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Chapter Four

Fin Ed History

The worst dictators in modern history came to power during times of financial crisis. Hitler came to power in Germany, Mao came to power in China, Lenin in Russia, and Milosevic in Serbia and Yugoslavia during an economic crisis. Hitler and U.S. President Franklin Delano Roosevelt (FDR) came to power in the same year, 1933. FDR, while greatly loved, created many of the financial institutions that caused many of the financial challenges the United States faces today. Some of his creations are Social Security, Federal Deposit Insurance Corporation (FDIC), and the Federal Housing Administration (FHA). He also took the United States off the gold standard in 1933. Many people believe it was World War II that brought us out of the Depression. While the war did increase U.S. productivity and its balance of payments, it was the Bretton Woods Agreement of 1944 that restored the gold standard and increased the power of the U.S. dollar and the United States in the world. In 1971, Nixon broke the Bretton Woods Agreement with the world and today we are in a crisis again, facing a possible new depression. The collapse of the gold agreement is known as the “Nixon shock.” After 1971, prosperity was created in America through debt and inflation rather than manufacturing goods that the world wanted to buy. Without the discipline of gold, the Federal Reserve Bank embarked upon a process known as systematic inflation. The United States enjoyed good years because the economy was based upon ever-larger quantities of counterfeit money. America’s national debt is a Ponzi scheme of debt and fiat currency, paying off debt with taxpayer dollars that are worth less and less. This system survives as long as the rest of the world goes along with the cash heist. If the world wakes up to the fantasy that you can buy things with phony money, the fantasy is over. If the U.S. dollar goes, the United States will go with it. This is where we are, as I write in 2011. Americans are in debt for generations to come. 122

Profile for Jamiel Cotman

Unfair advantage ebook  

by Rich Dad, Robert Kiyosaki

Unfair advantage ebook  

by Rich Dad, Robert Kiyosaki

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