Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
In the same category

Is the FED a great success story ?

IMG Auteur
Published : November 19th, 2010
1084 words - Reading time : 2 - 4 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Editorials

 

As a public cartel, the Federal Reserve can count on the government to protect it from competition and to shield it from legal action.  The purpose of a cartel is to create above-market rates of return for its members, in this case the largest commercial banks.  The justification given for cartels is that competition would thwart the higher standards sought by cartel members.  Since the goal of higher standards is supposed to benefit the public, the public will pay a high price.  In asking if the Federal Reserve has been successful, therefore, we also need to ask: From whose perspective?  Has the Fed made life better for the general public?

The answer can only be: Are you kidding?

1.  The Fed was sold to the public as a means to eliminate recessions and depressions, which prior to 1913 were called Panics.  Recessions have their origins in fractional reserve banking.  Far from eliminating this practice, central banks were created to protect it.  Why do they protect it?  Because it provides above-market rates of return during the inflationary boom the Fed creates.    

2.  One of the Fed's stated goals is to preserve price stability.  In seemingly innocuous increments, the Fed has debased the dollar with reckless abandon while telling us this is the path it must follow to assure prosperity and full employment.  In the 1880s, the U.S. experienced one of the most prosperous periods in mankind's history, while
the dollar actually appreciated in value.

3.  Earlier generations of Americans debated monetary policy, but the Fed, through its secrecy and mind-numbing obfuscations, has taken monetary matters out of the arena of public debate.  People are more interested in who will win the Heisman than in the counterfeiting cartel draining their wealth and making them more dependent on government.  Even with
Ron Paul exploding on the scene, mention the words "Federal Reserve" to almost anyone and brace yourself for a blank stare.

4.  As society's sole engine of inflation, the money cartel is funding the creation of a debt-laden super-state over a debt-burdened populace whose forerunners basked fat and prosperous under a smaller government and no Fed.

5.  During the 1920s, as a favor to special interests, including the Bank of England, the Fed inflated the economy into a crisis that led to the abandonment of the market's choice of money: gold coins.  Leading experts blame the "
mentality of the gold standard" for causing the Great Depression because it "limited the ability of governments and central banks to respond to adversity."  And what, one should ask, brought on this adversity?

The crisis was not caused by sovereign individuals engaging in voluntary trade with their preferred choice of money, but by the state-run gold standard and the banking cartel.  The state failed to protect depositors by failing to uphold contract law. 

The public had been persuaded to deposit their gold coins in banks in exchange for IOUs, which circulated alongside the coins.  The banks promised to redeem their IOUs on demand, a promise they could only keep for relatively few depositors because most of their reserves were loaned out.  In June, 1917,
the Fed began the process of centralizing the public's gold.  The public was being acclimated to using IOUs instead of coins, a circumstance they would be comfortable with when confiscation arrived.  As Gary North points out, trust moved from the people to the banks, then from the banks to the central bank under state protection. 


The transfer of trust moves from economics to political sovereignty. But a system based on political sovereignty is not trustworthy. It has the ability to cheat, and no agency can bring charges. No agency of appeal exists.


And none exists today as we witness pirates in fine clothes looting our capital to boost the economy.  Since 1933 Americans have been forced to use "IOU nothings" for money.  Such a system produces winners and losers, with the winners being those who control the money.  The losers are the ones with blank stares.

6.  The Fed recently made news when it celebrated the
100th anniversary of its founding at Jekyll Island, Georgia.  Ben Bernanke told the gathering that "We are committed to our price stability objective. I have rejected any notion that we are going to raise inflation to a supra-normal level."  Perhaps he really believes his policies won't reach a "supra-normal" level of inflation.  He once believed the Fed's policies wouldn't cause a housing market meltdown, either.

7.  In his
myth-shattering account of the Federal Reserve, G. Edward Griffin wrote this about the Fed's founding (p. 23):


What emerged [from the secret Jekyll Island meeting of 1910] was a cartel agreement with five objectives:

  1. Stop the growing competition from the nation’s newer banks;
  2. Obtain a franchise to create money out of nothing for the purpose of lending;
  3. Get control of the reserves of all banks so that the more reckless ones would not be exposed to currency drains and bank runs;
  4. Get the taxpayer to pick up the cartel’s inevitable losses;
  5. Convince Congress that the purpose was to protect the public.

It was realized that the bankers would have to become partners with the politicians and that the structure of the cartel would have to be a central bank.  The record shows that the Fed has failed to achieve its [publicly] stated objectives.  That is because those were never its true goals.  As a banking cartel, and in terms of the five objectives stated above, it has been an unqualified success.


If central banks are such pariahs, why do they continue to exist?  Gary North offers this explanation:


The collapse of the Soviet Union brought derisive laughter from academia, worldwide. The Marxists have never recovered, nor is it likely that they will. The emperor had no clothes. No similar derisive laughter has greeted central bankers after their centrally planned disasters have brought economic devastation to tens of millions. On the contrary, politicians call for more of the same. The voters are somewhat skeptical, more ready to cry out, "The emperor has no clothes!" Politicians are not. They know where their bread is buttered, and with what: fiat money for their political action committees.


 So, yes, the Fed has been a success - if you're a Fed insider.

 

George F. Smith

 

Read  his book : The Flight of the Barbarous Relic

 

Visit his website

Read his blog

 

 

George F. Smith is the author of The Flight of the Barbarous Relic, a novel about a renegade Fed chairman and the editor of Barbarous Relic.com.

 

 

 

Companies Mentionned : Gold |
<< Previous article
Rate : Average note :0 (0 vote)
>> Next article
George F. Smith is the author of The Flight of the Barbarous Relic, a novel about a renegade Fed chairman and the editor of Barbarous Relic.com.
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
First Report since April, 2014
05 FebAndy_K1
Jason, One of your articles written way back is one of the reasons I started paying attention to silver and shortly thereafter started to ...
Something has Changed in Gold St...
06 Febneville
No nothing strange has happened in GOLD stocks....absolutely nothing.....The fact of the matter is that you byrne have been playing the man and...
The Revisionist Theory and Histo...
05 Febovertheedge
"The key is in the hand of the U.S. government. It is the same key that was used to lockthe U.S. Mint to silver in 1873, and to gold sixty years la...
First Report since April, 2014
05 FebS W.1
Here I was just 2 days ago thinking whatever happened to that evangelical silver guy. Low and behold up he springs, like some spirit from the g...
LBMA Silver “Price”: A Perfect S...
03 FebS W.
There is no doubt that the Comex can be used as a casino for those who want to trade Silver up/or down or maybe some just wish to take a small punt...
LBMA Silver “Price”: A Perfect S...
30 JanOzSILV1
Bron refuses to EVER admit this market is a Casino and the disconnect between Paper and Physical is a big clue to this
LBMA Silver “Price”: A Perfect S...
30 JanS W.
Usually I enjoy Bron's take on things,but to be perfectly honest, I can't understand 95% of what he his on about here. I get the feeling that h...
ANOTHER NAIL IN THE U.S. EMPIRE ...
30 JanDemosthenes0
Very naive and pretentious article! The author thinks he knows everything and yet knows next to nothing. Shale gas producers are neither stupid n...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
Lara Expl.(Cu-Zn-Au)LRA.V
Revised Resource Estimate Report Filed for Maravaia Copper Gold Deposit
CA$ 0.34+1.47%Trend Power :
Corporate news
Black HillsBKH
Black Hills reports 4Q loss
US$ 50.90-0.59%Trend Power :
Corporate news
Kinder Morgan(Oil)KMP
Midstream Companies Were above the 20-Day Moving Averages
US$ 102.03+1.98%Trend Power :
Corporate news
Kinder Morgan(Oil)KMP
Midstream Companies Were above the 20-Day Moving Averages
US$ 102.03+1.98%Trend Power :
Corporate news
Devon Energy(Ngas-Oil)DVN
Gasoline Inventories Rose Last Week despite Fall in Production
US$ 22.66-4.31%Trend Power :
Corporate news
United States Steel(Fe-Sn)X
U.S. Steel (X) States Ratification of Labor Agreements
US$ 7.34-5.53%Trend Power :
Corporate news
Black HillsBKH
4:34 pm Black Hills Corp beats by $0.04, misses on revs; guides FY16 EPS below consensus
US$ 50.90-0.59%Trend Power :
Corporate news
Black HillsBKH
Black Hills Corp. Reports 2015 Fourth Quarter and Full Year Results
US$ 50.90-0.59%Trend Power :
Corporate news
Transcanada PipelinesTRP.TO
TransCanada to Sign Substantial Agreement to Benefit Québec Economy
CA$ 48.65+0.16%Trend Power :
Corporate news
Devon Energy(Ngas-Oil)DVN
4Q15 Crude Oil Prices: Fallout for the Energy Sector and SPY
US$ 22.66-4.31%Trend Power :
Corporate news
Comments closed