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Today, all eyes were on the Federal Reserve: How it
would respond to the recent turmoil in global financial markets? Would it
lower rates, and if so, would it do
any good?
By the time you read this, the Fed's decision - made
in secret - will have already been announced. Hundreds of news articles and blogs will argue over its wording and meaning. Was it
dovish or hawkish? Discussed ad nauseam will be: what the policy statement
does or does not clarify, what it leaves room for in
the future, what it means for the economy, housing, jobs, and the prospects
for recession or recovery.
What will not be discussed is the powerful role
played by central banks themselves.
Central Banks = Centralized Economic Planning
If you thought that centralized economic planning disappeared with the fall
of the Berlin wall in 1989, think again. Eight times each year, a group of
twelve men meet to make secret decisions that have a profound impact on the US and global
economies. None of these men are elected. Their meetings are closed to the
public. Even members of the US Congress and the Senate Banking and Finance
Committees are barred from attending, or even knowing what is discussed. No
detailed account of arguments or discussions is ever made public. Listen to
Congressman Ron Paul on the secrecy of the Fed:
..
In some parts of the world, this might be called a
cabal. Here it is called the Federal Reserve Open Market Committee (FOMC). Regardless
of what you call it, it is profoundly unfair to the majority of Americans. Eight
of the representatives at today's meeting - the Chairman and the Board of
Governors - are political appointees of the President. All twelve men are bankers.
Their secret decisions - made eight times each year - affect whether or not
you can get a loan, what your payment will be, whether the economy booms or
sinks into recession, and therefore whether or not you'll have a job.
What the Fed says and what it does are two different
things. Today, with the Fed's stated "focus on inflation," I am
reminded of Richard Russell's January 4, 2007 edition of his Dow Theory Letters, in which he had
a short analysis of central banks. Mr. Russell 83 is years old and has been
watching the market for well over fifty (50!) years. He's one wise &
curious dude (the last two his own words) who's been
writing non-stop since 1958.
This is what Russell has to say about central banks
in general:
CENTRAL BANKS - I get a kick out of all these
central bank governors, both here and overseas,
constantly warning us about the "terrible danger of inflation." What
a bunch of snake-oil salesmen these guys are. It's the central banks
themselves that are pumping out all that extra fiat money that is creating
the inflation. It's like an AIDS carrier indulging in all the sex he can
handle while simultaneously warning about the spread of the disease.
So what's it all about with these central bankers? Simple,
they like their cushy jobs along with the perks, and the only thing they're
worried about is that the world will get wise to the central bank/fiat money
racket, and maybe kill the beast. In other words, the central banks are
afraid that voters will finally get rid of the whole private money business
along with its nonstop production of intrinsically
worthless fiat money.
You see, a real headwind of inflation would anger
the public, in which case a few intelligent journalists might start putting
the blame where it belongs - on the central banks, not the least of which is
our own Federal Reserve. No, too much inflation, surging inflation, would be
dangerous - it might expose the Fed and the central bankers for what they are
- engines of inflation. When you've got a great racket going, like taking
control of a nation's money, you want to protect that racket.
So its no wonder that the governors of our Federal
Reserve take turns "warning us" about inflation while
simultaneously telling us that "they'll keep everything under
control." It's enough to cause this editor to "throw up his
cookies." The curse of the Fed - it keeps going on and on and on. These
freebooters know how to protect their racket. Create inflation, hide the
evidence (as they did when they hid the figures on the broad M-3 money
supply) and bravely act as our "protectors and saviors."
Where was Congress when the Federal Reserve was first approved in 1913? Answer
- At the same place it was when Congress handed over to President Bush the
power to make war. End of that Russell rant. Whew!
Richard Russell hits the nail right on the head. You
won't hear about this in the mainstream media anytime soon. Unlike the MSM,
Richard Russell is independent - beholden to no advertisers. He can say what
he wants; he is free to speak the truth.
Will the public ever wake up to what is going on
with our money supply, and "finally get rid of the whole private money
business along with its nonstop production of
intrinsically worthless fiat money?" The first step towards that goal is
awareness.
Since the Fed is worried about excessive inflation -
which it has been creating itself, perhaps it is time for it to create a
little deflation, i.e. monetary destruction. By limiting the supply of
credit, assets that rely on ever increasing amounts of credit creation begin
to lose value or disappear altogether. For those of you who think that deflation
is impossible, I direct you to one of the most profound comments ever to
appear on Bull! Not bull:
I am fascinated by the common perception that the
Federal Reserve is a proven non-stop inflation machine. Inherently, the
Federal Reserve uses inflation and deflation to whipsaw the average bystander
out of his savings. I don't see how one economic machination is more favored over the other when the goal is to ensure that
the public's savings ends up in the accounts of the shareholders of the
Federal Reserve System.
Think about it. And stay tuned.
The World's Debt Money System
Last week, in response to my article I received a
question on our debt money system: "I have heard that if all debts were
repaid, there would be no "money" left. Is this true?" The
short answer to this - thanks to the central bankers - is yes. The long
answer will come later this week. Please sign up here to be notified
when it is released.
By :
Michael A. Nystrom
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