The Federal Reserve is Robbing You Blind
Published Fri, May 3rd, 2013   Floyd Brown, Chief Political Analyst
 
 
Last week, I began to explain what America might look like after a government collapse. I ended on a note about the Federal Reserve, and I promised I’d come back to it this Friday.
Well, here we are. And I’m going to begin with a radical statement:
The purpose of the Federal Reserve is to benefit its shareholders… not America.
This statement is confusing to most people because they assume the Federal Reserve is an agency of the government. It’s not.
In fact, it’s a private entity. Only the shareholders aren’t private investors. They’re the major “too-big-to-fail” banks of America.
The next thing you must understand is that the Fed was given (by Congress) the most lucrative monopoly on earth… total control over the creation of money. So it can print money, legally. What a business!
Now, don’t get me wrong – there is some regulation. What Congress gives, it can also take away.
The problem is that when you can literally create money, you have lots of cash to influence the system.
Indeed, when it comes to the economy, the Fed is even more powerful than the president. Only Congress and the president, working in unison, can check the power of the Federal Reserve.
And considering that such cooperation isn’t exactly the norm in D.C., the Fed is using its insane amount of power to rob you blind.
Here’s how…
Too Big to Fail
Simply put, the supply of money should only grow at about the same rate as the economy. It creates a solid equilibrium between goods in the economy and the money supply.
But when the supply of money grows too quickly, it shatters equilibrium and leads to inflation (i.e. – too many dollars chasing too few goods).
And right now, we have too many dollars.
Of course, we can thank the economic crisis in 2008 for that. As you know, when the banking crisis erupted, the Fed was fearful its shareholders were going belly up. So the former CEO of Goldman Sachs (GS), Hank Paulson, arranged for billions of dollars to be transferred from the government to these private banks through the Troubled Asset Relief Program (TARP).
Keep in mind, I believe allowing banks to go bankrupt would’ve been the best solution for America. We have over 200 years of bankruptcy court precedent, and the courts should’ve overseen the liquidation of these mismanaged banks. It ultimately would have punished the guilty parties.
But that didn’t happen. Instead, the Federal Reserve kicked into action. It created over $1 trillion that was lent to these same banks to keep them from collapsing.
Now, with so much money floating around, bank deposit owners are worried that the supply of dollars will outstrip demand. This could drive the price of the dollar down. In fact, I believe we could even see a flash crash of the dollar.
And that’s precisely how the Fed is stealing from you. It’s knowingly devaluing the dollar, so your money can buy fewer goods.
And no one is safe.
Say you’re happily employed – perhaps you even got a raise recently. Unfortunately, inflation can devalue your dollars so fast that you end up with less buying power than you began with.
As long as the Fed continues on its current path, we’ll continue holding a currency that’s worth less and less every day.
How Can We Protect Ourselves?
We’ll all likely get poorer unless we have taken serious steps to hedge ourselves.
Buying gold, stocks, real estate and other hard assets is the best hedge. When the dollar crash comes, these assets will likely bounce back from the inflation, even if their prices decline at first.
Bonds, CD’s and cash are the assets I encourage everyone to avoid. They’ll be crushed by inflation.
Once again, this is just a small part in the ongoing quest to see what America will look like after a government collapse.
Along the way, I want to explain what’s happening behind the scenes in Washington and give you as much actionable advice as possible.
Until next time, I remain…
Your eyes on the Hill,

I disagree.

People with a pile of $$$ that has been devalued still have a pile to trade for food, even if its a wheelbarrow load for a loaf.
Those who have little have not enough to buy anything.

FEMA camp destination time,
Serious social unrest,Greece style, here.
The goobs are ready

justin_o_guy2 wrote on 05/10/13 at 09:51:30:



Uhhhhmmm no. Or rather not quite. Inflation is accompanied by raises ... the last few years we have been suffering cuts and furloughs. Back when we had inflation, I remember getting 7% one year and the manager who had to break it to me was so apologetic ...

Anyone else remember those days ...

People earning a pile and having $ left over also get the same/similar raises.

Those that have a static pile of $$$ or $ denominated assets lose. AKA the idle rich ... but if they have it invested they still get a return to cover them.

Taxation bites the lower rungs harder and the broader the tax base the worse it is for the lower incomes ... the ones that are @ -ve each month are deeper in -ve, the ones @ 0 are in the -ve and the small positive ones edge closer to 0 ... but as you climb up the income ladder the increases in taxes get less and less, cos they are not spending all their $. Obviously there is no raise coming to wash it away.

Those with a static pile of $$ dont even know what's wrong with people staving to death.

Cool.
Srinath.

Oh my god - now I know why you have had so many mis conceptions over this.

Printing $$ and sending it overseas will do nothing for inflation inside the US. The $ sent over seas usually isn't competing for products inside the US. OK It will in 1 sense ... we import a ton of stuff. Petroleum especially. I'd give you that. But not much else.

OK there is an easier way to explain this to you -

Try this - http://www.economicshelp.org/blog/797/economics/why-printing-money-causes-inf...

Printing $$ and adding to US circulation - yes that will cause domestic inflation.
Now what is it that makes your salary go up in tandem with domestic inflation as in - Is it possible to have domestic inflation in core commodities without rising salaries. The answer is no. If it was yes - these core commodities will rot on the store shelves. There is something called a wage/price spiral. A increase in cost of goods will create an increase in wages. Again not a rule, but its in effect stronger than any other rule there is.

In effect in the last few years we have had deflation in durable goods and inflation in consumables. That has effectively kept the consumer afloat. Total inflation is extremely low, but that only due to the durable goods factor. As in, dropping rents have give the households enough money to pay more for milk, meat and gas.
This is dangerous too, because durable goods have started to reverse their slide. The govt will take a bit to catch up and in the mean time those on the margins will get crushed.

If we had overall higher inflation, and your income does not keep up, seriously you will see stores toss out food by the truck load on a regular basis, they will soon close up shop and you would see a collapse in much of the consumables retail. Its not happening on a significant basis and that means incomes are keeping up with inflation.

Look it up any where you want. Higher taxation hurts the poor. Higher inflation hurts the rich.

Inflation is not possible without raising salaries. If it was, I think that is called stagflation. Prices have risen but no one is buying anything cos they cant afford it. Stagflation happens under some very special circumstances, and we are no where near that.

There is an even deeper abyss than Greece you can erroneously compare the US to - Zimbabwe - they have this thing called galloping inflation. Again loooooooong way to there.

Cool.
Srinath.

That inflation bill67 much of a point if you dont have a stash of $$$$. As in your dad left you 100 mill. 5 yrs form now you have 100 mill that is worth 1/2 what it was.

I think I am missing some sarcasm in your post ...

Cool.
Srinath.

These are not a pile of $$$ ...
I have to modify your question.

Your dad left you 100 million. You sat on that pile. You're the rich guy in this analogy.
My dad left me 100k, You could have bought 1,000 of these with the $$$ you had. I am the poor guy. I bought a house and 5 yrs later its worth 200k. You only buy 500 of these now.
I'm better off.

The 100 mill and 100k houses - well you were 1000 times better off then and now.

Inflation is in favor of those who spend more % of their income.
Taxation favors those who spend less % of their income. That's all they pay taxes on.

Cool.
Srinath.