Posted on 09/19/2017 7:24:05 PM PDT by Tolerance Sucks Rocks
I recently had the opportunity to read "The Creature from Jekyll Island" by G. Edward Griffin, a prodigious tome dealing with the circumstances surrounding the creation of the U.S. Federal Reserve System. I was taken aback by some of its provocative assertions.
One that stood out is that over successive generations, people with concentrated wealth have sought to use the American military and the purse power of the taxpayer for personal gain. In fact, Griffin argues, the creation of the current iteration of the Federal Reserve System was a political act designed to hide the fact that a private banking cartel would manage the U.S. currency.
The Federal Reserve, as Griffin explains, is neither "federal" nor a "reserve." It is not owned by the federal government, and it does not hold real assets in reserve. In reality, it is a giant debt factory backed by the "full faith and credit" of the government, or taxpayers.
One thing is clear. In the aftermath of the global recession of 2008, America and the world have been swimming in debt. America’s national debt alone has skyrocketed. While the Fed continues to justify flooding the market with cheap "reserve notes" based on the theory that it must supply these notes in order to support asset prices, the overall effect has been to debase the currency and prolong the pain of the American people.
As an entrepreneur who owns real assets — real estate, spectrum licenses and a publishing library, among others — I was able to benefit, at least on paper, from the Fed’s asset inflation strategy. I have been able to refinance my debt at attractive rates, and I've seen asset prices (but not necessarily values) climb. But others, especially workers (who derive the bulk of their income from salary instead of capital appreciation) and savers (retirees living on a fixed income), have lost under this post-recession scheme.
Workers lost because their spending power diluted drastically over the past 10 years. The costs of housing and energy have continued to rise in areas where the highest concentrations of jobs are located. For example, a young college graduate who wants to earn a high salary in the tech industry has to live in Silicon Valley, where even a base salary of $100,000 won’t enable them to afford to purchase a home there. Home prices are so out of line with average salaries that cities like San Francisco and Los Angeles are seeing an epidemic of homelessness never experienced since the Great Depression of 1929.
Savers have lost because the interest income they were counting on earning from their lifetime of saving has dwindled to less than nothing. These days, in most cases, you actually have to pay the bank to keep your money there. And so many retirees have had to tap into their home mortgages or take on additional consumer debt merely to survive. As America faces the largest retirement boom in its history — the retiring baby boomers — more than two-thirds of them do not have enough savings to retire comfortable. And on top of that, the Social Security system that was to be a back-stop against poverty for older Americans is practically insolvent.
The unwieldy national debt also causes friction for entrepreneurs. Governments have sought to increase taxes, regulations and fees on entrepreneurial activity in order to service the ballooning debt. This has sucked critical capital out of the system that entrepreneurs need in order to grow businesses and drive employment. With consumers still reeling from the great recession, demand for goods and services is lagging employment growth by a significant margin, further constraining opportunities for entrepreneurs.
The great project to rescue the American economy by the Fed has hit an obvious wall. The debt it used to goose the economy is now gumming up the system and constraining real growth. The looming question of what actually happens when the debt bubble finally bursts is one that not even the soberest economists at the Fed have been able to confront effectively. Unless we deal finally with the false notion that "central economic planning" can replace actual capitalism as the driver of American growth, we may be in store for far, far worse.
Armstrong Williams (@ARightSide) is author of the brand new book, "Reawakening Virtues." He served as an adviser and spokesman for Dr. Ben Carson's 2016 presidential campaign, and is on Sirius XM126 Urban View nightly from 6 p.m. to 8 p.m. Eastern.
Its nice work, if you can get it.
I guess. Luckily we don’t need them very often.
We don't need them at all. They should be hanged for crimes against humanity.
Did much better since 2008.
Screwed up with Russian default, Tech-bubble, housing too
But its the nature of all Central Banks. They are agents of government and the powerful, to protect their interests.
In the USA the maintain the pretense of independence. In China, they just do what the Party and Government tell them
The result is the same though.
How so?
But its the nature of all Central Banks. They are agents of government and the powerful, to protect their interests.
I agree, it's not in the interest of the government and the powerful to have the banking system crumble in a financial panic. Of course a banking system meltdown sucks for regular people too.
I considered that a year ago when he started spouting off about our monetary system in which he doesn’t have the foggiest idea on how it operates, and I think you are right which is why I didn’t respond to him, but he did respond to my post?? Paid Schill for the Money Changers.
You make the false assumption that central banks can prevent or mitigate financial panics
How did that compare to 2008-2010?
Why is it the Fed’s job to prevent banks from failing?
According to the Fed itself, the number of commercial banks in the USA declined by 20% from 1920-29 anyway.
Besides, is there a government / private agency to prevent computer companies, railroads, or any other business from failing?
A private central bank issuing a public currency is a greater menace to the liberties of the people than a standing army... We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty or profusion and servitude. If we run into such debt, as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our calling and our creeds...[we will] have no time to think, no means of calling our miss-managers to account but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers... And this is the tendency of all human governments. A departure from principle in one instance becomes a precedent for [another]... till the bulk of society is reduced to be mere automatons of misery... And the fore-horse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression.
~ Thomas Jefferson
Depends. Why are the banks failing?
Besides, is there a government / private agency to prevent computer companies, railroads, or any other business from failing?
I can't think of one.
It's a good thing we don't have that.
We must not let our rulers load us with perpetual debt.
I agree, the debt is way too high, they spend way too much on way too much.
“More tariffs and less income taxes. “
Goods from OPEC & China need tariffs immediately.
A uniform tariff would be better.
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