Oh, Say, Can You Still See? 
Part 2: The Ultimate Franchise

By Dr. Russell McDougal

Dear Jane and Joe,

Yep, you’re being robbed blind.  Last week in Part 1, we looked at the utter failure of the Federal Reserve to meet its “price stability” mandate over the last 94 years.  It’s not hard to see through the haze how costly this has been to you.  Stay tuned for the final act.

This week I’m going to blow away more smoke, shatter a few mirrors, and demonstrate the mechanism that causes monetary myopia.  Have I got a deal for you!

Here’s the ultimate franchise for your consideration.  You will definitely want one or even two of them.  Forget Holiday Inn Express, Chick-fil-A, Chipotle, Boneheads, or Moe’s Southwestern Grill.  They are all way too labor and capital extensive.

This windfall business privilege is called Free Lunch Corp.  It has global market dominance, yet not one in 50,000 earthlings understands exactly how it functions or originated.  Let’s change that.

Who is going to grant you this franchise?  The government, naturally.  Even though you will remain a private corporation.  Not only that, but they actually mandate that each and every citizen within the fiefdom … excuse me, I mean nation … utilize only your particular product.  You will be guaranteed a monopoly!  It’s called the “legal tender” law.

You’ll need just a few tools once you are granted your franchise.  A simple computer, pencil, and some paper to write up a bunch of contracts are sufficient.  You can run the business from home or a fancy and tightly guarded marble-laden office.  It won’t matter because your overhead will be insignificant either way.

Once you’re in business, you’ll be instantly successful.  An entourage of personal servants will follow.  Rich folks don’t do their own shopping, make their luxury travel arrangements, or even draw their own baths.

What’s your product to be?  Here are some hints.  Global commerce is impossible without it.  People regularly lie, cheat, steal, kill, dream, and toil for it.  They spend a lifetime attempting to accumulate it.  They even hoard it so as to pass it down to future generations.  Not one soul believes they have too much of it.

Surely, you know by now you’ve been granted a license to print money.  You are now a fiat meister!  National or local franchises are available.  As a “banker,” you will soon be a pillar of your community.

How does it work?  Let’s first look on the local level.  Your computer is booted up and your pencil is sharpened.  One of your groveling neighbors is in your presence requesting financing for a home he’d like to build.  Perfect!  You’re now in business.

All you have to do is enter the amount requested into the computer and this precise amount of “money” becomes instantly available.  Voila!  Fantastic fiat has been created out of nothingness.  Your neighbor is eternally grateful (as well as indefinitely indebted).

What, you thought the bank already had real cash on hand to lend you?  How quaint.  That’s not necessary when they have a Free Lunch shop.

You can punch up the loan amount as well as the amount of interest Joe and Jane have to pay you.  Could be anywhere from six to 22 percent annually.  Their years of toil might just eventually pay back the amount you so gracefully and effortlessly punched into the keyboard.

If you really get lucky with a particular loan, it will go into default. Then you, as a banker, get the entire house the loan from your keyboard was based on.  This paper money printing business can be really lucrative.  Too bad debt isn’t addictive.  Or is it?

On the other hand, a successful loan gives you, as the franchisee, the privilege of punching up eight more presto change-o transactions.  Debt begets more debt.  You can compound some interest in a hurry this way.  Forget about that house.

The entry level for local Free Lunch franchises is pretty high, but attainable.  National franchises are another story altogether.  You pretty much have to be born into that privilege.  Changing your name to Morgan, Schiff, Rockefeller, Lazard, Warburg, Rothschild, or Lehman will not suffice.  Don’t worry if you’re not actually an American.  That gives you better odds of ownership.

Any of these franchises will require you to pledge an allegiance to usury.  But there are worse practices.  Besides, practically no one has the slightest idea how your franchise works in the first place.

Each and every country grants national fiat franchises.  Whoever said there is no such thing as a free lunch must be from another planet.  Next week, we’ll look at the national “Bucks R Us” group.  They are the masterminds of this entire mechanism.

Could you imagine lending monetary needs to an entire country and collecting the interest for yourself?  Too cool.  Even the insurance guys are jealous over this one.

Invest Resourcefully,

Rusty

P.S. You can read volumes of complex monetary and economic books and still be exceedingly confused about how paper money works.  It is designed to confuse.  A simple explanation in “plain English” is therefore appropriate.  You’ve just seen how fiat money is created through debt.  My apologies to all the honest bankers out there caught up in this global scam.

P.P.S.  To let me know what you thought of today's article, send an e-mail to: feedback@investorsdailyedge.com.

[Ed. Note: Dr. Russell McDougal has dedicated years of study and investing in the natural resources exploration sector. During that time he has closed out DOZENS of gains of 500%... 1,000%... 2,000% and more! Currently he is sitting on multiple thousand percent winners, including one stock that is up a whopping +5,000%. And for a select group of investors, Rusty has agreed to share his secrets of success... and his top stock recommendations. Click here to learn more... ]

Market Watch

Could Lending Help
the Market Find a Bottom?

By Charles Delvalle

As I glanced at the front page of MarketWatch on Tuesday, I noticed that Citibank (C) received a $7.5 billion injection from the Abu Dhabi Investment Authority.  The day before, a Dubai investment firm bought a major stake in Sony (SNE).  And last week, Advanced Micro Devices (AMD) sold eight percent of the company to an Arab investment firm.

Could a new wave of lending boost the market in the months ahead?

Let’s see … China has an estimated $1.4 trillion in reserves.  And they aren’t alone.  Arab nations, commodity exporters, and developing nations are all flush with cash from the global growth boom.

It’s only a matter of time until they put their money into cheap, beaten-down companies.  Considering the U.S. market is down 10 percent (some financial companies are down more than 30 percent), it seems like a perfect time to get some great deals.

As this money flows into the market, you can expect investors to regain confidence and take stocks higher.

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