The Federal Reserve is a threat to our freedom
If I were to give you a hundred million dollars right now, what would you do with it? Just for comparison, that’s enough money to buy 4,000 brand new Camry’s, enough cars to fill over 8 large Walmart parking lots. Just the idea of such a large amount of money is almost unfathomable!
But what if I gave every person in America a hundred million dollars? At first, some may think, “That would be wonderful! Then everybody would have all the money they need, there would be no poverty, and all our problems would be solved!” Of course, this is far from reality because the dollar today has no intrinsic value.
Instead, money is the medium we use to trade our wealth, which means that the value of a currency depends on the amount of the currency and the production of the economy. Here’s an example. Every year, my family gets together with our cousins to have a family fair. Everyone brings something to sell. Some of us bring food, the girls like to bring homemade doll clothes, grandma brings lots of candy, to mention some of our inventory. For our money, we use buttons that we have earned by doing our chores during the weeks leading up to the fair. The average person there has about 40 – 60 buttons that can be recirculated. Most of the items sell for around 2 to 10 buttons.
Now, consider this. What if I went to Walmart and brought back a ginormous container of buttons? How would that affect the value of everybody else’s buttons? For example, let’s say that there are 5 cookies left at a booth. Do you think they would rather sell them to me for 15 buttons each, or to someone else for the original 2 each? Obviously, they would take the 15 each from me.
Looking at this model economy, it is clear to see that the buttons don’t have much intrinsic value—getting more buttons didn’t produce any more cookies—it just decreased the worth of each individual button. By getting more buttons, I was, in effect, just stealing wealth from everybody else at the fair.
Knowing that money itself isn’t wealth, and creating money is actually stealing wealth from everybody else, it’s pretty clear why the punishment for counterfeiting is so harsh. In the United States, it is up to two hundred fifty thousand dollars and 25 years in prison!
Judging by the punishment, counterfeiting is a pretty hefty crime to commit. Would it surprise you then, to know that the Federal Reserve does the exact same thing as a counterfeiter? Just like me bringing extra buttons into our family fair, the Federal Reserve increases the money supply, making our money worth less. For example, in 1970—only 50 years ago—a stamp would have cost you a mere 6 cents while today you pay nearly 10 times that much—over half a dollar!
Now some make arguments that the reason prices used to be lower is that “people made less back then!” Although that is true, it is not the full story! When the Fed inflates the money supply, the dollar does not initially lose value. Instead, it is after the fresh money starts to circulate that the dollar loses value—causing prices to rise before the average person’s wages rise. This delayed depreciation of value happens because of the method that the Fed has to use to inject fresh money into the economy.
Most people think that the Fed inflates evenly, like a blanket of money covering the entire nation. But in reality, the Fed actually has to inject the newly created money in certain “hotspots” such as a bailout of a certain industry (such as the home building industry in 2008), subsidies and bailouts to favoured corporations (such as General Motors in 2009), and in the form of loans—assisted by their artificially low interest rates.
By inflating the money supply, they are essentially stealing—or taxing—part of our money—but without the consent of the people.
The Declaration of Independence states that “governments derive their just powers from the consent of the governed.” Taxes such as income taxes, property taxes, and sales taxes are authorized by our elected officials—whom are held accountable to us every election cycle. On the other hand, the Federal Reserve is allowed to inflate as much as it wants, whenever it wants, and all without any permission or accountability to us—the people. Other than their very vague 6 week summary, they aren’t required to report on anything to anybody—not even congress. not even the inflation rates or where the new money goes.
Why should you care?
The power to inflate our currency at will, without any oversight from elected officials makes the Fed the most powerful bureaucracy in our government—more powerful even than the FBI or the CIA. Again and again, history shows that when the nation’s economy fails, the nation falls.
The tax of inflation is unique—and much worse than any other tax. Here are a few reasons why.
(1) It cannot be measured accurately.
(2) It takes wealth from the poor and middle class, and gives it to the elite power-holders and their friends.
(3) It can be adjusted instantly by merely printing more currency, or even adding zeros to a computer.
(4) Last, but definitely not least, an inflated currency will fall leading to the destruction of that nation’s economy and government.
As President Ezra Taft Benson of The Church of Jesus Christ of Latter-day Saints taught, “When government presumes to demand more and more of the fruits of a man’s labor through taxation and reduces more and more his actual income by printing money and furthering debt, the wage earner is left with less and less to buy food, to provide housing, medical care, education and private welfare. The individuals are left without a choice and must look to the state as its benevolent supporter of these services. When that happens liberty is gone.”
What should be done?
Knowing how dangerous the Federal Reserve is, how then can we best limit its power? The answer is simple. End the Fed. The Federal Reserve has no place in a free market economy. In fact, the fifth plank of Marx’s communist manifesto reads, “Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.” That is literally the definition of the Fed. Everything it is designed to do diminishes the “invisible hand” and increases the “iron fist”. Therefore, the only acceptable limitation on the Fed is to abolish it completely.
Contrary to what most think, life would still go on as normal in a post-fed world. The U.S. Treasury would continue to print the dollar, but only as replacement for the old, damaged money turned by each bank. We would still have the advantages of our digital world, such as online banking and debit/credit card transactions. The only differences: the dollar would retain its value, it would be easier to earn a living, in short, our economy would prove more successful than ever!
The myths about inflation being necessary for a successful economy would be proven false. The value of the dollar would go up if the overall production of the economy is higher, and down if overall production is lower. The invisible hand would smooth all the wrinkles that the iron fist can not control—no matter how hard it tries.
The Federal Reserve chairman will try to make you think otherwise (for pretty obvious reasons), but the United States of America will be better off without central banking. It’s time to Make America Free Again!