-
Banks create money out of thin air
and distribute it, unevenly throughout the economy, at
interest.
-
The Fed is expected to combat
inflation; instead it has allowed the dollar to lose 75% of its value in
the last 30 years alone.
-
Using the accounting rules that apply to
others, every money center bank has been hopelessly insolvent for over
20 years.
-
Financial bailouts --- by both the IMF
and the U.S. government--- involve massive wealth transfers from
ordinary taxpayers to the financial sector (mostly
banks).
-
FDIC insurance coverage encourages
money to flow into banks--- particularly risky banks--- that otherwise
would have flowed elsewhere in a free
market.
-
While money creation always increases
prices, some methods and patterns of distribution produce dramatic
wealth transfers while others have no such
effect.
-
The Fed was formed in 1913 to be a
lender of last resort; yet, throughout the 1920s, banks failed at
unprecedented rates and in 1933, 1/3 of all banks failed.
As you learn (more) of the facts, you
will likely begin to consider the following
conclusions:
-
Democracy and free enterprise both
suffer when government permits an elite group to create money and forces
the rest of us to honor that money through legal tender
laws.
-
Since the money creation privilege is
always abused, the government must grant additional special privileges
to cover-up the effects of those abuses.
-
Special privileges cover-up reality and
temporarily restore confidence but do not actually rectify the resulting
distortions.
-
A massive financial collapse is the only
viable result. Special privileges make the ultimate crisis inevitable
but also make the timing unpredictable.
-
The special privileges, below, make
financial collapse inevitable:
a.
unlimited money creation
b.
allowed accounting irregularities
c.
protective bank secrecy rules
d.
insured bank deposits
e.
Fed-protected bank assets taxpayer bailouts of bank
losses |
