The Federal Reserve Sends Thank You Letters To Congress For
Allowing Them To Destroy Our Economy In Secret
The Federal Reserve Sends Thank You Letters To Congress
For Allowing Them To Destroy Our Economy In Secret
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The Federal Reserve Sends Thank You Letters To Congress For Allowing Them
To Destroy Our Economy In Secret
Posted: 30 Sep 2012 11:58 AM PDT
The Federal Reserve continues to pump up this "bubble
economy" by recklessly printing money and by setting interest rates
artificially low, and the U.S. Congress continues to stand aside and allow them
to systematically destroy our economy. The U.S. Congress could choose to end
this madness at any time, but the truth is that Congress won't even pass a law
that would allow the American people to see what is going on over at the
Federal Reserve. Congress has voted down every single bill that would authorize
a comprehensive audit of the Federal Reserve. So the folks over at the Fed will
continue to be able to destroy our future in secret. In fact, back in July
Federal Reserve Chairman Ben Bernanke actually sent five thank you letters to
members of Congress that gave speeches on the floor of the U.S. House of
Representatives encouraging their fellow lawmakers to vote against the bill to
audit the Fed. Since the U.S. Congress continues to refuse to do anything to
hold the Federal Reserve accountable, the Fed will continue to print
unprecedented amounts of money, it will continue to set interest rates insanely
low and it will continue to pump up the greatest debt bubble in the history of
the world. Unfortunately, all debt bubbles eventually burst, and when this one
does it is going to be a financial nightmare unlike anything we have ever seen
before.
It was Politico that first broke the
story about the thank you letters that Federal Reserve Chairman Ben Bernanke
sent to five members of Congress back in July. Bernanke acknowledged in the
letters that there was never any worry that the "Audit the Fed" bill
would actually get through Congress and be signed into law, but he was still
extremely grateful that a number of members of Congress got up and publicly
denounced the bill....
In July, the Fed chairman sent letters of gratitude to five
Democratic members of Congress after they delivered speeches on the House floor
urging fellow lawmakers to reject the “Audit the Fed” bill authored by retiring
Texas Republican Ron Paul, the central bank’s chief antagonist.
Their efforts failed to defeat the bill, but they were not in
vain, at least in Bernanke’s eyes.
“While the outcome of the vote was not in doubt, your willingness
to stand up for the independence of the Federal Reserve is greatly
appreciated,” Bernanke wrote in the letters, which were obtained by POLITICO
through a Freedom of Information Act request.
So who did Bernanke send those letters to?
According to Politico, the thank you letters
were delivered to U.S. Representatives Barney Frank, Elijah Cummings, Melvin
Watt, Carolyn Maloney and Steny Hoyer.
By refusing to take action against the Federal Reserve, the U.S.
Congress is silently endorsing their incredibly foolish policies.
Sadly, most Americans don't even realize that the Federal Reserve
has more control over our economy than anyone else does. Most Americans that
are actually concerned about politics are busy arguing over whether Obama or
Romney will be better for the economy when it is actually the Fed that controls the
levers of economic power.
Just think about it.
The Federal Reserve played a major role in creating the housing
bubble which severely damaged our financial system a few years ago.
As the chart below shows, after 9/11 the Federal Reserve dropped
interest rates to historically low levels. This allowed potential home buyers
to get into much larger mortgages, and the big banks (which the Fed supposedly
"regulates") started making home loans to almost anyone with a pulse.
When interest rates started to go back up to normal levels in
2005, many home owners discovered that their adjustable rate mortgages started
to become much more painful. By 2007, we started to see a massive wave of
mortgage defaults. In 2008, the financial system crashed.
In response to the financial crisis of 2008, the Federal Reserve
dropped interest rates to record low levels. The effective federal funds rate
is essentially at zero at this point, and the Fed has promised to keep interest
rates at ultra-low levels all of the way into 2015.
But didn't artificially low interest rates cause many of our
problems in the first place? The central planners over at the Fed are convinced
that this is the right course for our economy, but can we really live in a zero
interest rate bubble indefinitely? Won't this eventually cause even greater
problems?....
The Fed is also
destroying our economy by recklessly printing money.
Once upon a time, the
U.S. monetary base rose at a very steady pace. But since the financial crisis
of 2008, Ben Bernanke has been flooding the financial system with money and
this has caused an unprecedented explosion in our money supply.
It isn't too hard to see
from this chart what the foolish "quantitative easing" policies of
the Federal Reserve have done to our monetary base....
Fortunately a lot of the
money from previous rounds of quantitative easing is being stashed by the big
banks as "excess reserves" with the Federal Reserve, but when that
money starts flowing into the "real economy" (and it will at some
point), we are going to have a major problem on our hands.
But more than tripling
our monetary base was not enough for Bernanke. He recently announced yet
another round of quantitative easing which he says will last indefinitely.
Basically, Bernanke is
taking a sledgehammer to the U.S. dollar. Our currency is being systematically
destroyed, and the U.S. Congress is standing by and doing nothing.
For a lot more on why
QE3 is going to be so incredibly destructive for our economy, please see the
following five articles....
The Federal Reserve
seems to think that printing more money is always the solution to whatever
economic problems we are having.
But of course the Fed
has been debasing our currency from the very beginning. The entire Federal
Reserve system is designed to create inflation.
From the time that the
Federal Reserve was created back in 1913, the purchasing power of a U.S. dollar
has declined from $1.00 to only about 4 pennies today.
And now Bernanke seems
bound and determined to wipe out those last 4 pennies.
The Federal Reserve
system was also designed to create a never ending spiral of government debt.
Sadly, most Americans
simply have no idea where
money comes from. Most Americans have no idea that money that the Federal
Reserve zaps into existence out of thin air is loaned to the U.S. government at
interest. Most Americans have no idea that the primary reason why we are 16
trillion dollars in debt is because this is what the system was designed to do
to us.
Today, the U.S. national
debt is more
than 5000 times larger than it was when the Federal Reserve was originally
created in 1913. This did not happen by accident....
Not that our politicians
should be off the hook for this. They have been spending money as
if there is no tomorrow. Most of them have shown no concern at all about
the legacy of debt that they are passing on to future generations of Americans.
If our politicians had
been more responsible, the
national debt would still be there, but it would be at a much more
manageable level.
If we ever want to
totally get rid of our national debt, the Federal Reserve must be abolished.
There is no other way.
And government debt is
not the only bubble that the Federal Reserve has pumped up.
The following is a chart
that shows the growth of all forms of debt (government, business, consumer,
etc.) in the United States. The total amount of debt in the United States has
grown from less than $2 trillion to more than $55 trillion over the past 40
years....
How in the world could
we have been so foolish?
How in the world did we
allow the total amount of debt in our country to get more than 27 times larger
over the past 40 years?
As you can see, there
was a slight "hiccup" in the bubble as a result of the financial
crisis of 2008, but now it has started growing again.
At this point our entire
financial system is based on debt, and if the debt bubble does not continue to
expand the entire thing will collapse.
But no financial bubble
grows forever. History has proven that to us over and over.
At some point this
bubble is going to burst.
When it does, we will
either experience a deflationary collapse or a hyperinflationary collapse
depending on how "the powers that be" respond to what is happening.
History has shown us
that financial collapse is often accompanied by social upheaval.
Many times it even leads
to war.
So what will happen to
America when our economic collapse happens?
That is a very good
question.
How would you answer it?
