Economic Reform Alliance
Economic Reform Alliance
"Working Together To Fix The Problem Not The Symptoms"
"Working Together To Fix The Problem Not The Symptoms"
Fundamental Flaws
Fundamental Flaws
The Problem
The Problem
The primary economic problem is also the golden goose. Making money with money is the fundamental flaw. This is a very important point because our current system of borrowing money is usurious. Excessive rates and charges for money that compound principal and interest cause inflation. This is significant because as long as we continue to support and uphold that inflation is caused by too much money chasing too few goods and services, we cannot stop this terrible scourge. The claim that too much money in circulation causes inflation has absolutely no foundation, and would only be possible if there was true full employment. The enclosed Exhibit I clearly shows that there is a critical shortage of money in circulation because as inflation escalates there needs to be more money in circulation to equal the inflated value. Not having the proper amount of money in circulation is the underlying cause of unemployment. There has only been one brief period in the history of the United States that there was true full employment. This occurred in 1945 when there was adequate money in circulation to have a normal unemployment rate of two percent. Simple arithmetic and statistics from this period provides valuable information about the correct amount of money needed in circulation to provided true full employment. By dividing the amount of money in circulation by the total population from 1945 and multiplying that number by the current population and by the current normal CPI-U increase, the correct amount of money needed in circulation today can be derived.
The actual unemployment rate in the United States and globally is significantly higher than the reported amount because those who do not find gainful employment after their benefit period expires are not included in this total. Self employed individuals who go out of business and who do not find gainful employment are also not included. Additionally, those who are underemployed, essentially part time workers and a large number of employed workers who are significantly underpaid are not acknowledged as marginally unemployed either. The actual unemployed and underemployed workers both nationally and globally is significant and is a direct result of the manipulation of the money supply. This manipulation is said to be done to control inflation. While wages and prices do tend to moderate during these periods of tight monetary policy inflation continues to escalate. The enclosed Exhibit II , clearly shows that the normal inflation rate has risen dramatically since the Great Depression. Currently, the normal Consumer Price Index (CPI) has increased over sixteen times since the Depression. Additionally, the Government reported CPI is inaccurate because it has falsely represented that the index was equal to $1.00 in 1967 when in actuality the index began to increase above the base of $1.00 in 1934. The actual CPI-U as reported by the government although inaccurate still shows that inflation has increased dramatically despite futile efforts to reduce it by controlling the money supply. The enclosed Exhibit III clearly shows a significant increase in prices despite the inaccuracies.
Manipulating the money to control inflation while causing high rates of unemployment and not controlling inflation is unacceptable. Because the Fed and the Treasury department have been informed about the underlying source of inflation and have rejected this discovery without cause, their actions are deceptive and criminal. Calling this a free market economy is nonsense. The direct cause of inflation is excessive rates and charges for money and the compounding effect of amortizing principal and interest on loans. The enclosed Exhibit IV shows the direct correlation between the rate of inflation and the cost of borrowing money under existing practices. The actual cost to print and distribute money is less than two percent. Giving value to money is the fundamental flaw and is designed by the wealthy and the establishment for their benefit at the expense of the majority. While these actions are despicable the central issue continues to be the long term welfare of humanity. Throughout the history of the world great waves of inflation are always followed by uncontrollable deflation.
Unfortunately, greed, arrogance and deception are the underlying source of the economic and social problems. The situation we find ourselves in goes to the very core of our humanity. Additionally, we are lead to believe that this problem is all part of a normal economic cycle. The truth is, our predicament is man made and is perpetrated by lies and deception. To this point we have not even been willing to take an honest look at the reality of our situation, let alone find a solution to correct it. The current economic and monetary policy system was designed of, by and for the wealthy. This includes government, institutions and large corporations that benefit greatly from making money with money and from economic downturns that artificially repress wages and prices long enough for the establishment to take advantage of others with limited resource who cannot weather the economic storms.
The problem with inflation is that at a point in time money becomes all but worthless. When inflation peaks putting more money in circulation when it has little or no value will accomplish nothing. This will create a situation that would be devastating because most countries have embraced the same economic system. Basically, the entire global economic system would collapse. Considering that prices have increased more that sixteen times in the United State since the Great Depression and that the dollar is currently worth about six cents, the peak of inflation isn't that far off. When the consumer price index peaks it will begin to deflate causing significant shortages and widespread unemployment and poverty.
The effects
The effects of inflation on society are significant. Unfortunately the establishment, particularly the government, continues to minimize not only the problem, but also the effects. Inflation causes countless hardships and numerous inequalities especially for anyone who's wages have not kept up with price increases. The disparity of wages and prices today is obvious and serves only the very wealthy. Additionally, repressing wages by manipulating the money supply, creating artificial shortages, higher rates of unemployment and drastically reducing tax revenues serves no purpose if it doesn't stop or even regulate inflation. This tax revenue shortfall caused by repressed wages and higher rates of unemployment is the reason tax rates have escalated so dramatically. The enclosed Exhibit V shows the dramatic increase in taxes that is a direct result of faulty economic reasoning. So, the combination of lower wages and higher taxes causes a significant financial burden. To compensate for this double edge wage loss necessitates borrowing, often with credit cards at excessive interest rates. This causes additional inflation and the cycle continues. This is not difficult to comprehend or understand, although it is amazing that no one is willing recognize or take responsibility for this cruel predicament.
Unfortunately, inflation has become a valuable asset and tool for the establishment, or so they foolishly believe. Economic downturns caused by interest rate movement to tighten the money supply is just another way that the wealthy take advantage of the unsuspecting majority. It is not a coincident that real wages have not been able to keep up with prices. Closer observation of the last economic downturn reveals many truths and realities that have been ignored or dismissed. There was a critical shortage of money in circulation long before the current crisis began. The actions of banks and lending institutions, as part of the housing crisis, was devious. The actions of the FED to raise the discount rate at the end of 2007, when the amount of money in circulation, M-1 was already dangerously low was the underlying cause of the eventual financial meltdown. To watch the establishment lay off workers, reduce employee wages and benefits, implement fur-lows and blame the unions and their employees for the problem is an outrage. The suggestion by the FED that their actions following the crisis help to prevent a depression is nothing more than misleading propaganda.
"Working together to Fix The Problem Not The Symptoms"