Fiat Empire: Why Bailouts Will Not Save America

There’s clearly an awful lot wrong with the financial system of today.  The talking heads and bureaucrats will tell you that they need more money powers to sort the situation out.  They say that they must create trillions of dollars and have the ability to take over large companies; all of this is to bail out the financial institutions.

When you are thinking about this situation, you have to realize that the original purpose of the Federal Reserve banking system was to give the large Wall Street bankers the peace of mind of knowing that they would always be bailed out, so they would never lose any of their own money.  With a system of this sort in place, financial institutions take risks that they would not have otherwise taken.

Lately, the investment banks such as Lehman and Merrill Lynch have gotten into the habit of “investing” 30 dollars for every dollar in capitol that they have.  It doesn’t take a genius to realize that this is incredibly irresponsible.

Have you ever tried mega-leverage with your own money, putting it into a leveraged investment account, such as a foreign exchange account, and “investing” it with 30x leverage?  It means that any losses you make are multiplied by 30, since you are using 30x your money.  Then is it any wonder that these “investment” banks are collapsing?

The core of the issue lie in the fact that, about a century ago, a cartel of powerful banks started the Federal Reserve system in order to redistribute wealth towards the upper 1% of the population.  In order to truly resolve the problems with the current system, we must uproot the Federal Reserve and re-implement a system of truly constitutional money.

There are going to have to be fundamental changes put into place, as opposed to a patchwork of actions, that are simply used to preserve and inflate the financial asset bubble.  More than any of this, we are going to have to change as individuals.

We cannot simply wait for someone to make the changes in Washington DC.  Instead we have to change ourselves by minimizing our dependency on government and the money system.  It is a difficult adjustment, but although change in Washington is essentially out of our control, we can do what is possible to remove ourselves from this system and become self-sufficient.

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