The Fed Will Bankrupt the US Trying to "Create" Jobs

The primary myth being perpetuated by the Central Banks of the world is the belief that loose monetary policy and money printing will lead to economic growth.

This is the reason why Central banks have cut interest rates more than 511 times since June 2007. It’s also why they’ve expanded their balance sheets by over $10 trillion (this doesn’t count unofficial lending windows and off balance sheet programs).

It’s a strange idea, especially when you consider that there is literally no evidence that printing money creates jobs. Look at Japan, they have and continue to maintain QE efforts equal to 40+% of their GDP and unemployment hasn’t budged in 20 years. The UK has engaged in QE equal to over 20% of GDP with no success.

If you need further proof that money printing and inflation don’t create jobs take a look at the below chart from Bill King’s The King Report. The blue line is CPI. The pink line is non-seasonally adjusted non-farm payroll (jobs). In the last 50 years, inflation has dramatically outperformed job creation.

Since Bernanke took over at the Fed, the US hasn’t experienced a single year of 3% GDP growth. All the talk of jobs coming back courtesy of the Fed is ridiculous. The employment population ratio peaked in 2000. Since that time jobs have not kept up with population growth, let alone grown.

Indeed, all that’s grown is inflation, the one thing the Fed is great at creating.

According to Harvard Professor Ken Rogoff in the 138 years leading up to the Fed’s founding in 2013, inflation rose a mere 20%.

Yes, you read that correctly, inflation rose just 20% over a period of 138 years. However, in the 100 years since the Fed came into existence, inflation has risen by 3,000%. The US dollar has lost between 96-98% of its value since 1913.

And yet despite the preponderance of evidence that money printing doesn’t create jobs, Bernanke and his Central Banker colleagues continue to perpetuate the myth that the recovery is just around the corner, as long as we continue to print money.

It’s complete and utter insanity. And all it will accomplish is bankrupting the US, resulting in higher costs of living (again inflation has risen 3,000% since the Fed’s creation in 1913) and lower quality of life for all of us.

It’s not the FED that’s bankrupting the U.S..

It’s insane trade policy that is killing our industries, and causing unemployment, and it’s Congressional overspending.

It’s not the FED that’s bankrupting the U.S..

It’s insane trade policy that is killing our industries, and causing unemployment, and it’s Congressional overspending.

"Yes, you read that correctly, inflation rose just 20% over a period of 138 years. "

What he's not telling you is that we had wild swings in the value of the dollar. Swings like 20% up one year followed by 20% down the next that were very disruptive to business.

We had deflationary depressions every 20 years prior to the FED.

Under the FED the value of the dollar is much more stable. The dollar has less than half the year to year variation that it did prior to the FED. However the FED does intentionally err on the side of inflation. And 80 years of consistent low level inflation takes a toll on the value of the dollar. It's not a toll that matters because it's spread out over 80 years. Unless of course you are hoarding cash in your mattress for 80 years.

Currency is meant to facilitate business transactions, not be a long term store of value. If you want to store value for long term, but the money in a bank account and draw interest to offset the inflation, or better yet, invest it in sound companies that will be around for the long term.

"Yes, you read that correctly, inflation rose just 20% over a period of 138 years. "

What he's not telling you is that we had wild swings in the value of the dollar. Swings like 20% up one year followed by 20% down the next that were very disruptive to business.

We had deflationary depressions every 20 years prior to the FED.

So stealing someone’s life savings over their lifetime is just dandy? Thievery is okay by you?

Furthermore, deflationary depressions are NONSENSE! Each of your wild swings (which were no more than 5%, not 20%) were caused by INFLATION of the supply of gold or silver. Check your assumptions: just because you were tested on it in Econ class doesn’t mean it’s true.

"So stealing someone’s life savings over their lifetime is just dandy? Thievery is okay by you?"

It's not thievery, it's simply the way our money works. Who doesn't understand that the dollar inflates every year? Everybody knows this concept whether they've had economics or not. If you're hoarding cash in your mattress, instead of drawing interest, you are either okay with losing value or you're an idiot.

"Furthermore, deflationary depressions are NONSENSE! Each of your wild swings (which were no more than 5%, not 20%) were caused by INFLATION of the supply of gold or silver. Check your assumptions: just because you were tested on it in Econ class doesn’t mean it’s true."

Year, Change in CPI
1802 -14.3%
1807 -6.4%
1808 9.1%
1811 11.%
...
1863 23.3%
1864 27.0%
...

I'm did not list every year that was over 5%. Just enough to show you that it's your facts that are wrong.
Source: CPI 1800-Current - Minneapolis Federal Reserve Bank

"So stealing someone’s life savings over their lifetime is just dandy? Thievery is okay by you?"

Year, Change in CPI
1802 -14.3%
1807 -6.4%
1808 9.1%
1811 11.%
...
1863 23.3%
1864 27.0%
...

I'm did not list every year that was over 5%. Just enough to show you that it's your facts that are wrong.
Source: CPI 1800-Current - Minneapolis Federal Reserve Bank

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