Notes From Gordon ~ Serf City

SERF CITY

(with apologies to Jan And Dean)

Remember 2008?

That was the warm-up pitch.

A financial crisis now looms on the horizon, this time precipitated by the looming implosion of the mega-trillion dollar global derivatives complex.

In my humble opinion, it would be as much of a mistake to hold one’s life savings denominated in dollars when this financial supernova goes off, as it would to watch a nuclear weapons test with a pair of binoculars and a lunch basket.

Interestingly, few give any thought as to where their money actually comes from, let alone whether the very way that bank credit money is created guarantees that financial crises inevitably must happen.

Which begs asking, what is money really?

Money is a means of assigning measurable units of value to human productivity.

These units can then be exchanged for goods and services provided by others.

If all human productivity were to stop, money would cease to exist.

The function of money has been served by any number of materials throughout the millennia, from animal skins to sea shells, from wooden tally sticks to gold and silver coins.

Money today exists primarily in electronic form and is transmitted at near light speed from one computer to another, with software tabulating which electrons belong to whom.

You may think of the money you have in the bank as tucked safely away in a vault, but it is really just a magnetized spot on the bank's hard drive.

A nation’s money can come from only one of two places: from their own government, or from a private organization.

The American people have opted for the latter.

Through their misrepresentatives in Congress “we the people” have consented to the use of money created by the Federal Reserve System, a private corporation that is no more federal than Federal Express.

The 'Fed' was birthed in 1910 during a private meeting on Jekyll Island, a resort island off the coast of Georgia, between top representatives of Europe's long established central banks, sent on a secret mission to America to draft legislation that would guarantee the creation of a central bank in the United States.

Created in 1913, the Federal Reserve was chartered as a privately held corporation with its Class A preferred voting stock owned by exclusively foreign banking families, the same dynastic families that controlled the great central banks of Europe.

A flow chart of this chain of ownership is displayed in the classic investigative work, Secrets Of The Federal Reserve by the late, great patriot, Eustace Mullins.

NOTE: This work is now available in PDF and has been posted for download in the Gordon Phillips Academy Telegram group.

These same dynastic families had already established central banks throughout much of Europe and the English speaking world, so America’s new central bank would be little more than a new neighborhood branch.

Rather than place money directly into circulation under the sovereign power of a nation to emit its own debt-free currency, the American Congress elects to borrow money for public use from the privately owned Federal Reserve, then pay a rental fee for its use.

This rental cost (interest) is then passed on to the American people in the form of taxes on their labor.

In this way, Americans are essentially indentured serfs to the private emitters of money which could just as easily be provided by their own Congress without any fees incurred to circulate it.

Modern money spawns through a process known as fractional reserve banking under which new money is borrowed into existence with the issuance of each new loan.

However, the money to repay the interest on new loans does not yet exist and will be created only when borrowed into existence as future loans are issued.

It would therefore be mathematically impossible to pay off all existing debts at once since there is never enough money in circulation to settle them.

For this reason, the entire economy can be seen to be an expanding Ponzi-like bubble that will end only when there are so many debts and so many debtors that the money supply cannot be expanded fast enough to accommodate them all.

At this stage, the economy must of necessity crash and reset itself, amidst widespread destitution.

To guarantee the private emitters of paper money a steady increase in rental fees, it is necessary only to entice the public into becoming ever greater users of credit, much as an addict needs ever increasing “hits” to achieve the same result.

In the early 1900's when it was considered a badge of dishonor to be in debt, the only credit available to most families was the tab they ran at the local general store, and strived to extinguish each week on pay day.

In the days before local zoning laws were pushed through the state legislatures by agents of the banking cartel, a would-be homeowner would clear the land of rocks and tree stumps, dig a foundation, frame a house and finally take up residence.

The entire process might take a few summers, as time permitted, between planting and harvesting.

Along came zoning laws to drive aspiring homeowners into the arms of the bankers to borrow the money required to go from groundbreaking to occupancy within the time allowed, often as little as eighteen months.

And borrow it from whom?

Why, from the same bankers who created the zoning laws.

Along with this clever trick came the construction permit that would be needed to build your own home on your own land with your own labor.

How would you obtain this permit?

Why, you would apply for it, of course.

An application always requires a signature, and signatures are always given voluntarily.

In this way the entire application process could be made to appear mandatory.

I know this is hard to believe in the land of the free, but stay with me here.

Individuals who borrow money from a bank to purchase a house on a thirty-year mortgage will typically repay up to twice the loan amount.

They will quite literally buy one house for themselves and a second (free) house for the bank.

Should the homeowner default on repayment of the loan, the issuing bank will take possession of a real asset that costs them nothing but the ability to monetize the loan out of thin air as key strokes on a computer.

It is through this alchemical process that uncountable quadrillions of dollars of wealth have flowed to bankers over the centuries and continue to transfer wealth into their hands from users of their product to this day.

As for the purchasing power of the money we are given to us, if instructed to do so by the dynastic families who pull their strings from behind the scenes, central bankers can accelerate growth in the money supply far beyond what is needed to facilitate transactions within the economy.

Periods of monetary acceleration are called booms.

Booms foster easy credit as millions of users of cheap credit money become fully addicted.

When deemed desirable, an engineered contraction in the money supply can force a drying out period (a so-called bust) to create a widespread default.

To quote Congressman Charles A. Lindbergh Sr. in 1913, following the passage of the Federal Reserve Act: "From now on, depressions will be scientifically created."

Once the economy has gone full 'cold turkey' in an economic depression, the money supply bubble expansion process can begin anew and further add to the bankers' bottom line.

Under the basic law of supply and demand, excessive amounts of fresh paper put into circulation debase the value of those other pieces already circulating.

We call this phenomenon inflation.

If we think of excess money creation as a spring bubbling up from the bottom of the money supply tank, what is needed in order to regulate the rate of inflation is a mechanism to skim excess money production back off the top of the tank.

In other words, to remove excess purchasing power from the hands of the people and return it to the creators of money.

Which is why some writers have referred to the dollar as a “tax anticipation coupon.”

The mechanism to remove this excess production, the flush handle if you will, is the income tax which is forcibly mulcted from the people under penalty of fines and incarceration.

The net result is that excess money can be continuously bubbled up from the bottom, then removed via the income tax, with a delicate balance maintained between the tax rate and the rate of inflation, like the balance knob on a stereo system.

As for the income tax, unlike real estate where tax is calculated on the gain above the original basis, you are deemed to have zero basis in your labor (your most personal of property).

Realty Capital Gains: You buy a home for $200,000 which creates the tax basis. You sell it for $250,000. The taxable gain is $50,000.

Citizen Paying Income Tax: When you fill out a Form 1040 you are taxed on your income from dollar one. Therefore, the basis in your labor is zero. Apparently, you are worthless to the federal machine until you begin feeding it. In all fairness, I should add that Congress throws you a bone each year in the form of a small gesture called the personal exemption. They kick in a little more if you’re blind or over 65.

Keep in mind (and I know this is hard to believe, so steady yourself), but this is occurring in a free society.

TO SUMMARIZE: under the modern system of money creation, the people pay taxes—and surrender a generous portion of their children's future inheritance at rates which no doubt would have propelled America's founders into picking up their muskets far sooner—in order to deliver a steady flow of profits to the banking industry, overall an excellent business opportunity for the private owners of central banks.

Were the Congress to emit American money directly into circulation and bypass the banksters entirely, there would be no need for an income tax.

### BIG FINALE ###

Which begs asking, since this blood-sucking monetary mechanism has been well known to the leadership in Congress for over a century now, and since our legislators could vote tomorrow morning to end the Fed and rescue the people from inflation and most taxation, what possible political, social or other external force could be great enough to cower our legislators into continuing inaction?

Ah, Dear Ones, this is a place where we must not go.

For the United States is now the lumbering Frankenstein monster, and a very clever little nation is the brain.