THE HAMBURGER STAND
To understand what is happening in our economy; we must understand our money system. Our government has debauched (corrupted, spoiled) our currency by converting it from money that represents Wealth, to money that represents Debts. Between 1792 and 1933, our Congress suspended the FREE Coinage of metals (raw resources) and switched us to bank credits and, or bank notes as our medium ofexchange (money).
The result? Now, all newly created money comes into circulation as an interest-bearing loan to some individual, corporation or government.
When the money supply is increased, so is the debt load on some individual, business or government. When the debt load is increased, so is the interest expense. When the interest expense is increased, the cost of doing business increases. When the cost of doing business increases, the price of the finished product must also increase or the living standard decreaseor both!
In a money system where all new money is created and put into circulation as interest-bearing loans, only the Principal is created-never the Interest.
This fact can be hidden for a long time if our government borrows from the banks and ‘spends’ the money into the economy.
If the money supply is increased by government debt instead of private debt, the government will need to increase taxes to pay its interest! Taxes increase! The cost of doing business increases! Again, there must be a price increase in the finished product or a cut in the living standard—or both!
All businesses take some raw material (labor, an idea or some raw resource of the earth) try to do something to it to add value and sell the value added product to someone. From the added value they hope to gain enough to pay their operating costs and have enough left over to pay for their costs of living. Let us consider a small Hamburger Standas an example of what is happening in all businesses.
In our Hamburger Stand the raw products will be labor, raw hamburger and flour.We combine our labor with flour to make buns, form the raw hamburger into patties, cook them and sell hamburger sandwiches as the finished product. If we buy the raw hamburger and flour for .50 and sell the finished hamburgers for $1.50, we would have an added value of $1.00 per hamburger to pay our other costs and our costs of living.
Now you see why American businesses seek out lower labor and tax costs overseas, why we must be good, efficient workers and why we must ‘compete’. When the money supply is increased, the debt load is increased. The money supply must increase each year or there is not enough money to pay the interest on last year’s loans! The people suffer recession.
This is exactly what’s happening in varying degrees to every citizen and business in America— growing shortages of money! Why? Because when money is created as loans, it forces society into perpetual indebtedness to obtain a medium of exchange. The additional cost (interest) which must also be repaid IS NEVER CREATED with the loan. It is ONLY A DEBT expected to be paid in money.