Without the Federal Reserve, We Wouldn’t Have Inflation

"Money responds to the law of supply and demand just as everything else does. When the supply of dollars goes up, the value of each individual dollar falls, and prices rise to compensate. That's inflation. Inflation isn't rising prices. Inflating the money supply causes rising prices. As prices rise, people become poorer and they demand relief. The politicians stop injecting money, people have less to spend, and business slows down, often causing a recession. The shakeout can be very painful, depending on how long the inflation has lasted and how many new dollars have been injected into the economy. What is generally overlooked is the fact that the Federal Reserve has been inflating the money supply almost without pause ever since the Fed was created 94 years ago. So, underpinning the most recent seven years of injections and malinvestment, we have the residual from the previous 87 years. In America's schools and colleges, the whole population has been taught that the government has the duty to create prosperity. If the government, led by Obama, doesn't inflate us out of this, he will be in very deep trouble. I think a whole new crop of multi-millionaires is about to be grown. The reason is, the dollar is the world's reserve currency, meaning the preferred medium for trade and savings. Trillions of dollars are held in foreign hands, and these foreigners absolutely do not want any further decline in the value of their dollars. If Washington inflates heavily to stop the recession, the foreigners will dump their dollars, possibly triggering a global monetary crisis in which the dollar would be completely rejected, becoming worthless. To prevent this, Washington must give the dollar some kind of backing that will make it trusted and desirable. I think it's safe to say it will be something that cannot be created on a printing press. Most likely it will be a basket of globally traded raw materials, perhaps copper, gold, silver, lumber, wheat, tin, iron, oil, and a lot of other things. Or, perhaps just one thing, gold. Until the 1970s, when this insane experiment with the paper US dollar as the reserve currency began, gold had been valuable for six thousand years. It worked so well it was the only reserve currency the world had ever known. There is nothing else so trusted. I don't know exactly what Washington will use, but I think gold will be in the mix." - An Interview with Richard Maybury, Author of 'Whatever Happened to Penny Candy'

Without the Federal Reserve, We Wouldn’t Have Inflation

June 25, 2012

Pete Ostapchuk, The Elkhart Truth - Many people believe that inflation, like sales tax, is a fact of life that has always been around. Inflation did not exist until after the Constitution was written. Otherwise, dollar amounts could not have been stated in the Constitution (see Article One, Section Nine).

The gold standard was why we had no inflation (see Article One, Sections Eight and 10). Around the beginning of World War I, the tag team of the Federal Reserve and the IRS came into being. A friend who survived the D-Day landing told me that you cannot have inflation until you can print money out of thin air. The perpetrators of the Federal Reserve system have left us with paper money. I can’t tell you who has our gold and silver. The Fed has the blessing of Congress to print paper money to increase the amount of money in circulation, which in turn causes inflation.

When you were young, you bought the lot next door for $5,000. When you needed money for retirement, you sold it for $50,000. Because of inflation, $50,000 now has no more buying power than $5,000 did back then, so you broke even. So far so good, until the IRS comes along and says you made $45,000 on the deal. The IRS wants you to pay income tax on the profit even though you just broke even.

Where is that government of the people, by the people and for the people? It only appeared that you made money because the Fed printed bogus money.

Jim Lichkay (“the word ‘capitalism’ does not appear in the Constitution”) wrote May 8 that the word “capitalism” does not appear in the Constitution, which it should not as it is the Constitution of our government, not our industry. But why does “Federal Reserve” not appear there?