'Fiat money' is a term that derives from the Latin word fiat, which means 'let it be done'. In the case of our money, it is created by government decree. The Fed says 'let there be money' and there is.
I love a good magic show as much as anyone but not when it comes to making money appear out of thin air... because the money can just as easily disappear.... Witness what happen to the world's economy.
How can The Fed can do that? Who or what is 'The Fed' anyway? We all know that it is a 'Central Bank', just like the central banks in other countries. Every country needs a central bank, right?
Conventional wisdom would have you believe that Wall Street greed caused our fiscal fiasco and that The Fed rescued us from certain disaster. But things aren't always as they appear to be.
Ed Griffin pulled the wool off my eyes and the result was like a line out of that song Amazing Grace...'I was blind, but now can see'. Amazing is what I see going on now. I am so incensed by it that I want to share what I learned with you, the same way I usually share news and information about pixel perfect printing.
In Your Best Interest?
You are probably thinking 'what does this have to do with giclée prepress?' Let me explain.
You know that I am into the Zen of giclée. In my book, Giclée Prepress - The Art of Giclée, and in many previous blogs I have described the many facets of the elusive state of being called Zen. The gist of it is that as prepress artists we have many repetitive tasks, 'thoughtless' ones. You know, when you feel like a robot.
During those stretches the mind wanders. You aren't 'here' you are somewhere else. Call it daydreams or whatever you like. You think about stuff. I want you to think about what Ed Griffin has to say.
I have been born again by Griffin's understandable explanation of how the nation --and world's -- economy actually runs. Now I understand who does what to who, and why.
It turns out that The Fed is not on our side at all. It is an 'Appearance of the Fourth Kind', according to Griffin who quotes from the sayings of Affectatus, a philosopher in an ancient land called Frigia.... But I disgress.
When it comes to politics I'm 'RGB'... red for some issues, blue for others and green for most. Mix those colors and what do you get? Gray. It's an appropriate color because my understanding of the money mess we're all in has been in a 'gray area'. I hear this and I see that. I think this and I ponder that. But I can't say that I totally get it. How about you?
Then one day I got an email from Randy Ettman which came as a total surprise since the last time I even heard the name was when I was in High School and we were classmates. We got in touch of course and after a catch-up found ourselves commiserating on the states of our respective economies. That is, crying on each other's shoulders.
Randy asked if I'd read 'The Creature from Jekyll Island' by Ed Griffin and of course I hadn't (I am not what you would call a reader, I'm a picture guy). He said he would send me a CD, and he did. But with a crazy name like that I let the disc gather dust. Then one day I rediscovered it while cleaning up. Rushes of guilt sprang forth as I realized I hadn't even thanked Randy for sending it. So I got right on it and listened to an eye-opening lesson in the economic facts of life.
As prepress artists and giclée printers we work hard for our money. I mean in the sense of long hours with tight profit margins. Its hard to balance the books when the spending power of the money we earn is eroding... intentionally, according to Griffin.
It has been several weeks since I first listened to the CD and I have replayed it thrice since. Today I listened to it again and was prompted to write this blog. I want you to listen to what Ed Griffin explains about the origins of The Fed and our fiat money system. That will give you plenty to think about during your moments of Zen.
As long as fiat money is the currency of the land our economy will be volatile. As Griffin points out, the number of dollars we pay for something is unrelated to real value. Dollar prices change, but real values do not change.
One anecdotal story Griffin tells concerns the buying power of an ounce of gold. Back in ancient Rome a thousand years ago a one ounce gold coin would buy a Toga, a belt and a pair of sandals. With an ounce of gold today you can buy a fine suit of clothes, a belt and a good pair of shoes. The real price for those wardrobe items hasn't changed, although now a cup of coffee costs $5 instead of 5¢.Only things have real value. That is why they call it 'real estate'.
Until 1971, when Nixon took the USA off the gold standard and out of the Bretton Woods agreement, the US dollar was backed by gold. Since then the dollar 'floats'... But what is the dollar floating on?
Promises Promises
Floating currencies based on nothing but promises are only as valuable as people think they will be tomorrow... in a year... or a decade... whatever. What they think is based on what they see and hear. Spin doctors try to alter what people see and hear because how something is perceived defines what it 'is' in their minds. Which brings me back to Griffin's well named character, Affectatus.
The word affectatious means 'to wear something out of character in an effort to put up a facade'. The character Affectatus explains that things...
1.) Are what they appear to be
2.) Neither are nor appear to be
3.) Are but do not appear to be
4.) Are not and yet appear to be
The thesis of Griffin's explanation is that The Fed is an appearance of the fourth kind. He explains how the plans for what became The Fed were laid out at a secret meeting of the world's richest men on Jekyll Island in 1910. Where do the plans lead? To quote from the website www.bibliotecapleyades.net, "Griffin sees doomsday as an engineered financial debacle the severity of which will cause panicked Americans to welcome — a World Bank "rescue" with a world currency. The IMF/World Bank is already functioning — in conjunction with the Federal Reserve — as a world central bank. A world currency is already designed, awaiting a crisis to justify its introduction."
That may sound far fetched to you now but it won't after you listen to Griffin's one hour explanation. Believe me, this is stuff you need to understand if you want to keep on being a happy go lucky giclée prepress artist.
Pass It On
Everyone's played 'pass it on' when they were kids. That's what this blog is all about. Now that I can see what is really going on I am outraged and want to do something about it. Like the character Howard Beale in the movie Network, I'm mad as hell and I ain't gonna take it anymore. But what to do?
1.) Try not to feel hopeless. It is so easy to be apathetic under the guise of denial. The institutions that are the fabric of society are huge and monolithic. There is no personal contact anymore. It's easy to see yourself as a cog in the wheel... or a brick in the wall.
2.) Pass it on. Right now... as you read this, I am accomplishing that goal, which is to persuade you to listen to Ed Griffin during one of your giclée prepress Zen states. If more people understand this situation for what it really is there will be a better the chance to rectify the situation.
3.) Vote. But be an informed voter. Sort out the facts. The airwaves and blogs are already filled with well-scripted political messages that are as confusing as they are divisive (be design). It takes a little work to separate the spin from the stories and get at the underlying truths.
Newscasters note that independents will be especially important in this year's mid-term elections. And many states formerly red or blue are now purple. Independents are a group that can swing elections, if they vote. Well, count me in on that.
Call me a dreamer if you like. Those who know me see a pragmatist in disguise as an artiste. I know full well that the 'cognizanti' is only a very small percentage of the total population. And that fractiousness is the goal of the intelligentsia. Divide and conquer. That's what 'polarity' is all about.
Ah 'polarity'. The yin and yang... black and white... red and blue... vanilla and chocolate... good and bad... true and untrue. Which side are you on?
There are no 'sides'. Polarity involves all sides at all times. They are co-dependent. Like the one between us and the institutions that (try to) run our lives. They do so partly -- maybe mostly -- because we let them. We play by the rules after all. And we pay by the rules too. Which brings me back to money.
By being informed I can work around the situation. The best workaround is not to feed the creature. Avoid paying interest of any kind. Interest is the lifeblood of the fiat currency system. I do that by using cash wherever possible, which turns out to be about 95% of the time. Credit card transactions now account for only 1/10th of my purchases. Further, I am divesting all investments which involve interest payments to banks, like mortgages. Then there's barter... stuff for stuff directly, without the need for any currency at all.
Think about it...The Fed makes money from nothing and distributes it through banks. When the banks loan you that money (nothing) they a.) Charge you interest and b.) Force you to promise them your real property as collateral for... nothing. That interest is paid by the sweat from your brow.
The magic of this shell game is that when it has gone full circle they have something and you have nothing. So what's new?
Even the name Federal Reserve System is an oxymoron.
● It is not Federal. It is a private cartel in partnership with the government.
● There are no reserves of anything other than promises.
● It is not a system. It's a monolithic central bank.
The Fed is not unique. It was modeled after other central banks and they are all in cahoots with each other. Nor is this anything new. The first paper currency -- called 'Jiao Zi' was used in China's Sichuan Province 1000 years ago during the Song Dynasty, a period of flourishing trade.
Jiao Zi text says that the note may be used instead of 77,000 wen of metal coinage (then made of copper or iron and now popular as 'I Ching' coins).
The square hole in the center was for stringing coins together. A string of coins weighed just over 70 pounds (32 kilos). Mule trains hauled the tons of coins needed to make big purchases. The shipping costs between Chinese provinces could be as much as 25% of the coins' value.Jiao Zi were originally notes made between people to make deals... like IOU's. They were backed by the metal coinage of the realm. The notes were made for convenience and to save people the shipping costs for the huge amounts of heavy coins needed to transact business. So many Jiao Zi circulated that the government created a savings bank to 'organize' everything. Then what happened? If you guessed that the notes evolved into credit instruments you would be right. But that didn't happen first in China.
In 1694 the Bank of England became a monopoly by Royal decree. Thenceforth only they could create currency. Private 'jiao zi' weren't allowed anymore. It didn't take long for other countries to catch on to this money making idea. By the early 1900's Germany's Warburg Bank had emerged as Europe's most powerful financial institution... and guess who was at that secret meeting on Jekyll Island? None other than Paul Warburg.
Enough said. Google® 'Jekyll Island' or 'Ed Griffin' and you'll be on your way to understanding the world a little better. You can download the program that I have on the CD from any number of sites. Or if you email me (douglas@vashonislandimaging.com) I will send you a copy of it.
Now I'll get back to the real 'currency' of our business, prepress.
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