Let's ask an important question.
Since the Federal Reserve System controls our currency and along with the government determines where the newly created inflationary money goes, who is responsible for every economic crisis we have experienced since 1913, the year special interests created this engine of monetary mayhem? I believe we can see that the answer is inherent in the question.
Isn't it about time we abolished the Federal Reserve System and instituted a 100% gold Standard? Does anyone really believe it has stabilized the purchasing power of the dollar since its creation in 1913.
Are you ready for the facts? Since special interests created the Federal Reserve System a century ago, the dollar has lost almost 95% of its purchasing power.
Now that's what I call stabilizing the purchasing power of the dollar! I believe a more accurate description is destroying its purchasing power.
Here's something that might interest you.
Let's go back to the year 1950, the beginning of the fabulous 50's and check prices.
Here they are.
1.
Average annual income - $3,210.
2.
New car - $1,510 3.
Loaf of Bread - 12 cents 4.
Gallon of gas - 18 cents 5.
Pound of coffee - 70 cents 6.
New house - $8,450 7.
Ounce of gold - $35 I'm sure you get the idea.
The paper money standard doesn't work very well.
In fact, it's a dismal failure.
Let's further discover why the Federal Reserve System is the "King of Economic Chaos.
" First, we need to define inflation.
Inflation is an increase in the quantity of money (money supply) which results in a drop in the purchasing power of the monetary unit.
Of course, deflation is a decrease in the quantity of money (money supply) which results in an increase in the purchasing power of the monetary unit.
This is important.
Other things remaining equal, rising prices are an effect of inflation, while declining prices are an effect of deflation.
Governments prefer inflation because they can pay off special interests with fiat money.
We must face a hard fact that establishment economists and money cranks refuse to face.
Increases in the quantity of money (money supply) cause economic distortions.
During the past 25 years, the Federal Reserve System recklessly increased the money supply causing the stock market boom, the tech boom and the housing boom.
When, the Maestro of Monetary Mayhem, Alan Greenspan lowered the Federal Funds rate to practically nothing (to counterbalance the effects of the tech collapse), he guaranteed there would be an unsustainable boom somewhere in the economy.
Conditions dictated the inflationary money went into the housing market.
Did marginal buyers really benefit from going into debt to pay for a house they couldn't afford.
Illusions are just that-illusions.
All artificial booms end in busts.
Here's another problem with the Fed's inflationary policies.
Inflation manifests as a transfer the wealth scheme benefiting the people who first receive the newly created "money", at the expense of the rest of us.
Who receives the inflationary money first? Members of the financial establishment.
Who pays higher prices once the inflationary money moves through the economic system? Non-members of the financial establishment.
Those unfortunate individuals who exist on a fixed income automatically lose purchasing power, the ultimate rip-off.
Thrifty people who save money discover that their purchasing power has declined.
Plain and simple, paper money allows members of the establishment to live at the expense of honest citizens.
The Fed confers incredible monetary benefits on members of this elite group, while the rest of us suffer the pain of diminished purchasing power.
Isn't central banking wonderful? What would we do without the Fed? Well, we would experience a real economic boom; not the artificial boom and bust cycles we have suffered time after time.
The Fed has systematically increased the money supply since its creation in 1913, accelerating its destructive policy over the past 25 years.
Isn't it time we abolish the Federal Reserve System, replacing it with a 100% Gold Standard.
By the way, if you are interested in investigating price changes over 10 year periods beginning in 1920 click here.
Robert Meyer The Libertarian Way