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Posts Tagged ‘Federal Reserve’

The Federal Reserve Wants You Fired

Posted by M. C. on September 6, 2022

written by ron paul

This is because the Fed’s strategy for reducing the historic price inflation now plaguing the economy — caused by the Fed’s unprecedented low or zero interest rate policies — is to increase unemployment in order to decrease consumer spending. In his speech to the annual monetary policy conference in Jackson Hole, Wyoming, Fed Chair Jerome Powell reiterated his commitment to increasing unemployment, or, as he puts it, “softening the labor markets.”

http://ronpaulinstitute.org/archives/featured-articles/2022/september/05/the-federal-reserve-wants-you-fired/

The Federal Reserve was no doubt troubled by July’s decline in the US unemployment rate to 4.5 percent and increase in job openings to 11.2 million. This is because the Fed’s strategy for reducing the historic price inflation now plaguing the economy — caused by the Fed’s unprecedented low or zero interest rate policies — is to increase unemployment in order to decrease consumer spending. In his speech to the annual monetary policy conference in Jackson Hole, Wyoming, Fed Chair Jerome Powell reiterated his commitment to increasing unemployment, or, as he puts it, “softening the labor markets.”  

Powell is correct that reducing price inflation is urgent. He is also correct that doing so will increase unemployment and slow economic growth. The Fed’s efforts to bring down inflation by increasing interest rates will also make it harder for average Americans to obtain home mortgages, purchase a car, or even pay their utility bills. Those hardest hit by the Fed’s “softening of labor markets” are also the primary victims of the Fed-created price inflation. This demonstrates the insanity and cruelty of the fiat money system, which enriches the elites while improvising the masses.

Well-connected members of the financial elite and crony capitalists benefit from the Federal Reserve’s money creation, as they are the first recipients of the new money. This enables them to increase their purchasing power before the new money has caused general price inflation. By the time the money creation has impacted the middle and working classes, the economy is racked with widespread price inflation. Therefore, a nominal gain in wages is not enough to compensate for the real price increase. So average Americans suffer from both Fed-created inflation and the Fed’s attempts to rein in that inflation. 

It is amazing that more individuals do not question the idea that inflation, recessions, unemployment, and booms and busts are necessary features of a sound monetary system. Even many otherwise staunch defenders of free markets maintain a child-like faith in central banking. Some conservatives support “reforming” the Fed by making it follow a “rules-based” monetary policy. These conservatives do not understand that the problem is the existence of a central bank with the power to manipulate the currency.

Many progressives recognize the damage the Fed does to average Americans when it increases interest rates. However, their “solution” is a cure worse than the disease: make the Fed maintain low interest rates (and thus high inflation) in perpetuity—or until the continued devaluation of the currency via inflation causes a dollar crisis, leading to a major economic calamity. The main victims of this crisis will, of course, be the very Americans progressives claim to care about.

The Federal Reserve’s failure to fulfill its dual mandate of producing stable prices and full employment, combined with the damage it inflicts on the American people, make the best case for changing our monetary policy. A stable currency, safe from manipulation by politicians or central bankers, would provide the basis for long term prosperity that benefits everyone, not just the crony capitalists and the power-hungry politicians. The first steps in this transition are to finally pass audit the Fed legislation and continue the efforts to pass state laws recognizing precious metals as legal tender.


Copyright © 2022 by RonPaul Institute. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are given.
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Thank goodness for diversity

Posted by M. C. on August 31, 2022

https://mailchi.mp/tomwoods/thefed?e=fa1aba8cd8

We have reason to celebrate, according to the Associated Press.

The Federal Reserve System is at its most diverse ever!

So the problem with the Federal Reserve isn’t that it interferes with the market economy by manipulating interest rates. The problem isn’t that its interventions cause the business cycle. The problem isn’t its bailouts, or the moral hazard introduced by the very existence of a paper-money producer like the Fed (since major market actors know there is no physical constraint on money creation and therefore on the Fed’s ability to bail them out if it came to that, they behave more recklessly than they would otherwise).

No, the problem is that not enough female, black, and “openly gay” people have been participating in these awful things.

And now, problem solved!

Progressives sure are a cheap date.

https://tomwoods.com/budgethomestead
Tom Woods

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How the Big Banks Enslave Humanity

Posted by M. C. on July 25, 2022

By Alexandra Bruce
Forbidden Knowledge TV

The Bank of China told their depositors that their savings accounts are now investment products and can no longer be withdrawn.

The New World Order is just the old world order: a cabal of parasite crime families feeding off of humanity and if we fail to take control of our own destiny now, then the New World Order will succeed and mankind will be eradicated. The choice is ours and there won’t be a second chance.

TRANSCRIPT

The Bank of China told their depositors that their savings accounts are now investment products and can no longer be withdrawn.

And to stop the people from trying to withdraw their money, the CCP deployed tanks.

Banks all over the world are imploding and within this Great Reset, there is great opportunity for mankind, so long as we realize who the real perpetrators are.

The word, “apocalypse” simply means “the lifting of the veil”, the revelation of truth or in modern terms, “The Great Awakening.”

Mankind is now awakening to the fact that we have been lied to and exploited as chattel for, at the very least, our entire lifetimes.

And one of the most valuable truths to be gleaned from the Great Awakening, as far as human civilization is concerned is who is responsible?

It’s crucial to identify who is responsible so that we can stop it from happening again, because the enemy likes to hide.

There is nothing new under the Sun and all we have to do is follow the money, which leads us directly to the Federal Reserve Banking System and their conglomerate of associates known as the Big Banks.

We can trace the Big Banks back to Mayer Rothschild, who famously said, “Give me control of a nation’s money supply and I care not who makes its laws.”

And he was likely speaking about the usury laws, that for centuries prevented people from charging interest on loans, because it was considered theft.

If all men are created equal, then the banks should be acting more like a service industry, not profiting off other peoples’ debt.

But Mayer Rothschild was able to bypass these usury laws, because the Rothschild banking dynasty was merely a front for the royal bloodlines as the Old World Order adapted their schemes for the Industrial Revolution, the Rothschild banking dynasty began running central banks for kings throughout Europe.

See the rest here

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Don’t Be Fooled: The World’s Central Bankers Still Love Inflation

Posted by M. C. on June 4, 2022

  • lagarde

Ryan McMaken

The Bank of Canada on Wednesday increased its policy interest rate (known as the overnight target rate) from 1.0 percent to 1.5 percent. This was the second fifty–basis point increase since April and is the third target rate increase since March of this year. Canada’s target rate had been flat at 0.25 percent for twenty-three months following the bank’s slashing of the target rate beginning in March 2020.

As in the United States and in Europe, price inflation rates in Canada are at multidecade highs, and political pressure on the central bank to be seen as “doing something about inflation” is mounting.

The bank is following much the same playbook as the Federal Reserve when it comes to allowing the target rate to inch upward in response to price inflation. The bank’s official position is that it could resort to very aggressive rate increases in the future in order to hit the 2 percent inflation target.

As in the US, it’s important for central bankers to sound hawkish, even if their actual policy moves are extremely tame.

The World’s Central Banks Are Still Committed to Monetary Inflation

In spite of their lack of any real action, however, Canada’s central bankers are comparatively hawkish when we look at the world’s major central banks. At a still very low target rate of 1.5 percent, Canada’s central bank has set a higher rate than the central banks in the US, the UK, the eurozone, and Japan. Indeed, in the case of the European Central Bank and the Bank of Japan, rising inflation has still not led to an increase in the target rate above zero.

  • Federal Reserve: 1.0 percent
  • European Central Bank: –0.5 percent
  • Bank of England: 1.0 percent
  • Bank of Japan: –0.1 percent

Moreover, the ECB and the BOJ haven’t budged on their subzero target rates in many years. Japan’s rate has been negative since 2016, and the EU’s has been negative since 2014.

banks

The Bank of England recently increased its target rate to 1 percent, which is the highest rate for the BOE since 2009.

In the US, the Federal Reserve has increased the target rate to 1 percent, the highest rate since March 2020.

However, it’s clear that none of these central banks are prepared to depart from the policies of the past twelve years or so, during which ultralow interest rate policy and quantitative easing became perennial policy.

The Federal Reserve has talked tough on inflation but has so far only dared to hike the target rate to 1 percent while inflation is near a forty-year high.

The Bank of England apparently suffers from the same problem, as Andrew Sentence of the UK’s The Times pointed out this week:

There is a serious mismatch between inflation and the level of interest rates in Britain. The rate of consumer prices inflation measured by the CPI is now 9 per cent—four-and-a-half times the official target rate of 2 per cent. The Bank of England is forecasting that CPI inflation will reach double-digit levels by the end of the year…. The older measure—the Retail Prices Index (RPI), which is still widely used—is already showing a double-digit inflation rate (over 11 per cent).

See the rest here

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How the lizard people avoid answering questions

Posted by M. C. on June 3, 2022

The best we can say about American elites is that they are deeply unimpressive people, and don’t know what they’re doing.

Another, rather more terrifying theory, is that they know perfectly well what they’re doing.

(This is an honorable disagreement among us.)

Whichever side you come down on, though, we agree that these are not people to rely on, or people who are going to improve your life.

The lockdown/mask/mandate regime should have made that clear enough, but the problem goes well beyond that.

Federal Reserve officials are another excellent example.

During the second George W. Bush term there were some excellent video compilations made showing just how in the dark then-Fed chairman Ben Bernanke was about every last trend that was about to blow up in Americans’ faces.

My favorite bit of Federal Reserve history involves former chairman Alan Greenspan explaining to Lesley Stahl how he managed to avoid answering questions before Congress. “I would engage in some form of syntax destruction, which sounded as though I were answering the question, but in fact had not.”

Stahl played for him a clip from a congressional hearing in which he had obviously been engaged in this practice. “Very profound,” he jokingly said to her after watching the clip. “Very profound,” she laughed in reply. “Impenetrably profound.”

Ha, ha, Lesley. Isn’t it just so funny the way our elites pull the wool over our eyes? What a knee slapper!

So-called progressives, meanwhile, who posture as protectors of the little guy, are curiously silent about the Fed, whose policies intensify inequality, reward influential people and institutions for their reckless behavior, and set the economy on a boom-bust cycle that can ruin people.

Just yesterday, Treasury Secretary Janet Yellen admitted that she’d been wrong about inflation, the precise thing that as a former chair of the Federal Reserve she would be expected to understand and anticipate.

“I was wrong then about the path that inflation would take,” she said. “As I mentioned, there have been unanticipated and large shocks to the economy…that I, at the time, didn’t fully understand.”

This problem was not caused by “unanticipated and large shocks to the economy.” If you’ve seen the money supply charts, you know that.

And we covered it on the Tom Woods Show with Gene Epstein, formerly of Barron’s:

https://tomwoods.com/ep-2092-inflation-what-caused-it-and-where-its-going/
I genuinely don’t know how ordinary people are enduring this present bout.

So remember, coming up very soon is the world premiere of the Money 2022 docuseries — which features normal people, rather than the lizard creatures who rule us.

You can watch the whole series for free if you register in advance. After that, they start charging for it.

What we are supposed to do in the current circumstances is a darn good question, and this series seeks to answer it.

The company making it is full of friends of mine, and has featured me in their documentaries as well. They have to deal with Big Tech censorship, so they rely on friends like me to spread the word about their important work.

Please click here to register for free:

http://www.tomwoods.com/moneyseries
Tom Woods

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The Number One Fallacy That Brought On This Economic Calamity

Posted by M. C. on May 24, 2022

When it comes to the economy and money, you can’t “fake it until you make it.” If you try to fake it, you’ll never make it. Ever since the founding of the Federal Reserve in 1913, America has been on a path to economic calamity. There aren’t many grains of sand left in the hour glass. Major changes will have to be made soon.

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Forget What the “Experts” Claim about Deflation: It Strengthens the Economy

Posted by M. C. on May 10, 2022

Nonproductive Activities Come from Lending Fake Money

https://mises.org/wire/forget-what-experts-claim-about-deflation-it-strengthens-economy

Frank Shostak

For most experts, deflation is bad news since it generates expectations for a continued decline in prices, leading consumers to postpone the purchases of present goods, since they expect to purchase them at lower prices in the future. Consequently, this weakens the overall flow of current spending and this, in turn, weakens the economy. Economic activity, believe the experts, is a circular flow of money. Spending by one individual becomes the earnings of another individual, and spending by another individual becomes a part of the previous individual’s earnings.

If people have become less confident about the future decide to reduce their spending, this weakens the circular flow of money. Once an individual spends less, this worsens the situation of some other individual, who in turn also cuts his spending.

According to the former Federal Reserve chairman Ben Bernanke,

Deflation is in almost all cases a side effect of a collapse of aggregate demand—a drop in spending so severe that producers must cut prices on an ongoing basis in order to find buyers. Likewise, the economic effects of a deflationary episode, for the most part, are similar to those of any other sharp decline in aggregate spending—namely, recession, rising unemployment, and financial stress.

Murray Rothbard, however, held that in a free market the rising purchasing power of money (shown by declining prices) makes goods more accessible to people. He wrote:

Improved standards of living come to the public from the fruits of capital investment. Increased productivity tends to lower prices (and costs) and thereby distribute the fruits of free enterprise to all the public, raising the standard of living of all consumers. Forcible propping up of the price level prevents this spread of higher living standards.

Economist Joseph Salerno adds: 

Historically, the natural tendency in the industrial market economy under a commodity money such as gold has been for general prices to persistently decline as ongoing capital accumulation and advances in industrial techniques led to a continual expansion in the supplies of goods. Thus throughout the nineteenth century and up until the First World War, a mild deflationary trend prevailed in the industrialized nations as rapid growth in the supplies of goods outpaced the gradual growth in the money supply that occurred under the classical gold standard. For example, in the US from 1880 to 1896, the wholesale price level fell by about 30 percent, or by 1.75% per year, while real income rose by about 85 percent, or around 5 percent per year.1

Money and Money out of “Thin Air”

Money emerged because it could support the market economy more efficiently than barter. The distinguishing characteristic of money is its role as general medium of exchange, evolving from the most marketable commodity. On this Ludwig von Mises wrote

See the rest here

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Repeal 1913: End The Income Tax & The Federal Reserve

Posted by M. C. on April 23, 2022

1913 was a fateful year for freedom in America. Both the Income Tax & Federal Reserve were created. The dreaded Income Tax made everyone’s hard-earned money the property of the federal government first. The earnings that government allowed people to keep would then be persistently stolen by The Fed’s inflation. Freedom was put in a vice in 1913, and after 100 years, there’s almost nothing left to be squeezed.

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Who Helped Biden Rip Us Off At The Gas Pump?

Posted by M. C. on March 17, 2022

As President Biden tries to pin blame elsewhere on the rip-offs at the gas pump, the fact remains that the policies of his administration are the chief culprit. Yes, his administration has had some help, primarily from the counterfeiting Federal Reserve, but whether it’s through domestic policies or the foreign policy of empire, the Biden Administration has hit American wallets where it hurts.

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Inflation: Who or What Is the Culprit?

Posted by M. C. on March 11, 2022

The key factor is not the quantity of money, but where newly created money goes and what people do with it.

Second, at a time when many Americans seem infatuated with socialism, our federal government has given us a painful illustration of how incompetent government is to manage (plan) our economy. In the name of trying to help steer our economy through the pandemic, Uncle Sam has given us high inflation and made millions of Americans poorer.

https://mises.org/wire/inflation-who-or-what-culprit

Mark Hendrickson

What triggered the last year’s explosion in prices? President Joe Biden has tried to blame inflation on greedy corporations and supply-chain disruptions. The former is laughable—there is no rational explanation for why corporations supposedly turned greedy when Biden became president. The latter is partly true—delays in bringing supplies to market have exacerbated price hikes for some goods. The fundamental reason, though, is that when prices are rising almost everywhere, the amount of money bidding for goods has soared while the supply of goods has not.

Orthodox monetarist economics, as espoused by the late Milton Friedman, posits that inflation is always and everywhere a monetary phenomenon—that is, when the monetary authorities (in this country, the Federal Reserve System) increase the supply of money, prices will then rise. Unfortunately for the monetarist theory, real-world evidence shows that increases in the money supply more often than not have not triggered higher prices, while at other times, prices have risen without the money supply increasing. In other words, there is no simple, invariable, mechanistic relationship between the supply of money and surging prices for consumer goods. Human action and economic relationships are far more flexible and less predictable than quantitative theories would lead us to believe.

The key factor is not the quantity of money, but where newly created money goes and what people do with it. For example, the supply of money and credit surged in the 1920s, but inflation in consumer prices was negligible. As Murray Rothbard detailed in his book America’s Great Depression, much of the newly created money and credit went into stocks and Florida real estate, inflating massive speculative bubbles that eventually popped, followed by crashing prices.

A more recent case: from 1995 to 2015, the domestic money supply tripled, yet consumer price increases were relatively tame. However, the Fed’s easy money policies definitely fueled the housing bubble that so painfully burst in 2008. Indeed, even the Federal Reserve’s barrage of easy money policies from 2009 to 2020 (zero interest rate policies and QE1, 2, 3, etc.) didn’t lead to large jumps in consumer prices. Instead, under Federal Reserve policies, much of the newly created money and credit that normally would have been lent out to businesses and individuals sat idle on financial institutions’ balance sheets, a buffer against systemic risk. Many other dollars, instead of making new purchases, were used to service the massive amounts of debt that both private and public entities had accumulated. (See these articles from nine and ten years ago.)

Since the financial crisis of 2007–09, loose monetary policy has led to markedly higher prices for stocks and houses. In the last year, though, consumer prices have exploded. The twin causes of this inflation have been the policies of the Fed and Congress and the policies of Presidents Donald Trump and Joe Biden. The Fed has accelerated its rate of money supply increase since 2020. That, in turn, facilitated blowout spending policies by Washington.

Panic driven by the covid pandemic, leaders of both parties adopted the highly problematic policy of going on a spending splurge. Writing in the Wall Street Journal, former Senate Banking Committee chair Phil Gramm (an economist), observed, “Federal spending … set to average 20% of GDP in 2020 and 2021 … doubled to 40% of GDP.” This spending binge included a flood of dollars going directly from the federal treasury to American citizens. Tens of millions of Americans received cash infusions totaling between $1,200 and $3,200 under the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, $600 more in December 2020, and $1,400 under the American Rescue Plan, signed in March 2021. At the same time, government lockdowns greatly curtailed the service sector of the economy. Not surprisingly, flush with a cash infusion from Uncle Sam, consumer demand for goods exploded upward, driving prices higher.

So here we sit today—our government an unfathomable $30 trillion in debt (up by over $6 trillion in only two years) and inflation raging at 7.5 percent. The culprits are obvious: Uncle Sam and the Fed. We should draw two important lessons from the present financial fiasco.

First, a central bank in charge of a fiat currency that tailors its policies to accommodate irresponsible deficit spending by the federal government is a menace to society, unleashing forces that it cannot control.

Second, at a time when many Americans seem infatuated with socialism, our federal government has given us a painful illustration of how incompetent government is to manage (plan) our economy. In the name of trying to help steer our economy through the pandemic, Uncle Sam has given us high inflation and made millions of Americans poorer.

Author:

Mark Hendrickson

Mark Hendrickson is adjunct professor of economics at Grove City College. 

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