When the Federal Reserve creates “money” out of thin air, it creates it as debt – and it tacks interest on it. The problem is this interest is not created, but it is required to be paid back.
To better understand this, imagine the following: there are 100 people in a bar, including the bar tender. The bar tender is the only person allowed to make beer, a particular kind of beer. He makes 100 liters of beer weekly and he then distributes it equally… a bottle for every person in that bar, including himself. But he tells everyone that if they want to drink again next week, he needs to receive back 105 liters by Sunday, otherwise the ones who cannot return the full amount need to do chores for him for whatever quantity will be missing.
Remember – in the above example nobody else can make that kind of beer anywhere else. They cannot fake it. Where do you think this is going?
People will try and compete… some will drink the whole litter of beer. Some will save half. Some will save the whole thing and try to bet against the others to win more beer. But in the end, on average, each and everyone of them will need to return 1.05 liters of beer or the bartender will own some of them. Why would anyone be so foolish to participate in this game?
The Federal Reserve and every other Central Bank in the western world play the same game on their countries’ citizens. This is why, on average, you have 5% unemployment, homelessness and poverty. This is how bankers introduce scarcity in a world created in abundance. This is math, statistics – and it is ruthless, it has no feelings, emotions or heart. Once a society accepts this evil game, there is only one end result: bankers and those serving them will own everything and everyone else will become poor.
Above, we did not even touch on the subject of the bartender cheating and making more beer for himself and his family… we know the Federal Reserve and all Central Banks create fiat currency and give it to the commercial banks like candy to children.
Once we allow a special kind of people in our society who can create “money” while everyone else needs to work for it (just like the bartender in the example is the only one who can make that beer), everyone else becomes slave to this special class of people.
So what is the solution? A return to sound money, money that cannot be created out of thin air. Gold is God’s money and this is why our Founding Fathers wrote in the Constitution “No State shall… make any Thing but gold and silver Coin a Tender in Payment of Debts” (Article 1 Section 10). Fiat currency is the government money. And smart people who understand this problem more recently created Bitcoin since the same bankers have used the powers given to them to accumulate gold as well. So Bitcoin is people’s money – which is why we advocate using Bitcoin while we fight to get the monetary system back to the people where it belongs.
In the end, a quote:
“Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.”
— Norm Franz