© Inspiracy Truth all rights reserved Now, imagine life on Bikini Bottom with: Spongebob, Patrick, Mr.Krabs , and Ben Bernanke Head of the Federal Reserve (played by Squidward).   Imagine that there was only one thing to buy on Bikini Bottom, Krabby Patties (KP). Now, we know that these four people would need more than just Krabby Patties to survive. They would need clothing and shelter and might want other comforts that Bikini might provide. They would all provide different services to each other and trade them for the services of the others. But in this example, the only thing that they trade for are Krabby Patties. Mr. Krabs owns the Krusty Krab, which produces 100 KPs per year. Mr. (Squidward) Bernanke is in charge of the currency, the Bikini Reserve Notes (BRNs). In order to purchase the only available product for sale on the bottom, one must use BRNs. Barter or the use of other commodities to make this purchase is prohibited. Each KP costs 1 BRN. Spongebob and Patrick each perform different services for each other which they trade for these paper notes in order to buy KPs. After a year Spongebob and Patrick each have 50 BRNs. There are a few things that are true. The first is that the BRNs held by Spongebob and  Patrick have no value of their own. Their value comes from the krabby patties that they can buy with the BRNs. Neither do the BRNs have any value away from Bikini bottom. Back on land, the currency is not recognized, although if Sandy were to acquire some BRNs, she would be able to purchase krabby patties with them when she went to Bikini Bottom. Secondly, Spongebob and Patrick are equally wealthy, not because they both have the same amount of BRNs, which don’t have any intrinsic value, but because they are both able to buy an equal quantity of krabby patties. They are each able to buy one half of all the KPs produced in one year in Mr. Krabs restaurant. In other words, each has the same purchasing power in the Bikini economy. Now, suppose Mr.(Squidward) Bernanke decided to print 5 additional BRNs and give them to Patrick. Patrick would immediately be wealthier, as his purchasing power has now increased by 10 percent. He can now buy 55 Krabby patties instead of 50. But where did this new purchasing power come from? Was it really created out of thin air just by printing additional BRNs? Mr. ( Squidward)Bernanke might say yes. However, there are still only 100 KPs available to purchase. Since there is no way for Mr. Krab’s Krusty Krab to produce more than 50 krabby patties during the current year, it would seem that Spongebob can still buy 50 KPs, Patrick can likewise buy 50 and his 5 additional BRNs are worthless until there are more krabby patties available to purchase. How can Patrick take advantage of the additional BRNs? Obviously, there is only one way. Rather than trading 1 BRN for each KP, Patrick will now offer Mr. Krabs 1.10 in BRNs per krabby pattie. This is the new market price, which Spongebob has to pay as well. Mr. Krabs certainly isn’t going to sell krabby patties to Spongebob at 1 BRN a piece when he can get 1.10 from Patrick. So, with Spongebob and Patrick each paying 1.10 per KP, Patrick is now able to buy 55 KPs, while Spongebob can only buy 45. What we have seen is a transfer of wealth. Patrick is now 5 KPs wealthier. However, this new purchasing power was not magically created simply by printing the 5 extra BRNs. It was transferred from Spongebob, who can now afford only 45 KPs, even though he has the same amount of BRNs that he had before. No one snuck into Spongebob’s house and removed any of his money. He still has the exact same amount. But he has been robbed nonetheless. Regardless of how important the reasons given for printing the new BRNs and giving them to Patrick – to stimulate the economy, create new jobs, etc. – it was nevertheless accomplished through theft. It should also be noted that no additional wealth has been created. The total number of krabby patties that Spongebob and Patrick are able to purchase are still 100. The wealth has simply been redistributed from Spongebob to Patrick. Imagine if this were to go on for decades. At some point, Patrick would be fabulously wealthy and Spongebob would be poor. Now, the only reason that this theft is possible is the law that forces Spongebob to use the BRNs. If he were able to pick shells and offer them in trade for the KPs, he might be able to produce enough in shells to buy more KPs than Patrick. Only the power invested in Mr. (Squidward) Bernanke allows him to transfer wealth and it is the only power he has. He doesn’t produce a single krabby pattie himself. He simply decides how those KPs are going to be distributed. Of course, no economy is this simple. There is never only one product or service to purchase in any economy. However, even if there were four – or 300 million – the principle would remain the same. There would be some finite amount of wealth that all of their efforts combined could produce. All other factors being equal, printing new BRNs and distributing them unequally among the inhabitants would produce the same increase in prices and the same redistribution of wealth. So, my conclusion ends with these questions; Why does Spongebob allow the BRN System to continue? Why does the United States Government not print its own money free of interest? INFLATION