Monday, May 9, 2011

There's Money In The Air!

From 2001 to 2005, the Federal Reserve created $1 billion a day out of thin air! Is it any wonder there was a housing bubble? All that money created from nothing had to go somewhere.
I've been telling people for years how the value of the dollar has been purposely devalued since 1913 by the Federal Reserve, but don't take my word for it. Listen to this college professors explanation starting at 13:48 to 14:30. (Click on the red link.) $1 from 1913 is only worth 5 cents today. This is a transfer of wealth from the you to the banks and only we have the ability to strip the Federal Reserve of its power to print money. Don't complain about higher prices. Learn what causes it.

On my recommended reading list you'll find a copy of a book that covers this topic better than anything I've come across. The book is The Creature From Jekyll Island. Hope you take the time read it.

The machinations of the Federal Reserve is just one more reason to start your own banking system using non-direct recognition dividend paying Whole Life insurance contracts as instructed in books like Becoming Your Own Banker by R. Nelson Nash and Bank on Youself by Pamela Yellen. These policies replicate the individual banking function you outsource to your local bank and unlike the Fractional Reserve Banking system your local bank operates under, these Whole Life contracts are anti-inflationary.

With insurance contracts, wealth is created from capital. Money first has to be saved before it can lent out. It is not created from thin air like with a bank. Ask yourself where the money for your mortgage came from. Did the bank lend its own money? The truth is that the money to refinance or buy your house was
spontaneously created from nothing with just a mere signature on a mortgage note giving the bank the power to create money and the ability to collect interest on that money which never existed prior to your signature. How sinister is that? Also, how great of a business model is that where you get to create currency and charge interest for essentially doing nothing? You might come to dislike bankers but they are only doing what we allow them to do.

Life insurance companies do not have the ability to create money out of thin air. In fact, they are the most heavily regulated financial institutions in the country having to maintain complete solvency at all times. Compare this to a bank which only has to keep a fraction of deposits as reserves (hence Fractional Reserve Banking) while lending out the remainder of what is not kept as a reserve, plus the multiplier effect of creating 10x or more in loanable money than what is deposited. Make no mistake, our banking system is the most highly leveraged and inflationary financial system there is.

While we can hope that the Congress will learn the truth about our monetary/banking system, we can actually do something as individuals to work around the Federal Reserve banking system. Instead of repealing the Federal Reserve through Congress, we can simply bypass the "Fed" by creating our own banking systems. This is what a true free market enables free thinking individuals to do which is bypass the red tape and hurdles created by government intervention. Be self-reliant, don't rely on the government for answers and don't rely on the very banks that work in concert with the Federal Reserve under the Fractional Reserve Banking system to rob you of your savings.

John Montoya
JLM Wealth Strategies

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