"My people are destroyed for lack of knowledge."

Hosea 4:6

This short article will address the topic of

inflation, its causes, the effects thereof, and

how to safeguard against it.

Do not fall victim to inflation, i.e., the

government manipulation of your money. Let me

explain.

I. What Causes Inflation

Have you ever heard of the Federal Reserve? Well

then you know what causes inflation. The "Fed" is

the engine of inflation, by self-admission. But

how can that be?, you ask. The "Fed" is a branch

of the federal government, no?

It is not. It is neither federal, nor are there

any reserves - anywhere - to speak of. Time was,

when the American dollar was indeed as good as

gold, for it was actually backed by gold. These

days, the dollar is no more than a three cent

piece of paper(the three cents includes the price

of ink), worth anything only because our

government says it is. This is to say, that the

dollar has value due only to government's faith in

the people's ignorance, or, more accurately, the

people's ignorance of their government's lack of

faith.

The story of the Federal Reserve exemplefies this

infidelity, the greatest fraud ever perpetrated on

the American people. Even the most cursory

investigation will reveal that the "Fed" is a

private corporation, a "cabal" of bankers, if you

will. As with most corporations, it has

shareholders - mostly foreign, in this case. This

bears repeating: the controlling interest in the

company known as the Federal Reserve is European.

And I thought we won the Revolutionary War(!)

Let us pause here. My dear reader will agree

that the aforementioned facts are cause for

concern: of much import and gravitas, for you

academic types. For the rest of us, it is a matter

of everyday life, indeed, one of survival. Truth

be told, and at the risk of sounding like a

Democrat, it is getting harder. Let's clear the

air, and get down to brass tacks. Does your salary

double every ten years? It had better, because the

average price of a new car does. Clearly we are

dealing with inflation here, and clearly

government-given figures regarding inflation are,

well, underinflated. What is not as obvious is

that there need not be inflation.

But first, a question: What is in your pocket at

this moment? Is it a one dollar bill?

Congratulations! You are one dollar in debt! Do

you perhaps have a twenty? Then you are twenty

dollars in debt. For this is all that the dollar

is, no more than an instrument of debt. It is

simply the federal government's obligation to the

Federal Reserve, with you - the American people -

pledged as collateral.

Observe the back of a cancelled check from the

IRS: it will often state, "Pay any Federal Reserve

Bank, for debts incurred by the US Gov't."

It works like this: a)government needs money to

operate; b)government borrows money from private

bank(Federal Reserve); c)private bank prints money

"out of thin air"!(This is known as fractional

reserve banking, the discussion of which is beyond

the scope of this article. But I urge the reader

to conduct his own investigation.); d)since

government gets its money from the people,

government issues legal tender("dollar"), in

effect, "passing the buck"; e)ignorant American is

now forever enslaved by debt, owing Federal

Reserve what he thought was his own money.

How's that for representative government?

"The one aim of these financiers is world control

by the creation of inextinguishable debts."

--Henry Ford

Now you know what the dollar is.

This brings us to the underlying causes of

inflation. Let us remember that the dollar is an

instrument of debt, i.e., a loan. As such, it must

be repaid, and with interest. Where will the money

to the pay the interest come from,however, if the

principal itself never existed? Why, it must be

printed. The bankers are a clever lot, admittedly.

The most important factor causing inflation then,

is the interest charged by banks(the shareholders

of the "Fed"), the costs of which are then passed

along to consumers in the form of higher prices.

Inflation is, purely speaking, an inflation of the

money supply, as required simply to pay this

interest. The money supply, or number of dollars,

is inflated, or expanded, thereby reducing the

value of each and every individual dollar.

Know that it is not, generally speaking, that

commodities are rising in price, but rather that

the dollar is losing value. With every new dollar

that is printed, each pre-existing dollar loses

corresponding value. And when you have a dollar

that is worth less, naturally, it will take more

of them to make your purchase.

Worse yet, because all our "dollars" are debts

loaned into circulation, and with interest due,

the more of them there are, the greater the impact

on inflation. In other words, inflation is not

only here to stay, it must, by definition, only

get worse.

Thusly, and seemingly, prices rise. In reality,

you are wanting more of the devalued dollars for

the same amount of goods. In the absence of a gold

standard, this is not only entirely possible, but

encouraged.

"In the absence of a gold standard, there is no

way to protect savings from confiscation through

inflation. There is no safe store of value. If

there were, the goverment would have to make its

holding illegal, as was done in the case of

gold... The financial policy of the welfare state

require that there be now way for the owners of

wealth to protect themselves.

"This is the shabby secret of the welfare

statists' tirades against gold. Deficit spending

is simply a scheme for the 'hidden' confiscation

of wealth. Gold stands in the way of this

insidious process. It stands as a protector of

property rights."

--(a younger and much more honest)AlanGreenspan:

Gold and Economic Freedom

As we can see, inflation is a hidden tax, and

like the income tax itself, is the interest we are

paying to the Federal Reserve. It is no

coincidence that both the "Fed" and the IRS were

created in the same year, just as it is no secret

that prior to that year, 1913, the income

tax(along with property taxes, incidentally) were

nonexistant. The constitution, in fact, strictly

prohibits such a direct tax on income.(Where is

the ACLU on this?) The inescapable conclusion is

that the more government spends, the more the

Federal Reserve profits. It is for this reason

that we have the welfare state we find ourselves

oppressed by.

Did I mention that Alan Greenspan(titular head of

the private company known as the Federal Reserve)

visits the White House on a weekly basis?

Can you say conflict of interest?