I just read an MSN money article (11/8/05) that said if you make less than $57,343 annually, you either are already or soon to be behind the financial eight ball. Not to mention, the article cited according to 2003 IRS statistics, 75% of Americans fall into this category.

The articles conclusion? Though Americans in the top 1-25% over the last 10 years have and continue to expand their purchasing power, those in the 75% are increasingly at risk of losing purchasing power especially given increasing energy and medical costs. Thats not to mention the outsourcing and downsizing of jobs, the loss of company pension plans and unrelenting increases in college tuitions, property taxes, homes, automobiles and grocery bills.

Growing statistical evidence adds credibility to the mounting financial challenges faced by the majority of Americans. How could this be in the land of the American Dream and why does the slide into dire straits seem like a slow-motion inevitability for so many? Where are our leaders when we need them to lead us to a safe harbor?

Unfortunately, the various solutions offered by well-meaning financial professionals do not stop the bleeding. Have you noticed? For example, debt-consolidation, bankruptcy, budgeting and frugality measures, downsizing and responsible credit use may help for a while but remain Band-Aid measures, at best.

As usual, there is a reason for that. No problem in life, financial or otherwise, can truly be effectively reversed without first unearthing its root cause.

We spend most of our waking lives earning and spending money one way or another. Yet, almost all of us do so without understanding the role money plays in the context of a global monetary system. Nothing occurs in a vacuum - especially money! The truth is, you and I are not fully informed about how money works until we have taken into consideration the system of which it is a part. For example: You can discipline a child who is exhibiting behavioral problems at school but, truth is, the discipline will have little, if any, long-term effect. To impact the problem so that the child shows meaningful improvement requires knowledge of the childs home life and the family system in which he or she lives.

Planets dont magically rotate and revolve. Theyre influenced by the gravitational pull of other planets and stars. Animals, plants, water and air are hardly mutually exclusive from one another. Theyre all a part of the eco-system that surrounds us. If something occurs to dramatically affect one then there will surely be an effect on all the others. Were taught these things when were young and eventually they become a part of that largest of all libraries, common sense.

Incredibly, when being taught about money, either by family, friends, universities, or the school of hard knocks, most of us are never educated about the larger framework within which money exists. The result? Our important financial and life decisions are made without the benefit of complete, accurate information about money.

The monetary system I refer to is global in nature with operations in 17 countries, including the United States. Commonly known as The Federal Reserve Banking System, it functions via a network of what are called central banks. Central banks worldwide use a system called fractional reserve banking to put money into circulation and are the only authorized banking entities able to do so. The process of issuing currency begins with a governments request to borrow money from a central bank. Of course, money borrowed by a government must be repaid with interest.

This procedure eventually trickles down to the consumer who requests a loan from their local bank. In other words, ALL money, everywhere in the world goes into circulation at the time its borrowed. The borrowing process multiplies the volume of currency in circulation while simultaneously causing moneys value to decrease over the course of time from the cumulative affect of compound interest. (Think loss of purchasing power.) Take a look at any U.S. paper currency and you will see the words Federal Reserve Note prominently stated. A note represents credit, requiring repayment. Every time you make a purchase you do so with an IOU!

Heres the rub. That one-dollar IOU in your pocket is no longer worth the one dollar it started out as in 1913 when The Federal Reserve Bank began in the United States. Nearly 100 years later after the issuance of gazillions of dollars in loans (that had to be repaid with interest), expert consensus is that a dollar now has the purchasing power of between only 5 and 13 cents. (Think: Money depreciates like a car!)

Now back to those 75% of Americans. Without understanding the personal implications of currency creations built-in hidden inflation, going forwardwere all in duck soup! This missing piece of information about how money works, not only fully informs us, but also calls us to make course corrections regarding how we think about, spend, earn, save and invest money.

Since traditional financial solutions do not rest on the root cause, they also fail to solve the magnitude of the problems families and individuals face today. If Americans (and people worldwide) desire to maintain or regain their financial equilibrium, they need to seek out personal finance approaches based on the full story about money. No one is immune to the effects of hidden inflation.

That being said, your financial advisor is still likely to tell you otherwisethat if you do what he or she says, everything will be fine.