A Copernican Revolution in American Economics!

On average that’s how much the American economy grows annually. That’s, on average, how much new value is created each year by the American economy. 330 MILLION! That’s the approximate population of the USA in 2021. So, if you divide $4 trillion dollars by 330 million people, you’ll find that, on average, the American economy grows at the rate of $12,000 per person, annually.

With those figures in mind, let’s explore what happens if the Federal Reserve, through local banks, issued $12,000 worth of CAPITAL CREDIT at ZERO PERCENT INTEREST to every man woman and child in the USA, ANNUALLY? My question at this point is, has any money been spent? The answer is NO MONEY HAS BEEN SPENT! All that’s happened is that there’s been $4 trillion dollars of capital credit issued, all of which is just WAITING TO BE SPENT.

Note here that CAPITAL CREDIT is different from CONSUMER CREDIT because it can only be used to purchase wealth producing capital assets (stocks, bonds, land, buildings, machinery, patents, copyrights) that are expected to yield regular, predictable dividends to their owners.

Now suddenly, one person decides to use their capital credit to purchase $12,000 worth of blue-chip stock. At this point $12,000 HAS BEEN SPENT. But it’s INSTANTLY collateralized (secured so neither the local bank or the Fed are at risk) by the value of the rock solid, blue-chip stock that’s been purchased at zero percent interest.

In order to speed up the ownership process, the new owner is also allowed to repay this capital credit loan using PRE-TAX DOLLARS yielded by their stock. In other words, the new loan is automatically collateralized. The owner does not dig into his/her savings account. They don’t put a second mortgage on the family home. They pay the loan off using PRE-TAX, FUTURE EARNINGS/dividends. In investment circles this strategy is called “a Leveraged Buy-Out.”

On average, the loan will pay itself off (it’s self -liquidating) in 3 to 7 years. But the dividends continue to flow, creating a RESIDUAL INCOME for their owner. Multiply this scenario by 10 years and you’ll find that $120,000 has been invested on behalf of the owner by their 10th birthday. By the time they reach college age, over $200,000 will have been invested on their behalf which will provide all the residual income they’ll need to attend college, while incurring NO COLLEGE DEBT. And at retirement, the owner won’t need social security.

To repeat, not one thin dime is spent UNTIL a purchase is consummated. Once that happens the loan is instantly collateralized by the value of the wealth producing asset purchased. Then the self-liquidating loan pays itself off with pre-tax dollars in a predictable amount of time so neither the individual or the government incurs any long-term debt. And to make things even more secure, a small percentage of the purchase price is used to INSURE the entire transaction, just in case the rock solid, blue-chip stock fails to perform as expected and does not pay itself off.







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