Discussion in 'Current Events' started by wkmac, Nov 25, 2008.

  1. wkmac

    wkmac Well-Known Member

    [FONT=Georgia, Times New Roman, Times, serif][FONT=Times New Roman, Times, serif]The Fed and Its Lies[/FONT][/FONT]

    [FONT=Times New Roman, Times, serif]by Anthony Gregory[/FONT]​

    [FONT=Times New Roman, Times, serif][FONT=Times New Roman, Times, serif]Based on a talk given outside the Federal Reserve Bank of San Francisco, on November 22, 2008, during the first national End the Fed Rally, the grassroots protest at every Fed office and bank in 39 cities all over the United States.[/FONT]
    [FONT=Times New Roman, Times, serif]Last month, Alan Greenspan told a House panel that the current financial crisis has shown he had "made a mistake" in trusting the free market to regulate itself. As a true free marketer, I took offense at this. Here he was, the former head of the Federal Reserve, the governmental monopoly of the money supply, implying that what he had championed was free-market capitalism. [/FONT]
    [FONT=Times New Roman, Times, serif]Of course, a true free market would mean a separation of money and state. There would be no Fed, no central bank, no legal tender laws. Private currencies would be free to compete with one another. Money originally emerged as a market mechanism and it could and would again be completely managed without government intervention of any kind. What most of us here would expect to happen is to see gold and other precious metals once again take the role as the premier money in our economy.[/FONT]
    [FONT=Times New Roman, Times, serif]This all brings us to the major myth behind the Fed: That it is the center of our free enterprise system. In fact, it is the exact reverse. It is the state’s tool for socializing and intervening in the most crucial of all commodities in an exchange economy – money itself. Going back to the Hamiltonians who always wanted a national bank to fund their pet corporate welfare projects, the central bankers and their advocates have always been the great enemy of free markets in America. [/FONT]
    [FONT=Times New Roman, Times, serif]This ties into another persistent myth, one that forms a paradox with the free-enterprise myth and one just as important in muddling the debate and public understanding over this issue. That myth is the lie that unregulated banking was dysfunctional and predatory until the Federal Reserve reined in the big banks all for the sake of the little guy. [/FONT]
    [FONT=Times New Roman, Times, serif]If the free-enterprise myth is the thesis of monetary propaganda, and the progressive myth is its antithesis, they both serve together to form the synthesis of all of us being ripped off and very few understanding what is happening. In reality, the Fed is the worst of both worlds: Privatized profits and socialized risk: It is the key to corporate socialism and the corporate state: It is the intersection of the wealthiest private interests with the brutal power and monopoly that only the government can offer: It is economic fascism in our midst.[/FONT]
    [FONT=Times New Roman, Times, serif]Indeed, the Fed was signed into law by Woodrow Wilson at the height of the Progressive Era, and soon enabled the U.S. government to become a global empire, especially with its horrific entry into World War I. The central bank was admittedly sold to the public as a way to protect the people from greedy bankers. But we all know that when representatives from banking giants J.P. Morgan, the First National Bank of New York, the National City Bank of New York, and Kuhn, Loeb & Company met at Jekyll Island in 1910 to plan the creation of the Federal Reserve, their interest was not to curb their own power and wealth. [/FONT]
    [FONT=Times New Roman, Times, serif]It is a lasting irony that the key triumph of progressive economic planning was the Fed, for the Fed provides the most regressive form of taxation in our society. The new money and credit coming from the Fed do not become distributed evenly among the general population. It all goes to the central bankers, the government itself, the politically connected corporate interests, the military-industrial complex, and favored firms on Wall Street. Meanwhile, the value of the dollar declines. It is wholesale robbery from the poor, the middle class, and those on fixed incomes, all to benefit the most politically and financially powerful elite in American society. [/FONT]
    [FONT=Times New Roman, Times, serif]The last great myth behind the Fed is that it leads to stability. Well, for the power elite, perhaps, but not for the country or international economy as a whole. At the center of this myth is the idea that the Fed keeps inflation in check, which is like saying the Pentagon wages peace. In fact, the Fed’s operations are inflation. That’s what it does. It has caused prices to increases virtually every year since 1913, simply by increasing the money supply.[/FONT]
    [FONT=Times New Roman, Times, serif]Then there is the idea that the Fed keeps the booms and busts in line. This is another total reversal of the truth. In a normal market setting, savings and inflation would be in harmony. The willingness of some to save and the demand of others for credit would work out to an equilibrium and produce the market interest rate. The Fed’s injection of new money into the system undoes this delicate balance. People get cheap credit and invest wildly in projects for the future, but those low rates no longer correspond to high savings. The consumers are still spending like crazy, the investors are investing like mad. This is what causes booms and eventually busts. When years later, people have not saved up enough to purchase all the products being produced through long-term investment projects, we have the bust. The Austrian Theory of the Business Cycle and sound economics help to explain the 1929 crash, 1970s stagflation after the guns and butter of the 1960s, the dot-com and real estate bubbles and all the other problems since 1913 that Keynesian economics doesn’t account for sufficiently. I suggest to everyone they read Murray Rothbard.[/FONT]
    [FONT=Times New Roman, Times, serif]Very recently, we’ve seen the Fed behave even more criminally than normal. Its operations are intrinsically fraudulent, but it has become even more brazen. It has reached for new powers to become more directly involved in financial central planning. During the Billionaire Bailout deliberations, the Fed was injecting hundreds of billions into the economy even without Congress or the president or anyone else having a word to say about it. In the last couple months alone we’ve seen a 40% increase in the monetary base. Right now we are not feeling inflation and are thankfully having some deflation, the one welcome part of recession, but within a year or so we can expect very significant inflation. Prices will go back up. And as in the 1970s, we might have the worst of both worlds as unemployment rises along with inflation. Predictions are always tricky but we are probably in for a wild ride, and of course Obama and his team of establishment crooks will not do anything to reverse this. [/FONT]
    [FONT=Times New Roman, Times, serif]Everything the Fed does is based on a foundation of lies. It does not represent the free market. It does not curb corporate greed for the benefit of the little guy. It does not stabilize prices or the economy in general. It does not prevent inflation or the boom and bust cycle. Everything the establishment, both political parties, the mainstream media and the government have said about the Fed is the opposite of the truth.[/FONT]
    [FONT=Times New Roman, Times, serif]It is great to see this grassroots movement, all around the country, all united against our common enemy, the central bank. We don’t all agree on everything, we come from different political viewpoints, but we do share a very vital common interest on this neglected issue. [/FONT]
    [FONT=Times New Roman, Times, serif]If you really believe in true free enterprise and oppose seeing it destroyed in its own name, [/FONT]
    [FONT=Times New Roman, Times, serif]If you hate seeing the poor and middle class squeezed dry to benefit the privileged elite,[/FONT]
    [FONT=Times New Roman, Times, serif]If you want an economy of openness, fairness, and honest balance sheets, [/FONT]
    [FONT=Times New Roman, Times, serif]If you are sick of seeing the people responsible for our booms and busts claim they know the answer, when their only solution is more of the same,[/FONT]
    [FONT=Times New Roman, Times, serif]If you oppose profligate spending and reckless social engineering from Washington, DC, without any consideration of fiscal discipline,[/FONT]
    [FONT=Times New Roman, Times, serif]If you oppose the government’s perpetual wars and empire, which is funded through inflation so as not to stir up resentment through high direct taxes,[/FONT]
    [FONT=Times New Roman, Times, serif]Then we do have common cause. Fight the power. End the Fed.[/FONT]

    source of the above:

    Well said IMO. You can find more by Anthony Gregory @

  2. Monkey Butt

    Monkey Butt Dark Prince of Double Standards Staff Member

    IMHO - Too much to read...I come here to interact with people. Just a thought. :peaceful:
  3. wkmac

    wkmac Well-Known Member

    Ignore is just a mouse click away!
  4. wkmac

    wkmac Well-Known Member

  5. av8torntn

    av8torntn Well-Known Member

    From Ron Paul.

    On the Floor of the United States House of Representatives
    November 20, 2008
    Madame Speaker, many Americans are hoping the new administration will solve the economic problems we face. That’s not likely to happen, because the economic advisors to the new President have no more understanding of how to get us out of this mess than previous administrations and Congresses understood how the crisis was brought about in the first place.
    Except for a rare few, Members of Congress are unaware of Austrian Free Market economics. For the last 80 years, the legislative, judiciary and executive branches of our government have been totally influenced by Keynesian economics. If they had had any understanding of the Austrian economic explanation of the business cycle, they would have never permitted the dangerous bubbles that always lead to painful corrections.
    Today, a major economic crisis is unfolding. New government programs are started daily, and future plans are being made for even more. All are based on the belief that we’re in this mess because free-market capitalism and sound money failed. The obsession is with more spending, bailouts of bad investments, more debt, and further dollar debasement. Many are saying we need an international answer to our problems with the establishment of a world central bank and a single fiat reserve currency. These suggestions are merely more of the same policies that created our mess and are doomed to fail.
    At least 90% of the cause for the financial crisis can be laid at the doorstep of the Federal Reserve. It is the manipulation of credit, the money supply, and interest rates that caused the various bubbles to form. Congress added fuel to the fire by various programs and institutions like the Community Reinvestment Act, Fannie Mae and Freddie Mac, FDIC, and HUD mandates, which were all backed up by aggressive court rulings.
    The Fed has now doled out close to $2 trillion in subsidized loans to troubled banks and other financial institutions. The Federal Reserve and Treasury constantly brag about the need for “transparency” and “oversight,” but it’s all just talk — they want none of it. They want secrecy while the privileged are rescued at the expense of the middle class.
    It is unimaginable that Congress could be so derelict in its duty. It does nothing but condone the arrogance of the Fed in its refusal to tell us where the $2 trillion has gone. All Members of Congress and all Americans should be outraged that conditions could deteriorate to this degree. It’s no wonder that a large and growing number of Americans are now demanding an end to the Fed.
    The Federal Reserve created our problem, yet it manages to gain even more power in the socialization of the entire financial system. The whole bailout process this past year was characterized by no oversight, no limits, no concerns, no understanding, and no common sense.
    Similar mistakes were made in the 1930s and ushered in the age of the New Deal, the Fair Deal, the Great Society and the supply-siders who convinced conservatives that deficits didn’t really matter after all, since they were anxious to finance a very expensive deficit-financed American empire.
    All the programs since the Depression were meant to prevent recessions and depressions. Yet all that was done was to plant the seeds of the greatest financial bubble in all history. Because of this lack of understanding, the stage is now set for massive nationalization of the financial system and quite likely the means of production.
    Although it is obvious that the Keynesians were all wrong and interventionism and central economic planning don’t work, whom are we listening to for advice on getting us out of this mess? Unfortunately, it’s the Keynesians, the socialists, and big-government proponents.
    Who’s being ignored? The Austrian free-market economists—the very ones who predicted not only the Great Depression, but the calamity we’re dealing with today. If the crisis was predictable and is explainable, why did no one listen? It’s because too many politicians believed that a free lunch was possible and a new economic paradigm had arrived. But we’ve heard that one before–like the philosopher’s stone that could turn lead into gold. Prosperity without work is a dream of the ages.
    Over and above this are those who understand that political power is controlled by those who control the money supply. Liberals and conservatives, Republicans and Democrats came to believe, as they were taught in our universities, that deficits don’t matter and that Federal Reserve accommodation by monetizing debt is legitimate and never harmful. The truth is otherwise. Central economic planning is always harmful. Inflating the money supply and purposely devaluing the dollar is always painful and dangerous.
    The policies of big-government proponents are running out of steam. Their policies have failed and will continue to fail. Merely doing more of what caused the crisis can hardly provide a solution.
    The good news is that Austrian economists are gaining more acceptance every day and have a greater chance of influencing our future than they’ve had for a long time.
    The basic problem is that proponents of big government require a central bank in order to surreptitiously pay bills without direct taxation. Printing needed money delays the payment. Raising taxes would reveal the true cost of big government, and the people would revolt. But the piper will be paid, and that’s what this crisis is all about.
    There are limits. A country cannot forever depend on a central bank to keep the economy afloat and the currency functionable through constant acceleration of money supply growth. Eventually the laws of economics will overrule the politicians, the bureaucrats and the central bankers. The system will fail to respond unless the excess debt and mal-investment is liquidated. If it goes too far and the wild extravagance is not arrested, runaway inflation will result, and an entirely new currency will be required to restore growth and reasonable political stability.
    The choice we face is ominous: We either accept world-wide authoritarian government holding together a flawed system, OR we restore the principles of the Constitution, limit government power, restore commodity money without a Federal Reserve system, reject world government, and promote the cause of peace by protecting liberty equally for all persons. Freedom is the answer.