What do history's most notorious despots have in common with many of the flag-waving, patriotic politicians of our day? Both groups rise to power through the exploitation of fear, which has become a societal plague. There have been widespread casualties. We need an antidote. Feardom offers its readers a much-needed immunization.
photo credit: JUD
You’re at a grocery store, shopping for items for your upcoming family picnic. You stroll through the aisle with chips and cookies, and grab a nice, big bag of Lays potato chips. The bloated bag feels like it contains enough snackage to feed your family with some left over for lunches throughout the week. You arrive at the destination of your picnic, get settled, and then open the bag. To your dismay, the bag is only half full.
We’ve become accustomed to this type of packaging, where the container is deceitfully enlarged to mask the true amount of content contained inside. Chips are the best example, since in some cases literally half of the bag is full of air. We’ve likewise become accustomed to an economy that is packaged and presented in exactly the same way.
Fractional reserve banking is one of the largest culprits in perpetuating this monetary deception, since banks operating within this system keep only a small fraction of your deposited money and loan out the rest. Thus, with an initial deposit of $1,000, a bank is able to create thousands of new dollars out of thin air. The 45-minute “Money as Debt” video explains this quite well.
Our elected leaders (who grant themselves authority to “lead” the economy while they’re at it) often praise our economy, speak of its growth and size, pay homage to its power, and create policies that they think will help guide it forward. Government, however, is an external economic force. As true economy involves individuals (and the products and services they create and provide), government can only negatively act as a third party, destructive force. Appropriately applied (for example, to enforce contracts), this process works well. But any deviation from proper and moral procedure is like filling the bag of potato chips with even more air. Inflating the economy with newly printed dollars, for example, will make the bag (economy) a bit bigger, but there comes a point when the force is too much and the bag explodes at the seams.
This event is not far distant for the American economy, if we proceed along the same course we have pursued since 1913.
Just as many people don’t know how to read the labels on our food to know what’s inside, so too are many being fooled as to the real health of the economy. Politicians and pundits alike try to reassure Main Street that “all is well”, for in that deception lies the only chance the economy has of perpetuating itself in its current form. Any lack of faith or question of its integrity leads to bank runs and collapses, like the one we saw just yesterday.
Buying potato chips is not a bad thing, but the wise consumer must know what he is getting in return for the cost incurred. Likewise, there are many good things about our economy, but to be financially sound we must be aware of all the hot air and bloated packaging surrounding the good.