Thursday, December 11, 2008

The Fed Stranglehold

Thursday, December 11, 2008 | Posted by Chris Waner | Edit Post
Over the last 95 years the Federal Reserve's power over the economy has become virtually absolute. Once we have a basic understanding of the Fed's fraud against the American people, see this article, we can begin to examine how this power is becoming increasingly complete.

The US economy was one of the most vibrant and complex in the world. As of the turn of the 20th century, our economy was riding high on the gold standard. Gold is a commodity that has remained relatively fixed in price to the inflation-adjusted dollar for quite some time, at least since the early 19th century. So long as the dollar is pinned to a commodity like gold, the value and quantity of dollars in the market remains relatively stable.

This is a serious problem for the central bankers who want to make large sums of money by controlling the currency. Under a gold standard or, even better, a mixed commodity standard: copper, nickel, silver, gold, and platinum, the bankers must have the majority of the world's supply of these metals in order to have a major influence over the value of the dollar. This is difficult in the extreme--infinitely more difficult than issuing paper currency because fixing the value of the currency under a commodity standard requires limiting the supply. The Fed and the international bankers have worked hard to avoid a gold standard and especially a mixed commodity standard. And in 1933 they succeeded when FDR, at the behest of the Fed, took us off the gold standard and put us on a fiat currency--a currency which has value because the government says you must use it.

When this happened, the value of the dollar was no longer controlled by a commodity resistant to mass production--like gold or silver, but was now purely controlled by the quantity of paper money and the demand for that money. FDR made domestic demand for the paper dollar 100% when he made it illegal to use anything but the dollar as money.

The result is that now the only factor which determines the value of the dollar is the quantity of dollars in the market. And who is in absolute control of the quantity of money? The Fed and the international bankers controlling the Fed. Truly, the fewer factors that influence the value of money, the easier it is to control. And the other factors have been systematically eliminated.

The only remaining factors working against the Fed's absolute control is an informed public watching the economic statistics. Please don't get bogged down in these terms; I'm including the definitions because they might help clarify their importance. There are many economic/monetary indicators, but three of the biggest are the Consumer Price Index, the M3, and the Money of Zero Maturity. The Consumer Price Index (CPI) is a survey of products compared over time to determine whether monetary inflation is occurring--to determine if the buying power of the dollar is dropping. The M3 indicates how much money the Fed has directed into the economy (printed) because this stat includes long term capital investment holdings like bank reserves, derivatives, money held in foreign banks, and large donation ($100,000 or more)--it keeps track of what the big money players like bankers are doing with their money. The Money of Zero Maturity (MZM) is money immediately or almost immediately available for withdrawal, like checking and savings accounts, mutual funds, etc.

Now even these available statistics are under attack. As of March 23, 2006 the Fed/US government has stopped publishing the M3 numbers, claiming that it is largely irrelevant. If they are irrelevant, then why not publish them and let the public decide how relevant they are. In my opinion something fishy is going on here.

Walter Williams, economics professor at George Mason University, has documented proof that the Fed and the US government are cooking the books with regard to CPI (and other key indicators for that matter, including unemployment numbers) by subtly changing the year by year product comparisons; the CPI is becoming increasingly irrelevant because year by year comparisons are no longer comparing apples to apples but apples to oranges [source].

I have no proof that the MZM has been tampered with, and by all measures it is a better indicator of inflation than CPI; but Bernanke, the Fed chairman, has said under oath before Congress that the Fed will take no monetary inflation indicator into account except for the CPI, and as I just mentioned the government is actively cooking those books.

I don't know how to put this softly; we're in trouble. Our monetary system is outside the control of the people and largely even the federal government. The Fed has a stranglehold on the quantity of money, and the government won't allow competitive currencies into the market. The dollar is forced on us, and now even the information about the dollar that is supposed to be available to the public and make everyone accountable is becoming contaminated, ignored, or removed all together. It's time to get educated. Tell people around you what's happening. Point them to good sources of information. Get them interested. Compel them to take an active roll. Contact your Congress person. Make your voices heard. Something's going down, so keep your eyes open.

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