"Most people in the U.S. want to go back to when the 'times were good,' not realizing that the 'good times' they remember were nothing but an illusion created by the Federal Reserve's artificially low interest rates. The wealth created in the U.S. during the past decade was phony and all Americans will soon pay for it by suffering through massive price inflation.
Today there are huge reserves of dollars sitting at our nation's largest banks collecting interest. When price inflation in the U.S. reaches a level that is higher than the interest this money collects, the banks hoarding these dollars will be forced to lend this money and seek a higher return. As this money gets lent out, we will see an increase in the multiplier effect where each dollar could transform into ten dollars or more.
Federal Reserve Chairman Ben Bernanke believes that by printing money he can generate prosperity, when in fact, prosperity can only be achieved by the production of goods that we can export to the rest of the world. Printing money transfers wealth from the middle class to the rich while taking away our freedoms. Inflation has occurred after every major crisis in U.S. and it has always led to bigger government, more regulations and greater centralization. In Germany, hyperinflation led to the rise of Hitler.
The U.S. already saw one instance of hyperinflation beginning in 1775 when the Continental Congress issued a paper currency called the continental which eventually became worthless. This is why the U.S. Constitution said only gold and silver were to be used as legal tender, because they saw what happened in the past and anticipated what would happen in the future with another fiat currency. Debased currencies always fail over the long-run because the government isn't smart enough to know how to manage money better than the free market.
Gold was chosen as real money by the free market, not the government. Gold is the best gauge of the strength of the U.S. dollar. With gold prices approaching a new all time high, we are seeing that the world has no confidence in the U.S. dollar. The only way we can ever go back to having a strong economy, peace and prosperity is by returning to sound money that is backed by gold and silver. A sound currency would force our government to live within its means. Without sound money, our country may not survive when the artificial high we are feeling right now begins to wear off. The entire system could come to a complete halt.
The Federal Reserve has given Congress the power to spend endlessly with no limit by printing the money needed to fund unnecessary wars, bailouts and stimulus plans that steal from the savings of all Americans. Politicians today are working with the Federal Reserve to dilute the value of our money. Since the creation of the Federal Reserve in 1913, $0.95 of every $1 saved by Americans has been stolen. Some might consider this dilution of our savings to be a crime, yet there is still no widespread outrage about it.
Think about the millions of lives that have been lost in Iraq for a war that wouldn't have been possible if it wasn't for the Federal Reserve inflating our currency. Without a printing press, diplomatic solutions would be used to prevent war. Wars do not help an economy, they destroy wealth. They are also used to distract from economic problems.
The U.S. government created all of the problems it is now trying to solve. It is the government's reckless policies that have forced Americans to become dependent on government entitlement programs. The solution to our current problems is to allow the free market to work for itself, but unfortunately George Bush ruined the name of the free market and today the blame for all of our problems is being placed on the shortcomings of free-market capitalism.
We have not had a free market in the U.S. for decades. If we had a free market, banks would be allowed to fail. If banks knew they wouldn't get bailed out, they wouldn't take unnecessary risks and would compete against each other in order to preserve wealth. Manipulating the supply of money and interest rates creates the opposite of a free market system, so the free market in no way can be blamed for the mess our country is in.
It is impossible for central banks and politicians to know what the proper interest rate should be. The Federal Reserve's attempts to micromanage our economy postpone inevitable consequences while making them much worse. By allowing large corporations to privatize profits and socialize losses, they have delayed the pain and suffering that must occur in order to rebalance the economy. The latest false signals being sent by the Federal Reserve of an economic recovery are only building the imbalances in our economy to a breaking point of total collapse.
Until the Federal Reserve no longer has the power to inject trillions of dollars into economies around the globe without revealing who benefits, a short-term mindset over long-term outlook will reign supreme in the U.S. with Americans enslaved to their huge credit card debt, student loans, automobile loans and mortgages."
