Folks talk about the machinations of the Federal Reserve as if it is some sort of difficult process to understand, clothed in secrecy and veiled in mystery. Nothing could be farther from the truth. What the Fed does is simple to understand. If you do not understand what the Fed does, consider these truths:
- The federal government almost always spends more money than it takes in via taxes. The career politicians who approve all of the profligate spending do so because each spending program buys them more votes, thus allowing them to remain career politicians.
- Career politicians realize that they can only take so many eggs from the golden goose. They heavily tax the top 49% of the income population, thus ensuring that the majority of the voters still support them, but they also realize that taxation is a hindrance to capital creation. Career politicians want the economy to grow so they can continue to fleece it. As a result, they limit their taxation to some level below the point where it would actually destroy the economy.
- To give themselves to an unlimited supply of money to pay for their myriad boondoggles the Federal Reserve was created. The Fed is the federal government's personal banker and it exists for just one reason....to make loans to the federal government.
- If the Fed made real loans, using real money that already circulates through the economy, we would have no problem. The Fed does not use real money. Instead, the Fed creates counterfeit money at will and feeds it to the career politicians to spend on their vote-buying agendas. The actual process by which the money is created and funneled to the politicians, involving the Department of the Treasury as a complicit criminal, is unimportant. All you need to know is that all money created out of thin air by the Fed is counterfeit money.
- The money supply in a country should remain static. A static money supply, coupled with a growing economy, guarantees ever decreasing prices and an ever strengthening currency. Those are both good things, despite what the propaganda mills of the government and government approved schools of economoics try to tell you. Each and every counterfeit dollar created by the Fed and "injected" (their terminology) into the economy reduces the value of the existing money supply. For example, if there were one million dollars in circulation in the SDA yesterday and last night the Fed injected one hundred thousand new dollars into the economy, each dollar in existence the day before would be worth ten percent less today. Conversely, the prices of goods and services purchased by those dollars would be ten percent higher today. That is called inflation and inflation is the economically necessary result of counterfeit dollars being created by the Fed.
You will notice that the supply of money has almost doubled in the past ten years, going from just under 7 trillion dollars ten years ago to almost 13 trillion dollars today. Although economic growth and the ceaseless efforts of profit seeking businesses operating in the semi-free market have ameliorated a great deal of the damage done by that rate of inflation, the fact still remains that the dollar is being devalued. You need to have $115 to purchase the same amount of goods or services you purchased for $100 ten years ago. That $15 difference is evidence of theft. Just like Wal-Mart has to raise prices to adjust for the shoplifters who steal from its stores, so the dollar goes up in total numbers to adjust for the counterfeit dollars created by the Fed.
This process is easy to stop. Career politicians could pass a law tomorrow outlawing the Fed. Ron Paul attempted to outlaw the Fed for years but was always ignored by his fellow career politicians. There is a good reason for why the Fed will never be outlawed. The majority of the people who live in this socialist democracy want free stuff from the federal government. Most of the time they think the free stuff is being paid for by the top 49% of the income population and they are quite happy to use the government to steal from that politically unprotected class. At the same time they are too stupid to realize that a portion of the cost for their free stuff is being borne by them as the value of their dollars constantly erodes under the impact of counterfeit currency. As long as the majority of the voters in this immoral land believe they can get something for free from the federal government we will see the Fed operating as an immoral source of counterfeit dollars for the career politicians who run the show. That makes all socialists, self-professed or simply de facto ones, complicit in the theft and robbery of the career politicians and the Fed. We truly live in a den of thieves.