Monday, July 10, 2006

Half-Way Through 2006

This is the best article I've read year-to-date. I highly recommend reading the whole thing. Bill Walker explains how the Fed was started in 1913, how the Fed ruined the economy in just 16 short years, inflation, deflation, the IRS, and more.

The current Fed Chairman, Ben Bernanke, has openly boasted that the Federal Reserve caused the Great Depression. Of course the Fed’s guilt is not that controversial among free-market economists, but it’s interesting that most Americans still don’t grasp this most basic fact of US economic history… even when the Fed Chairman himself has spoken about it publicly.

In 1929 and through the 1930s, as Bernanke says, the Fed hurled the entire US economy into the Great Depression and kept it there for years, unemploying millions. Civilization literally went backwards, with negative economic growth.
In 1933, the Fed magically stole all the gold from the bank vaults of the nation and moved it into darkness (a darkness so complete that the gold has not been audited since the 1950s).

Today, the Fed detaches the military-entertainment complex from the need to openly pass war taxes through Congress. They simply print as many dollars as they want, reducing the value of all other dollars proportionately. The purpose of taxes is just to maintain a demand for depreciating dollars, since everyone needs them to send to the IRS.

The Fed performs no productive economic function. All it does is increase the fluctuations in the value of the medium of exchange. Thanks to the "fractional reserve" nature of the Fed, it can’t even accurately control its own destructive powers.

Many Americans already realize that the dollar is a terrible store of value, and use it only for the shortest term that they can. Long-term savings are held in the form of stock mutual funds, real estate, and increasingly "exchange traded funds" like GLD and SLVin other words, gold and silver, just as people have done for thousands of years.


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