Lawmakers in more than 10 states have adopted resolutions to introduce alternative currencies. The premise behind the introduction of alternative currencies is that after an economic collapse, American citizens must accept an alternative currency and the currency must be visible to Americans months before the collapse. One such visible alternative currency has emerged as a viable way for savvy Americans to transition during the chaos caused by an economic crash.
Have You Heard of the Bitcoin?
You most likely have heard of the alternative currency the American government has come to loathe. Considered the most successful experimental alternative currency, the Bitcoin is a decentralized digital currency that allows for instant payments for goods and services to anyone in the world. Peer-to-peer technology operates without any centralized governing body impeding the flow of Bitcoins in and out of accounts.
Building on the principle that money represents an object, Bitcoins use cryptography to control the creation and transfer of money, instead of relying on the criminals at the Federal Reserve.
You can send Bitcoins via the Internet and not have to entrust your money to a third party. Bitcoin transactions are irreversible by design and the transaction times only take a few minutes. Compare that with the window banks work out of to transfer funds.
Bitcoin transactions cost a fraction of what dollar transactions cost. User agreements and computer software regulate Bitcoin supplies, which mean the human element of greed disappears from the economic equation.
How viable is the Bitcoin: much more viable than a funny money system of Monopoly money stored inside of inflated bank accounts. However, other alternative currencies may rival the Bitcoin in terms of ease of transaction and cost. Therefore, pay close attention to alternative currencies, especially those issued by state and local government.
Why Ditch the Dollar?
The American government is now over $16 trillion in debt, yet the staggering number only represents the tip of the financial iceberg. The $16 trillion figure does not include at least four times that in unfunded government liabilities, such as Medicare and Social Security. Add to that the colossal amount of personal debt and it is no wonder that alternative currencies are becoming the principal way to transact business deals all over the country.
According to economics expert Michael Snyder, it is mathematically impossible for the United States government to pay off the national debt. The federal government could confiscate every last cent from businesses, banks, and taxpayers and there would still be trillions of debt dollars floating around the artificial economy. Even if the government paid off the debt, American society would cease to function because all of the liquidity would vanish. This leads us to make one startling conclusion…
The principle of money created out of thin air by the stroke of a computer keyboard has prompted millions of Americans to seek alternative currencies. Many people have resorted to bartering for goods and services in preparation for what they believe will be the primary form of commerce after the collapse. Fractional reserve banking, which is the Federal Reserve System’s version of a Ponzi scheme, cannot sustain the economy forever and sage Americans understand they must create alternative currencies to fill the financial void.
FRACTIONAL RESERVE BANKING
Leave It up to the banksters to devise a term that simply describes an elaborate Ponzi scheme. Fractional reserve banking is a fancy way of saying that banks only have to hold a fraction of the money they lend to bank customers and other banks. Let’s assume the fraction hovers near 10 percent. If you deposit $100 in the bank, the bank can lend as much as $1000. This scam allows the money (term used loosely) supply to grow at multiples of the underlying currency reserves. The biggest obstacle to the banker scam come I n the form of bank runs.
Yet the Federal Reserve System has the scam backed up by promising to be the lender of last resort, if the banks bleed their currency stashes dry. The federal government also offers protection by guaranteeing deposits up to a designated level. Fractional reserve banking is illegitimate on so many levels that it’s a wonder more Americans haven’t risen up and tried to change the corrupt system. Their deposits become property of the banks and they receive an asset called a deposit account. You never get to see your deposits, because they only exist on paper. The more deposits a bank receives, the more money it can loan.
Fractional reserve banking sits at the root of many American economic woes. The only reason we have interest rates is to allow the Fed to control the size of the money supply by regulating the rate of borrowing. The rapid increase in the money supply exacerbates inflation, especially for food and energy. Fractional reserve banking is like playing the banker in a game of Monopoly and stealing $500 from the bank. The additional money sent into the monopoly economy diminishes. You can expect fractional reserve banking to comprise one of the leading causes of the economic collapse. Even if you still have your head stuck in the sand, why would anyone want to allow a bank to lend out money they can lend out themselves…and reap the interest payments?
What to Look For: The Announcement By the Federal Government to Default on its Debt Obligations
Most Americans believe that bank runs are a relic from the past, and something like that can never happen again in America. The thinking is there are too many safeguards to prevent people from frantically trying to get their hard-earned cash out of bank vaults. While we might not see the Depression-style bank runs in the digital age, Americans can expect “bank holidays.” Unannounced and unexpected, bank holidays prevent traditional bank runs because the banks will simply close and lock their doors.
People won’t be able to set foot in banks to lay claim to their deposits. At first, banks close their doors infrequently based on stabilizing the fiat currency. Then, bank holidays become more frequent until the banksters can no longer keep the system afloat by injecting more fake money. The best way to avoid bank holidays is to take your money out of the bank and store it in a secure location. There is a reason why the brainwashers indoctrinated us at an early age not to hide money under our pillows.
The fact of the matter is that money is not going to be relevant for some time after a collapse. We’ve all heard the stories of people having to use wheelbarrows of money to purchase loaves of bread during depressions. Rather than stash your money under your mattress to keep it out of a defunct bank, it’s a much better idea to convert your money into the purchase of food, water, and supplies before the collapse happens.
What to Look For: The US Dollar Losing Its Status as the World Reserve Currency
Another economic event to watch for involves the dollar losing it’s world reserve currency status. Watch for an announcement by any foreign nation, especially nations that hold huge chunks of U.S. debt, such as China and Saudi Arabia.
The dollar is a very weak currency and its only saving grace, the thread it hangs by, is the fact that it still has world reserve status. This means the US dollar represents a trade currency accepted by all nations. If BRIC nations or OPEC oil producers announce they no longer plan to trade goods using US dollars, expect an immediate collapse of our currency, along with treasury markets. The people who have noticed this trend transact in alternative currencies.
Finally, the devalued and mostly worthless dollar should cause a rapid increase in commodity prices. We already see the effects of our slumping currency at the grocery store and gas pump. Hyperinflation has the distinct capability to bring out the worst in a society. People can handle a Dow collapse, or even deflation, but when a currency declines, we lose all possible means of self-support, unless we participate in an alternative form of currency. Americans who do not prepare by trading in alternative currencies such as the Bitcoin can expect to lose their entire life savings in one bankster swoop.
Ben Bernanke recently said he expects the Fed to pump up interest rates to combat rising prices. Nonetheless, all Bernanke and his minions plan to accomplish is an exacerbated collapse. Anyone who lived through Jimmy Carter understands the economic significance of double digit inflation and interest rates occurring simultaneously. The next time that happens, which Bernanke ensured sooner rather than later, you better have already developed a strong alternative currency system…
…even if the system only involves bartering goods and services.