When the
government deficient spends it creates money to cover the deficient. If that is
true, why is the government in debt? Why doesn't the government just create
enough money to pay off the debt? The truth is that the government does not
create money. All money is created by banks. When the government deficit spends
the privately owned Federal Reserve Banking System (Fed) creates the money and
loans it to the government. It is simply an electronic accounting entry in the
government's checking account. Then the people are taxed to pay interest and principle
back to the privately owned Fed who created the money at no expense. Money is
also created by local banks through the fractional reserve system when loans
are made to individuals. Most of us believe that banks take in savers money at
one rate of interest, loan it out at a higher rate of interest, and make a profit
off the difference. They do that. However, they also create new money when
making loans through the fractional reserve system. All money comes into
existence by being loaned into existence, at interest, by banks and must be paid
back to the money creator with interest. The money supply must be constantly
expanded to repay loans as they come due. As the money supply expands the value
of the money falls. If new money creation is slowed, there will not be enough
money available to repay loans as they come due. If the money supply is
expanded the money looses value and anyone with savings finds that their
savings will not buy as much as it did when it was earned. This is the fatal
flaw in our money system. As the money supply is expanded debt grows, and
requires further expansion of the money supply to repay loans as they come due.
It is a vicious circle of continuous inflation with cycles of recession if the
money supply is not expanded rapidly enough. The inflation steals the savings
of senior citizens, and the ever increasing debt places future generations in
debt bondage.
What is the solution? If the
government created the money directly, and spent it into existence the people
could be supplied with a debt free supply of money to carry on commerce. Then
with the proper balance of taxation and government money creation the nation
could have a money supply that functions as a stable store of value. Local
banks could then take in savers money at one rate of interest and loan it out
at a higher rate of interest and make a profit off the difference. There would
be no need for the Federal Reserve Banks. The international bankers that
control the Fed and the economies of the world do not like this solution. It
would greatly reduce their wealth, power, and control. They will use every
media they control to demonize this solution and tell why it will not work. The
system we now use gives too much power to too few people, and concentrates the
wealth of the nation in too few hands. It is nothing more than a very
sophisticated and devious form of theft.
Charles Fuqua
is the author of God's Law - The Only
Political Solution. He is available to speak at churches and any other
group setting. GodsLawForAmerica.com, CharlesRFuqua@gmail.com, 870-612-3570.
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