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Markets – by definition – should be CHAOTIC.

Not RANDOM – but CHAOTIC – in the Mathematical sense of the word. Patterns should exist, but in general they SHOULD still remain UNPREDICTABLE. Ideally, a FREE MARKET – is a Market which SHOULD behave CHAOTICALLY. Chaos LEVELS the playing field. It allows BIG investors to lose BIG sometimes – and the SMALL ones to win BIG – sometimes.

Big Investors LOATH chaos.

And that is why they LOATH the Free Market.
They prefer the odds to be in their favour – like in a Casino. They want the HOUSE to always WIN.

But here’s the problem: How do you get money away from people – who DON’T go to Casinos?

First, you invent this thing you call a “Bank.” Tell them that it is SAFER to keep their money there because you have this HUGE VAULT that no one can get into (except of course – you – The Bank!)

Then you loan out more money than is kept at the bank – using their savings as a “fractional reserve.” Already, due to this wonderful thing call “inflation” – the value of their SAVED earnings is depleted by the NEW loaned money. Every dollar created – draws its value – from EXISTING dollars. And the EXISTING dollar – comes from those poor risk-averse savers.

Now, you lend some of that money out to people who DO GAMBLE – knowing that they’d lose most of it. Now, since you’re lending out – more money than you have – by the time they come back with empty pockets your bank will be in debt!

If you’re a tiny little bank – the game ends here. Many, many tiny little banks end up this way… but it doesn’t matter.

You see, if you have friends in government – you can get this thing called a “bail-out.” Then you get to start this process all over again – this time using the money of your WHOLE COUNTRY – collected via taxes.

But even THAT isn’t enough for most rich folk. You see, there’s still a chance that you could lose money. If the politicians in power decide NOT to lend – you’re toast! And that is why, you have to make sure that whoever it is that’s in office – WORKS FOR YOU.

Enter Obama.

But let’s go even further. Let’s have this PRINTING MACHINE which can make as MUCH MONEY as it wants – and lets you “borrow” money from those OUTSIDE your own country.

Enter the Fed.

Unlike other banks – this Fed thingy – can NEVER GO BANKRUPT – since they print as much money as they want – regardless of what they have backing each bill. They don’t NEED to borrow but they make it seem – like they do. It helps keep the image of wealth intact.

So… now you have a “Bank” which can NEVER lose money. That sounds cool. Except…

What happens if all those who BORROW from the Fed – can’t pay their loans back on time?

That’s easy: Just Borrow NEW money (from the Fed) to pay back the OLD money. But of course, you’re going to have to borrow MORE money since the Fed charges INTEREST on all previously printed bills. (They say that it’s to pay off their own investors or, “bond holders” – most likely, mythic dragons sleeping on gold hoards.)

Now…. you’re borrowing money – to payback money which you have borrowed with interest?

Yes. And that’s the way it works – until your INTEREST payments alone – exceed what you are capable of earning. All this time – the Free Market – is shrinking, because you have LESS and LESS – FREE MONEY!

The cycle repeats until you are declared BANKRUPT.

Now that is how you turn into a slave – with NO PROPERTY and NO PROPERTY RIGHTS – not even over your own self. The FREE MARKET can only exist – if there are FREE PEOPLE buying and selling within it. Enslave the people – and the free market dies with them.

Why would the rich need free markets – when they have slaves – to get them anything they need – for FREE?

What is the difference between Money and Currency?

Well, FIRSTLY – they are VERY DIFFERENT THINGS!

Money is ANYTHING which has the following properties:

1. It retains its value over time
2. Can be exchanged for any items of equivalent value – directly or, indirectly.

Currency, on the other hand has the following properties:

1. Its value depends on the amount in circulation.
2. Can be exchanged for any items of equivalent value – so long as the banks remain open.

Currency is affected by INTEREST RATES controlled by the Central Bank. The bank and the currency it issues are fundamentally intertwined. You cannot have one – without the other. The AMOUNT of currency in circulation – is what controls its value. Increase interest rates, and you will see the amount of currency in circulation DECREASE (at least, in theory) – since people will be tempted to save rather than spend. Now, theoretically decreasing interest rates SHOULD increase the amount of currency in circulation since it cost less to borrow, and earns you little to save. Much better to use borrowed money when the interest rate are low, than to dip into you own savings – at any rate – and the very ACT of borrowing increases the amount of currency available – since banks CREATE CURRENCY THAT WAY!

Money on the other hand, cannot be arbitrarily created from nothing. Gold or silver represent “real” money because their stock depends on the amount which can actually be mined. If goods and services can be created at an equal rate at which a certain amount of gold or silver can be mined – then the value of money stays exactly the same. If demand for goods and services increases faster than the rate of production – then prices for the goods and services will go up. Prices going UP – is what we call INFLATION.

And that’s not a bad thing.

But if there simply isn’t enough gold or silver around – to buy these things – then the value of this money actually INCREASES FASTER than the price of the goods and services it is supposed to purchase. Then we have, DEFLATION – which isn’t a good thing.

This kind of deflation is precisely the one which hit he world in the 1930’s. And it has been the reason why most economists are so reluctant to return to either gold or silver – as a standard for currency value.

What has happened however is that, as of 1971 – when then President Nixon took the United States of America off the gold standard completely – to help finance the Vietnam War – the U.S. Dollar no longer had any intrinsic value. You could theoretically create as much as “money” as you needed. Essentially, you could create as MUCH inflation as was NEEDED – and avoid DEFLATION forever.

So…. how come the U.S. is now in a DEFLATIONARY SPIRAL?

Prices are coming down, the value of the currency is going up… BUT – so is the value of GOLD!

That’s not supposed to happen. Or, is it?

Apparently, the CENTRAL difference between “Money” and “Currency” – is not JUST in the rate at which it can be created – but the FAITH people place in that medium of exchange.

And it seems that people have shifted from saying “In God We Trust” – to “In Gold We Trust!”

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