Originals

There is no doubt that many Americans are well aware of our national debt. However, these same Americans for the most part do not understand the banking system of the United States. Many will listen to politicians endlessly proclaim how “we have to pay down the debt, stop deficit spending, change the tax code, etc., etc.” But do not be fooled! These politicians and the many administrations that grace the White House periodically have no intent on paying the debt or even to help slow down the bleeding of our economy. One might ask why and the simple answer is that they can’t. They know, well maybe some actually know, that our banking system is just a charade, a house of cards that can fall at any moment.

Just look at previous administrations, both Democrat and Republican and consider why their “economic brain trust” always comes from the same circles? There truly is no difference between the economic advisors of the different administrations as the media and politicians would like you to believe. To get an understanding of this charade one must look at the repercussions of the Federal Reserve Act of 1913, the subsequent establishment of Fractional Reserve Banking, and how our tax system is geared towards servicing the debt to the private cartel of bankers (The Fed).

Let us look at some highlights of the Federal Reserve Chairmen between Reagan and Obama; Paul Volcker, Alan Greenspan and Ben Bernanke.

Paul Volcker

• 1952- joined the Federal Reserve System of New York
• 1957- joined Chase Manhattan Bank as a financial economist
• 1965- became vice president of planning in 1965 with Chase
• 1969-1974- was under-secretary of the treasury and helped coordinate plans for the total removal of the gold standard in 1971
• 1975-1979- became President of the Federal Reserve Bank of New York. Yep, the same establishment which brought us Timothy Geithner
• 1979-1987- Chairman of the Federal Reserve

Alan Greenspan

• 1954-1974- formed Townsend & Greenspan, an economic consulting firm
• 1967- Director of Domestic Policy Research under Nixon
• 1974-1977- Chairman of the Council of Economic Advisors under Gerald Ford
• 1981-1983- Chairman National Commission on Social Security Reform
• 1982-1988 – Director Council on Foreign Relations foreign policy organization
• Corporate Director Positions prior to heading the Fed:
  1. Aluminium Company of America
  2. Capital Cities/ABC
  3. General Foods
  4. J.P. Morgan & Co, Morgan Guaranty Trust Company of New York
  5. Mobil Corporation
  6. The Pittston Company.

• 1987-2006- Chairman Federal Reserve

Ben Bernanke

• 1979-1985- Professor at Stanford
• 1996-2002- Chaired Economics Department at Princeton
• 2002-2005- Board of Governors of the Federal Reserve System
• 2006-Present- Chairman of the Federal Reserve

These three men have a unique wealth of experience to bring to the table. Volcker and Bernake are out of the Fed system with Bernanke refining his skills at such progressive institutions as Princeton. Greenspan spent a lot of time in the corporate world while at the same time working on government commissions. Volcker and Greenspan both had access to the President. Especially Volcker who helped shape the policy of removing the U.S. completely from the gold standard in 1971 under Nixon. Volcker is a career “Fed”, Greenspan understands the corporate bailout mindset being involved intimately in corporate and government affairs, and Bernanke is a product of progressive philosophy. The three chairmen have demonstrated that their only interest is to keep the charade going as long as they can.

This is exactly the Keynesian philosophy, not a capitalistic one. Volcker worked with Reagan and now is working with Obama. Not for partisan reasons, but the simplest one yet: to keep the scam going a little bit longer and let someone else worry about the problem when it finally collapses. Common sense would lead anyone to understand that our banking system is a fraud. Why would these educated men not correct the errors unless they are actually the beneficiaries? But what is more astonishing is that Bernanke is starting to float the idea of no reserve requirements at all. Consider the following from a prepared statement by the Federal Reserve to the Committee on Financial Services in February:

The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system.[i]

Private Central banking is really nothing new. The Bank of England began in the 1690’s. The goal of the bankers was to get a private central bank in the United States. Attempts were made but ultimately postponed thanks to Andrew Jackson and his battles with the bank. It wasn’t until 1913 that the official central bank became a reality, thanks to the Federal Reserve Act of 1913 and the efforts of Morgan, Rockefeller, etc. This central bank, the Federal Reserve, would serve as a banker’s bank and subsequently put the U.S. taxpayer on the hook for any bad investments these banks might make and eventually made. Another key facet of the Act was to remove the constitutional authority of issuing the currency from the government and placing it in the hands of this private cartel. Ultimately the act paved the way for what we know today as “Fractional Reserve Banking.”

Here is how the scam works today. When the Fed wants to create more money it simply purchases an asset, usually U.S. Treasury bonds. The amount of the purchase would represent the new artificial money injected into the system. The banks that now have the new money are allowed to lend 90% of that money out. This should not be too worrisome except for the fact that many who borrow this money will re-deposit this money in other banks which will lend 90% of that money back out.

Basically, the money multiplier effect is this: the amount of deposits can be expanded by 10x the initial deposit. By law, banks are only required to hold 10% of deposits, leaving the remaining 90% to be loaned. So a $10,000,000 infusion by the Fed will lead to $100,000,0000 being increased in the money supply.[ii] Yep, that is $90,000,000 of fake money!!! It breaks down like this: monetary inflation leads to price inflation which leads to the “business cycle” or booms and busts that we have grown to know. Now here is the kicker, the Fed is a backer of our tax system because this is how they are assured they can retain the artificial money being loaned out.

During the 1930’s it was apparent that the Fed system still had some holes in it, and this is where we see the creation of deposit insurance. But this is just another scam. Consider that the FDIC itself has “less than one percent of the deposits it insures.”[iii] As Murray Rothbard points out, “how does one insure an institution that is inherently insolvent?”[iv] This is the house of cards the U.S. economic system is built upon. And no, this is not a product of the evils of capitalism, but rather heavy government involvement in a once free market.

If our market was actually “free” any bank engaging in fractional reserve banking or other dubious acts would be quickly found out and render itself out of business. It is only the propping up by government regulations, which enable one bank to lead to two banks and shortly thereafter an entire industry, which engages in these fraudulent acts. Consider the bailouts of recent and times past as an example. There is no interest whatsoever to correct our scheming system for the simple reason that there is too much artificial money to be made. Furthermore, Congress is totally beholden to this private cartel (The Fed) for money it was originally empowered to issue. Thanks to the Federal Reserve Act of 1913 this power now lies with the private central bank.

So what about revamping our tax system? There are plenty of ideas out there such as the Fairtax, a flat tax or even a Value Added Tax. While these ideas are definitely better than the 60,000 some odd pages of our current tax code, they do not address the root problem. The root problem is the income tax period. Why not eliminate the tax? It worked well for years before the implementation of the 16^th Amendment. The reason is simple. Taxes are used as a down payment of sorts to the Fed. In addition to that, the tax system provides too much power to Congress, a power they will never relinquish. Nor can they relinquish that power due to the fact they have to have a mechanism to pay back the private cartel.

So lets just sum it up. Next time you hear politicians or media figure heads complaining about the debt or the deficit ask yourself why they do not mention the fraud of Fractional Reserve Banking? Here is the root problem to our fiscal insanity and nobody talks about it. Without Fractional Reserve Banking our government would not be able to sustain many of the programs that are crippling this country. The government would have to learn to live within its means. Is that such a radical idea?

Rahm Emanuel stated “you should never let a crisis go to waste”[i] and it seems as if the Obama administration is in lockstep with this motto again. When the Deepwater Horizon Oil Rig exploded last April and subsequently unleashed massive quantities of oil into the gulf (ocean if you believe Janet Napolitano[ii]), the Obama administration must have had a smile from ear to ear. The oil spill in the gulf is going to accomplish what advertising and political banter could never achieve. The issue of drilling vs. clean energy is about to hit many people personally. This event is going to advance cap and trade and other so called “green legislation” —all in the effort of a clean world. This is exactly why the Obama administration isn’t running around trying to find a quick solution to the spill. Obama wants an oil induced catastrophe to quell the public debate concerning increasing our off shore drilling capabilities.

When you look at cap and trade and other “green” legislation the common denominator is that it protects the big companies while making it increasingly harder for up-starts to compete. It is no coincidence that the left adhere to the Rockefeller philosophy that “competition is a sin”. This is the same mindset Obama holds and you can see it through the legislation the Obama administration has already passed—The bailouts of major financial houses (the small guys were left to die), healthcare which mandates a purchase of a product from the major companies in that field and cap and trade which will eliminate all but the biggest business players if it is passed. These bills are not designed for the public good. These bills are a move to consolidate even more power amongst the elites.

So here we have a gift that has fallen in the lap of the leftist agenda. This oil spill has already dumped more oil into the gulf than the Valdez accident and it is continually leaking more oil daily. Some estimates have the total amount of oil spilled around 6 – 7 million gallons to date. For a comparison the Valdez accident unleashed 257,000 barrels into Prince William Sound.[iii] As the oil keeps pumping into the gulf it is not that surprising that Obama has dragged his feet trying to contain the spill and even providing assistance. His administration has not given the state of Louisiana approval to build their own sand barriers to protect the coastline. Louisiana Gov. Bobby Jindal stated he wasn’t waiting any longer for federal approval to build the barriers.[iv] What a tale of two disasters. During Katrina, Louisiana refused federal help[v] and during this spill the feds won’t offer any. Obama and the left need this spill to be catastrophic. Nothing will advance their “green” agenda more than the devastation this spill will deliver.

The Government’s hands are not too clean in this issue either. It is reported that the particular rig that exploded was certified numerous times despite safety concerns. It is going to be hard for the Obama administration to spin this as the dangers of drilling when his administration consistently approved of their operation. It is sad but it is clear to me that Obama is not going to waste this crisis and the future only holds more advocacy of business killing legislation like cap and trade.

Last week Thursday (May 6th) the Dow dropped a staggering 1000 points in less than an hour. The Dow did bounce back and closed down 347 and change but that is not the story here. The story is what happened and how could the market drop so unexpectantly so fast? Many theories are floating around as to the cause, such as a computer glitch, a simple mistake on a trade order etc, etc. Don’t believe the spin being directed your way. This was nothing more than a test run by the elite bankers to crash the market in the near future.

The sudden drop in the market left many investors losing a vast amount of wealth. If you are not too familiar with the trading realm you might be asking yourself how could anybody lose that much money? After all the market and stocks bounced back to respectable levels even if they were down a little from the open. Well, the answer to that question is something called stop-loss. Many investors have a certain price (which they provide) that will trigger the sell of their stock if it reaches a certain price. When the market fell in to free fall many of these stop-loss mechanisms kicked in and investors holding certain stocks such as Accenture and Proctor & Gamble lost money. Accenture actually dropped from $40 a share to under a dollar before it rebounded. This happened in one day!

So ask yourself if this is normal or have we seen such market manipulation in the past? The Panic of 1907, the crash of 1920-21,the 1929 crash, the S&L crisis, the dot.com bust and the housing bubble all have the same common denominators. These crashes were all designed by the elite bankers and the “free-market” usually caught the blame. It is almost simplistic as to how to read what is going on in the world today. All one has to do is look to the past. Crashes of the past almost entirely revolved around the easy expansion of credit and then the removal of credit from the market. When the market realizes the credit dried up it crashes. Then the bankers cash in on everyone’s misery. Now there are other factors that are manipulated here but this is the simple explanation to help you understand the scam.

The recent “test crash” should serve as a warning to us all. The central banks just had a successful test run for the crash of the near future. Look all around you. The EU is broke, Greece is about to riot, the U.S. has been broke and the coming newscasts will revolve around more bailouts and loans to countries. Does it make sense that to solve an economic crisis the parties involved would pile up even more debt? Of course not but that is the scam. If a country has so much debt that they are beholden to the banks they are easier to control. This is nothing new here as this theme has a tendency to repeat itself through history. Make no mistake, the trillion dollars of wealth that was eliminated in under an hour is just the precursor to what will follow.

No doubt many of you have and will see reports about the Tea Party movement and their “agenda.”  What you will probably not hear is that the Tea Party movement is not a partisan, racist and/or extreme movement orchestrated by right-wing nut-jobs.  The movement in itself is simple-Follow the constitution.  Unfortunately our elected officials, in their infinite wisdom, have not done so and will not begin to do so no matter their level of rhetoric.  The ultimate goal here is to strip away our Constitutional rights in favor of an ever increasing Federal government.  Consider some of the more recent pieces of legislation that have passed and imagine what could possibly come next.  Sadly these officials are making bolder moves to eliminate and erode what is left of our freedoms.

The Patriot Act-Unconstitutional

1^st Amendment

Congress shall make no law … abridging the freedom of speech … Now it seems that the “government may prosecute librarians or keepers of any other records if they tell anyone the government subpoenaed information related to a terror investigation.” Government (FBI) can also monitor political and religious groups (Speech) without suspecting any criminal activity.

4^th Amendment

The government can engage in search and seizure, called “sneak and peak”, without probable cause.  It also gives the government the authority to jail American Citizens indefinitely without a trial.  According to Sen. Feingold, the Justice Department made 763 requests for “sneak and peak” warrants, but only 3 had to do with terrorism.  This sounds more like a government ploy to stop true patriots rather than finding terrorists.

6^th Amendment

The government may monitor conversations between attorneys and clients in federal prisons and deny lawyers to Americans accused of crimes.  Americans may be jailed without being charged or being able to confront witnesses against them. US citizens (labeled “unlawful combatants” now labeled “belligerents”) have been held incommunicado and refused attorneys.

The Military Commission Act 2006 HR 6054-Unconstitutional

This act is something one would expect to read in a textbook describing Nazi Germany.  Fast forward to 2006 and we find this insidious legislation a reality on our shores.  What is our country becoming?  This act gives the Federal Government authority to detain U.S. citizens, by declaring them “unlawful enemy combatants”, without providing our constitutional rights of Habeas Corpus.  Anyone (US Citizens) who speaks out against government policies runs the risk of being labeled an “enemy combatant.” Click here for a good article on the act.

John Warner Defense Act HR 5122

This gem of a bill violates the Posse Comitatus Act 1878 (18 U.S.C. § 1385).  It authorizes US troops to police U.S. cities to quell public disorder and dissent. It also allows the President to declare a public emergency and station federal troops anywhere in the U.S. while taking over the National Guard Units without the consent of the Governor and/or local authorities to suppress public disorder.

Section 333, “Major public emergencies; interference with State and Federal law” states that “the President may employ the armed forces, including the National Guard in Federal service, to restore public order and enforce the laws of the United States when, as a result of a natural disaster, epidemic, or other serious public health emergency, terrorist attack or incident, or other condition in any State or possession of the United States, the President determines that domestic violence has occurred to such an extent that the constituted authorities of the State or possession are incapable of (“refuse” or “fail” in) maintaining public order, “in order to suppress, in any State, any insurrection, domestic violence, unlawful combination, or conspiracy.”

Basically, this Act makes it easier for a declaration of martial law to be made.  Why is the government working so hard to strip the citizens of their liberties?  The easy answer to this would be that sooner or later the population is going to wise up to the corruption and fraud (well lets just call it treason) that has been going on and they need these measures in place to detain and eliminate “dissenters”.

Belligerent Act  S.3081-Unconstitutional

Introduced on March 4, 2010 by Senators John McCain and Joe Lieberman the “Enemy Belligerent Interrogation, Detention, and Prosecution Act of 2010″ gives the President ultimate authority to order the arrest, imprisonment, interrogation of anyone “suspected” of being affiliated with terrorist activities. Basically any question regarding Habeas Corpus from other unconstitutional bills is virtually eliminated with this gem.  Furthermore, you can be classified as a “high value detainee” with nothing more than what the “President considers appropriate.” Here is how it reads in the bill:

(2) CRITERIA FOR DESIGNATION OF INDIVIDUALS AS HIGH-VALUE DETAINEES- The regulations required by this subsection shall include criteria for designating an individual as a high-value detainee based on the following:

(A) The potential threat the individual poses for an attack on civilians or civilian facilities within the United States or upon United States citizens or United States civilian facilities abroad at the time of capture or when coming under the custody or control of the United States.

(B) The potential threat the individual poses to United States military personnel or United States military facilities at the time of capture or when coming under the custody or control of the United States.

(C) The potential intelligence value of the individual.

(D) Membership in al Qaeda or in a terrorist group affiliated with al Qaeda.

(E) Such other matters as the President considers appropriate.

Goodbye Habeas Corpus and Hello Dictatorship.

With the recent popularity of the Tea Party and the growing discontent with the ever encroaching role of our Federal Government , I felt It necessary to delve into the actual causes of a revolution and mindset; particularly the American Revolution.  Some people might fall out of their chair when they learn that the American Revolution had nothing to do with a tea tax but rather this tax was just the culmination of anger of a distraught society who had suffered under the economic manipulation of The Bank of England.  The colonies, under their monetary system of colonial scrip were thriving. It wasn’t until colonial scrip was forcefully ended that economic conditions became deplorable. The rising level of anger in the colonies along with dwindling financial security led to an attitude ripe for revolution.  In some cases there are similarities between the colonists and the Tea Party movement today.  As in the colonies, Americans today are getting fed up with the astronomical burden of debt the tax payer is paying via higher taxes and inflation. Although the Tea Party movement of today has not quite caught on to what is going on in Washington (some still are immersed in partisan rhetoric) they all know that something is horribly amiss and want a remedy.  The remedy:  Put the power of issuing currency back in the hands of “We the People” and not privately owned central banks.

In the interest of time, let us look at the American Colonies around the period of 1750’s.  During this time the colonies were thriving and people were gainfully employed.   The reason for this is simple: the colonies learned the secret of money.  The issuance of colonial scrip, which was controlled by the respective governments, gave rise to a period of growth, peace and happiness.   Colonial scrip was a fiat currency but there is one notable difference from the fiat system we have today.  The government controlled the currency, not a private bank.  Benjamin Franklin, while in London on business on behalf of the colonies, witnessed that the economic situation in England was far worse than that of the colonies.  Franklin wrote that, “The streets were covered with beggars and tramps”.  Unable to reconcile how England with all its wealth could have such poverty in the working class, he began to inquire amongst his English friends.  Franklin was told that businesses, “were already overburdened with taxes, and could not pay more to relieve the needs and poverty of this mass of workers.”  He was then asked how the colonies collect enough revenue to support the poor houses back home.  Franklin replied, “We have no poor houses in the Colonies; and if we had some, there would be nobody to put in them, since there is, in the Colonies, not a single unemployed person, neither beggars nor tramps.”

Obviously this must have come as a surprise to the English so they understandably inquired as to how this was possible.  According to Franklin it was quite simple, “In the Colonies, we issue our own paper money. It is called ‘Colonial Scrip.’ We issue it in proper proportion to make the goods and pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one.”  The Central Bankers of England were not pleased by this revelation.  How dare people thrive under conditions not directly controlled and manipulated by the Bankers.  England was in a financial mess.  Since the inception of The Bank of England in 1694, England saw itself prey to countless wars of expansion and an ever increasing debt burden.  Parliament was desperate for more money to help make the interest payments on their outstanding debt, a debt owed to The Bank of England.  Does any of this sound familiar?

The Bankers devised a plan and quickly retained the support of Parliament for its implementation.  Although there were minor laws passed by Parliament in response to gaining more monetary control of the colonies, the devastating blow came in the form of the Currency Act of 1764. The act made it unlawful for anyone in the colonies to issue their own money.  In addition, all debts had to be paid by gold or silver coin, which was regulated and manipulated by The Bank of England.  Only one year after its implementation Franklin noted, “In one year, the conditions were so reversed that the era of prosperity ended, and a depression set in, to such an extent that the streets of the Colonies were filled with unemployed.” To sum it up, the circulating medium of exchange had been cut by half.

So as you look through government textbooks and read that the American Revolution was waged because of a tea and stamp tax, consider these words by Benjamin Franklin, “The Colonies would gladly have borne the little tax on tea and other matters had it not been the poverty caused by the bad influence of the English bankers on the Parliament, which has caused in the Colonies hatred of England and the Revolutionary War.” In fact it was the removal of authority for the colonies to continue issuance of Colonial Scrip that Franklin believed was the catalyst for the Revolutionary War.  Let us fast forward to the current version of the Tea Party.  99% of the people involved in this movement are aware of the actual problem or just know that something is wrong and will start to unravel this web of deceit and fraud as they continue to educate themselves on pertinent subject matter.  Is it any wonder why the Democrats are trying so hard to demonize the Tea Party movement as violent and racist?  Is it a coincidence that the Tea Party movement is in the process of becoming hijacked by Republicans who also see a danger in the truth coming out?  As I have stated before, the vast majority of Democrats and Republicans are playing for the same team.  Where one uses social entitlements to increase the size and power of the Federal Government, the other uses national security.  The politicians and bankers are scared of the Tea Party movement.  That is why we all will see an attempt by so called conservatives to derail the true guiding principle of the movement (the U.S. Constitution) and by democrats to discredit the movement by any means necessary.

Now if you are wondering why this is not taught in your textbooks and schools consider where they get their funding from.  If that does not convince you, consider where the politicians get their money from.  Government does not want to bite the hand that feeds it, and the Central Bankers will make sure that a large segment of the population is undereducated.  After all, if people wise up to what is really going on then the scam is over, and there is too much money to be made for politicians and the bankers to let that happen.  Throughout history the problems credited to destroying great nations have always been rooted in the manipulation of the medium of exchange.  For the past 300 plus years it has been the privately owned central bankers who have wielded the power which has led to economic depressions, wars, loss of purchasing power and a greater dependency on one’s own government.  Follow the artificially created money and it will be obvious where the problem lies.

Fox news is reporting that Eric Cantor had shots fired at his campaign office today. Yesterday Democrats  received death threats. Where are we going as a Nation? Should a unpopular Bill lead us to violence? Or is the arrogance of our Congress and yes even the President making people turn to “other forms” of persuasion. The Congress heard from the American people in townhalls, phone calls, faxes, letters, emails, protests and certain elections. Yet they did not listen! Instead the  “buy offs,” backroom deals and promises made by the administration were too good and therefore the bill passed.  So what else can the American people do to get their attention? Can they follow the next rational step by boycott  the government by not paying taxes? No the system is fixed. Income tax is preemptively held from checks. I have more questions than answers. I know Americans are angry and have every right to be. They feel left out. They voted for change but hoped for something different from this. Even with the passage of this unconstitutional legislation, acts of violence are premature and should not occur. There is no need to “provide new guards for our future security.” States are pushing back and the bill could be repealed one day. Every effort should be exhausted to bring the kind of change people want peacefully. All of this energy needs to be focused for the upcoming elections. We the People can make the biggest impact this year on the government through our vote in November. So never forget these events, work hard for a campaign you believe in, and VOTE!

With all the hype and coverage over health deform, it is imperative not to lose focus on the real enemy, the Federal Reserve.   Keep in mind that many of the entitlement programs we currently have would be all but impossible without the Fed’s help and their promotion of our fiat currency and fractional reserve system.  Sure, some programs may have been pursued anyway but they would have been much more limited in scope and would have to meet fiscal guidelines.  After all, if a government is unable to create and help facilitate the creation of money out of nothing they might be more concerned on how they spend it.

During testimony before the U.S. House of Representatives Committee on Financial Services on February 10^th,2010, Federal Reserve Chairman Ben Bernanke floated the idea that minimum reserve requirements should be eliminated all together.  Consider the following statement found on the Feds own website:

The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system.

Remember that the U.S. operates on a “fractional reserve” banking system which requires the banks to keep on hand 10% of its total deposits.  They, in turn, can lend out the rest.  Now if this seems illegal, it is.  If one of us tried to pull this over we would be arrested.  All you have to do is look at Bernie Madoff.   But more disturbing is the fact that the elite bankers willingly pursue policies which lead to economic instability and ultimately will lead to the economic collapse of the United States and the world.  One might have to ask if this is being done by design?

Return your focus to the past history of the Federal Reserve System.  Obviously it was created in 1913, but since its creation the U.S. dollar has lost 95% of its purchasing power.  It was not that long ago when our grandparents could purchase cars and homes with money they saved up.  Now it is all but impossible to purchase a home unless you get financing from a lending institution.  To add insult to injury, most mortgages are not even paid off until the borrower pays 3 or 4 times the amount of the original loan.  Bankers are making a killing off of these unethical and illegal practices, but mostly everyone is quite silent on the subject.  It really does make sense when you realize that the Federal Reserve is no more Federal than Federal Express.  It is owned and operated by the interests of private “elite” bankers who are in the business of making money.

The Fed creates and manipulates boom and bust cycles.  This is not a free market, but rather central planning in disguise.  Consider recent economic downturns such as the S&L crisis in the late 80’s, the dot.com bust of the 90’s, and more recently, the housing crash.  These episodes were all created by policies enacted by the Fed.  Whether it was artificially keeping interest rates low, easy expansion of credit, increasing the money supply or a combination of them all, the Fed is the real problem, not the solution.  If these examples do not have you convinced look back to the 20’s.  During 1920 and 1921 the U.S. was hit with a far more serious economic episode than that of the crash of 1929.  What was the difference?  President Coolidge, at the time, let the market heal itself rather than burden it down with government programs, policies and procedures.  Subsequently, the hard times were relatively short lived and soon gave rise to what everyone now knows as the “roaring” twenties.  The crash of ’29 was quickly followed by government intervention after government intervention and the hard times were drawn out for years.  It is not a coincidence that the Federal Reserve flooded the markets with easy credit and money shortly before they pulled the cash back out creating the crash in 1929.

Fractional Reserve Banking, or Ponzi Banking, has been the norm for America under the Fed.  It is illegal for most people, but not the bankers.  Bernanke, in his infinite wisdom is now trying to reduce the fractional requirements for banks down to zero.  So instead of having fractional reserves backing up loans, (although these loans far outnumber what is held in reserve) the Fed wants everything to be virtually created out of nothing.  This is unsustainable.  Our current “fractional” system is unsustainable and this policy, if pursued will be the final nail in the coffin of a nation once considered the best and strongest the world has ever seen.

Here in Atlanta we have recently had an interesting statement delivered to us by one of our State Senators.  Sen. Don Balfour decided to state publicly that tuition is “embarrassingly cheap” in Georgia while advocating an increase in college tuition to help fill gaps in the state budget.  It is dumbfounding how Balfour, a Republican, sees hiking tuition as a good thing when his party constantly advocates lowering taxes to generate more revenue.  Should this philosophy not apply to tuition as well?

As a recent college graduate I can attest to the ridiculous fees and book prices students have to pay.  College is becoming more and more out of reach for the middleclass family and left only to the athletes or upper classes.  Now, I want to emphasize that I in no way blame the wealthy or am suffering from wealth envy because they can easily afford tuition costs.  Rather I am stating a mere fact that as tuition prices rise the amount of students enrolled will drop.  Right now the majority of families are taking out loans for college because the costs are so out of reach.  The Students who achieve their dream of graduating are rudely welcomed to reality with $40,000 to $80,000 worth of debt.  The dream of graduating college and getting a starter house with a little fence has quickly morphed into the nightmare of rooming with two or three in an apartment to make ends meet.  The payments rendered toward student loans would help so many if that money was allocated to real needs.

You may be thinking I want a free ride for everyone to attend college, but you would be mistaken.  While that would be great in theory, reality just does not entertain that fact.  What I am advocating here is a reduction in tuition which, in economic logic, would close the education budget gap.  It does not take a rocket scientist to figure out that the cheaper a product is the more consumers will purchase said product.  It doesn’t matter if a person is buying a candy bar or tuition; prices drop, more people buy, prices rise, less people buy.  A higher education should have a cost but when do we reach a point of diminishing returns?  Sooner rather than later people are just going to stop paying the over-priced costs for college and pursue other schooling.  Bringing the cost of college back into perspective would create such an increase in enrollment that colleges would find that their revenues actually increase rather than decreased.

Here is a quick example:  Let us say that 10 people can afford widgets at $1000.00 per widget.  This would bring $10,000 to Widget Inc.  Keep in mind these are top of the line widgets!  If the price of the widgets dropped to $600.00 perhaps 15 more people could afford to purchase them.  So now you would have 25 people (10 originals plus 15 newcomers) purchasing widgets at $600.  Now Widget Inc. has revenues of $15,000.  Why would this simple and logical idea not work with tuition?  Perhaps there are more sinister and greedy forces at work.

But let us return to the education guru, Don Balfour.  Balfour, through his hard work, has attained a position in the private sector (He is a CEO with Waffle House) which pays well.  So his idiotic statement is subjective and to him tuition may seem cheap.  But if he were to ask one of his employees, would he get the same response? I seriously doubt it.  The ironic or hypocritical thing here is how Republicans bang the “lower tax generates more revenue” drum to death but are ever so willing to increase costs across the board in other areas.  If lower prices really do raise more revenue then how can Balfour actually say with a straight face that he has the public’s interest at heart?

The conclusion of the 2010 CPAC convention should have set off alarm bells across the country.  Ron Paul (R –TX) won the straw poll with 31% of the vote compared to 22% for Mitt Romney.  What is discouraging about the poll is not the winner but the overall reaction accorded to him after the results were shown on screen.  Amongst the cheers were the unmistakable sounds of boos for the winner.  Obviously the crowd would have preferred Romney to win the poll as he seemed to receive the loudest applause when the rest of the names and vote tallies were read.

My question is simple.  What the hell are these people smoking at CPAC?  The only legitimate and true conservative wins the conservative straw poll and is booed.  This does not sit right, and it sure doesn’t pass the smell test.  Congressman Paul has been a long advocate of fiscal conservatism and has put forth legislative efforts to audit the Federal Reserve and correct our broken monetary system.  Why would “the base” be so upset with his victory? Maybe it is time to look at these so called leaders and really examine what they truly advocate.  Romney is supposed to have been the poster child for conservatism and business expertise but isn’t this the same guy who allowed universal healthcare to become a reality in Massachusetts?  This is hardly a conservative notch on the belt to bring to CPAC.

There were even more disappointments at CPAC.  Dick Cheney, as Vice President, saw the size of the Federal Government double during his two terms.  In addition to this conservative accomplishment, the national debt exploded during the same period.  Some may argue that revenues increased under W’s administration, but that still does not pass the smell test.  I ask you, my intelligent reader, if you were to get a raise at your job would it make the best conservative sense to go spend your additional money or simply save the money and continue to live within your means?  Obviously you know the answer.  Then there is Sen. Demint.  He finally made some real noise with his balanced budget proposal, but what took him so long?  Is it just the fact that a Democrat is in the White House instead, or is it pure concern for our nation’s fiscal irresponsibility?  Conservatism and fiscal responsibility have no truer champion than Congressman Paul.  His tireless efforts to bring attention to the fraud going on in Washington have largely been ignored and dismissed by many.  His predictions of the past are ringing more and more true everyday, and he was booed at CPAC.  Maybe now, as our country is on the verge of economic ruin, his warnings will ring loud in the ear of every American and we can finally replace the tired established “phony conservative” figureheads who have destroyed the meaning of the word.

Its is very disturbing that conservatives run around proclaiming fiscal responsibility but none have yet to actually practice it.  The one person who would actually implement policies to get us going in the right direction is constantly dismissed and ignored.  Hopefully with this straw poll victory, Congressman Paul’s message will be ignored no more.