Money: What You Don't Know (Part 1).
This article is the first of a series that I think you will find fascinating.
When I've written about money in the past I've received comments from some people who really don't like the subject. They don't like to think about money, or they truly think that money is the root of all evil.
The truth, in my humble opinion, is that money is simply a tool. It's neither good nor bad. It just is. It is, however, a very important tool. Money is necessary in order to be self-sufficient. We need money to take care of our loved ones, and to simply go shopping at the store.
It's important to be financially educated so we can ensure that we vote in people who know what they are doing and will run our country in a responsible way.
So think about this...
How is it possible that students go through K-12 and then university to learn how to make a living, but they are NEVER actually taught about money? In fact, instead of teaching kids about money, we tell them that they need to go to college and incur ridiculous amounts of debt - debt that could stay with them for most of their life.
We're not taught...
What is money? (It's actually different than currency).
Why does money have value?
What determines how much buying power a dollar has?
Who owns your money when you put it into a bank?
Why is our money worth less each year? Or in other words, why do prices for things keep going up every year?
What is the right way to think about money? (Big picture and in daily life)
What does it mean that the US Dollar is the world's reserve currency?
Why are students not taught about money?
What do the rich understand about money that other people don't understand?
What is the right way to manage money?
What is debt, and is it always bad?
What are different approaches to investing?
How do I keep my money safe? And who do I need to protect it from?
Who should I trust to manage my money?
Is our government properly managing our money supply?
What are the best resources to learn about money?
I believe that it's not a mistake that people aren't taught about money in our schools. The fact is, people in power stay in power because they understand money while the masses don't.
If people remain financially ignorant, they can't see how the entire financial system is designed to actually steal your money.
Furthermore, the vast majority of US Representatives, Senators and even US Presidents have very little financial education. They simply listen to "advice" given to them by people in the Federal Reserve.
So here are a few things to think about...
FIRST, WHO PRINTS US DOLLARS?
The US Constitution clearly states that Congress is given supreme power to print money. BUT, since 1913, the US Congress has delegated that power to the Federal Reserve. So what is the Federal Reserve? Isn't it the same thing as the US Treasury?
Actually no. The Federal Reserve is not Federal, nor does it have any reserves. The Federal Reserve is not a government entity. It is, in fact, a privately-owned central bank. Or more accurately, its a banking cartel, which means that many banks together own the Federal Reserve.
This privately owned bank has complete control over the printing of the US Dollar. Congress has abdicated so much of it's power to this central bank that Congress doesn't even know what the Federal Reserve does. For years, Ron Paul tried to pass a bill called "Audit the Fed" so that the government would know what the Federal Reserve does. To this day, the bill has never passed.
Why does this matter? It matters because of trust and loyalty. Now that you know that the Federal Reserve is a privately owned bank, where do you think their loyalty is? Do you think they are in this to help you, me and America, or are they in this for themselves?
So, now I want to skip to something more practical.
SECOND, WHO OWNS YOUR MONEY AS SOON AS YOU PUT IT IN A BANK?
Remember the financial crisis of 2008? During this crisis, we actually came very close to total collapse of our financial system. But the Fed printed tons of money and bailed out the banking system.
But after that the laws were changed, and that's bad news for you and I.
If the banks run into problems in the future, they won't be bailed out, but rather they will be "bailed in". Here's how this article describes the "bail in" process.
"Under conditions of financial strain, customers and depositors who are storing assets in a bank are “creditors” who can immediately be regarded as legitimate bank “shareholders.”
This means that a large portion of their stored funds can be converted into bank equity. To be clear, depositor funds and assets can be legally confiscated by the bank to maintain its solvency.
This is called a “bail-in,” and it affects every depositor in the US. If you are like most Americans, you too are a depositor, meaning that your funds are vulnerable to confiscation.
What does this mean practically? Don't just blindly trust banks. Diversify your money by putting it in different banks, and even keep some money outside of the USA. If you have large amounts of money that you need to keep safe, read this article.
THIRD, WHO SHOULD YOU LISTEN TO?
Certainly not me. Let me be clear, I am not giving financial advice with this article. Do your own research. I can give you some suggestions on where to start your research though...
Suzie Ormond if you are not disciplined with your money and need a kick in the butt to control spending.
Dave Ramsey if you are somewhat disciplined and want financial stability.
Robert Kiyosaki if you want to actually know how the wealthy invest their money.
If you are an investor, look into Richard Maybury.
More coming soon on this topic. Share your comments below!