In 1791,
the first Secretary of the Treasury of the US, Alexander Hamilton, convinced
then-new president George Washington to create a central bank for the country.
Secretary of State Thomas Jefferson opposed the idea, as he felt that it would
lead to speculation, financial manipulation, and corruption. He was correct,
and in 1811, its charter was not renewed by Congress.
Then,
the US got itself into economic trouble over the War of 1812 and needed money.
In 1816, a Second Bank of the United States was created. Andrew Jackson took
the same view as Mister Jefferson before him and, in 1836, succeeded in getting
the bank dissolved.
Then, in
1913, the leading bankers of the US succeeded in pushing through a third
central bank, the Federal Reserve. At that time, critics echoed the sentiments
of Messrs. Jefferson and Jackson, but their warnings were not heeded. For over
100 years, the US has been saddled by a central bank, which has been manifestly
guilty of speculation, financial manipulation, and corruption, just as
predicted by Mister Jefferson.
From its
inception, one of the goals of the bank was to create inflation. And, here,
it’s important to emphasise the term “goals.” Inflation was not an accidental
by-product of the Fed—it was a goal.
Over the
last century, the Fed has often stated that inflation is both normal and necessary.
And yet, historically, it has often been the case that an individual could go
through his entire lifetime without inflation, without detriment to his
economic life.
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Yet,
whenever the American people suffer as a result of inflation, the Fed is quick
to advise them that, without it, the country could not function correctly.
In order
to illustrate this, the Fed has even come up with its own illustration
“explaining” inflation. Here it is, for your edification:
If the
reader is of an age that he can remember the inventions of Rube Goldberg, who
designed absurdly complicated machinery that accomplished little or nothing, he
might see the resemblance of a Rube Goldberg design in the above illustration.
And yet,
the Fed’s illustration can be regarded as effective. After spending several
minutes taking in the above complex relationships, an individual would be
unlikely to ask, “What did they leave out of the
illustration?”
Well,
what’s missing is the Fed itself.
As stated
above, back in 1913, one of the goals in the creation of the
Fed was to have an entity that had the power to create currency, which would
mean the power to create inflation.
It’s a
given that all governments tax their people. Governments are, by their very
nature, parasitical entities that produce nothing but live off the production
of others. And, so, it can be expected that any government will increase taxes
as much and as often as it can get away with it. The problem is that, at some
point, those being taxed rebel, and the government is either overthrown or the
tax must be diminished. This dynamic has existed for thousands of years.
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However,
inflation is a bit of a magic trick. Now, remember, a magician does no magic.
What he does is create an illusion, often through the employment of
a distraction, which fools the audience into failing to understand what
he’s reallydoing.
And, for
a central bank, inflation is the ideal magic trick. The public do not see
inflation as a tax; the magician has presented it as a normal and
even necessarycondition of a healthy economy.
However,
what inflation (which has traditionally been defined as the increase in the
amount of currency in circulation) really accomplishes is to devalue the
currency through oversupply. And, of course, anyone who keeps his wealth
(however large or small) in currency units loses a portion of it with each
devaluation.
In the
100-plus years since the creation of the Federal Reserve, the Fed has steadily
inflated the US dollar. Over time, this has resulted in the dollar being
devalued by over 97%.
The
dollar is now virtually played out in value and is due for disposal. In order
to continue to “tax” the American people through inflation, a reset is needed,
with a new currency, which can then also be steadily devalued through
inflation.
Once the
above process is understood, it’s understandable if the individual feels that
his government, along with the Fed, has been robbing him all his life. He’s
right—it has.
And it’s
done so without ever needing to point a gun to his head.
The
magic trick has been an eminently successful one, and there’s no reason to
assume that the average person will ever unmask and denounce the magician.
However, the individual who understands the trick can choose to mitigate his
losses. He can take measures to remove his wealth from any country that
steadily imposes inflation upon him and store it in a country where this either
does not occur, or occurs to a lesser degree.
