{"id":1445938,"date":"2023-12-26T15:00:00","date_gmt":"2023-12-26T20:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1445938"},"modified":"2023-12-26T15:00:00","modified_gmt":"2023-12-26T20:00:00","slug":"the-christmas-gift-that-keeps-on-taking","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/the-christmas-gift-that-keeps-on-taking\/1445938\/","title":{"rendered":"The Christmas Gift That Keeps On Taking"},"content":{"rendered":"

The Christmas Gift That Keeps On Taking<\/span><\/p>\n

\n

Authored by Michael Maharrey via SchiffGold.com,<\/em><\/a><\/p>\n

Two days before Christmas in 1923, Woodrow Wilson gave the United States a Christmas gift that keeps taking. <\/strong>On that day, he signed\u00a0the Federal Reserve Act<\/a>\u00a0into law, creating the US central bank.<\/p>\n

<\/a><\/p>\n

Since that inauspicious day, the US dollar has lost 96% of its value.<\/strong><\/p>\n

It\u2019s no surprise that Wilson signed the Federal Reserve Act just one day before Christmas Eve. It was perfect timing so the general public wouldn\u2019t notice.<\/p>\n

The stated purpose of the legislation was to \u201cprovide the nation with a safer, more flexible, and more stable monetary and financial system.\u201d<\/p>\n

In reality, it was a gift to bankers.<\/strong><\/p>\n

In\u00a0an article published by the Mises Institute<\/a>, George Ford Smith explained why bankers were clamoring for a central bank.<\/p>\n

Before the Fed\u2019s founding, bankers in general and Wall Street in particular complained about US currency\u2019s lack of \u201celasticity.\u201d \u201cElasticity\u201d in this context is one of the great euphemisms of human history. According to lore, this missing feature of \u201chard\u201d money, such as gold or silver, was responsible for the panics of 1873, 1884, 1893, and 1907. The supply of the coins that were behind the paper banknotes couldn\u2019t be increased when needed. Gold and silver were therefore said to be inelastic. Because of this inelasticity, the legend persisted that banks were having trouble meeting the demand for farm loans at harvest time, as G. Edward Griffin explains in\u00a0The Creature from Jekyll Island<\/a><\/em>:<\/p>\n

\u201cTo supply those funds, the country banks had to draw down their cash reserves which generally were deposited with the larger city banks. This thinned out the reserves held in the cities, and the whole system became more vulnerable. Actually, that part of the legend is true, but apparently no one is expected to ask questions about the rest of the story.<\/em><\/p>\n

\u201cSeveral of them come to mind. Why wasn\u2019t there a panic every Autumn instead of just every eleven years or so? Why didn\u2019t all banks\u2014country or city\u2014maintain adequate reserves to cover their depositor demands? And why didn\u2019t they do this in all seasons of the year? Why would merely saying no to some loan applicants cause hundreds of banks to fail?\u201d<\/em><\/p>\n

The Morgan and Rockefeller bankers on Wall Street dreamed of having a central bank that could supply money when needed, as a \u201clender of last resort.\u201d A central bank would also control the banks\u2019 inflation rate. If bank reserves could be maintained at a central bank and a common reserve ratio established, then no single bank could expand credit more than its rivals, and therefore there would be no bankruptcies caused by currency\u2019s draining from overly inflationary banks. All banks would inflate in harmony, and there would be tranquility and profits for all.<\/p>\n

The origins of the Fed are pretty shady.<\/strong><\/p>\n

The central bank was conceived during a secret meeting at a private club on Jekyll Island, Georgia. According to\u00a0an NPR article<\/a>, Sen. Nelson Aldrich, chairman of the Senate finance committee, organized the clandestine meeting.<\/p>\n

\u201cHe told a handful of New York bankers to go on a given night, one by one, to a train station in New Jersey. There they would find a private rail car hitched to the back of a southbound train. To conceal their identities, Aldrich told the bankers to come dressed as duck hunters and to address each other only by first name.\u201d<\/p>\n

The attendees at this meeting hammered out a blueprint that became the Federal Reserve Act.<\/p>\n

The rest is a history of money devaluation and government growth.<\/p>\n

THE ENGINE RUNNING THE BIGGEST GOVERNMENT IN HISTORY<\/strong><\/h2>\n

The Federal Reserve serves as the engine that makes all of the US government\u2019s\u00a0borrowing and spending<\/a>\u00a0possible. Without the Fed, the entire system would collapse. Ultimately, you can thank the Fed for\u00a0the massive national debt<\/a>.\u00a0<\/p>\n

Case in point, in the early days of the COVID-19 lockdowns, the Federal Reserve effectively monetized 100 percent of the new debt taken on by the US government.<\/p>\n

Here\u2019s how it worked.<\/strong><\/p>\n

In March and April, the US\u00a0Treasury Department issued\u00a0$1.56 trillion<\/strong>\u00a0in debt securities<\/a>\u00a0to fund Uncle Sam\u2019s massive coronavirus spending spree. Meanwhile, in March, the Fed bought $1.2 trillion in Treasury bonds. The central bank slowed its roll a bit in April but still purchased $526 billion in US bonds. That brought the two-month total to\u00a0$1.56<\/strong>\u00a0trillion.<\/p>\n

In effect, the Federal Reserve bought all of the debt issued by the US government in March and April with money created out of thin air.<\/p>\n

Therein lies the Fed\u2019s true power. It can \u201cprint money<\/a>.\u201d<\/strong><\/p>\n

When we say the central bank \u201cprints money,\u201d we don\u2019t mean it literally runs off dollar bills in the basement of the Eccles Building. Modern money creation is digital. The Fed can simply write a check, even if funds don\u2019t exist in the account, and \u201cpoof,\u201d new money appears in the account of whoever receives the check. The Federal Reserve can\u2019t bounce a check. This enables the central bank to expand the money supply at its discretion.<\/p>\n

According to the powers-that-be, this is a feature, not a bug. The Fed\u2019s ability to inflate the money supply supposedly creates economic stability.<\/p>\n

In reality, it creates government stability.<\/strong><\/p>\n

If the federal government had to rely on tax receipts and debt it could repay to fund all of its unconstitutional wars, foreign aid, and domestic spending, it would be dead in the water. The ability to raise revenue through taxation would naturally limit the government. But with the Fed backstopping the borrowing and monetizing the debt, there are virtually no limits on its spending.<\/p>\n

But you still foot the bill via\u00a0the inflation tax<\/a>.<\/strong><\/p>\n

As Peter Schiff put it during a 2022 interview, when you talk about families struggling with inflation, they\u2019re really struggling with government.<\/p>\n

Inflation is a tax. It\u2019s the way government finances deficit spending. Government spends money. It doesn\u2019t collect enough taxes, so it has to run deficits. The Federal Reserve monetizes those defiticts \u2013 prints money. They call it quantitative easing, but that\u2019s inflation. Government is getting bigger and bigger, and families across America are going to have to bear that burden through higher prices.\u201d<\/p>\n

The Federal Reserve may well rank as the worst Christmas gift ever. It\u2019s the give that keeps on taking.<\/strong><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nTue, 12\/26\/2023 – 10:00<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/christmas-gift-keeps-taking<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

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