If you look at any paper money you have, it reads “Federal Reserve Note.” All US Currency is backed by the assets of the Federal Reserve, meaning that your dollar’s value is defined by it’s proportion of the US Federal Reserve’s Assets. Here’s the scary part:
Before 1933 $100 would equal $100 worth of Gold. According to the Federal Reserve Balance Sheet as of July 8th 2020, if I gave you $100 bill (a Benjamin) this is what that $100 bill represents today (simplified, and rounded to nearest cent):
Total Physical Assets: $0.22
22¢ worth of Gold
Total Debt “Assets”: $92.51
18¢ Loans to undisclosed organizations 68¢ Overnight Loans to Shadow/Investment Banks $1.08 Loans to Private US Citizens/Small Businesses $2.73 Loans to Private US Corporations $41.80 In Securities Purchased from Central Banks (MBS, Junk Bonds) and Loans Given to Central Banks $46 Loans to the US Government
Currency Assets: $7.27
$6.58 U.S. Dollars (Yes, according to the Federal Reserve Balance Sheet 6.5% of your dollar is backed by more dollars, anyone smell a Ponzi Scheme?) 69¢ Foreign Basket Currency
If the Federal Reserve were a private Corporation, it would have a Debt/Equity Ratio of 98:1. Lehman Brothers at its worst? 60:1. It would be guilty of accounting fraud to the tune of $8.75 billion. Last but not least, it would be guilty of operating a $327 billion Ponzi Scheme.
Federal Reserve Governors serve 14 year terms, and make $183,000 a year.
The two largest shareholders are Central Banks (Global) (41%) and the US Government (45%). However don’t confuse US Government with US Taxpayer. We’re a Republic not a Democracy.
-The Federal Reserve is legally immune from audit. -The Fed is immune to traditional securities laws. -The Federal Reserve has the power to print dollars, which fuels the aforementioned “Ponzi Scheme.” -The Federal Reserve has full/partial ownership of at least 5 LLC’s that they use as special purpose vehicles to circumvent the law. -Inflation is taxation without actually calling it taxation, worse it’s taxation without representation as Fed Governors determine fiscal policy without congressional input
Due to majority ownership by the US Government and Central Banks, fiscal policy is directly influenced by the wants/needs of Banks and Government. Fed purchase of bad private securities (bailout) is unfair to other private security companies who are doing it right. These bailouts are positive reinforcement for risky bad behavior by banks.
Thus, stonks always go up because the Fed has to make bank and government debt (your social security) cheaper to service and less likely to default to save their balance sheet. Great for autists like us in the short term, but the long term outlook is dire. If any assets purchased by the Fed default due to COVID (which is likely), we could see inflation/hyperinflation proportional to the percentage of defaulting Federal Reserve debt assets.
Inflation doesn’t just mean stonks go up – it means EVERYTHING goes up. This could cause the collapse of the $USD and loss of it’s status as the world’s reserve currency. So in addition to these short term plays buy hard assets such as food, precious metals, weapons, and other barter-friendly items. Enjoy your gains, but set aside 10-15% to prepare for the worst case scenario that 3-20 years from now we may live in a post-$USD society. Your tendies will mean nothing then if denominated in $USD.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.