Busted: Bankers and The Global Economy

April 29, 2008

America: Land of Pain and Pleasure

The Federal Reserve is working desperately to get a grip on the problems in the U.S. economy. The problems are many. The prolific reduction of interest rates has not spurred the economy because bankers have refused to pass on the savings. In the end, mortgage credit is not easier and the U.S. financial system continues to fall apart.

Low interests rates do help the economy in trade with foreign lands. As a result, exports have climbed, marking a bright spot in an otherwise drab economic set of circumstances. The Fed is unlikely to continue to trim interest rates any more without fueling inflationary pressures.

For the time being, the dollar has leveled out and the U.S. can enjoy a period where the economy can get a handle on the trade deficit for those that care. In the meantime, all that prognosticating might just get us in trouble.

The Constitution leads you to question why the Federal Reserve even exists. There is no mention of a central bank in the Constitution. The Federal Reserve seeks to control the money flow and availability of currency on the open market as a separate corporate entity with its own set of overarching directives straight from Switzerland and Rome. The unregulated printing of money and issuance of credit creates inflation and ultimately deflation when compared to other currencies. For 20 years, the United States has masked a 10% average inflation rate compared to the official rate of about 3%. Now the inflation rate is much higher and America feels the pain.

“It is that not only have we had a subprime market in housing; the whole economic system is sub prime,” Ron Paul fumed last November at Ben Bernanke. “We artificially lower interest rates. And it wasn’t under your tenure in office; it’s been going on for 10 years and longer and now we’re bearing the fruits of that policy.”

“The real deception is when we distort the value of money, when we create money out of thin air. We have no savings. Yet there’s so-called capital. There’s money available. But it comes from what you have to do and the pressures put on you. How in the world can we expect to solve the problems of inflation, that is, the increase in the supply of money, with more inflation?”

Bernanke responsed, “What we’re trying to do is follow the mandate that Congress gave us and the mandate that Congress gave us is to look at employment and inflation as measured by domestic price growth. And as I talked about today, and I think you would agree that we do see risk to inflation and we are taking those into account and we want to make sure that prices remain as stable as possible in the United States.”

Ron Paul countered that by putting more money on the market, Bernanke and the Federal Reserve are devaluing the dollar and robbing from Americans. Bernanke argued that since Americans use dollars to buy their goods here in America, a devalued dollar will make imported goods more expensive.

So much for arguing about a devalued dollar. Six months after the excited conversation between Ron Paul and Ben Bernanke, the status quo has been expanded on with still more Federal Reserve authority. Now the Federal Reserve acts as a huge broker of U.S. securities, which are held to be super-secure and much more secure than securitized bonds designed by the commercial banks. These U.S. securities are holding the economy in place by allowing it to continue to function.

The Federal Reserve doesn’t suggest changing the way banking is doing business. Instead, the Fed suggests more financial literacy; bankers aren’t savvy enough.

The Fed is fat and happy making money by making money. Financial literacy is an excuse. More education is always needed, always at the cost of civil liberties. Perhaps we need to look at the money dealer as it seeks to become the governor of the people. The slight of hand is that the money isn’t real to begin with. Good trick Ben.

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