Fiat Currency & Theft On An Unimaginable Scale

If the Fed was inflicted on America by a foreign power it would have been considered an act of war (see Source 2 at the end of this post).

Basic Terms Explained

One of my traits I have been told to work on is explaining concepts and terms on a basic level and I have decide that in this post I will clear the air and explain more which might have been missed in my first two posts on Fiat Currency.

To start off we define some unfamiliar terms:

• Fiat Currency - Federal reserve note with little to no intrinsic value since its removal off the Gold standard. Currency is a medium of exchange, A Unit Of Account, Portable, Durable, Divisible & Fungible. Remember this term as it is the root cause of a coming financial crises on a scale never before experienced.

Additional information on Fiat Currency:

• G. Edward Griffin (1999) The Creature from Jekyll Island: A Second Look at the Federal Reserve, Third edition, American Media, Westlake Village, California

This book traces the history of the Federal Reserve, revealing how the American government has used the Reserve as a way to deceive taxpayers and control the global economy and explaining how the Reserve influences the flow of money between citizens, businesses, banks, and the government.

• Money - Is often confused as Fiat Currency but it has one additional character which Fiat Currency lacks and that is a store of value over a long time.

Additional information on Money:

• Money vs Currency - Hidden Secrets Of Money Ep 1 - Mike Maloney
  

I am yet to find a better series explaining the basics of the economy and finance. Mike Maloney has a 9 part series on these topics and his latest (episode 9) includes the crypto currency market.

Inflation In The Working & Retired Class

In my previous posts on what inflation is I have explained from the very top how inflation works. The previous posts can be viewed here:
Post 1 - Your money diluted like shares. Not that complicated really! (https://steemit.com/diluted/@dpl/your-money-diluted-like-shares-not-that-complicated-really-285d1a13ab81c)
Post 2 - If you save in Fiat Currency, and that includes stocks and pension funds I am afraid the news is not good. (https://steemit.com/devaluing/@dpl/if-you-save-in-fiat-currency-and-that-includes-stocks-and-pension-funds-i-am-afraid-the-news-is-not-good)

This post further zooms in on the working & retired class to explain the concept of inflation on ordinary people.

Closed System

First, we look at the financial system, zoomed in, without any extra Fiat Currency pumped into the system. Except for external influences ( e.g. natural disaster pushing up the price of oil etc.) which is very small compared to quantitative easing induced inflation. The volume of Fiat currency in the system is balanced and people buy only what they can afford and prices for goods and services does not change.

Open System (or open season). Quantitative Easing

Secondly, we look at the financial system, zoomed in, under current conditions. The system is continuously being subjected to quantitative easing, which is the printing of extra Fiat Currency and including it into the system (better known as counterfeiting and blatant theft, refer to Source 1 at the end of this post). The extra printed Fiat Currency is worth most to the corporations and people who uses it first (path of new fiat currency into the system is explained in Source 2 at the end of this post) after which it balances out throughout the system. Once equilibrium is reached it means inflation for that specific injection of quantitative easing is at a maximum. The people hit hardest is the people not actively engaged in the system (retired class) as they do not get their hands on the increased volume of fiat currency (they live off their pension which has been set a long time ago, refer to my previous Post 2, Image 2 of 2)

Interest is due to the increased volume of Fiat Currency in the system which leads to an increase in the prices for goods & services. More people can afford to pay more, in other words the demand increases and to adjust to the change the price of goods and services increases. This increase in price is what is known as inflation or better known as the devaluing of Fiat Currency (which is essentially the lowering of purchasing power of Fiat Currency).

Dilution Example (inflation or theft)

Probably the most simplistic way to explain this is through an example of a company that has 1000 shares. 4 Users buy 250 shares for $1.00 a share ($250 worth of shares for each user). The total paid is $1000.00 as seen in the illustration below.

The company then decides to generate 1000 more shares and sell it to a 5th user without notifying the first 4 users. Whatever they decide to sell the additional shares for they have stolen from the first 4 users by diluting the shares. This devaluing of the shares is what we experience as inflation. Our economic system is however not as small and the full extent of the devaluing might take a while and the amount stolen depends on the growth of the shares.

Source 1

Source 2

• Path from quantitative easing into the system (see from 09:30 minutes into the video)
• An act of war (see from 07:05 minutes into the video)