Inflation and Crash in the Dollar

The speaker talks about the creation of dollars through a fractional reserve banking system.  He discusses how money can be created out of thin air by the government and the federal reserve.  Essentially, when the government needs money, the federal reserve buys government bonds and then prints dollars which get sent to the government electronically.  The government then injects those dollars into the available money supply, thereby creating wealth out of thin air. 

When the Fed purchases these bonds from govt., they are essentially creating money out of debt since the fed purchases bonds with money they created out of thin air.  He then goes on to review how banks can create money out of thin air when they issue loans.  In reality, 9 dollars can be created out of thin air for every dollar in deposits that they receive.  He reviews how this is possible. 

As more and more dollars are injected into the money supply, the value of each dollar decreases which then increases consumer price inflation.  In fact, the dollar has lost 96% of its value since the Federal Reserve was introduced in the 1920's. 

The bottom line is that if there were no debts in our money system, there would be no money. 
Tim Ord
Ord Oracle

Tim Ord is a technical analyst and expert in the theories of chart analysis using price, volume, and a host of proprietary indicators as a guide...

Tradingsim.com
Day Trading Simulator

Tradingsim.com provides the ability to simulate day trading 24 hours a day from anywhere in the world. TradingSim provides tick by tick data for...

Send this article to a friend.

Enter multiple addresses on separate lines or separate them with commas.