A Short Economic Education: The Two-Tiered Economic System of the Elites
1. Irving Fisher, the best statistical economist of his time and the inventor of the price index, wrote that in the 1929 depression period, the total nominal amount of debt outstanding decreased (because of foreclosures and liquidation) by 20 percent; while the "real" debt burden on Americans (in terms of the purchasing power of the dollar due to inflation) increased by 70 percent. Debt burden increased even as debts were liquidated; and actual dollars owed became fewer because dollar supply had diminished. This is happening today. Most people don't have the incomes to meet their debts as they lose jobs or are cut back in hours or pay, or as their small businesses founder for lack of sales revenue; and you will note this, please: statisticians do not look at family debt burden when computing the cost of living index! They just look at the typical things we buy. Remember, deflation hits all prices; but debt is never adjusted downward to allow for the swelling purchasing power of the deflated dollar. This is a windfall to the creditor class – and why they always use their formidable political influence to promote deflationary policies. And the biggest tragedy is that Americans are so misinformed that they think the economy is experiencing inflation: they do not realize that the prices of items at Wal-Mart are monopolist administered prices – with most kinds of items supplied by oligopolies in non-competing collusion, i.e., cartel price fixing.
2. One of the biggest weapons of the criminal financial elites in their war of plunder against non-elite Americans has been the drug war. Banking families have been profiting from the drug trade since before the "Opium Wars" in China. We know they profit from drug revenue. We know they rejoice at how drugs destroy our people: how they destroy families, vocations, etc. while filling their for-corporate-profit jails. But just as big a cost and completely overlooked – and an even more powerful boost to the criminal financial elites – is the fact that all of that drug revenue cash leaving the country increases deflation in a devastating way. A trillion dollars leaving the country to be laundered in international banks – joining the "outer loop" dollar hoardings – actually has a "money multiplier" contractionary effect on the money supply: so that every penny of debt owed by Americans becomes all the heavier – one trillion? two? three? – over a number of years, just due to the deflationary effect of drug money leaving the country. The fact that no one in government or academia addresses this fact, just tells you who is running our government and academia and think tanks.
3. My thesis – in case you haven't been paying attention – is that the Moneyed Elite profit at our expense from deflation more than from anything else. They operate both inside and outside the domestic economy; and they make money by lending money to the domestic economy at compound interest, which ends up in the long stream of loans-flow-in and principal-and-interest-flow-out. This flow drains purchasing power from the domestic economy, i.e. causes deflation – which leads to business losses, more unemployment, business bankruptcies, home foreclosures, etc. – all of which puts real assets on the market for the creditor class to buy up at bargain-basement prices. Now consider this: Did the Fed or the government act to stop the deflation that was causing the foreclosures? Did they pump in billions of dollars to counter the deflation so as to prevent the foreclosures? No they did not. They let the people default for want of purchasing power; and only when the homes and businesses were in receivership – only when they were in the hands of the bankers – did the bailout money start to flow – and flow only to the bankers, never getting near the people whom even a fraction of that bailout money might have saved. You see, the bailouts give the banks the money to sell the houses: an earlier bailout would only have had to pay an amount that would have caught people up on their two, three, or four months' delinquent payments. All they would have had to do, was what I suggested three years ago: simply lower the reserve requirement to give banks extra reserves so they would not have to call in loans, so they could reflate the economy. But all of you ignored that; and if you recipients of my e-mails don't pass on what I write, it goes nowhere; and certainly none of the Federal Reserve presidents or governors thought that idea worth considering. Certainly none of the zealous young staffers of congressmen, or Larry Summers or Barney Frank, or Geithner or Volcker, happened to think that a good idea; neither did Ron Paul or Glenn Beck or Webster Tarpley. Bottom line: they waited until the damage was done, to be sure that none of the bailout would reach the lower-loop people, i.e., us Eloi. All the money went to Rupert Murdoch [spoke before the Worshipful Company of Stationers and Newspaper Makers], George Soros, and their kind.
The international loop is called "creditors"; the national loop is called "debtors": thus the "national debt" financial fiction. Citizenship in the national debtor loop is registered via the birth certificate (financial instrument), via which – along with the application for the Social Security Number – the offshore (pirate) creditor class grants "benefits and privileges" to the inland serf class. The rules are formulated within the Uniform Commercial Code (UCC), under maritime admiralty (commercial) jurisdiction.
It's a deceptively simple two-tiered system.
Federal Reserve notes are not fiat money: they are liens against property. We do not own property: we only have usufruct from the creditor class that owns it all. In matters of debt, admiralty law trumps all (IRS tax is a tariff, etc.) – unless and until the people rise up and say otherwise. A new social credit system – with one set of books – can replace this entire two-tiered fraudulent financial system and the feudal servitude it imposes.
Social credit is fiat money from the people, to the people, for the people: so the market economy serves us – instead of interest, rent, and monopoly fattening an offshore financier class.
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I GET IT NOW: SO CAN YOU!
Look in any textbook on economics and you will find lots of chapters on inflation; but how many on deflation? Out of thirteen books at Barnes and Noble, I found over a hundred entries on inflation and only one or two on deflation – and then only part of a page. Why?
Because deflation and how financial collapse is performed can never be explained to the public, lest they rise up and erect guillotines in town squares… in such places as Manhattan.
How do the rich make their money?
They make it by increasing the mountains of trillions of dollars of debt that is owed to them by imposing deflation in the realm where dollars are spent: in the US domestic economy where you and I live. But that needs some explaining. Especially if, after this, you want to explain it to someone else and have it have any meaning and application based on what you know.
What is a credit bubble bursting – but deflation?
When there is deflation, the entire mountain of payments owed to "creditors" by "debtors" increases in weight – and the creditors' wealth is increased. This is why we have the C.H. Douglas phenomenon of purchasing power leaking out of the circular flow – causing recession.
The economic pie example
Everyone knows that if the people of a nation back the economic pie – and are paid with so many dollars for their labor – those dollars will be used to buy the pie that has been made.
And everyone knows that if someone gets a printing press and makes more dollars, the dollars in the system are devalued. Then people will end up with the dollars they earned making pie, and have to buy smaller slices for the same price – or buy the same size slice as they got last time, but now costing more dollars.
And some also know that when new money is printed and spent by the counterfeiters before the other people realize what has happened, the people with the new money can rush in and buy pie at the old lower price: so that those victims of inflation who buy last will have even smaller slices of pie than the new spenders, because the first pieces of pie that were bought were too big for the new higher amount of money in circulation. This is why Goldman Sachs is front running the $600 billion "easing" with their (unofficial but pretty damn obvious) partner: the private Federal Reserve Bank.
The economic pie story told in the case of deflation
Suppose someone has some dollars and he wants to buy pie. Instead of cheating and going to a printing press and printing counterfeit tickets so he can have more claims to buy, he can simply arrange that everyone else give up their dollar claims to pie: so that fewer dollars will exist to claim pie; so that slices of pie per dollar, increase. By making sure that other people don't have their dollars, the pie thief gets more pie for his dollars; and no one can say he stole the pie using the printing press. Pretty sneaky!
A sort of RICO by the establishment
Of course, this trick is conducted by an entire class or crime syndicate – the financiers – and not by individuals. The financiers own IOUs that pay them interest. They are owed – by "debtors" – a stream of payments into the future.
If the financial wizards as a group can arrange for general deflation in the domestic economy, then the purchasing power of that stream – the amount of pie that each dollar in that stream buys – will be increased.
And all the financiers "up there" have to do is to create a domestic deflationary drain of purchasing power "down here".
This explains why the financial sector "injects" loans into the domestic economy; whereas they "extract" from the economy the principal amount of the loan that has been repaid plus compound interest on the loan.
That is a net loss of domestic purchasing power.
Where do they hide these dollars they take in order to make domestic deflation? They impound them in the exogenous realm – the international sector or "offshore financial havens" – where they are never spent. Foreign currency holdings may not be what we suspect: they may be keeping dollars out of our domestic system and reflecting the amount of deflationary war spoils accumulated.
But the rich are not investing those dollars in America: in fact, in their investments and derivatives buying, they are betting against domestic economic recovery. This is much like Goldman Sachs caught – but curiously not prosecuted – inside-betting against their client Greece: after putting together the debt package for their client Greece to fraudulently enter the EU, Goldman Sachs later profited by betting against Greece during their default. Shameful: they totally took advantage of a client.
The elephant in the room: the ever changing price of gold
The rich are selling their gold for dollars, seemingly endlessly, with the increasing price of gold reflecting – in fact, driving – the increased printing of physical purchase credits (dollars) by the Federal Reserve private bank.
The only reason the rich sell their gold to us is:
That they make more money by taking dollars out of our domestic economy than they do by owning gold.
The ultimate goal is:
The dollars they drain from gold buyers "down here" is a loss of money that will cause a further "multiplier" contraction of the domestic money supply.
Dollar deflation "down here" will mean that their dollar holdings "up there" (where they are withheld from spending down here) will, by deflation, add to the value of their stockpile of dollars "up there" and their mountain of dollar-denominated IOUs which they also keep "up there".
This is why the State Department / military industrial complex / elite monopoly families are worried about losing the dollar as the international monetary standard currency.
Besides, it is senseless for the rich to buy gold
The dollar price of what they want to buy – foreclosed land and buildings and businesses – is going down in price due to deflation.
What has really been happening all these years is that American purchasing power "down here" has been deliberately withdrawn from where Americans can earn it and spend it, in order to effect the deflation that increases by trillions of dollars the value of elite wealth of our IOUs (and our government's IOUs) that they hold "up there" but "not here".
Even after a trillion dollars in loans is defaulted, the creditor class becomes richer: because each loan default represents a contraction of domestic purchasing power that is a multiple of the default amount. The money multiplier that multiplies new money in inflation also works the other way – and multiplies the contraction of purchasing power when a loan is called.
Now this is the important part to understand:
There are two economic loops:
–The lower loop, where American households and domestic American businesses struggle with a constant drain of purchasing power, leading to loss and default and transfer of collateral to creditors – their gain in real assets – as, for example, via the mortgage payments we cannot meet due to deflation since the time we assumed the obligation.
–The upper loop, where our real assets end up in the hands of the "creditor", who sells it to someone outside our loop: someone in the outer loop where the dollars are sitting idle waiting for the opportunities that come in the form of our distress sales or the auctioning of property following foreclosures. The houses that the people of the elite loop buy now become rental properties; and the rent is sent to an absentee landlord living in the upper loop – in the international sector.
Our debt is their financial wealth
The mechanism maintaining the separation between the two loops – our domestic financial system and the international financial system – is run by the New York Federal Reserve Bank: this nation's people's most dangerous enemy.
The New York Federal Reserve Bank has monopoly control of the interchange between outer-loop and inner-loop money via the Federal Open Market Trading Desk. It is here that dollars are transferred – a deflationary transfer – from the inner loop to the outer loop, where they will never be used to stimulate a domestic business startup.
The prime directive:
Enhance creditor class wealth with depression-causing deflation in the inner loop.
The prime means to that end:
"Putting America To Work!"
This slogan – seen around the nation on the $50 million recovery stimulus signs – is a direct insult by the thieves, when seen for what it actually admits. It is under the policy and allowed practice of these private bank persons that the draining of dollars from the domestic economy citizen-laborer loop is continuously being funneled. The open market purchases of securities are flooding the outer international loop with dollars; but none of these dollars will reach the domestic loop – except in distressed asset purchases that will open up a rent payment stream, or a profit payment stream, draining wealth from the inner loop to the outer loop.
The Inconvenient Lie
People are told that they are living with inflation; but the fact is that the higher prices for food and fuel and rent come from monopoly pricing. There is really rampant deflation in the lower loop.
Our labor is paid fewer dollars: either by having our pay cut, or becoming unemployed, or being fired and then finding a new job that pays much less. The rich don't buy the candy, the bread, the milk, the shampoo, or the books and DVDs that we do. Rather, they buy factories and farmland, and shopping centers that were once locally owned. They buy small businesses and their patents and copyrights: and these things are sold to them for next to nothing by people caught in a lower-loop depression.
But knowing the exact spot where the deflationary transfer is occurring is like a nuclear detonator to the Federal Reserve and Central Banks of Europe scheme. It is their scheme, naturally – with acolytes here performing the necessary harvesting.
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When the Debt Slavery system suddenly withholds usury credit, crashing the domestic economy, people can rescue themselves from the plunderers by chucking the Usury System and substituting Social Credit. They will quickly become far better off and secure in their future prosperity than they have ever been before. We simply take back our own credit which the Rothschild interests have been monopolizing everywhere for centuries. The Social Credit solution will be viewed negatively by those looking forward to dominating the world economy through an international gold system where they control the gold supply and can set its price.
The solution is: 1) repudiation of debt; 2) nationalization of money and credit – taking it out of the hands of Wall Street and the City of London; 3) an impersonal mechanism that introduces money directly into the hands of consumers – instead of into the hands of monopolists and speculators. Under this plan – called Social Credit – market demand will once again organize and build up production to meet that demand.
With Social Credit, the government creates debt-free Treasury money without borrowing from international bankers. They give an amount of money to every American – not redistributing funds, but giving households the chance to spend the new money into existence – so that household demand guides the market economy. People receive these checks and treat them like they would a tax return or a dividend payment or a pension check. People still work for a living – the social credit does not replace work, or entrepreneurship, or the market system, or earning a living – what it replaces is the way new money enters the economic loop.
Among the thinkers who have contributed to the solution are those named in the gallery of pictures below:
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