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What These Massive Government Bailouts Really Mean for You

By Jim Gillespie | September 22, 2008

I don’t ever remember a time when there’s been so much volatility and concern over what’s been happening in our financial markets. And in addition people have been asking questions like, “Are these bailouts really necessary?” and “How will these bailouts affect me personally?” And both of these questions are really good questions to be asking right now.

The focus of my article here will really be on answering the second of these two questions, as you’ll be hearing countless experts both on TV and in other media debating both sides of the answer to the first question for months to come. And at the end of this article I’m going to give you a resource that I believe is the best one I could ever give you for having you really understand the underlying cause of these current conditions in our economy right now, too.

So let’s look at the mechanics of what’s really going on here. We oftentimes hear that bailouts are going to be paid for with taxpayer money, but what does this really mean? And if these bailouts will be paid for with taxpayer money, and the government is already spending more money than it’s receiving in taxes, where will the additional money come from?

And before you begin to answer that question by saying something like, “We’ll be borrowing the money,” do you know exactly who we’ll be borrowing the money from, and the mechanics that will actually create the borrowing for us? This is oftentimes a very nebulous arena that’s never really been explained to us. And if you’ve never really studied how our banking system works, fasten your seatbelt and get ready to learn something that will really surprise you…

What our banking system will do to handle these bailouts is create money that’s never, ever existed before. Since the bankers have the ability to create and add money to these companies’ bank accounts, this is what they’ll be doing. The money will be electronically placed into both bank and financial accounts to the sum of hundreds of billions of dollars, and all of this money will then become part of our entire money supply that’s now in circulation. There will be certain administrative procedures, paperwork, and details that will be followed around the timing and transfer of the money, but for all intents and purposes, this is the way it’s going to happen.

And of course in exchange for all of this money, our government will be taking over all of the bad loans and investments from these companies, too.

So the ways that we as taxpayers will all lose out because of this is:

1) The dollars that we’re currently holding onto ourselves will all become worth less through inflation, because they’ll be diluted by the new money being added into the system. And over time as this new money begins circulating, people will have more money in their possession and will begin spending it, causing prices to rise as a result of this.

2) We as taxpayers will be charged interest on the hundreds of billions of dollars of new money that will be added into the money supply, because we’ll be deemed to have “borrowed” it from the banking system. And this interest will then be added to the annual deficit and become part of our national debt…along with the hundreds of billions of new dollars that will be created and utilized for the bailouts themselves.

So has all of this now become crystal clear to you?

And if your head is spinning a little wondering how something like this could happen, my head was definitely spinning when I first began studying all of this stuff years ago, too. We’re used to thinking that money is something more tangible that’s exchanged for goods and services, and the concept that it could be created out of thin air in such huge numbers electronically, can sometimes be very hard for us to swallow. But I’ve read quite a lot of books about the banking industry and about the history of money throughout the ages, and I’ve studied these subjects quite extensively. And I can tell you with absolute certainty, that this is how the system works.

But the truth of the matter is that explaining in every detail how the system works is not something that’s really possible for me to do here in the context of this one article. And with this in mind, there’s a lecture that I recommend you listen to, and I’ll make an audio recording of the lecture available to you for free right now. The lecture is titled “The Creature from Jekyll Island”, and it’s based on the book of the exact same name. While in some ways the title may sound like a mystery novel, Jekyll Island is the island where our banking system was created many years ago. The lecture was given by G. Edward Griffin, the author of the book, and there’s no one who can explain how our banking system works in more down-to-earth, easier to understand terms than Ed.

I can’t emphasize strongly enough to you the importance of listening to this lecture. When you listen to it you’ll come away from it with an entirely new understanding of our banking system, and an understanding that will be quite a profound one, too. And as these government bailouts continue to mount in the coming months, you’ll have a much better understanding of what’s really going on underneath them, which will help you to make better financial decisions.

The lecture itself is 70 minutes long, and I know this is a long time to sit next to your computer listening to a lecture. But just begin by listening to the first 35 minutes of it, and once you do I can almost guarantee you’ll want to listen to the second 35 minutes of it.

I’ve had people worth millions of dollars who have listened to this recording on my recommendation, and every one of them has told me it’s made a profound shift in both their knowledge and understanding of everything that’s financial. And if you feel after listening to this recording that you’ve learned a great deal from it, I recommend that you buy Ed Griffin’s book of the same title. Because I guarantee there’s a lot more you’ll learn in the book that there really wasn’t time for him to discuss within the time allotted for the lecture.

Click here to begin listening to the lecture.


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