I spent a lot of time last year studying the world’s financial system, focusing in on the United States, and specifically on the impact of the Federal Reserve. The United States left the Gold Standard in two waves. FDR made it law that you would no longer be able to trade in cash for gold. It used to be that dollars were receipts transferrable to an exact amount of gold. Now, you could no longer take out the gold, but the receipts were still pegged. That was true until Nixon in 1971 when he finished the United States relationship between paper dollars and gold for international settlements. Beginning then and continuing now, the United States dollar is backed by the full faith and credit of the United States government.

Meaning, every dollar is backed by one big “trust me, bro”.

Maybe it is not so big a deal to trust the United States dollar. Whose currency would you realistically rather have? We have the strongest economy with the richest tax base backing those dollars (because if things get bad they can just tax us more), we have the best military, we have great strategic positioning on the world stage, and we are considered the world leader in technology which is where everyone is trying to go.

But I believe to trust the United States or any country with currency not pegged to anything but trust is a big deal. Currency has been the collapse of many nations of antiquity and very recent history. And it seems the more they tell you to trust them, the more you should question whether you should.

Part 1: Coin clipping and the money printer

Back in the day, a silver coin was made out of — you guessed it — silver. Its value was tied not to an arbitrary number but the actual value of the silver. But, as people always look for an advantage, they began taking small cuts of the silver off the coin. Hardly noticeable. Once they got enough of these small cuts, they could melt the silver down into one single bar and sell it for the value of that silver. They made money off the money by debasing the currency.

Sometimes governments would do this while under huge financial strain. When citizens did it, it was obviously a scandal and led to people being executed.

How did coin clipping get cut off? None other than the great Sir Isaac Newton began the practice of putting notches on the edges of coins so that it would be obvious if someone had taken a part of the coin.

Just because we have ridges on our quarters does not mean we do not carry forward the practice of monetary debasement today. In fact, it seems to be our favorite way to practice monetary theory.

When a dollar says it is backed by the “full faith and credit of the United States”, who is that speaking of? The credit of the senators? Or of the president? No, it is the tax base. Our elected government tells the world that if our currency is ever in a pinch, the tax base will bail out the currency through taxes.

Since going off the gold standard, predictably, the government began spending like there was no tomorrow. At least not one they would see. In order to spend money, you have to make money. The United States government makes money through taxes. So, if they increase their spending, to balance the books they need to start increasing taxes. But increasing taxes doesn’t win many elections, so they began the modern version of clipping coins — they turned on the money printer.

How does the money printer work? Say I owe you 2 pieces of pizza. We buy a pizza with 8 slices. I turn on my “pizza printer” which is really just scissors. There is no change in the amount of pizza, the amount value in the system, but now there are 16 slices. I give you 2 of those 16 slices, now I have paid off my debt. It was the agreed number, but the value underneath that value has changed.

This is called “currency debasement”. It is also how we get inflation.

The Federal Reserve has a mandate to have 2% inflation every year. How do they achieve this? By clipping 2% of the coins and reselling it back into the market, increasing the supposed amount of supply. It’s by printing 2% more, though the value hasn’t changed.

Currency debasement/inflation is a tax on the people of the United States. The government needs it to offset some of its crazy debts and allow it to take on more debt. The government must make the dollar weaker or debt becomes more expensive to pay off.

The United States is slave to its debts. The government no longer primarily serves you, but you and I are slave to the governments’ debt. And they will get their payment either by taxes you can see or debasement which is harder to see.

To me, this is the biggest deceit playing out on the world’s stage. While you worked every day, the world’s elite have been playing a game that you didn’t know the rules to. The United States moved from being a place where you work hard and you can have the life you want to who knows the game the best. It became less what you can build and more about the financial games you can play behind the scenes. A business is worth a certain value, but people can make financial vehicles out of its debt and make multiples of that companies value, while producing nothing of themselves! Grifters. Vermin. Venomous snakes to a world that says “trust me”.

Part 2: Childcare centers

Olga and I looked at a running total of income and expenses and then considered whether or not childcare would be worth the cost. Simply put, there was no way. At the time, she made more than me, over half of her monthly income would go to childcare expenses. And I don’t blame these centers, as they are actually probably underpaid and understaffed for the great service they do. Kids are expensive. For us the decision was simple, she wanted to stay home anyway and this was a great excuse. But it was smarter financially for us to have less than to work simply to have someone else raise or kids.

There are so many people who are financially tight right now. And childcare is a serious pain point for those who are making just enough money on a dual income but never enough on a single income. It is a huge expense for families or those who want to start a family.

So when this Minnesota scandal broke out, some of the nastiest feelings were unleashed in the United States. It did not help that the president used some terrible language to describe an entire nation, giving cover for racism and islamophobia and a host of other damaging language.

When we speak like this it actually covers up the issue. The issue is not the color of their skin or country of origin, but fraud and deceit that moves like a disease in our society. It is these sins, like all sins, which disease the human heart and attempt to seduce us to degrade a society of trust.

Yes, it seems to me that the Somalian community found this fraudulent way to collecting tax dollars for services not provided. That is fraudulent and infuriating and people should be given justice. But I also believe that there are many other organizations who abuse the system that should be rooted out.

There are guesses now that 10% of our tax dollars are obliterated by waste, fraud, and abuse. Fraudsters are disgusting, but when so much corruption is allowed to happen, maybe we should look at the system that has allowed it to happen to begin with.

Part 3: Just acting like big brother

I have two sons, and the younger watches the older like a hawk. When the older one does nice things and is rewarded, the younger takes notice and repeats the action. When the older decides to be destructive, it feeds the actions of the younger. The older is learning his ABC’s and 123’s for the first time, and the younger is picking it up. The younger child has significantly less understanding than the older, and yet is able to observe the actions and reap certain outcomes.

Many people in America struggle to understand why they just feel poorer. Groceries are more expensive. Housing costs are up. Their paycheck doesn’t go as far to provide nice family experiences, if they feel they can even afford to start a family.

But there is an angst, a sense, that its the governments fault. At least the part of the government that is a different color than their own side. They know that they are doing something to cheapen their money. The government must be clipping coins.

So some of the people in the country feeling financial pressure, like our government, are finding their own way to clip coins, by gaming the system that has been gamed against them. They are doing things like opening daycares to absorb as much government money as possible. Yes, it’s a crime. But more than that, it’s a symptom, an outcome, of abuse done against citizens. Citizens not just of one nation, but an entire world being placed under the bondage of a debt they did not cosign for.

The real crime, I argue, is not done by the Somalians in Minnesota, but by our elected leaders in deficits and inflation.

Part 4: The Mirror

Elected… Meaning they represent us. Maybe they don’t always do the best job, or maybe we just don’t know ourselves. Maybe they are the perfect reflection of who we are, even when we do not recognize ourselves.

In the book Poverty, by America, author Matthew Desmond lays out for the reader that our nation of America is subsidized in nearly every avenue by the taxpayer. We all benefit from the softening of these subsidies and the small injections of cash buffers the move us along the maze of the economy. And we continue to vote for these things. We ask for our representatives to get us more subsidies. More benefits. We all accept help where we can get it.

It is only short term help as all of these come with a cost to the government, who is then going to get that money from its citizens through taxes or inflation.

Our government, in seeking election, has promised monetary benefits to its voters to the point that we have no chance of balancing the national budget. But their fiscal irresponsibility, telling its voters that they can live like kings today, is sacrificing the future. Their voter base is doing the same thing with their own money, spending record amounts of money from the future on little plastic cards. At least Trump is capping the interest rate at 10% this year, now we can spend even more!

Our government is elected by us. Is it any surprise that they spend recklessly, when we are also drowning in personal debt? Currently, there is a call for government austerity. Is there a similar push for personal austerity? Eventually it is forced upon you, credit tightens, and suddenly ideas like “simple living” are not optional. Better to live simple by choice before it is a mandate.

Part 5: What can we do?

First, we need a values reset. We need to change our consumption habits as individuals. We need to live a little smaller, more communal, more simple. You can live an exciting and beautiful life using money that you actually have rather than mortgaging your future away with large debt repayments. We need to educate the next generation on the power of debt to enslave debtors. We need to celebrate simplicity and personal austerity. When we celebrate those values personally, it spreads to the government.

We need a government that reflects new values. One that makes hard decisions to build a better tomorrow, rather than take tomorrow’s money to pay for a fun today. This comes down to citizens voting to make hard decisions.

We need to root out fraud. Fraud is corrosive to democracy. We are in a moment where trust is more valuable than gold. We need to salvage the trust that we have left in the system and aim to build up more trust if possible.

We need to recognize that current monetary theory needs at least some inflation to maintain liquidity in the financial system, which is actually a good thing as without it the whole system would collapse. So, because inflation is not going away anytime soon, the best way to combat inflation is owning assets. Real estate and stocks go up naturally as the value of the dollar drops. Owning a business is an asset. This is why you cannot spend every dollar you have. Some of that money needs to go to owning an asset. It is like a boat riding the rising tide of inflation.

Lastly, we need to deepen our communities. I believe that when we get to know one another it will increase trust and decrease things like fraud within communities. We need to decrease the amount of people who feel like outsiders, who feel like they need to make it on their own. Encourage and support the creation of legitimate businesses. Create and attend community events to build connectivity. By prioritizing these efforts, we shift from a society of isolated individuals chasing short-term gains or government handouts to one where people feel seen, valued, and responsible to each other.

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