“When you or I write a check there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn.  When the Federal Reserve writes a check, it is creating money.” 

~ Boston Federal Reserve Bank Publication

Okay, I know, a great place to start this morning–in the weeds.  But, hold onto that quote, because it will come to be very powerful later in the post.

Today we have to deal with the $8 trillion gorilla in the room: the Federal Reserve.  I’ve already been hammered for talking about this by people in LaLaLand on the Internet, so why not go back for more punishment, right?  The reality is, as I discussed with a FFRL (friend from real life–yes, I have some) just the other day, it would probably be impossible to get rid of the Federal Reserve, since it does have more power than Lord Voldemort and Word Girl put together.  However, having average citizens in the United States aware of the Fed and what exactly it is and does is a laudable goal.  Of course, I understand the average citizen probably isn’t reading this post, but hopefully that’s where you come in (spread this message far and wide, my people!).  In any event, the Federal Reserve is the single most important institution in the United States, and probably in the world, and will have the single biggest impact on global monetary policy (yes, that thing I apparently “know nothing about”) in the next 5 years.  I won’t dare project beyond that, but the next several years are certainly shaping up to be a doozy, and the Fed is going to be in on this in a MAJOR way.

Again, with American Endgame, I am trying to recreate my own learning experience for the reader.  And while I understand the whole “lead a horse to water” theory–and certainly don’t expect anyone to learn the same way I did–I want to create an opportunity for people to have a couple bread crumbs to start their own journey.  So, if we’re throwing down bread crumbs (or tiny pebbles that shine in the moonlight, because we know the bread crumbs get eaten, and then you end up in a cage in a gingerbread house being poked by a witch with a stick), then we have to go back to Chris Martenson and his Crash Course.  This series of videos is what first allowed me to wrap my brain around the really complex stuff that’s going on–I highlighted this series as an important resource here.

Today we start with Chapter 7, which deals with Money Creation.  Watch the video, embedded below (takes 5 minutes).  The key vocab from today’s lesson is “fractional reserve lending.”  Please watch:

So, as you see, lending money is key to the current monetary system, but is a double-edged sword since any defaults really foul things up.  Now, please keep this last chapter in mind and take another 8 minutes to watch the next chapter, which discusses the Federal Reserve.  This is where the red meat is:

So, what do we take away from this?  Essentially, what really set my mind reeling–and what I immediately recognized as something that had major implications for how our nation’s currency is managed–is the fact that our currency is literally created out of thin air when our Congress runs out.  I was occasionally told by my father growing up that “money doesn’t grow on trees.”  Well, now I can emphatically tell him I disagree with his premise.  No wonder Congress can’t stop spending: they can get more money anytime they want!  As Chris puts it in the video, there are two kinds of money: one kind is “loaned into existence,” and the other is “printed out of thin air.”  This is where I start to get concerned and wonder what exactly my entire financial and monetary world is built upon…

So, where do we go from here?  The suggestion that the Federal Reserve can print more money without necessarily anything backing it–we don’t even have gold or silver backing our currency, which is a major cause of the (hyper)inflation we are all experiencing, and is probably the subject of another post–should make us all take pause.  It may take several days for you to truly appreciate the idea that your money is not worth anything and that the Federal Reserve is printing it like toilet paper, but once you make that cognitive leap, come back.  We’ll be ready to walk farther down this spooky path, closer to the gingerbread house.


“Truth is treason in the empire of lies…”  ~George Orwell

Some folks on the Web have been really enjoying AE’s informative articles.  In fact, as I predicted, many adults reacted to the last Endgame Concepts post about fiat money with caustic replies.  Apparently, what I wrote was “just more Ron Paul BS propaganda” and allegedly I “have no idea how world monetary policy works.”  That all may be true.  Here at American Endgame we are strong supporters of free speech, and believe one of the great things about the Internet is that it is and will remain free to all.  Honestly, I’m glad that I was able to get through to some people.

So, in the spirit of continuing to provide a public service that makes many Americans want to rip their hair out and berate me, I provide today’s Endgame Concepts post, which will certainly push many of you closer to the edge of mayhem–while possibly getting one or two of you to think about something in a different way.

Today’s concept: “official statistics” are deceptive, manipulated, and used to achieve political ends.

… Waiting to see if anyone is shocked by this revelation…  Not yet?  Okay, moving on then.

Statistics–collected, organized, analyzed and interpreted data–are crucially important in the organization of any major civilization.  Initially, they were important for things as rudimentary and basic as, oh, you know, survival–“how many acres of arable land do we have?” “What percentage of those acres are now productive?” “How many people do we need to feed?” “Will we have enough food?” “What is the probability of a major crop failure?” You get the picture.  Of course, statistics have taken on other, far more useful roles in modern societies: “What is Alex Rodriguez’s batting average against right-handed pitchers with two men on base in July?” (That was a joke…  I do have a sense of humor, you know).

Clearly, statistics also play a MAJOR role in our politics.  And this is an area where I think we all see the connection between statistical analysis and mass manipulation–which is, just as a head’s up, where we’re going today.  After all, we can see how statistics are injected into our minds in this 2012 GOP primary season.

This graph is fantastic.  It clearly shows the state of people’s opinions about the GOP candidates at each and every stage of the campaign season.  Here, the information is organized, and then it is left to be analyzed and interpreted.  You or I could analyze and interpret this in several ways…  We could draw dozens of conclusions from this information.  For example, we could be as bold as to say that near the end of December 2011, Newt Gingrich was the front runner.  We could peek into the future and state that based on his fairly stable performance throughout the campaign, Mitt Romney would soon retake the “lead” from Newt Gingrich, who appeared to be a statistical flash in the pan.  We could state that the five candidates near the bottom collectively had nearly as much support as the front runners, and that support would coalesce behind one of them as time went on and the others exited the contest.  In any event, its clear there’s a ton of information here.

However, when we see this in a magazine, or on the news, or online, the analysis is done for us by whoever published the information.  We are told what to see.  And that changes everything.  Examples of this are everywhere.  As I write, I am reminded of a recent incident on Chris Matthews’ broadcast on MSNBC, where he was discussing the favorable/unfavorable numbers for the GOP candidates left in the race.  He showed Romney at 34%, Santorum at 32%, and Gingrich at 25%.  He omitted Ron Paul’s rating, which stood at 42%, much higher than the other three.  In fact, Paul wasn’t even mentioned.  This is not designed to endorse Ron Paul, but to show the way the mainstream media manipulates statistics.

So, we know the MSM uses statistics to move public opinion.  But the government?  Isn’t that going a bit far?  Am I sitting here with a tinfoil hat on my head?  No on both counts.  Look:

This chart, from ShadowStats.com, shows unemployment measured three different ways.  The red line represents the “official” unemployment rate that runs every month on CNBC or Bloomberg.  The gray line represents the unemployment rate that the Bureau of Labor Statistics uses internally (which leaves you wondering, if its good enough for the Federal government, why don’t average Americans see this each month?).  It includes the infamous “underemployed” category (people who are forced to work part time for lack of full-time opportunities) and the “short-term discouraged” category, which includes people who have been seeking work for a period of a few months.  The blue line is what the unemployment rate would be if it was measured the same way the government measured it in 1994.  This number is calculated in a fairly simple way: essentially, divide the number of people who have jobs by the number of people who are old enough to have jobs, and here’s what you get.  About 23% of Americans are unemployed.  Not 8.3% like the President and Congress would have you believe.  Call me strange, but I struggle to understand how the government can have any credibility when it changes the definition of unemployment over time.  If we defined unemployment the same today as we did 20 years ago, unemployment would be in Great Depression territory.  And here we sit, thinking its about to drop below 8%.  We, my friends, are manipulated by official government statistics.

One more example before I get this out.  Look at inflation:

Again, the red line if “official” inflation, as defined by the U.S. Government in 2012.  The blue line is inflation today as if it were defined by the U.S. Government according to their 1990 methodology.  In other words, if the U.S. Government defined inflation the same way today as it did in 1990, inflation would be 3 times higher.  Now, of course, the government has an answer for this.  They have all kinds of fancy terms and statistical rationale for changing this.  Substitution, for example, they say, plays a factor here.  Substitution is the concept that says, “well, as the price of something goes up, people tend to substitute something less expensive, therefore inflation isn’t happening at the same high rate.”  This is foolish and makes no sense.  Inflation is the rate at which the dollar looses its value over time.  The government calculates the inflation rate by essentially taking a “basket of goods”–a gallon of milk, a stick of butter, a loaf of bread, a pound of ribeye steak, etc.–and figures its price today against the price of those goods a year ago.  That’s inflation.  By substitution logic, you would compare the price of a gallon of milk, a stick of butter, a loaf of bread, and a pound of ribeye steak a year ago to a gallon of milk, a stick of butter, a loaf of bread, and a pound of hamburger today.  Does that seem like a fair way to calculate price change?  Even fifth graders agree: this makes no sense.  And yet, that’s exactly how our government figures inflation.

Why do we care about how the government calculates inflation?  Let me point out the difference between 2% inflation at 6% inflation.  At 2% inflation, $1.00 loses 75% of its buying power during the course of my lifetime.  At 6% inflation, $1.00 loss 75% of its buying power by the time I graduate from college.  Does that difference matter?  I’ll leave that up to you.  Again, why do we care how inflation is calculated by our government?  Well, if a dollar was going to be worth a quarter in 25 years, would you want to know that, or would you rather be told the problem is three times better than it really is?

I hope you enjoyed today’s cheery lesson on how the population is manipulated by statistics by the mainstream media and the U.S. Government.  Keep in mind that unemployment remained essentially unchanged for almost all of 2011, and then miraculously dropped almost a whole percentage point in three months.  And just in time for election season…  Hmmm…



As American Endgame discussed yesterday, several sources around the world, from The Slog’s secret, highly-placed sources to The London Telegraph discussed the very real possibility that–despite ALL PUBLIC COMMENTS TO THE CONTRARY–the Eurozone, led by Germany and Chancellor Angela Merkel, are preparing to allow Greece to default on its debts and be shepherded out of the common currency.  The argument goes that chasing good money after bad–when Greece will still be above the all-important 120% Debt-to-GDP Ratio in 2020 and when it appears by all measures that Greece will simply default in 2 years anyway–is not in the Eurozone’s best inerests.  Fair enough…

So, what are we to make of the “pending bailout deal,” an agreement that is allegedly going to hand Greece the $170 billion it needs to stay afloat after March 20?  Is the AE story from yesterday a clear example of alternate journalism gone wrong?  Not necessarily…  This from ZeroHedge today:

“According to a just released update on the website of the European Council, the much anticipated press conference “to end all press conferences” will take place at 23:00 CET, or 5 pm Eastern. What will then likely happen is another delay until midnight, then later, then finally when Europe is sleeping a few finance ministers will say that the Deal is virtually done, the terms of the PSI are agreed upon (except that “some” creditors, those who have a blocking stake, will vote no and force the use of CACs and thus trigger a default before March 20) with the exception of a few minor outstanding items, such as whose debt is cut to bring total Debt/GDP to 120% by 2020, which they hope to get resolved shortly. And so this latest and greatest meeting will come and go, and anyone who shorted the Belgian caterers will be broke when the market opens up tomorrow, when Belgian catering ETFs all go limit up.”

And this from The Slog itself:

“[F]rom what I’ve seen or been told about the additional savings package being imposed on Greece (and they’re still arguing about it as I write) it contains a large number of potential deal-breakers before the 130 billion is actually handed over. My hunch is that Schäuble will use these to derail the process and keep his own plan on track. If a deal is announced today, then the MSM will of course all shout “Crisis Over!” in one Stepford tone. They will be wrong: default will only be avoided when the bailout cash goes into the Athens government’s bank account. Even  with an agreement today, this is not a done deal: riots alone over the next few weeks could blow it off course.”

In other words, as another famous Greek once quipped, don’t count your chickens before they’re hatched.  Until the Euros are in Greek coffers, this whole issue may still drag out until the March 20 hard default deadline, or the alleged March 23 planned default.  And in the meantime, until this press conference goes off, hold off on assuming Greece is back on track.  It seems we may have a way to go…


Discuss this with a room full of fifth-graders, and they will understand it in about 30 seconds.  Talk about this with a class of seniors in high school, and it will become clear to them with time–then they’ll get really mad.  But, review this with most adults, and they will either a) not understand or b) ignore what you are telling them.  What is this concept, so difficult for adults but clear as crystal to anyone under 12?

U.S. Dollars themselves are worthless…

(Ditto for Euros, Yen, Yuan, Rials, etc…)

Today, as a public service, American Endgame risks its integrity and credibility to explain a concept that, until very recently, was reserved for the Kook’s Corner of the Internet.  Rest assured, I am not going to take this discussion too far afield.  There will be no diatribe on how FDR sold Americans as debt slaves to the Federal Reserve, or anything of that nature.  This is meant to be a serious discussion about an important topic that adults in the United States know almost nothing about, but which has everything to do with understanding the house of cards upon which our society has been built.  Follow along, and please feel free to post questions below…

  1. The U.S. Dollar is an example of a fiat currency.  So, what is fiat currency?  Quite literally, it is a currency that derives its value, not from its intrinsic worth, but because of a government law that says it has value.  How else could a piece of cotton and linen be worth a dinner?  Or a set of golf clubs?  Or anything?  And what makes a $1,000 bill worth ten times a $100 bill?  Adding a zero?  Other than the factor of ten in ink, they are identical objects.  You’d think a $1,000 bill would be ten times larger–but its not.  Again, the only thing that makes fiat currency worth anything is a government edict.  Hence the name “fiat,” which comes from Latin and means “let it be done.”  In other words, “let it be money!”  [Reminds me a lot of “let there be light,” which also seems like an inadequate explanation of other examples of creation from history.]
  2. The value of the Dollar used to be linked to precious metals. While the history of the relationship between gold, silver, and the Dollar is long, complex, and beyond the scope of the discussion, we can pick it up for today’s purposes in 1933, when President Roosevelt officially set the value of gold at $35 per Troy Ounce.  This meant, conversely, that one Troy Ounce of gold was worth $35, two $70, three, $105, etc.  By this time, it wasn’t to say that $35 could be exchanged for a Troy Ounce of gold, but there was an explicit “peg” in place.  The value of the Dollar was anchored to gold in a particular ratio, or standard.
  3. The value of other currencies was linked to the value of the Dollar.  While the Bretton Woods System may be the subject of a future post, suffice it to say that after World War II, the major global powers agreed to link the value of their currencies to the value of the Dollar (the world’s only major, stable currency), and the U.S. in turn agreed to (more or less) fix the value of the dollar to a standard of $35 per Troy Ounce of gold.
  4. Eventually, however, this linkage was abandoned, and the Dollar became officially worthless.  Of course, when an economy grows, the need for more Dollars increases.  Without an equally expanding supply of gold, this standard would be difficult to maintain for very long.  Therefore, over time, the ratio of U.S. Dollars in circulation to Troy Ounces of gold began to increase.  In turn, the value of other nation’s currencies began to decline.  You can imagine how well this went over in, say, France or Great Britain.  Nations around the globe began to abandon the Bretton Woods System, which forced the United States to “float” the Dollars value.  In other words, the Dollar was no longer “pegged” to the value of gold.  Instead, the value of a Dollar was determined by a series of formulas, and was essentially equal to whatever the U.S. Government and the Federal Reserve decided it was worth.  Finally, after nearly 50 years of erosion, the U.S. Dollar officially had no intrinsic value, nor was its value tied in any way to anything that had any intrinsic value.  The Dollar was finally, officially, a fiat currency.

Why does this matter to the average American?  Stay tuned for a future exploration of the fiat concept…


The End is Nigh…

Posted: February 19, 2012 in General

…and its time more of us begin talking about it.

Welcome to the introductory edition of American Endgame, a news source dedicated to the presentation and analysis of important economic and geopolitical information that will significantly impact our nation and its people.

First, I would like to share a bit of information about myself, mostly for the purposes of convincing you that I’m not one of these people that’s either lost his mind or is in the process.  I want to assure you that I am of sound mind, and fully aware that things I’m writing about may, at times, seem hard to accept.

By way of a biography, allow me to iterate that I am in my early 30s, married with children (not living in the basement of a dormitory or anything), and gainfully employed.  By way of true confessions, I was associated with a “liberal” political stance for most of my adult life, and supported pretty much all the public policies that came with that tag: social safety net, universal health care, gun control, limited war, etc.  The major exception is that I never really bought into the “globalization” of the economy (frankly, I don’t think most other liberals did, either).

However, in the last year, the lens through which I view the world has gone from a rosy hue to a decidedly cloudy gray…  I no longer support most initiatives that our President proposes to “fix” the economy, and I am turned off by the state of politics in America (for the record, I made more phone calls for Barack Obama the Candidate in 2008 than anyone in three counties in my state, and I am not sure that I will vote for him in 2012).  In addition, I am slowly road-testing the notion that regardless of who is elected President this November–President Obama or John Q. Republican–our economic and geopolitical problems will continue.  We can get more into my political views later, but for now, understand that you are reading the consciousness stream of someone who is in the midst of a political philosophy 180…

What caused this drastic change?  The US Public Debt now stands at $15,300,000,000,000 and change.  For the first time in American history, the amount of money our government owes to others is more than the net worth of our production as a country.  In other words, we don’t make enough money in a year to pay off what we owe.  Now, granted, not all of the $15 trillion must be paid back in a year, just like the principle I owe on my home is not due by December.  However, the realization that we had moved, for the first time, above 100% Debt-to-GDP Ratio led my brain to a whole series of questions: “Who do we borrow money from?”  “Where does the money come from?”  “Why have we suddenly run into this problem in the last 30 years?”  “What happens if we don’t start paying the principle back?”  I hope to give powerful primers on all of these topics as time goes on, but let it suffice to say that the answers scared me out of my liberal views.  The more I learn about America’s economic problems, the more I lean Straight Libertarian.

Our geopolitical reality is even more frightening.  The wars we’ve been fighting for the last 10 years–wars I believed were fought for convenience and/or profit–are in fact part of America’s survival strategy.  The only problem is that we were sold a War on Terror, when in truth these are proxy wars with nations around the world who have decided to end the system of Western dominance and move beyond the Pax Americana that has existed since the end of the Cold War.  Again, these topics will be explored.

My goal for this blog is to create a clearinghouse of information that can guide real people through the jungle of information I’ve hacked my way through for the last 9 months.  I will highlight news information, I will share other important blogs and web sites which all cover aspects of the American Endgame in detail, and I will present analysis to the best of my ability.  I hope you’ll follow along as I guide you through what I and many others believe will be a fascinating and potentially frightening period in our nation’s history.  If things go well, we may survive the gauntlet.  If not, America may look significantly different in the years to come.

~ Dark Smith

As American Endgame develops and continues to expand, we will from time to time, add information we find relevant and immediately important, as a stand-alone piece.  This post is the first of such pieces.

In the last several days, more and more material has begun to leak out related to a major developing story that is being almost entirely ignored by the MSM.  It appears that both U.S. and E.U. elements are planning for a coordinated Greek default in or around the third week of March, 2012, at which time Greece will run out of funds absent a second bailout which, despite weeks of teasing to the contrary, now appear not forthcoming.

American Endgame first learned of this possibility at The Slog, where it was reported that Germany was planning to nix any second bailout package–essentially arguing that this was chasing good money after bad, since Greece would be incapable of making the cuts necessary to bring their Debt-to-GDP Ratio within expected limits within an appropriate time frame.  The original article can be found here.  Follow up pieces (here, and here) suggested that the White House as well as companies like JP Morgan were involved in the discussions.  Finally, more information, this time from a highly-placed bank official in the United States, seems to confirm that plans are in fact underway.

On Friday, a semi-MSM source, The London Telegraph, ran this piece, suggesting that the Germans in particular were in fact in the midst of creating a plan to remove Greece from the Euro by axing any future aid to the nation.  The significance of this piece is two-fold: it confirms The Slog’s story, and legitimizes the conversation.  Finally, Saturday brought this post from Tyler at zerohedge.com.  All in all, the picture is beginning to take shape, and things don’t look good for Greece.  The main question at this time is how this will impact the world markets and the United States in turn.  It is entirely possible that this event will pass, and that governments and banking systems will have properly insulated themselves.  However, its equally as likely that this is merely the first domino to fall.


Consider the Alternative…

Posted: February 19, 2012 in General

An important component of the American Endgame philosophy is that the U.S. Government, and by extension the Mainstream Media, are not necessarily interested in being truthful with the American people about its challenges, motives, and goals.  As a result, it is inherent upon each of us to take everything we see on the news, read in the papers, or hear from a government official with a grain of salt.  I’m talking everything.  Now, to be clear, I’m not advocating a Mel Gibson, “Conspiracy Theory” worldview, where the U.S. Government is controlled by an evil cabal and bent on controlling the minds of its citizens.  However, it is clear that not is all as it seems.

Submitted for your approval: zerohedge.com.  This is an important source of information for anyone who wants to truly understand what is going on in the world.  Each day, several articles are presented with a non-state-sanctioned take on the world’s events.  This site demonstrates the power of looking at the world through a different lens.  I visit this site every day, and many of its stories will be the subject of future posts.  Take 10 minutes a day to scan the headlines, and read at least one or two of Tyler’s articles.  This is an important step to seeing the world as it really is.

~Dark Smith