STAFF NEWS & ANALYSIS
New Gov. Analysis Shows Fed Policies Have Deepened Downturn for Many
By Daily Bell Staff - August 21, 2016

Wealthy Have Nearly Healed From Recession; the Poor Haven’t  … The Great Recession and the subsequent recovery from it have deepened the wedge between the very wealthy and everyone else in America, plunging the poor deeper into debt and wiping out two-fifths of the wealth held by families in the heart of the middle class. The wealthiest Americans, meanwhile, appear close to regaining all their losses over the same period, according to an analysis released last week by the Congressional Budget Office. – Washington Post

This analysis helps prove a point we’ve been making for years: Fed stimulation provided by too-low interest rates does NOT stimulate industry only finance and speculation.

The Congressional Report doesn’t seem to mention central banking, so in this article we will rectify the omission. The entire justification for central banking is that it helps policymakers produce prosperity. But it doesn’t.

We don’t need a government analysis to confirm this but it’s useful to have because it illustrates once more the truth of what’s occurring in terms of economic manipulation. The entire apparatus of monetary leadership, and its influence on the marketplace itself, does not deliver what it is supposed to.

The idea is that the Fed provides additional liquidity as necessary. But this is a form of price-fixing. In a  normal economy where the government itself was not involved in “adjusting¨ the value and volume of currency, the value would be provided by the market itself.

This is the way it has traditionally worked throughout history. The last century has been one enormous experiment. But the consequences are obvious.

Say an economy utilizes gold as money. When too much gold circulated in the marketplace, the value relative to what could be purchased would likely decline. As the value declined, less gold would be produced and circulated. Mines would close, etc.

When less gold was produced, demand would build. The competitive marketplace itself would define the value of “money” and thus the contraction or expansion of money stock.

This does not seem to be a complex point. It is generally admitted that the only way to set a valid price is to allow the market itself to produce the value.

But somehow, not when it comes to money.

Then it seems to be universally acknowledge by power brokers in the US and abroad that a monopoly facility (a central bank) is necessary to adjust the price.

It makes no sense. And furthermore it is an example of what we call an elite dominant social theme.

It is paradigm circulated throughout the world that is so prevalent and fundamental that the mainstream media simply doesn’t question it.

Global warming is such a theme (here). Vaccines are such a theme (here). These themes and many others constitute the propaganda launched by governments – and shadowy power brokers – to reinforce and justify authoritarianism.

Every dominant social theme has two parts. The first part is the problem. Fear is to be raised and deepened whenever possible. That’s why so many elite memes focus on scarcity. The world is running out of water, food, air, etc.

The solution is always to be found in government – the bigger the better. The idea is to justify and advance global government (via the UN) whenever possible.

This is one reason that we are suspicious of the “nuclear weapons” narrative that we have been concentrating on of late. It fits perfectly into the fear-based elite paradigm. Nuclear weapons exist and can destroy the world. Only government can stop their spread and usage.

The same paradigm can be spotted when it comes to central banking. The world is ever in danger of recessions and depressions. And only monopoly central banking – the control of the money supply by an elite, technocracy – can save us from poverty.

Questions do arise of course. But always they have to do with the “job” a given central bank is doing. They are policy questions pertaining to the competence of a monopoly money-printing facility.

But the basic functionality is almost never questioned in the Kabuki ritual that passes for establishment dialogue.

But it should be. Unfortunately, as with so many articles in the mainstream media and Washington Post in particular, when something substantive is presented, the analysis is lacking.

The article presents the information but then leaves it lying there like a dead thing. No fundamental explanation is offered.

Here:

The analysis shows the wealthiest 10 percent of Americans now hold three-quarters of the nation’s wealth, up from two-thirds in 1989, and a three percentage-point increase from the start of the recession.

Most Americans found themselves with less wealth in 2013 than Americans of a similar age had in 1989; the only age group doing better than its counterparts from a quarter-century ago was senior citizens.

The report was commissioned at the request of Sen. Bernie Sanders of Vermont, who made inequality a central theme of his run for the Democratic presidential nomination this year.

In a statement, he said the analysis “makes clear that since the 1980s there has been an enormous transfer of wealth from the middle class and the poor to the wealthiest people in this country.”

Of course Sanders has the answer! He doubtless wants MORE government interference so that the problem government has created with its monetary price fixes can be cured by yet more meddling.

When central banks provide more money to the economy than necessary (and there is no way to prove how much IS necessary), the extra cash flows into the hands of the wealthy closest to the central bank money spigot.

Often this money is “invested” in securities exchanges and more money is made. This money doesn’t necessarily translate into industrial stimulation.

The wealthy make more money from central bank processes. But workers are left out of the process.

This is a simple and clear result of monopoly money printing. Price fixing never provides us with expected results. It always damages certain groups at the expense of others.

Over time, monopoly central banking has increasingly impoverished the people it supposedly seeks to help.

And gradually in this Internet era, workers are realizing it. The Fed, for instance, just launched a Facebook page (here). It is already bombarded with negative, nasty comments.

People, more and more of them, do understand the impossibility of improving the economy by giving a handful of people the power to expand or contract the money stock at will.

In simplest terms it is a ridiculous idea. It can’t work. It doesn’t work. And this analysis is further proof.

We’ve been reporting on the gradual decline of central bank – and Federal Reserve – credibility for about a decade now here at DB. Nothing that we have seen leads us to conclude that central banking is held in higher esteem than before.

In other words, the trend is down. And sooner or later the current system will not have the necessary popular support to survive.

While this will be a good development for the prosperity of many, we also know the corollary  difficulty that will emerge. At this point those who stand behind central banking have long-ago concluded the system is not viable.

But that doesn’t mean they will cooperate with removing it. What they will inevitably suggest is that because the current system doesn’t work, a larger, global system is necessary.

The groundwork is already being laid for this global  system. Just yesterday we pointed out that both the ruble and the yuan were being positioned to compete with the dollar. And yet the positioning elements – the IMF and World Bank – were being provided by the West!

The upcoming currency crisis is being manipulated by Western programmatic elements. The solution is to be some sort of increasingly globalized (world) government.

And as this conversation proceeds in the mainstream media, you will find little or no analyses of the price-fixing that inevitably accompanies monopoly central banking at any level.

It will be proposed that global price-fixing will somehow ameliorate the problems coming from regional price fixing of money.

Conclusion: But it won’t. The only path to prosperity is to privatize money and let the market itself calculate its value and volume. This should be done as soon as possible. The disease of central banking should be cured by the application of free-market solutions. We eagerly await this outcome and confidently expect its application within the better part of, hm-mm … a thousand years?

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  • Scott

    The Federal Reserve works to p̶r̶o̶m̶o̶t̶e̶ ̶a̶ ̶s̶t̶r̶o̶n̶g̶ ̶U̶.̶S̶.̶ ̶e̶c̶o̶n̶o̶m̶y̶.̶ ̶ destroy the US economy by debasing its currency.

  • Samarami

    A thousand years???

    Ha! Car free and an avid biker, I’d best get to peddling my scrawny butt if it’s a-gonna take that long. But I’ll short ya a few hundred.

    I plan to be alive and aware and well when it all begins to come together. I do not expect it to be brought about by the psychopathic element that created the spinning of the carousel in the first place, however. I expect a critical mass of survivors to make it happen — to refuse to allow another group of lunatics to “lead” them. A Somalia of the Americas if you will — but with the specific goal of quenching any smouldering embers of state before they reignite.

    Don’t ask for a plan. There will be no plan. It will happen spontaneously. “Spontaneous non-combustion”.

    The only plan will be to abstain from beans: http://www.anarchism.net/anarchism_abstainfrombeans.htm

    Sam

    • Praetor

      A friend and I came to a conclusion on how to beat the bassturds. Out live THEM!!!!

      • john bentley

        Obama care will solve that problem for them. If we let it live.

  • Praetor

    Yep! The scumbags are running the world. But natural law doesn’t like scumbags much, because the rules have been written and the rules can’t be changed, no matter how hard the scumbags try.

    In time some of the earthlings throws a wrench into the gears and the whole thing stops and breaks down. In this history is our guide.

    The final question will be, will we allow them to do this again!!!

  • Pedestrian

    Bravo, another excellent piece! Keep the education coming.

  • CAI

    Executive Order 1110 gave the US the ability to create its own money backed by silver. …

    http://www.john-f-kennedy.net/executiveorder11110.htm

    • Sven

      Yeah, that’s probably what did him in.

  • Clayton Smith

    The advantages to the statist of fiat money, legal tender laws and central banking are so overwhelming that short of an economic collapse or a revolution they are unlikely to be rescinded. The dependence of the international exchange value of the dollar is another question, as is the domestic exchange value of the dollar for locally available goods and services. As the maestro himself, Sir Alan, said before leaving his position of chief mischief maker at the Fed concerning the issue of entitlements. We can guarantee that the social security checks will be in their mailboxes on time, but we cannot guarantee what those checks will be able to purchase. Concerning the future of Medicare, he said that they could not guarantee the actual delivery of services. These comments went little reported in the press. The commodity markets will ultimately determine the international exchange value of the dollar. Here, the continued role of the petro-dollar will be of central concern. Currently, the single bright spot in the economy for the average Joe is the lower price of gasoline and natural gas (lower utility bills). Take that away and there is little room for any increase in interest rates and with it an increase in income for savers. The economy is in a cul-de-sac, a place with no exit, save for a general war. But how does one fight a general war with no real existing industrial base? Meanwhile, P.G.&E. is planning to close down its last remaining nuclear power plant, which generates nearly 20% of its electricity, It is to be replaced by a combination of unspecified increases in efficiency and renewables. Of course, the solar and wind machinery is to be imported from China. It is hard to feel much encouragement at the moment. About the only concrete thing to do is to vote for Trump and hope for the best.

  • rahrog

    I know successful businessmen who are intelligent and hold degrees from major American universities who do NOT know what fiat currency is.

    • Sven

      Can totally believe that. I always am bringing these topics up and am always amazed at how much ignorance is out there across all age groups and experience.

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