Money Matters II: More Money

For most of us, economics is nothing more than a course we tried to avoid in college. But from a practical standpoint, it means access to resources and there is nothing in the history of human civilization which has been prioritized above it.

Marx and Engels wrote, "The history of all hitherto existing society is the history of class struggles." The point has never been stated more succinctly.

Every war or revolution you've ever been in or heard or read about, every conflict where masses of people were convinced to sacrifice their lives for some illusory ideal like "patriotism" or "freedom" or "democracy" was really just economics in sheep's clothing.  So bear with the lesson a moment.

Beyond interest, there is another mechanism by which the Federal Reserve manipulates your ability to purchase the things you need to live.  It's called, inflation, and the skinny goes something like this.

Anytime the Money Supply (the amount of money in circulation) increases ahead of the rate of production of goods, then the amount that an individual has to spend for that good, say a loaf of bread, increases also. In other words, if there is more money, but an equal amount of goods, then the dollar loses purchasing power as prices increase.

In the real world, this means that people who've spent their entire lives saving their money are actually losing money as the dollar loses value. It also means that when prices increase ahead of wages (which they almost always do), it becomes increasingly difficult to feed and clothe your family.

Essentially, inflation is an invisible tax on your dollar; one you did not vote for or likely didn't even know was there. All you know for sure is that five dollars doesn't buy you what it used to and one in a million earn enough to compensate for the difference. The unfortunate and inevitable result is that you've got a whole country in which everything is out on loan.

For a more in-depth explanation, check out the videos linked in Money Matters: The Federal Reserve, this lecture by Texas Senator Ron Paul and two excellent documentaries, The Money Masters, and Money, Banking and the Federal Reserve, both of which serve as a fantastic foundation for understanding how money works in this country if you have the patience to sit through them.

As part of their defense of central banking, Fed supporters claimed that it's establishment would serve to stabilize the economy in order to prevent nasty things like recessions and depressions, but a cursory glance at history quickly reveals that the Federal Reserve has done no such thing.  On the contrary, there have been multiple recessions and now two great depressions since The Fed came to town. Additionally, a more thorough examination reveals a profoundly more disturbing implication—

That by gradually increasing and then suddenly contracting the money supply, the Federal Reserve is able to incite an economic crisis as deliberately as you start your car in the morning. In the words of Senator Charles Lindberg,

"Under the Federal Reserve Act panics are scientifically created. The present panic is the first scientifically created one, worked out as we figure a mathematical equation."

He was referring to the Panic of 1920, but the banks have been playing the same game ever since. If it ain't broken and all that. Worse is that their ability to manipulate the economy has only strengthened as the average politician has become less willing to challenge the status quo.

Now, you might be asking yourself why anyone would do such a thing. What could possibly motivate a bunch of rich guys to cause the rest of us to live in squalor at the push of a button?  I'd say that's a more than fair question and while I'll always suggest that you do yourself the favor of investigating the matter on your own, my take is forthcoming.

Thanks for reading.