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July 26, 2011 / 74

Why the Dog and Pony Show? (Debt Ceiling Wrangling)

I came across a piece this morning posted on the website “Right Bias”, a Conservative headline gathering site ( http://www.rightbias.com/ ). the article was in a news outlet called the “New American”. I’m not sure I trust it as a source, but the article was a piece about the GAO “investigation” of the FED’s activity during the financial crash (links to the report in the article), and it set me to thinking.

In my post yesterday, I went into what currency/money is. If you read it, then you are now aware of the NATURE of fiat currency (such as the US Dollar). Which is to say you know what it REALLY is. The answer to that is, fiat currency/money is essentially “non-specific debt”. ie Every dollar bill, every bank accounting sheet that lists US dollars on it as “on deposit”, every transaction that has “money” flowing out of the FED is debt – created by the FED! Debt that the US Congress not only has no control of, but that it doesn’t even have an accounting of HOW MUCH there is out there, especially since during the crisis, the FED was conducting “secret” transactions around the world.

The article I saw said that there was some $16 TN handed out in bailouts by the FED during the crash, handed out to financial institutions, central banks, and corporations around the world. If you add that printing press currency/money to the acknowledged US Debt of $14 TN, the US currently has about $30 TN in total debt!!!! That’s a far cry from the $14 TN the politicians are dancing around about.

Another aspect of this is that if the Fed doubled the total amount of US dollars in global circulation, it cut the VALUE of those dollars in half – imposing a defacto tax on the US people of 50% via devaluation of the currency.

So of course, the question arises – why is Congress and the President playing the debt ceiling game? What’s the dog and pony show for? If the FED has the authority to create debt, and they do, then the debt created by the Congress is irrelevant and created on sufferance of the FED – and there is no such thing in the real world as a debt ceiling. Or if there is, it is the FED that controls it, not Congress. The other rather ugly possibility is that congress is clueless about the real state of affairs in the financial world, and they do not realize that they are nothing more than a sham government – powerless and useless. COULD they be that dumb?

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