Prepetorial #8: End of the System

By John Galt

November 28, 2007

The final vote was Yeas 398, Nays 21 and with that announcement on the floor of the House of Representatives, the motion was forwarded to the U.S. Senate in a rapid manner. The date was November 3, 2011 and the legislation was on the fast track to pass both houses and to be signed by Madame President the moment it hit her desk. The business community lobbied hard but considering the economic conditions drastic action was necessary. The newspapers blared the headlines the next morning of “End of the Reserve System” and “Death of the Fed” but the truth was it was the end of an era where the Federal Reserve system was dissolved and a return to the concept of the U.S. National Banking System. This vote though did little to stimulate the equity markets nor inspire confidence in the failing U.S. Dollar. Inflation was running at an annualized rate of 71.5% despite the use of hedonic calculations to smooth the numbers out. The dollar had lost fifty percent of it’s value since 2008 and the world would no longer accept it as the reserve currency of choice. Much to the dismay of most Americans, we were past the point of no return and the National Banking Act was needed to accommodate the introduction of the new trans-national regional currency. It was hoped that by creating a multi-national North American currency the inflation rate would moderate. Sadly, the average household had no idea what this would really mean…..

The section above of course, is pure fiction. But just what is the impact on the average household? That’s the question I’m going to attempt to guess at today and offer the “why” as to how today’s economic news is so critical to everyone and how ignoring it is at your own peril. So what would the real inflation rate be if the hedonically adjusted rate is around 71%? Based on the current ratio of about 5-1 this would put the real inflation rate in excess of 350% annually. Think about that folks. That’s almost 30% inflation per month or 1% price increases daily. Sound far fetched? Not in my book. We’ve all seen daily price inflation when your local gas stations increase prices from $2.69 to $2.73 in one day, then from there to $2.79 the next. Despite the protestations of the media, that’s inflation. The price you are paying for a good or service. And if you start applying it to reality and look at everything you consume to survive, then you realize that the impact of inflation on your household is serious and forces changes in your lifestyle. The mainstream media and popular financial media wants you to think your income has increased to accommodate the changes in prices but you know better. The BLS has a fascinating statistic which shows that real wages since 1981 for households with incomes under $100,000 (that’s most of us average folks gang) have actually decreased by just over 3% since 1981. This means that since the last great inflation, the increases in prices over the last 27 years has gnawed into your earning power and basically leaves you in a negative cash flow to maintain your lifestyle unless you change the way your family manages it’s affairs.

The impact of today’s economic news is never felt overnight by any one American household unless they are playing the grand casino on Wall Street and depend on that for their income. The real problem most Americans are starting to notice is the absolute decimation of the one asset they perceive as a safe and stable investment because that is what they have been taught over the years; their homes. The problem is that “homes” are just tools. And extracting equity out of a home to purchase goodies and “pay” bills off has been demonstrated as not just foolishness, but dangerous. Your home as a tool provides shelter, but the “investment value” is not determined any longer by normal supply-demand economics. It is managed by the government and those who wish to create value in other areas which may positively or negatively impact your little slice of heaven. When you realize that a “home” is not an investment, but a place to sleep, eat and provide protection from the elements you’ll understand why the crisis in real estate could have been avoided. And you’ll understand the economic myths that you were taught as a child are now being pierced by the hard reality hitting our shores. There was a lifelong perception that life will move on just like Mom and Dad’s,  where corporations would demonstrate life long loyalty to the American ideal and you had a job from cradle to grave if you just did an acceptable job to earn your wages. That myth is being destroyed now by the new world plan for the redistribution of wealth and resources under the concept of inclusiveness which forces a political stability on to the world scene by imposing interdependency as a precondition for economic success. That myth is about to be exposed as not only dangerous, but foolish.

The great powers that be thought that by re-introducing an eighty year old plus concept where corporatism and fascism were merged, a new oligarchy of socio-economic power would guarantee “peace in our time” as is the ultimate desire for all of those in control. With a relatively stable and peaceful world, the imposition of draconian political policies would be difficult unless one group, or society was brought up economically and others degraded from first world to second world status via the introduction of socialism. The profit margins would increase dramatically for all of the corporations who enhanced the power base of the political party and vice-versa. By using social discontent to force internal economic changes, the ultimate goal of political power and control over every aspect of a society could be either introduced or enhanced depending on the nation involved. America is now at that point. I would say that the point in time we are at is the “Chinazation” of our society where we will degrade our economic and political status to impose changes which brings our standard of living and political system in line with a one world government plan. The initial introduction of regional political and economic blocs is the key to this plan and with the ASEAN nations announcing their desires to create such a bloc last night, it’s only a matter of breaking our system down completely to create the political will to modify our Constitution to save “our way of life” as the political elites will describe it. In reality, it will be the suborning of our past and an introduction to Marxist slavery for our future.We will willingly march forward to accept the plan as the shortages begin to impact every aspect of our lives and create an air of desperation to take care of the “children” and “elderly” in the future.

Thus the premise of the brief piece of fiction above. The Federal Reserve System was created to prevent drastic changes in our economic landscape and to accommodate those with huge amounts of economic and political power to maintain the status quo. For almost one hundred years, it can be called a success, but only in the mythical sense of the word. It introduced the political system we have today, abused by not just corporatists but the by the elitists who think they can “design” a better America instead of protecting the idealism of Jefferson and Hamilton. The ultimate goal of all who desire an oligarchy is to eliminate all competition while maintaining the appearance of open and free markets. This approach is the same in politics as well and desperation breeds the basis of a fascistic foundation for the future. As the American public is broken down economically the will to resist the imposition of socialist idealism will falter as the majority always rules, even as they fly over the edge of the cliff and take our nation with them. By eliminating the Fed in the future, the political and economic elites will have the ability to create a new system which manages every aspect of your life and mine while altering the original intent of our Founding Fathers. This is neither a defense of the Federal Reserve System nor endorsement for their policies mind you. The original intent of the founding fathers was quite clear and we have deviated from this path which puts us where we are today.

Once a political power has the ability to use it’s economic partners to control the level of hunger in your belly, they have the power to modify your desires for what’s important in your life. This is why you must pay attention to the economic landscape that is changing in front of your eyes and start to plan for the prospects of a very bleak future over the next twenty years. The statement “it can’t happen here” has been the warning out over the years and the truth is that it can and is happening before your very eyes. And the demonstration of the test case for an economic oligarchy with a political one was tested and almost successful if not for the insanity that absolute power breeds. Germany and Italy were the test beds and capitalism was proclaimed as the “freedom” the citizens enjoyed there. The systems were neither free nor capitalistic in their approaches, but the corporatist idealists maintained that façade even though they found that by cooperating and working with the political oligarchy they held absolute control over pricing and trade. Their lessons have been learned well not just by the modern American corporate world, but the new test bed, in Communist China is progressing quite well. Now America, the once great land which saved the world from these systems, will be tested on the idea of imposing this system in reverse. May God have no mercy on these souls which seek to destroy our society. As there is no mercy in a Marxist system and there is no freedom no matter what the propaganda the media spouts out as so. The choices are obvious and simple. You must prepare now.

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