I checked? Yeah.

You might scoff and insist "our money is safe." And, "we're not a Banana Republic." And some would add "but we could never have a total economic collapse! Not here, this is America." But I hope you do realize that your money is not safe. In fact, it's not even in the bank where you entrusted it to safekeeping. Due to the nature of fractional reserve banking, only a very small fraction of deposits must be kept as reserves. Less than half of one percent.

Let's think about what that actually means. We'll say that - hypothetically - a particular bank branch has one million dollars in reserves in their vaults. In practice, that number could well be too generous. So let's reduce it to $500,000. You're nervous because you've heard of the prospect of a Banking Holiday, where ATM withdrawals of cash would be halted. So you're in line to empty your account of its entire $10,000 balance.

First of all, were you to try that, it's likely the teller would have instructions to refer you to the Branch Manager. As far as I am aware, if you go into any branch of First National Just-Try-And-Get-Your-Money-Back Bank they will frown in supercilious indignation and frostily question your intentions if you try to withdraw $5,000 let alone $10,000. This is not conjecture, nor urban myth; try googling it on the Internet.

Then, if you do manage to gain approval, they may try to foist a potentially worthless-in-a-crisis bank draft on you. Another paper certificate gambit to keep their reserves intact. Finally, let's pretend they actually have the cash and will give it to you. As Maureen counts out your hundreds, she looks up nervously. The Branch Manager has just locked the front door and placed some kind of sign on the window. He's unlocking the door to let patrons out, but not admitting any new ones.

Developing the premise that everyone wants to withdraw the same amount, only the first fifty people will get their money this day. The thousand customers in the line outside are getting more irate by the moment. You can hear their muffled shouts of outrage through the thick glass of the doors. Maybe you're not in such a hurry after all. Try and walk through that milling throng and - quite likely - push will come to shove. You'll never make it to your car. The three police cruiser's that just screeched to a halt in the parking lot won't be enough to protect you.

So, the wonders of fractional reserve banking. Your money isn't there to begin with. And if you decide you want it back, look what could happen. An unlikely scenario? Just ask the people of Argentina what it was like when their currency collapsed. Ask anyone from any country that has encountered hyperinflation. This could happen. In the United States. The ultimate destiny of ALL fiat money is worthlessness. We're well on our way down that road; we can't turn back.

How do you prepare for the destruction of the dollar? First, try to eliminate your debts, so you can sleep free from anxiety. Keep only the amount of money in your bank that is necessary to cover pending bills. If you have any discretionary income you need to immediately convert your monopoly money - I mean your dollars - into a tangible form of worth that will preserve your purchasing power and be useful for barter. Precious metals are what I'm talking about. Can you say Amen, Brother?

Buy Silver. Buy Gold. Save Copper. Start Now.

Our economy is terminally ill. This time, an injection of trillions won't be enough to save us. We are on our deathbed. No life-saving elixir can rescue us from the ruinous debt that is killing our nation. The obituaries will soon mourn the passing of America. That day is fast approaching. A colossal financial collapse will occur. We will witness Wall Street carnage, and a catastrophic economic meltdown. And we will experience Hyperinflation. That devil has many names, but whatever you call him, we're going to have Hell to pay.

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