FAKE by Robert Kiyosaki
How Much Money Are You Printing? How To Take Control?
Printing Money #1: Printing Cows
- For thousands of years, money has taken many forms. Money has been beads, feathers, stones, animals, and pottery. One of the earliest and most important forms of money was cattle.
- When a person left his cattle as collateral, the moneylender was paid in kind with the children of the cattle. Calves, or kinder, were an early form of interest. Today, when a banker lends you money, the interest you pay your banker is today’s modern form of kinder.
- In kind means like-for-like. Calves-for-cattle, money-for-money, and an eye for an eye.
- Interest is in kind. Or, another way to look at it: Interest is money having children – or money printing money.
- Modern banks could not survive if they were not allowed to charge interest on their fake money.
When you use your credit card, you are printing money. There is no money in a credit card. The only thing behind a credit card is your good credit. Your good credit is the bank’s collateral. In America, your credit is measured via a FICO score, a measurement of how creditworthy you are. The difference is that when you use your credit card, you are printing money for the bank – money you have to pay back and, likely, pay interest (in kind) on.
When you borrow money for a car, home, or business loan, you are printing money. You are printing money for the bank, and the bank charges you interest on their newly printed money.
Printing Money #2: The Fractional Reserve System
Printing Money #3: Derivatives
Derivatives from an Orange:
Think of an orange. When you squeeze the orange, you get orange juice. The orange juice is a derivative of the orange. When you take the water out of the orange juice, you have orange juice concentrate, a derivative of both orange juice and the orange.
Derivatives of Money:
Stocks are derivatives of a company. A mortgage is a derivative of real estate. And a bond is a derivative of money.
Printing Money #4: Inflation
1.With inflation, debt gets cheaper – because money gets cheaper – and debt can be paid back with cheaper dollars.
2.With inflation, people spend faster. They are afraid prices will go up.
3.With deflation, people do not spend. They wait for prices to get lower, which may lead to financial depression.
4.Historically, when the gap between the rich and everyone else grows too wide, revolutions occur.
When inflation fails, many countries have suffered hyperinflation, often fueled by a hyper-printing of money. The Chinese symbol for crisis is made of two words: danger plus opportunity.