Federal Reserve Notes Are Backed By Nothing

This past week we saw a great deal of bad economic news come out. The housing market as we've predicted for awhile now is really starting to go down the toilet which needless to say will be a huge negative for the U.S. economy. The USD index has also fallen despite what I'm sure was a good effort from the Plunge Protection Team. They were however successful in keeping the gold price in check despite all of the bad mortgage news. One thing is for sure, the price of gold and silver cannot be contained much longer considering all of the fundamentals at play. Paper money is worth nothing, gold and silver stores value. Therefore the value of paper money like the USD will move closer to zero where as the value of gold and silver will always maintain its value. The recent price drop in gold from $680 to $640 was obvious manipulation on the part of the central bankers and they are continuing to fight a losing battle.

Let's first look at the housing market debacle. According to an article from Reuters, Jim Rogers one of the more well known commodity gurus on the planet has gone on record saying that we could see 40 to 50% drops in the value of particular U.S. real estate assets and many defaulted loans. He was quoted as saying "It's going to be a real mess." Although the value of the price drop could be debated, I couldn't agree more with Jim. The writing has been on the wall for many years now and it is going to get ugly. This is all the fault of Alan Greenspan. Greenspan reduced interest rates to the point where almost anyone could get a home loan even if they weren't qualified for it. Now, all of those adjustable rate mortgages, interest only loans and other creative financing packages are putting the screws to many home owners. Unfortunately we have only seen the start of this. What really makes me mad is the fact that Greenspan is coming out and predicting future problems in the housing market when he was the person responsible for creating this mess in the first place. He even had the nerve to blame home buyers for the problem even though it was his plan to make all of this excess money available. It is ridiculous that the mainstream media treats him like he is some wise financial prophet when he is nothing of the sort.

Greenspan Cautions About Subprime Loans

Let's now look at the USD. The USD index has now fallen under the 83 mark and will undoubtedly continue its long term trend downward. I'm still amazed at the propaganda the mainstream media puts out about the falling USD and inflation. The bottom line is that the Federal Reserve causes inflation because they have created and continue to create an excess amount of money. It is that simple. Why nobody in the mainstream media can come right out and say this is pure insanity. They always try to explain inflation as some sort of market phenomenon that the Federal Reserve is heroically trying to control. If that's the case how come there was very little inflation in the 19th century prior to the Federal Reserve? Why is it that following the implementation of the Federal Reserve we have seen rampant inflation with our currency devalued over 95%?

The long term trend of the value of Federal Reserve Notes has gone down ever since the founding of the Federal Reserve. Is there any sign of that reversing? No, because this long term trend would only reverse if they decided to back their worthless paper with something of tangible value like gold or silver.

What really concerns me is the fact that we have a massive credit bubble accelerating due to increases in technology. People are taking on a greater amount of debt than ever before and can no longer save for the future. Technology has made the use of credit cards far more widespread than ever before. It has gotten so ridiculous that you can even buy cans of soda using a credit card. I couldn't believe it when I actually saw a vending machine that accepted credit cards. A big wig at Visa has even said that by 2012 we could achieve a cashless society. The combination of rampant inflation and digital transaction technology is brewing what could be a severe financial correction.

At this point in time, protection is the key. I continue to advocate that everyone puts at least a portion of their savings into precious metals. Despite the recent price reduction, I still see gold hitting $700 an ounce and silver hitting $15 an ounce in the very near future.

Paper notes and digits on a hard drive have no value and represent a pyramid scheme facilitated by the world's central banks. They have designed a financial enslavement system and are working to take it to another level. There is a company called Verichip that has developed RFID chips for humans and as they advance this technology they will undoubtedly market these chips as an easy way for people to buy and sell. This is nothing short of a satanic control grid that these people are trying to put into place. Fortunately, with gold and silver you'll still be able to barter even if the bankers are successful in implementing this satanic financial system.

I will end this article with this quote taken from the U.S. Treasury's own web site in which they bluntly state that Federal Reserve Notes are backed by nothing.

U.S. Treasury Currency FAQ

Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything. This has been the case since 1933. The notes have no value for themselves, but for what they will buy. In another sense, because they are legal tender, Federal Reserve notes are "backed" by all the goods and services in the economy.

19 March 2007

Lee Rogers
Funny Money Report
www.funnymoneyreport.com
Free Girls Gone Wild Gift DVD (US Only)