Dirty, Filthy, Delicious Money

Money

Besides studying politics from the inside and seeing the practice of lobbying for a little while, I have also worked at Bank of America and Wells Fargo. I have been a teller and a banker. In banker's school I scored the top of my class on a SIFMA (Securities Industry and Financial Markets Association) exam as a pre-qualification to become an investment banker. I thought I would share a little bit of my knowledge about money, since it is a major consideration in anything.

Have you ever asked yourself, wtf is money?
Because the world functions on a monetary system, money is the primary incentive for most actions because you can use it to get anything you want. This is seen most clearly in the thought - "Life would be so much better if I just had money." or, more famously, "I wanna be a billionaire, sooo frickin' baaaaad."

The hip-hop industry has clearly and profoundly stated that all that matters is "money, cash, hos" (how the heck do you spell hos? hoes? Which one is the promiscuous girl and which one is the garden tool? Are they spelled the same??)

But wtf is money? Can you eat it? Does the paper advance technology? Does it make a good house or warm clothes? Can you drink it? Does it cure diseases?

Where Money Comes From

It might as well grow out of rectums because where it comes from is crap. When a government, like ours, needs money, it borrows it from a central bank (the Federal Reserve in our case). The Fed then purchases government bonds, totaling the requested amount (let's say $850 billion for kicks) and then the government can then print out "federal reserve notes" or dollars for the same amount. This is typically done digitally, appearing as blips on a computer screen.

Bonds are debt instruments - money made from nothing, a loan of imaginary digits telling the people of that country that they now owe the central bank that made the loan. The more debt you have, the more of a slave you become to the monetary system. Money is created out of debt...WTF?! This can then be multiplied exponentially because banks are only required to keep a certain small percentage of their money liquid (just sitting there, like money in your checking account). The rest of the money can be loaned out and each deposit any individual makes is subject to the same rules. This is called the Fractional Reserve System.

Where Does Money Get its Value?

It gets it from the existing money supply. More printed (created) money steals value from the money that already exists. This is called inflation and is the reason why prices keep going up and your dollar doesn't buy as much today as it did 10 years ago. Consider inflation a hidden tax on your money that doesn't buy you anything.

$1.00 in 1913 required $21.60 in 2007 to match the value. This is a 96 percent devaluation since the Federal Reserve was established. Inflation will never go away in this system. The money that you work so hard for will always lose value the instant you earn it.

So, if your savings and investment accounts do not give you more money back (Annual Percentage Yield) every year than the rate of inflation, your money actually loses value even though you gain a few dollars here and there. All of this is done with numbers that have no true value in terms of feeding you, clothing you, keeping you warm (unless you burn it) or anything else needed for survival.

So when we bailed out the banks who put us into debt with imaginary money...we did by borrowing more money from the Central Bank (Federal Reserve)...which gave more imaginary money back to the banks that screwed us...and the machine keeps turning.

Edit Previous Posts: It looks like America gave in and we are now devaluing our own currency...just like China and everyone else...who suffers? Everyone.

South Korea...I'm so sorry to hear about the shots fired. Here comes the test. We're really close to war in that region and you can bet there are a lot of people trying to broker deals right now to keep it quiet. No matter what happens, those are two sons that are now gone forever. Rest in peace.