Everybody is worried about THE BOMB. Will Iran build one? Does North Korea have one?
I’m more concerned that our economy will be blown to Smithereens first by the misguided Keynesian policies of our own Federal Reserve.
Ask any ten people you meet: What is the Federal Reserve? Who owns it? What do you know about the Fed’s power, policies, politics, leaders, and motives?
If you know anything at all about the Fed, you are a rare American, indeed. Although the Fed controls the value of our money and indirectly manages the economy of the United States and its 300 million citizens, most of us have no clue what it’s about. Since the Fed’s creation 100 years ago we have blindly trusted this mysterious organization with our hard-earned wealth and that of future generations.
Is it a government agency? Well, not exactly. It isn’t owned by the government. It was created by the Federal Reserve Act of 1913 and signed into law by the most progressive president in our history, Woodrow Wilson – Democrat, racist, proponent of eugenics, and enemy of the constitution. The Fed’s leadership is appointed by the sitting U.S. president, and its actions are supposedly under Congressional “oversight”, although it claims total independence from political influence.
The assets of the Fed come from privately-owned banks who allocate a portion of their depositors’ funds to the central bank. Do these private bankers own the Fed? Again, not exactly. But they are getting a pretty good deal out of the “partnership.”
That 6.00% statutory dividend paid to the banks sure beats the heck out of the 0.05% interest you are receiving from your savings account. Meanwhile, the big banks use your deposits to buy risky derivatives and stocks, knowing that the government will be right there to bail them out with your tax money if their gambles don’t pay off. Not a bad gig.
For years the Fed has been “printing money”. While they aren’t actually cranking out dollar bills with a printing press, they have been regularly expanding the money supply by buying treasury and mortgage bonds with “credit” – a practice called quantitative easing. When the money supply (dollars) expands for no reason (no real wealth has been created) it obviously decreases the value of every other dollar that exists. The price of everything goes up. It’s called inflation.
At the same time the Fed holds interest rates to near-zero for years in the hope that it will spur economic activity. This misguided policy has had the opposite effect, as banks fear making long-term loans in what will surely be an extended period of ugly inflation.
So congratulations for working hard, earning money and saving it. You are not only receiving zero interest, but the dollars you have in the bank are worth less every day. And while the value of your dollar plummets, so does real family income and employment.
And who benefits from the policies of the Feds? It seems the big banks are doing fine. Fed Chairman Ben Bernanke announced last week that the Fed will continue to “print” $85 billion a month. That means the banks will buy more stocks and derivatives with wealth squeezed from your saved dollars, and the government will pay more entitlements in lieu of wages derived from earned profits. It’s clear to me that the Fed exists to protect the bankers, and lately that has been at the expense of the citizens and taxpayers.
I don’t know if Iran has the brainpower or the money to build a nuclear bomb. And I guess I’ll just trust Dennis Rodman to take care of the situation in North Korea. But if we don’t get the Fed under control soon, the Dollar Bubble is going to blow up, and it won’t be fun.
Tom Balek – Rockin’ On the Right Side
And then you dropped me to the ground
You dropped a bomb on me.
You Dropped A Bomb On Me – Gap Band