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AMERICAN ‘Money’ vs. ‘Wealth’! What has happened?

October 21, 2013

In reality, ‘money’ does not EXIST on planet Earth. MONEY is ‘invented’ (from our Consciousness) by people for trading purposes and then politicians and dictators like to take CONTROL over the money system for their expansionist dreams. History reveals that the game of ‘money’ rules our planet and those who CONTROL the issuance of money units (banks and such) have effective ‘control’ over those who are recipients of the issuance. Money, however, is different from WEALTH. The real goal of economics is the production and expansion of WEALTH. Let’s think about the history of ‘money’ and the intended purposes of money and also the concept of ‘wealth’. Let’s first of all define some key words for this missive. What is ‘wealth’ and why do we have money (in the first place)?

Money does not exist within our space/time universe. Rather, money is invented from our metaphysical Consciousness! Money is a proxy for VALUE…it is NOT WEALTH. WEALTH emerges from our Natural Resources!

Prior to any money units emerging in the marketplace (on our planet) there was WEALTH. Wealth is what planet Earth gives us for nothing (free) provided we have a desire to develop our ‘wealth’ (natural resources) with our work effort and the substitutes of our work effort (our technologies). Wealth consists of all our natural resources provided from nature. We start with items needed for our food, clothing, and shelter. Farm animals were/are a form of ‘wealth’. The oldest form of ‘wealth’ on this planet is probably the COW. Cows provide us milk, cream, butter, meat, leather, work energy, and fertilizers. What a gift from nature. When I was 6-15 years of age, I lived on a small farm in Roseau, Minnesota. What provided our ‘wealth’ during these years?

My family had 3 cows, a dozen pigs, some chickens, a dozen or so beef cattle, some planted corn, and a huge vegetable garden. We had an outdoor well for most of our water supply. These items of ‘wealth’ were mostly multiplied without any need for official ‘money’ units. Money units were available and used in the Roseau community, but these units were mostly given to people who had a desire to produce more wealth (food, clothing, shelter, etc.) for the growing community. The real goal of economics is the production of ‘wealth’ and the ‘growing’ of wealth so that ‘surplus products’ could develop. Surplus productivity then could lead to new advances in services (medical and such), activities (sports and such), and new ideas that would lead to advancements in technology (robotics, computerization, and virtualization).

The COW is one of the oldest forms of WEALTH. Americans have some 100 million cows providing wealth for consumption! 

History shows that Americans started-out mostly within a farming type community (1776 and after) and expanded Westward with new farming, manufacturing, and new tech industries emerging over time periods. Today, our work ethic and our privileged role within banking and money has given us a high ‘standard’ of living when compared to much of the undeveloped or developing world. Our ‘wealth’ today consists mostly of all our retail goods (visit Wal-Mart and such), our properties (homes, offices, business buildings, and such), our medical industry (hospitals, clinics, and such), our shelter industries (houses, apartments, and such), and our high-tech industries (computers, mobile phones, and such). Americans have created for themselves one of the highest standards of living on this planet. Americans currently consume some 20% of all the WEALTH produced on our planet. How did this happen? Why do many Americans view themselves as ‘exceptional’ and ‘special’?

From 1776 until today, Americans have mostly developed a work ethic and a creative ethic which has given us many advantages within our greater world society. Education and internal drive is certainly part of the factors which helped us create our current ‘life style’ and ‘standard’ of living. Economic prosperity has fallen into our hands as we gained dominance over our counterparties (other Nations and cultures). One of the greatest gifts given to Americans was the ability to dominate the World Banking and Money systems. All this emerged mostly after World War II where America was the victor and this victory in battle allowed us to set the agenda for all our monetary favors which followed. Let’s talk about a couple of key events which gave us huge advantages over our counterparties.

Victory of Allied Troups after World War II. America is Numero Uno!

As mentioned above, ‘money’ tends to rule the planet and those with the GOLD generally make the RULES. So how did America obtain all its GOLD in the first place. The key event which helped with our ability to accumulate gold (as a Nation) were events which happened after the first World War and after the stock market crash of 1929. One key event was the decision of Franklin D. Roosevelt (FDR) in 1934 to call in all the gold coins which Americans had accumulated since its founding (1792 and after). After this decision in 1934 and after our Treasury started to accumulate huge supplies of gold coins and gold bullion (from Americans but also from foreigners). Foreigners could sell their gold to our Treasury based on FDR’s new definition of our Dollar. The new definition allowed our Dollar to be acquired (by foreigners) for 13.71 grains of gold (previous to 1934 it took 20.23 grains to purchase our Dollar). This new definition created by FDR in 1934 meant that foreigners could receive $35 for one ounce of gold (previously $20.67 could be received for a one ounce coin).

After 1934, America’s gold accumulated to a total of some 740 million ounces…a representation of our monetary WEALTH! This hoard of gold (stored at Fort Knox) represented some 70% of the total ‘official’ world supply!

This advantage in exchange rates for our Dollar (a devaluation from the point of view of Americans but a revaluation from the point of view of Foreigners), produced a growing supply of new gold into our Treasury from 1934 up until 1944 (many foreigners sold gold to the USA for our Dollar). The estimate of our gold supply in 1944 was about 740 million ounces (all supposedly stored in the vaults at Fort Knox, Kentucky) to represent America’s economic wealth and power. America had some 70% of all the World’s official gold supply in 1944. What an advantage this gave to America to set the stage for the new Bretton Woods Monetary Agreement (1944-46) which set in place new RULES for international banking and commerce after 1946. The Bretton Woods Monetary Conference took place at Bretton Woods, New Hampshire. Go to Google search for details:

The Bretton Woods Conference, formally known as the United Nations Monetary and Financial Conference, was the gathering of 730 delegates from all 44 Allied nations at the Mount Washington Hotel, situated in Bretton WoodsNew Hampshire, United States, to regulate the international monetary and financial order after the conclusion of World War II.[1]  The conference was held from 1 to 22 July 1944, when the General Agreement on Tariffs and Trade (GATT) was signed and agreements were executed that later established the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF).

This key event after WWII along with our victory over the axis powers in 1945 gave American a huge advantage in all economic matters after 1946. The Bretton Woods Agreement provided America with a World Reserve Currency (called the Dollar) that could be used to settle all balance of trade issues (if desired) and also could be used to ‘price’ most commodities in Dollars so that America had FIRST take on the commodities that America needed to grow its WEALTH for the American citizens. What a great advantage America acquired as a result of our huge GOLD supply (in Fort Knox) and also our huge military VICTORY over the axis powers during the greatest of Wars (WWII). American ‘pride’ and exceptionalism seemed evident to Americans and also the entire Global Community. American was numero UNO after these international events!

America became ‘exceptional’ for a time period. Reality, however, is lived in the NOW! What is our image NOW?

So what happened after 1946 that helped America to create its NEW WORLD ORDER for the planet? America started to consume and grow its economy to a status that surpassed all competitors since the dawn of man on this planet. America could purchase any commodity that it desired. America could expand its technology and creativity to a new and higher level. Americans could consume goods and services from all over the planet to advance its economic status, prosperity, and standard of living. I was born in 1943 and I have experienced most of these advantages. It’s difficult not to assume that America is special and exceptional. Our wealth and military power seems to confirm this emotion! But is this advantageous situation going to continue going forward? That is the 64,000 $ question! Is American ‘pride’ and ‘exceptionalism’ going to continue indefinitely? Are we now so ‘special’ and ‘exceptional’ that we can continue to take advantage of all our counterparties on this planet?

Personally, I think the rest of our planetary citizens are recognizing that all our advantages are mostly unfair and based upon illusions which they do not share. Our Dollar (now an imaginary digit within the computer screen) is being used to purchase goods and services from developing and emerging countries without a fair exchange of ‘value’. America is borrowing from China, Japan, India, etc. to secure real goods for our vast retail industry and providing no real exchange of value. The American Dollar has allowed Americans to purchase goods produced in foreign countries with no counter production given to our counterparties. We give them more digital dollars which we can create ‘out of nothing’ for our purchases. Just look at our balance of trade deficits for evidence. Look at our accumulating DEBT for evidence. Is this fair trade (what we call ‘value’ for ‘value’ exchanges)? I don’t think so!

Notice the credit boom since the closing of the gold window in 1971. Who created all of this credit (debt)?

Our current national, state, local, and public debt now exceeds $60 trillion. All this DEBT can not be repaid. To continue our extravagance we must continue to borrow from ‘Peter’ to pay ‘Paul’ (an unfair exchange of value). Our foreign counterparties are catching on to this Ponzi Scheme which is administered by our Politicians and our Banking Cartel policymakers. None of this behavior is fair and balanced and our ‘special’ advantages may soon be removed (by those who wisely recognize this unfairness of trade). See:  for all the evidence.

The U.S. Treasury Department collects our taxes but it spends (via borrowing) much more than it collects. Why is America able to spend (via borrowing) and accumulate some $17 trillion of National Debt with no recognizable consequences (to date)?

Keep in mind that our current DEBT represents the over-consumption which has mostly occurred since the closing of the gold window in 1971. Americans have OVER-CONSUMED by some $60,000,000,000,000 and counting. This over-consumption was not paid for with ‘value’ for ‘value’ exchanges. Rather, this over-consumption was paid for with ‘funny money’ (borrowings that can now NOT be repaid). Are we really so ‘exceptional’ after all? Value for Value is how trade is supposed to work. Americans have developed into a consumption society as a result of our special advantages that occurred from Military Victory (after WWII) and the Bretton Woods Monetary Agreement (giving us the special privilege of managing the RESERVE CURRENCY for the planet). Can these advantages continue going forward? I don’t think so!

Watch world events such as actions from China, Japan, Russia, and all the other countries which hold our Treasury Securities and who may change our SITUATION in the near future. America is living on ‘borrowed’ time. The past advantages are now being withdrawn. Will America wake-up to this Challenge or Not? Understanding our history is essential if we are to wake-up and learn from our past experiences. NOW is the time for a new awakening! Watch the markets for signs that the END of American hegemony is over! That is my sense of our situation. I am:

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