The Federal Reserve does not back Treasury bonds. The honor and faith of the United States of America does. It is the Treasury that redeems its bonds. Today our Treasury cannotredeem or even pay interest.
Lately we have been hearing about stringent oversight of national park lands which is a"euphemism" for sudden interest by Washington in what could be sold re those lands to redeem the bonds for which they have no money to do so. The Congress is in on this business and has given away the whole ofthe national lands for this new project but the states are up in arms. The land was taken from the states since the Civil War and that set in motion our national bankruptcy The sixty years that followed the termination of that conflict is what led us to arrange for a central bank, the Federal Reserve, to whitewash the problem.
Establishing the Federal Reserve made stupid Americans think there was a great pot of cash in private hands that could be tapped to bailout our bankrupt national government. Well there wasn't any because the so called free marketeers had been making partners of governments anxious to improve their balance sheets and hoping that the miracles of discovery in far off lands would do the trick. They didn't, they just gave a fictional euphoria to the masses, cleverly exploited by those trying to keep the financial systems in every nation going. It was robbing Peter to pay Paul and eventually, the major players had to go to war amongst themselves to pick the ones who would continue as the most wealthy to keep the illusion that money was there to be had when it was not. The whole notion of the British Empire was to give the anglo-americans a greater shot at the brass ring and it worked even though it impoverished everyone involved, including us. It supplanted the remnants of the Holy Roman Empire in Central Europe but the lack of funds still persisted.
That's why we had WWII. By the 1930's, the entire industrialized world was out of cash, the politicians were promising heaven on earth to their people and so some had to invade others to keep the illusion that someone else had the wealth to keep them going. The new incentive was to make a global government so big no one could manage it and so illusions would continue to rule over reason.
That's why we had the"build up"on both sides that so confused the people. Mussolini and Hitler were the darlings since the c*******t/socialists in Russia were failing from day one of their revolution. The public was seesawed back and forth until public opinion could be focussed on one side for the USA to join in the effort. Japan was maneuvered into Pearl harbor and the die was cast. The West, the anglo-americans would take on the rest.
We won but Britain was exhausted. It had no money at all, not even illusions. We had no money left either but we had that great American spirit that our west would see us through! Our great landmass, our west, could refuel the illusion and get us out of the morass!
Eisenhower had mapped out a great national road system to expedite the raising of our spirits and it took off, driving the recovering t***sport industries to new heights, focusing on technology to do what gold and silver used to do, create wealth where there was none. The sheen of gold,silver, all metals was t***sferred not only to the t***sport industry but to the home. Tech would wash dishes, clothes, aircondition and heat them and that took off too.
World Fairs showed us the future and then American Express showed how you could increase the use of credit to get people to buy it all and we were off to the races and we have never turned back. We got charge cards, plastic to replace cash and everyman was given them. I can still remember men showing their wallets and the many cards they had and one man stood out when he said "I make 8.000 a year but I can buy 100,000 bucks of stuff with these cards!" That was back in the early 70's and I knew then we were on a rollercoaster that was going to give us a hell of a ride!
And what a ride we have had!
I get a kick out of all those dolts who blame the bankers. Throughout the last millenium, the banks and their bankmen have juggled the cash needs of first shipping and trade for goods from far away places to setting up accounts for every living person who can sign name,address , say they have income and voila, they morphed from deposits and savings to ATM's and in each step of the way,they mirrored exactly what their governments were doing...using the banks to give the false impression we were all accumulating wealth when all we were doing is trading ever increasing "limits" on what we could borrow to finance the next innovation we were told we had to have or we honestly found we wanted. This is the so called free market we are told about so much!
The only wealth humans ever accumulate is what they can warehouse and keep through their lifetime and then, half is taken to satisfy creditors and what is left, maybe the estate. Of course it is taxed and from time to time it is lost in risk and gambling, far more in those directions than the economists want to chronicle.
You can lambaste the Fed, the creature from Jekyll Island,the international Monetary Fund but they are all just devices to keep your fanciful illusion that wealth is out there in a pot of gold,silver,stocks, bonds, but like houses,you don't have it while the mortgage and taxes must be paid. In fact, nothing is adding much to you except when you sell it and can buy with the proceeds something to replace it and have no more debt to do so. The only wealthy in this world are those who have done just that and guess what, all the debtors in this world want to take it from those who have been so careful to get their affairs in order. that way! In simpler terms,the takers want to get it all from the makers! The problem is that we have so many more takers than makers and that is why governments and empires fail every epoch without cease!
I am 90years of age and have lived all over this world. The talk about emerging nations and the greatness of America is bull s**t. If you have wide open spaces you have a chance at the brass ring, if not and you are confined to fenced in areas,you can just go so far and then you reach limits and there you stay. Climate can affect too since if it is too cold or too hot,those limits are like fences, restrict you. If you have too many people in a small space,not so good and if you neglect to tell your youth to look around and see for themselves what is there,you are stymied absolutely.
The Federal Reserve does not back Treasury bonds. ... (
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