CBS News recently reported that the billionaires increased their net worth over $4 trillion dollars in the first year of Covid-19 shutdowns. Since there are approximately 2300 billionaire families this amounted to a 54% increase in wealth for these families. While I love free markets and free enterprise, this wealth is not due to free markets, but instead captive platforms controlled by a centralized money system known as the Financial Matrix.

Despite the people suffering losses of jobs, health, and hope due to Covid-19 the billionaires enjoyed a banner year, significantly better than pre-Covid-19. The idea in a free market is to leave the economy free for those who perform to advance, and those who don’t to change. However, America is now run as an oligarchy where those with power and those with wealth effortlessly control America through Money, Media, Management, and Monopolies.

Perhaps it’s time for the people to strike back, not through protest, but rather by what Joseph Schumpeter called “Creative Destruction”. What if the people joined forces to created their own platform economy and the people enjoyed the perks, and the people who helped build the platform could even share in the profits built. Think about it. We all are on platforms anyway, but now we settle for perks, while the billionaires get all the profits.

It’s time for the middle class to make a stand or soon there will not be a middle class standing.

Sincerely,

Orrin Woodward

Bitcoin is here to stay and will only grow as governments increasingly manipulate the money supply. The nation-states and banking system have joined forces to create the Financial Matrix, a financial system which uses fiat and fractional reserve credit to enslave the people. This is described in detail in my new book EXPOSED: The Financial Matrix. Bitcoin, however, is the free market response to the Statist’s money system. It’s vital the people understand Bitcoin and how its limited supply can protect the people’s wealth.

The demand for Bitcoin, simply stated, is a place to park wealth outside of the control and manipulation of the Financial Matrix. Just as lawyers and accountants have value to legally protect assets through knowledge of the IRS codes, so too does Bitcoin have value because it legally protects a person’s wealth from the rampant inflation of money applied by the Statist monetary system. The Austrian economists call it marginal utility and the utility of Bitcoin is its limited supply. People who desire to protect their hard-earned wealth are utilizing Bitcoin as a hedge against inflation, investing 5–10% outside of the Financial Matrix money system.

Throughout history when the force matrices became too oppressive people escaped to new lands where the matrix could not reach. Today, however, the Financial Matrix reaches everywhere. Thus, the escape is to a virtual currency where the Financial Matrix cannot reach. We live in exciting times because the pivot towards Bitcoin digital gold has the possibility to bring free market principles back into money and banking and help set the people free!

Bitcoin is a decentralized, distributed, digital virtual currency created in 2009 as a direct result of the housing market crash and has been called analogous to digital gold. It was created by the pseudonymous Satoshi Nakamoto and follows the protocols outlined in the white paper released at its creation. The identity of the person or persons who created the technology is still a mystery to this day. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized, distributed authority, unlike the Financial Matrix’s centrally issued currencies. Since bitcoins are digital, there are no physical coins, only balances on a public ledger transparently displayed with the transaction history. Furthermore, since bitcoins are decentralized and are not issued or backed by any government or bank, no entity can control the creation, transfer, or value of them. Instead, bitcoins have market price because, like all goods and services, the market values them. In fact, the value appears to be growing as people realize the size of the con the Financial Matrix is perpetrating at their expense. Bitcoin, essentially, is a grassroots movement aimed at the creation of free market money, entirely separate from centralized governments and force matrices.

The idea of free market money is not new. Also, the idea of digital money is not new. And certainly, the desire for stable money goes back as far as money itself. The reason Bitcoin is so revolutionary is that it figured out elegant solutions to massive age-old problems in order to accomplish all of these desires for money in one invention. One of the biggest obstacles to creating something like Bitcoin was the problem often referred to as the Byzantine Generals Problem (BGP). Software entrepreneur Marc Andreessen described this: “Bitcoin is the first practical solution to a longstanding problem in computer science called the Byzantine Generals Problem (BGP). To quote from the original paper defining the BGP: ‘[Imagine] a group of generals of the Byzantine army camped with their troops around an enemy city. Communicating only by messenger, the generals must agree upon a common battle plan. However, one or more of them may be traitors who will try to confuse the others. The problem is to find an algorithm to ensure that the loyal generals will reach agreement.’” The BGP, in other words, poses how to identify trustworthy actions from fraudulent ones, and establish a basis for trust in a decentralized network of unrelated parties like the Internet.

Nakamoto’s technological solution created, for the first time in world history, the ability to transfer value between distant peoples without relying on a trusted intermediary, as neither banks nor governments are needed to successfully complete the transaction. Indeed, the ramifications of Bitcoin’s core technologies are so profound that it has rightfully been suggested that Nakamoto is a worthy potential recipient of both the Nobel Prize for economics and the Turing Award for advances in computer science. The four fundamental technologies uniquely encapsulated to create Bitcoin are:

1. Digital Signatures: These ensure identities cannot be forged, permitting one party to securely verify transactions with other parties.

2. Peer-to-Peer Networks: Durable networks like BitTorrent or TCP/IP are difficult to take down and require no trusted central third party.

3. Proof-of-Work: This ensures users cannot spend the same money twice, even without a central authority to regulate transactions. Bitcoin has created an incentive system for “miners,” who are paid by “discovering” new coins, by running powerful networks of computers that validate transactions, securing them from tampering. Moreover, anyone with computational resources can anonymously and democratically choose to become a miner to earn new coins.

4. Distributed Ledger: Bitcoin records the history of each and every transaction in every wallet. This “blockchain” ledger publicly displays all validated transactions.

Essential Characteristics of Money

These technological innovations created Bitcoin with the essential characteristics of money, money that is scarce (only twenty-one million bitcoins will ever be created), durable (being digital, they don’t degrade), portable (the digital signature allows bitcoins to travel with you anywhere and to be transmitted electronically), divisible (into trillionths called satoshis), verifiable (through the public blockchain), easy to store (paper or electronic), fungible (each bitcoin is equal in value), difficult to counterfeit (cryptographically impossible), and achieving widespread acceptance within the marketplace, with many top technologists and programmers working overtime to improve it.

Although systems are everywhere, there are only two main types of feedback loops. The first is reinforcing loops, where a change in the system serves as a signal for further change in the same direction. Reinforcing loops cause either runaway (1) exponential growth or (2) exponential decline, depending on whether they are positive or negative reinforcing loops. The other main feedback loop is balancing feedback, where a change in the system serves as a signal for change in the opposite direction as the goal seeking system seeks to restore the lost balance. The balanced feedback, in other words, is goal seeking, striving to maintain equilibrium by recalibrating toward a certain value or situation.

GRAPHIC: SYSTEM FEEDBACK LOOPS

The world’s economic system is a balanced feedback system loop whose components are constantly updating to balance the money supply with the supply and demand for every good and service within the marketplace. Thus, we must study the economy systematically because it has balanced feedback loops, and any intervention in one part of the economy interacts with every other part like a wave in a pool.

I share this architecture so people can see how the FRB system is a fraudulent intervention into the balanced economy. The artificial expansion of the money supply manipulates price signals, temporarily imbalancing the system, until the economic factors (price, supply, and demand) adjust to restore dynamic equilibrium at the new money-supply level.

FRB’s intervention into the balanced economy system is similar to a binge drinker’s alcoholic intervention into the balanced bodily system because both temporarily imbalance a naturally balanced system. The binge drinker’s amusing slogan, “One beer is too many and a million is not enough,” explains the systemic effect of alcohol intervention on the human body. It also illustrates the artificial debt-money intervention because “any expansion of the money supply is too many and a million is not enough.” The positive reinforcing cycles (beer leads to more beer and debt-money leads to more debt-money) continue until the balanced system can handle no more. Because balanced systems must recalibrate, the positive reinforcement loop cannot last forever and eventually must reverse to rebalance the system. When it reverses, the positive reinforcing loop transforms into a negative reinforcing loop because the overconsumption of beer and debt lead to the balanced systems counteracting it with sickness and sleep for too much beer and insolvency defaults for too much debt. In consequence, every intervention into the body or economy creates an artificial boom followed by a real bust as the system rebalances.

GRAPHIC: INFLATION/DEFLATION — INCREASE/DECREASE OF MONEY SUPPLY | INFLATION

Fractional Reserve Banking Is the Cause of the Boom/Bust Business Cycle

This is why the FRB systemic inflation is even more catastrophic than debasement. Whereas the debasement of coins merely expands the money supply by increasing the total number of coins, the FRB system inflation increases and decreases the money supply (through the positive and negative reinforcing loops). This introduces a new phenomenon — deflation, a decrease of the money supply — into the monetary equation. As if increasing the money supply (inflation) wasn’t bad enough (like getting run over by a van), the FRB system, unlike debasement, can also decrease the money supply (deflation) when loans are paid off or defaulted on (as if the van subsequently reverses and runs over us again). The Roman debasement was inflationary theft because it increased the money supply by the additional coinage mixed with base metals. Nonetheless, it did not have a deflation component (the decrease of the money supply) because the additional coins were a physical reality, not created out of thin air, and therefore, they could not vanish into thin air. In contrast, in the FRB system, debt-money is created out of thin air (causing inflation) and vanishes into thin air (causing deflation), which occurs with every loan opened and closed. Therefore, the boom/bust cycle that has plagued the modern economy is a direct result of the systemic inflation/deflation oscillation inherent within the FRB system.

GRAPHIC: INFLATION/DEFLATION — INCREASE/DECREASE OF MONEY SUPPLY | DEFLATION

The inherent oscillation within the FRB system is one of its defects; the other is its mathematical absurdity because total debts increase faster than the total money supply, which makes it an inherently unsustainable system. FRB loans must be procured this month (increasing the money supply) in order to pay the debts accrued in past months. And if new FRB debt-money is not created, the old debts become unpayable, and the wave of defaults begins. In other words, the boom expansion of the FRB debt-money loans (the positive reinforcing loop inflation) continues until the banks cannot loan any more money (from either the banks or the people reaching loan limits). Then, because there is not enough debt-money in existence to service all the loans, the bust contraction of the FRB debt-money begins (the negative reinforcing loop deflation) with the least solvent borrowers defaulting first. Once deflation begins, round after round of defaults occur, crashing the money supply (deflation) and exposing the FRB systems’ inherent lack of reserves.

The problem with FRB loans is debt-money must continue to expand (positive reinforcing loops) until the banks can no longer loan any more money. And as soon as this point is reached, the most insolvent debtors will begin defaulting, crescendoing throughout the banking system as the money supply seeks to return to its original level. Booms lead to bust (negative reinforcing loops) just as predictably as throwing balls up leads to balls coming back down. Moreover, even though the money supply has deflated, the prices of products and services are still inflated. The FRB system boom has caused an unnatural inflation of the money supply and prices, and now the bust is a period of deflation of the money supply and prices back to pre-inflation levels. Recessions and depressions are periods of stagnation caused by the supply of goods still being priced at the inflated money-supply levels while the money supply has been deflated to a lower money-supply level. The duration of the recession/depression stagnations depends on the time it takes for the market to recalibrate prices and wages to the now-deflated money supply. The mathematical imbalance between total debt-money and total debts is inherent within the FRB system. This is what causes the boom-cycle inflation and the bust-cycle deflation. As a result, the only way to end the boom/bust cycle is to end the FRB system that caused it.

To elaborate, consider the following example: If a person obtains a $250,000 mortgage at 5% interest for thirty years, the FRB system creates $250,000 of new debt-money, but no money is created to pay the interest on the debt. Thus, the borrower owes $250,000 in principal, plus another $233,000 in interest over the duration of the loan (a total of $488,000), even though only $250,000 of total money was created. The only way the borrower can raise the additional funds to pay the mortgage is to compete with other borrowers for the limited money supply when compared to the total debts. There is simply not enough money available to pay off all the debts. This is the systematic defect of the FRB fraud, that the interest owed was never created, so how, exactly, can something be paid back to the lender that does not exist? Moreover, with every additional FRB loan, the total debts increase faster than the total money supply.

FRB is nothing more than a game of musical chairs where every loan expands the gap between the total money supply and the total debts. And the only way to keep the music going is to continually expand the number of FRB loans. Since there are more dollars owed than created, if the music ever stops and all the money is demanded, we would discover there is not enough to pay back what is owed (because it was never created), and the economy would come crashing down. The game of musical chairs forces society to borrow from Peter to pay Paul until the unsustainable model leads to another global economic meltdown, as in 2008 and 2020.

The following chart illustrates the inherent problem: the US money supply is around $15 trillion, but total debts are over $50 trillion. It is impossible for $15 trillion to pay back $50 trillion, which indicates that the only way this can continue is for more debt-money to be created. This is a monetary game of musical chairs. There is no way every government, business, and person can pay off all of their debts because of the FRB system’s imbalance between the total debt-money supply and the total debts. If all bank loans were demanded to be paid back today, over two-thirds of the debts could not be paid and the world would discover it is completely insolvent due to the fractional reserve banking system. This fraudulent system has created an unnatural scarcity in the money supply compared to total debts and the game of musical chairs can only continue as long as more money can be borrowed from the Financial Matrix. When no more FRB loans are forthcoming, the music stops and the boom turns to bust.

GRAPHIC: US MONEY SUPPLY VERSUS DEBT JULY 2019

The FRB system can rise and fall, but because of its very architecture, it can never stabilize. The FRB system is wreaking havoc on the global economy because it is wholly incapable of providing the one thing the free market money system needs — namely, stability. A stable money supply is foundational for the free market (discussed further in Chapter 5) because it provides entrepreneurs with accurate, non-manipulated price signals, which end the dreaded boom/bust cycles and increase the wealth for everyone. From the people’s perspective, it is sheer lunacy to build the world’s money supply upon the most unstable of moneys: FRB debt-money. However, from the banking elites’ perspective, it is sheer genius because they have achieved absolute power and profits.