“Where does the rest of the money come from?”
I suspected I was getting ready to push against my client’s belief system.
She had been complaining about taxes and, as often happens when a client rants about government theft, she resolved herself to paying taxes because they funded government programs.
I had pointed out that the Grace Commission report, done during the Reagan administration, demonstrated tax dollars only pay for the expenses of collections and the interest on government debt. Income tax doesn’t pay for government programs. There is another source.
“It comes from the Fed.”
My client’s raised eyebrows said she didn’t believe me.
I reached into my back pocket, pulled out my wallet, and opened it. I found a ten-dollar bill and handed it to her while pointing to the top border.
“Federal Reserve Note.”
“What’s a note?”
“It’s a debt.”
“That’s right. Our money is debt. We use debt for currency. Do you know what the Federal Reserve is?”
“The government bank.”
“You’re half right. It’s a bank but it is privately owned.”
“Who owns it?”
“That’s a good question. As far as I can tell, it has twelve board members. Eleven of them are connected to Rothschild banks and the twelfth one is from Chase, which has Rockefeller connections.”
My client reached for her purse and pulled out her wallet.
She opened it, removed a stack of twenty-dollar bills, and thumbed through them to see if each one had “Federal Reserve Note” printed on it.
“I’ve never seen that before. How long have they been printing that on the money?”
“Every denomination of dollar bill since the sixties is a Federal Reserve Note. In the past hundred years or so, there have been some silver certificates and some treasury notes. Today, they are all Federal Reserve Notes.”
She reached into another part of her wallet and pulled out her collection.
“See, it isn’t on there.”
She handed me one.
“It is on there. It’s just in a different location. It isn’t on the border of the bill. It’s just above Jefferson’s picture.”
I pointed to it as I handed the note back to her.
She acknowledged it was there and I could see the wheels turning in her mind.
She was worldly wise and set in her ways.
She had reason to be.
After growing up in Europe, she had traveled all over the world while competing as an elite athlete in three sports and then, running a successful business. In the almost twenty years I had known her, she had started several successful businesses in New Mexico, selling some and keeping others.
I have often watched her access and dismiss new information.
I assumed she would do the same with my Federal Reserve story.
“How does this work?”
She pretended to be curious so she could test me.
I knew she had a daily habit of reading the news.
“Have you read the stories about QE3 and QE4 where the Fed purchases debt?”
“I’ve seen them. If I understand correctly, that’s how money gets into circulation.”
“Yes, when the Fed purchases debt, it puts dollars into our economy. Between QE3 and QE4, the Fed is currently committed to purchasing one hundred twenty billion dollars of debt a month. That’s an annual number of 1.4 trillion. Last year’s government deficit was 1.2 trillion. Do you see the connection?”
The look on her face went from skepticism to determination.
“And that is why we have inflation, isn’t it? We have such a financial mess in our country and it only gets worse as we insist on sending our troops all over the world. If we brought them home, our government wouldn’t have to spend so much money.
“Well, if you look closer, you’ll see that those military expeditions are designed for financial profit.”
“What do you mean?”
I sighed again as I realized I was once again pushing against her belief system.
However, she seemed open to hearing what I had to say, so I continued.