Posted on 02/22/2022 6:58:17 AM PST by RandFan
According to numbers released by the US government, consumer prices have increased by 7.5 percent in the past year, the steepest increase since 1982. The actual price increases are even worse than the government numbers suggest, given that the “official” statistics are manipulated to understate the real rate of price increases. According to John Williams of ShadowStats, prices have actually increased by around 15 percent over the past year.
The fact that prices remain at historically high levels shows that inflation is far from “transitory,” as Federal Reserve Chairman Jerome Powell had described it. The continuing inflation has led the Federal Reserve Board to suggest the Fed will start increasing interest rates earlier than previously announced. The Fed may also break with its practice of only raising rates by 25 basis points at a time and increase rates by increments of up to 50 basis points. However, the increases the Fed is discussing would still leave interest rates at historic lows. Thus, such interest rate increases would do little or nothing to ease the pain rising prices cause for average consumers.
Most policy “experts” and politicians, including President Biden, support interest rate increases to deal with inflation. However, some progressives oppose raising rates. Opponents of rate increases fear that increasing interest rates will slow economic growth, increase unemployment, and depress wages. These progressives believe the old fallacy that workers benefit from easy money. The truth is workers are inflation’s main victims.
Workers may see their nominal pay (pay unadjusted for inflation) increase while the Fed-produced price increases cause real wages to plummet. That is certainly the case today. In contrast, the Federal Reserve’s money creation benefits crony capitalists who receive the new money created by the Fed before the injection of new money causes prices to rise. This increases the elite’s purchasing power, furthering income inequality.
The Federal Reserve’s creation of new money does more than erode the value of the currency. It also artificially lowers interest rates, which are the price of money. This distorts the signals sent to market actors, leading to investment decisions that do not reflect the real condition of the market. The result is a temporary boom, followed by a bust. Workers who find new jobs in the boom lose those jobs in the bust. These workers are then not just unemployed. They are also often saddled with unmanageable debt incurred during the low interest rate, easy money phase of the business cycle.
Progressives could help workers by joining the movement for market-based money. Free-market money will be safe from government manipulation, and thus its value will remain stable. A step toward restoring a free-market monetary system is letting the people know the truth about the Federal Reserve by passing Audit the Fed. Another step is legalizing alternative currencies by repealing legal tender laws and ending all capital gains taxes on precious metals and cryptocurrencies. Congress must also begin to cut spending, starting by making major cuts in our 750 billion dollars military budget and ending all corporate welfare.
Fiat money benefits financial and political elites at the expense of working people whose standard of living is eroded by Federal Reserve actions. As a Texas labor leader once told me, “Gold has always been the working man’s friend.” I would add that fiat money is the worker’s foe.
“GIVE me control of a nation’s money supply, and I care not who makes its laws.” -Mayer Amschel Rothschild, founder of the Rothschild banking dynasty.
Thank you for the clear persepctive. "Pretending to be capitalism...."
An article from 2004: "Perpetual Debt: From the British Empire to the American Hegemon" https://mises.org/library/perpetual-debt-british-empire-american-hegemon
They buy Treasuries using thin air money.
Is that a problem? Why?
So many people don’t know the truth behind the beginning of the federal reserve. Started on Jekyll Island Georgia with a group of FOREIGN elites who put together the agency to steal wealth from the people of the United States.
The Federal Reserve is in its final days. Soon it will be gone.
https://m.youtube.com/watch?v=O1x0gqmgoi0
Long but worth every minute. An older documentary called the money masters about the running battle of who controls the money supply.
The creation of money by increasing debt is the problem. The Fed just happens to be the organization that’s doing it now. Get rid of the Fed and some other agency would do it.
The firts type is when the government borrows lots of money to buy lots of goods or services from the real economy.
This is what Hamilton saw as a bookkeeper for a British trading company as a young man. Britain borrowed a fortune for the Seven Years War, which went for ships, guns, and military service. That expanded the British economy dramatically.
The same thing happened here during WWII as American businesses and banks were recapitalized after the Depression.
But at the end of the Sixties, something changed here.
First off, military procurement spent oodles of money on production that had nothing to do with the civilian economy, although there were important technical developments that helped. For example, IC's from military and space contracts obviously had a huge impact, but was it a rational expenditure or a distortion in terms of the cost?
Second, by going off the gold standard the US was opened to unlimited trade deficits since excess imports no longer required transfer of gold and official devaluation of the currency while dollar reserve status kept the US dollar artificially high. Going off gold also effectively transferred control of the currency un-Constitutionally to the Federal Reserve via interest rates. "Monetary Policy" as an economic theory only makes sense in a fiat currency economy.
Third, deregulation of banking combined with unlimited imports set off a speculative frenzy by encouraging asset bubbles and beggar the country labor arbitrage across national boundaries. Capital that was once needed to invest in equipment and expensive skilled labor was freed to just import products to sell at low cost and then purchase more assets. This made the asset holding top part of the economy richer and richer by depressing wages and wage growth. Every loosening of monetary policy also meant that US taxpayers essentially financed the growth of East Asia through enormous trade deficits.
Only players at the top can play in this economy and win, the game is rigged against everyone else.
Think it was meant to associate Ron Paul with banking committee.
I really worry about the future of America and my generation’s future prospects. However, politicians such as Ron Paul and his son (and of course, many of the wise Freepers on this forum!) give me a sense of hope in these increasingly dystopian times.
Just like Trump will soon be back in the Oval Office?
I’m fed exing you a red pill. 😆
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