I've been down this rabbit hole for more than a year now, reading up on just about everything I can get my hands on. Watching speeches from renowned economists, both in the left and right of the political spectrum. As much as I can't really conclude that anyone has truly found the answer, one thing is for sure; Bankers are true magicians.

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The birth of Magic Paper

Most people today are probably not aware of where the dollar came from. Meaning, that they think that it's possibly existed as is for hundreds of years anyways, and that yeah, it went from being coins to being paper, or something of the sort, but nothing could be further from the truth.

Don't worry however, this won't be a history lesson with crazy names for you to remember, the concept is what's important here, and possibly nothing else, at least for the time being.

Before the Federal Reserve took over all the printing duties for the government, all Banks had the ability to print their own legal notes, their version of paper money.

Now think about that for a second, the banks would have gold reserves, and they would print legal tenders, little IOUs if you will, against the gold they held in their vaults. This meant, that anyone with a note from a Bank, could walk up to the bank and exchange the legal tender for the equivalent amount of gold the bank had.

This created many challenges as you might imagine, because some banks were not too adept at making unfalsifiable tenders, and someone transacting with a state that was on the other side of the map, had the task of finding out if the legal tenders from the bank were even any good.

When the Federal Reserve stepped in, it "fixed" this problem, because it was the "best" bank at making notes that were not falsifiable. It was algo a gigantic bank that just about anyone knew, so their legal tenders were accepted nationwide.

The first magic trick came in the form of printing more legal tenders than the gold they actually held, and all of the sudden it was for some reason acceptable to run at 40% backing. Think about that for a second, this meant that if everyone would go with their dollars to claim the gold, only 40% of the people would be able to claim it. I think this is an amazing magic trick, don't you?

But, the gold became a problem, Why? because it somewhat limited the amount of magic money they could print. I mean, what would happen if the Federal serve ran with 10% backing or less? Chaos, that's for sure, people would probably freak out, and rightfully so.

Taking it up a notch

The US economy worked like this for a while, and you could say that it chugged along just fine, but even that is debatable. No other bank was printing notes, but still, the legal tenders, the dollar was working. Before the Vietnam war, any of us could go to a bank and get a dollar of gold, believe it or not the name dollar was meant as a specific weight of gold.

But then, we were knee deep into a war that overextended our debt. There was no way of footing the bill anymore, the magic bank, The Federal Reserve, could not continue printing anymore. So what can a magician do in this case?

This was the time of president Nixon, oh yes, that one. The proposed solution was so ridiculous, yet so genius, it worked. Why not get rid of the gold all together?Yes, yes, perfect. If there was no requirement for gold backing up the legal tenders, the magic papers, then they could be completely magical, unicorn level stuff.

And it was then, in 1971 when we abandoned the gold standard, and we became 100% magical. There was no way anymore for absolutely anyone with a legal tender to exchange it for gold at any Bank. The shackles have been removed, the restrictions became nonexistent. Now, we could print as much as we needed, we could finance all the wars, we had all the magic money to do so.

What happened to people you say?

They loved it, they thought it was great, we were fighting for freedom after all. But then, all of the sudden, they started to realize things were a little different. Prices started to go up, you see, inflation was beginning to do its thing, it's antimagic.

All of the sudden both Husband and Wife had to work, because one salary was not enough, everyone had to contribute to the household to make ends meet. Yes, this was happening right before everyone's eyes, but do not worry, magicians are awesome and they've always known how to distract your attention.

The dwindling middle class needed escape goats, they were not happy, so our dear government installed systems for doing just that, things to distract our attention. Their main role after all, is to assist the magicians, and their role is to take from you your buying power and your financial fortitude.

But listen, don't worry too much about these people, we are onto them, and soon enough there will be no one that will fall anymore for their sleight of hand.