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Issue for ...
January 13, 2009
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JOIN US THIS 'WEALTH WEDNESDAY'... IT'S FREE!
Join Gordon this Wednesday night at 8:00PM U.S. Eastern time (5:00PM on the
left coast) and get prescient answers to your questions about Forex trading,
debt elimination, saving and investing, fiat money, market sentiment,
precious metals and how to protect your family in the event of a cataclysmic
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Dear Friend,
It's another day here at The Institute Of Higher Earning and Gordon has just
completed an introductory lecture on monetary principles to some new members
who were given sunglasses and led out of Plato's cave earlier today. Let's
listen in as they ask some followup questions.
Q: So why is there paper money?
A: Under a hard money system, governments had to stop warring when they ran
out of gold. When the king's coffers ran dry, the game was over and the king
got rooked. Another king with more gold conquered the first king and took
his stuff, then went after a third king's stuff. Under a fractional reserve
paper money system, war can continue forever. Or at least until all the
trees are gone.
Q: So kings of old only killed each other to get the other king's stuff?
A: And to impress their girlfriends. But most of history's wars have been
fought over natural resources. Once it was just gold. Today it is oil.
Tomorrow it will be water. Beyond that it could be air.
Q: Kings are monarchs, and monarchs can be brutal. Aren't today's
governments kinder and gentler?
A: No, actually, hundreds of millions of people died at the hands of their
own governments during the course of the 1900's. Today's governments are
said to be democratic, a word that the public has been led to believe means
fair. Of course, all democracies throughout history have failed when the
majority discovered that they could loot the public treasury at the expense
of the minority. From there it was just a short downhill trip to
totalitarianism.
Q: I see, but aren't democracies better than monarchies?
A: That would depend on the monarch. There probably has never been a person
born who would not eventually be corrupted by enough power. Aside from
myself, of course. Plato suggested that the world would be best served if
ruled by an all-wise philosopher king. Perhaps he had himself in mind. A
democracy is where a majority of the people elect their rulers and the
rulers rule the people. If the people are moral, the government will be
moral. If the people are raised on video games like 'Grand Theft Auto' and
become immoral, the government that later employs them will be immoral.
Q: But where do the rulers come from? Can the common man get to rule?
A: No, that would be a little too democratic. Certain candidates are
selected to emerge, then spend millions running for office.
Q: Do the people really support these candidates?
A: Usually, but that's because they don't see that they have other choices.
The author Douglas Adams said it best in an excerpt from his book, 'So Long,
And Thanks For All The Fish.' Let's listen in as two characters, Arthur and
Ford, discuss this very thing.
"The people hate the lizards and the lizards rule the people."
"Odd," said Arthur, "I thought you said it was a democracy."
"I did," said Ford. "It is."
"So," said Arthur, hoping he wasn't sounding ridiculously obtuse, "why don't
people get rid of the lizards?"
"It honestly doesn't occur to them," said Ford. "They've all got the vote,
so they all pretty much assume that the government they've voted in more or
less approximates the government they want."
"You mean they actually vote for the lizards?"
"Oh yes," said Ford with a shrug, "of course."
"But," said Arthur, going for the big one again, "why?"
"Because if they didn't vote for a lizard," said Ford, "the wrong lizard
might get in."
Q: I think I'm beginning to see the light. So who selects the lizards, I
mean, the candidates who get to run?
A: The private foundations and think tanks.
Q: And who chairs them?
A: The bankers.
Q: Where do the millions in campaign donations come from?
A: Largely from corporate donors.
Q: And who chairs the corporations?
A: The bankers.
Q: So where does the government get its army so it can kill other armies?
A: From the people.
Q: And why do the people serve in the army?
A: People who watch tee-vee believe that America is actually at military
risk from other nations, when in fact America could turn out their lights in
a nanosecond. Others serve because they need a job and the army will pay
them to kill the other guy and break his stuff. In private life,
premeditated murder will get you the electric chair. In the army, you don't
get prosecuted for killing strangers. Do it well and you get a medal. Keep
killing them long enough and you get a pension.
Q: But how do the people know which other army to kill?
A: The tee-vee tells them.
Q: And who controls the media?
A: The bankers.
Q: How does the government pay its army?
A: With paper money.
Q: And who provides the paper money?
A: Why, the bankers.
Q: But where does paper money come from?
A: Rag linen from the flax plant is fed into one end of an intaglio printing
press and legal tender coupons emerge from the other, each bearing the
trophy likeness of a different deceased notable.
Q: Why do you say trophy likeness?
A: Because many of the people depicted on Federal Reserve Notes opposed
paper money during their lives. Jackson called the bankers a 'den of
vipers.' Lincoln referred to them as the enemy to his rear. Jefferson just
thought they were creeps.
Q: Is a Federal Reserve Note a dollar?
A: No, a dollar is a unit of measurement, like an inch or a quart. A dollar
was defined in the 1792 Coinage Act as 371.25 grains of pure silver. A
Federal Reserve Note is about 1 gram of pure paper. The only difference
between a $1 bill and a $10 bill is the ink required to print the extra
zero.
Q: So who gets to print and spend this fresh paper money without being
prosecuted for counterfeiting?
A: The government, of course. It makes them vastly richer, for a while.
Q: So does the government just print up all the paper money the economy
needs and send trucks around the country to deliver it to the people for
their use?
A: Certainly not, for then the people would labor no more than absolutely
necessary. They would work mornings for themselves, then take the rest of
the day off. Today they labor all morning just to pay the government 50% of
their wages in the form of taxes, fees, fines and inflation which, of
course, is the biggest tax of all.
Q: To whom are these taxes and fees paid?
A: Why, to the government.
Q: But isn't' the government just 'We The People'?
A: No, only certain people.
Q: But why must everyone's taxes be so high?
A: Because the government is so large and its workers must be paid. Besides,
the government pays huge amounts of interest to the bankers for the use of
their credit money, and someone has to pay all that interest.
Q: Can't the government spend its own money to pay that interest?
A: Governments inherently have no money of their own. They get it by taxing
it or printing it. The modern way is to do both.
Q: Who don't governments just print and distribute interest-free money?
A: Because then there would be no inflation and the people would relax and
work less. Less work would mean less taxes. Less taxes would mean smaller
government. A smaller government would collect even less taxes and would
therefore have even less money with which to pay the interest to bankers to
create more credit money for them. It's a downward spiral that could lead to
a very small government and a great deal of personal liberty for the people
which, of course, cannot be tolerated.
Q: So the government delegates the credit money creation process to private
bankers instead?
A: You've been paying attention.
Q: Is all of our money paper money?
A: It's not our money, it's their money. They just let us rent it from them.
Q: Got it. But, again, is it all in the form of paper?
A: No, paper money is but the small part of the currency iceberg that is
visible. Most modern money is electronic and remains beneath the surface. It
is born in a computer, travels between computers over electronic pathways
and dies in a computer. A modest portion of it emerges as paper from time to
time. I will henceforth refer to the whole lot of it as credit money.
Q: But why do ever increasing quantities of credit money need to be created
in the first place? Isn't there enough to go around already?
A: No, there is never enough for 'tax and spend' politicians.
Q: So how does new credit money come into existence?
A: When a banker issues someone a loan.
Q: Is this true of all new money, or just some of it?
A: All money. If every loan outstanding where paid back our entire money
supply would cease to exist. We are absolutely without a permanent form of
money.
Q: Like gold and silver?
A: Precisely.
Q: So there is no new paper money created until the act of borrowing creates
it, yet the additional money needed to pay the interest on this newly
created money does not exist at the moment it is created, is that right?
A: Right. That additional money only comes into existence when even more new
money is borrowed into existence.
Q: Wow. So the ever-expanding creation of credit money must be the largest
Ponzi scheme in the history of the world.
A: Bingo. By virtue of its pervasive nature and brobdinagian scope and
volume, credit money is the ultimate 'something for nothing' scheme,
violating in every way the TANSTAAFL principle.
Q: What does that stand for?
A: 'There Ain't No Such Thing As A Free Lunch.'
Q: But doesn't nature abhor a vacuum?
A: Yes, but bankers love one. Fresh credit money rushes into the economic
vacuum created through fractional reserve banking. Maybe that's the giant
sucking sound Ross Perot once referred to. Ponzi schemes can be found
everywhere but bankers rule the roost. Government sponsored wealth
redistribution programs like Social Security where Peter's pocket is picked
to pay Paul stand a distant second in line. Bernie Madoff is a mere piker by
comparison, but then he doesn't run the government and the government
decides who to gets to run a scheme. Fees paid by governments to private
bankers for the use of their money has enriched those bankers beyond
comprehension.
Q: This fractional reserve banking scheme sounds like it could expand
forever.
A: No, only until it crashes. All paper monies throughout history have
failed. This one will too.
Q: But isn't our money system too big to fail?
A: Ask Rome.
Q: So why do the people borrow so much money?
A: So they can have more stuff.
Q: Do they really need all of this stuff?
A: No, but the media tells them they do. Social approval requires that
people have the same stuff as their neighbors. When new stuff comes out,
they sell their old stuff on Ebay or give it away on Craigslist. You can get
some great stuff that way.
Q: And who controls the media?
A: Why, the bankers.
Q: Whew, the bankers really have things wrapped up. So who are the bankers?
A: The members of dynastic families who chair the board of directors who
oversee the corporations that run the banks that own the shares of the
world's central reserve banks. The knee bone is connected to the thigh bone.
Q: Where does the money come from for governments to make their interest
payments to bankers for the use of their paper money?
A: From the public in the form of taxes exacted under threat of force,
penalty and incarceration. This is so everyone can be free.
Q: Why do the people pay these taxes?
A: So the government will protect them. There is a species of ant that herds
an insect called the aphid, much as mankind herds sheep. The ant strokes the
aphid with its antenna and the aphid produces a drop of liquid that the ant
uses as sustenance. In exchange for the aphid's generosity, the ant patrols
the neighborhood and protects the aphid from its only known predator: the
ant. It's called the protection rackets and Al Capone understood it well.
Q: So taxes are a protection scheme?
A: No taxes are a protection racket. Ancient Egyptian pharaohs sent out tax
collectors to bludgeon farmers who failed to pay over a portion of their
crops. Today the IRS just asks the bank to send them your bank balance and
the bank does it for them.
Q: You mean the IRS doesn't actually take the money themselves?
A: No, that's illegal and they know it. They get the bank to send it to them
instead.
Q: But why would the bank do that?
A: Because bank managers have pamphlets from the IRS telling them they have
to do it.
Q: But aren't IRS pamphlets the law?
A: No, the IRS is in the executive branch of the government. Only Congress
can pass laws.
Q: So is there a federal law that allows banks to transfer your account to
the IRS?
A: Only under certain conditions, such as when you owe unpaid taxes on
alcohol, tobacco and firearms. Besides, the legality of the bank handing
your money over to the government without your permission would come under
state law.
Q: So are there state laws that allow banks to transfer your account to the
IRS without your permission?
A: No, that would be theft by conversion and is a felony under state law.
Q: So why aren't all the bankers who do this in jail?
A: Because account holders give their implicit permission by just going
along with things. Besides, the government runs the IRS, the courts and the
jails.
Q: I see. Getting back to money, didn't a high Fed official once admit that
taxes are collected by governments to protect the buying power of their
credit money.
A: Yes. Former chairman of the New York branch of the Federal Reserve
system, Beardsley Ruml, explained this in a blockbuster 1942 essay "Taxes
For Revenue Are Obsolete." He said that since the government can print all
the paper money it needs to pay its bills and meet its obligations, it has
no need to collect taxes from anyone. But printing too much paper money
would cause excessive inflation, even hyperinflation. So the government
forcibly collects taxes so that when the people pay taxes to the IRS it
leaves less spending power in their hands, therefore removing much of the
excess created credit from the money supply, thereby controlling and
protecting the spending power of paper money.
Q: Do you mean to say that the bankers can deliberately create more credit
money than is actually needed, then mask the fact by getting the government
to siphon some back off the top of the money supply through taxes that
wouldn't need to be collected in the first place if the government just
printed and distributed its own money, interest-free?
A: Go to the head of the class.
Q: Wow, that's quite a feedback mechanism.
A: Yes, it works just like the rubber ball in the back of the toilet tank.
When the water gets too high, the valve shuts off. The water is the money
supply, the buoyancy of the rubber ball is the tax rate and the IRS is the
flush handle.
Q: Jeepers, why do people put up with all this?
A: Mostly because they do not know what is going on. Besides, they're
happier that way.
Q: Why doesn't the government run public service announcements on TV to
explain it all?
A: No one would watch them. Without wardrobe malfunctions, people eating
bugs for money and similar forms of entertainment, the people simply aren't
interested.
Q: So why don't the preachers, priests and rabbis explain it from the
pulpit?
A: Because they don't work for real churches as described in the Bible and
other religious scripture. They work for incorporated churches that applied
to the IRS for tax exemptions. The IRS then perches on their shoulders like
a little bird so it can keep a close watch on everything they say. If they
cross the line, they lose their tax exemption and that's not good for church
business. After all, people don't want to pass the plate if they can't write
it off on their tax returns.
Q: Aren't there any public school teachers who are aware of these things?
Why don't they teach the children?
A: Because the Teachers' Union won't allow them. If they did, the state
schools wouldn't give them their fair share of free cheese subsidies from
the federal government.
Q: Wow, they've pretty much got this whole thing locked down, don't they?
A: Pretty much.
Q: But don't the people want to be free?
A: A pet will love whoever feeds it and will not wander far from its food
bowl. A taxpayer, especially a retired taxpayer, will not wander far from
his benefits and will love whoever keeps the free cheese coming.
Q: Is it possible to be free and still receive government benefits?
A: There is a difference between freedom and liberty. A dog on a leash
clipped to a wire strung between two trees is free to wander back and forth.
But it is not at liberty. Likewise, a taxpayer is free to pay taxes or go to
jail, as well as to vote for their choice of a Republicrat or a Demican,
both of whom are opposite sides of the same playing card and controlled from
a level above that of elected politics.
Q: Didn't President Dwight Eisenhower called that the military-industrial
complex?
A: Yes. Various writers call it the Hidden Hand. Others the Illuminati. Of
course, this unseen element does not really exist. If it did, you could see
it. Since you can't see it, it must not be there. Besides, if it were, Peter
Jennings or Larry King would mention it. But they don't. Quod erat
demonstrandum. Anyway, it's all just a coincidence. Nothing to worry about.
Q: Sounds to me like the public is pretty well conditioned to believe
whatever the government and the media tell them. How long has this system of
mass mind control worked this way?
A: For thousands of years. The church ran it for a long time. Today it's TV.
Who knows, maybe tomorrow it will be on a chip.
Q: Is government even necessary?
A: That's an ongoing debate. All governments throughout history have been
little more than bands of rogues and thieves in temporary possession of
territory. The bankers had a hand in the writing of the U.S. Constitution to
make sure that the new federal government would pay off the debts of the
colonial government. They had a hand in fomenting the War of 1812, the War
Between The States, World Wars I and II, and they've had a hand in the
perpetuation of war -- with occasional interruptions of peace -- ever since.
Q: Can't the people just govern themselves?
A: Apparently not. That was the great American experiment America's founders
had in mind, but it isn't really compatible with lavish surround sound.
Q: So what can people who want to be self-governing do about all this? After
all, the ant is much larger than the aphid, plus the ant has all the guns.
A: Yes, but the aphid has the juice.
[At this point several of the students removed their glasses and headed back
to the cave. At this rate, we won't have many members left before long. And
you, Dear Reader, are you still there? Hello? Hello......?].
And May The Pip Be With You,
Gordon Philips for
THE INSTITUTE OF HIGHER EARNING
gordon@higherearning.com
.· ´¨¨)) -:¦:-¸.·´ .·´¨¨))
((¸¸.·´ ..·´ When you wish -:¦:- -:¦:-
-:¦:- ((¸¸.·´* upon a pip... -:¦:- -:¦:-
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PUBLISHED BY:
The Institute Of Higher Earning
P.O. Box 113
Milford, NH 03055 USA
800-504-2340
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WHAT IS THE HIGHER EARNING REPORT?
* A highly prestigious Internet newsletter.
* A deeply cathartic literary experience.
* A financial air bag for your portfolio.
* A total waste of innocent electrons.
* A compass for your retirement ark.
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WHY THE INSTITUTE? MAYBE BECAUSE YOU...
* Still work at a J.O.B.? (Just Over Broke.)
* Got drunk and hired a financial planner?
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* Need some solid education and support from some very nice people?
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YOUR EDITOR
Gordon Philips, Senior Researcher, Head Trader, Custodian, Home School
Principal, Sibling Rivalry Negotiator, and Complaint Department Manager for
the Institute
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OUR SLOGANS
'Conquering Debt, Mastering Money.'
'So Many Trades, So Little Time.'
'Build Your Own Ark. Quick!'
'What Goes Up...'
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FAVORITE SONGS ABOUT MONEY:
--- Bull Market Music ---
'Million Dollar Girl' -- Eddie Money
'For The Love Of Money' -- The O'Jays
'This Golden Ring' -- Gary Lewis and the Playboys
--- Bear Market Music ---
'Ain't Too Proud To Beg' -- The Temptations
'Been Down For So Long It's Looking Like Up To Me Now' -- Junior Johnson
'Brother, Can You Spare A Dime?' -- Various Artists
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LAST BOOK READ:
'The Evolution Of Consciousness' -- by Robert Ornstein
CURRENTLY READING:
'Reading Price Charts Bar By Bar: The Technical Analysis of Price Action For
The Serious Trader' -- by Al Brooks
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DISCLAIMER
Information from The Institute Of Higher Earning is provided for educational
and informational purposes only. No one on our utterly terrific staff is
licensed to utter personalized financial advice. Before trading or investing
we suggest that you seek the counsel of a registered financial advisor who
is thoroughly versed in the equities and currency markets and can
demonstrate long term, consistent success in both. Warning: this may be a
protracted search. Our work is based on what we've learned as financial
journalists and graduates Minima Cum Laude from The School Of Hard Knocks.
It may contain errors and you shouldn't make any investment decision based
solely on what you read here (watch MSNBC first ;-.) There is risk inherent
in all forms of trading and investing, from baseball cards to church bingo,
so don't trade or invest with money that you cannot afford to watch go up in
smoke and still sleep well. If in doubt, consult spouse.
Thank you. |
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