Federal Reserve News

I am selfish. I am proud of that. I deserve to have the Life, Liberty and Pursuit of Happiness that the Declaration of Independence talked about. However, every day that passes seems to take me farther from those values. I and my wife worked hard to get to what looked like a doable retirement, a time to enjoy life, liberty and whatever happiness my pursuit got me, only to see it all about to blow up, to implode. The money we saved is shrinking. It is being inflated right now, through expansion of the money supply by more than 14% per year. The only way to fight this is to live on credit, to borrow our way through. We are slaves to the banks. How could the banks have gotten such a strangle-hold on the rest of us? I have an inkling, but the pieces of the puzzle do not all fit well. Moreover some pieces seem to be missing.

It is counter-intuitive to think that the bankers are enjoying this. They appear catatonic; too fearful to lend, scared of lending even to each other. I suspect that what it would take for such a loan to be entered would be a confiscatory interest rate. Few are ready to offer, and the lenders know it. The real rate that would cross is too high. The rate that the Fed proposes — one percent — is fiction. Anyone borrowing from the Fed at one percent are just sitting on it.

The bankers are counting on something, something that takes a couple of years to develop.

Go back in time a bit. Decades back smart companies with great cash flow would invest for the short term. They would buy commercial paper for n days. The sellers were firms that had a gap in the stream of their revenues, a hole in receivables. They covered their operating cash short-fall by selling commercial paper. There was plenty of liquidity and no banker was needed.

It is hard to believe this is all a thing of the past, but it makes sense. Individuals as well as companies used to save, to hold retained earnings for a time, to build up funds for future purchases. Saving money earned interest which was not eaten up by inflation and taxes. It is true that people may have ignored some inflation and taxes that were always eating away at what they saved. However, they used to really save. This meant that there were funds with which to invest in a new car or a new factory.

Inflation and taxes have become a heavy burden, and everyone is acutely aware of it now. It pays to borrow, because the dollars you repay a loan with are cheaper dollars. However, it means we have become totally dependent on the money-lender.

The same thing has happened to government. Now it is conceivable that this happened without anyone intending for it to happen. However, since everyone is suffering except banking, we have a suspect in mind.

What happens when everyone has to, everywhere and always, borrow for operating funds and to invest in new equipment? We keep making trips to the bank to get a loan. A book-keeper makes an entry in a ledger and you write checks against it. This money is paid to someone else who banks it, and the next bank lends out 90% of it. This goes through the system and ends at another bank, which in turn can lend out 90% of it. The curious path of this expanding sum can go in circles, back through a bank again. Initially it may have started with the Fed buying a $1,000 bond from the first bank. The end result is that the affected banks have created up to $10,000 worth of loans, all earning interest. Money does grow on trees.

If I have any political goal, it is greater freedom for myself. Now before anyone begins slamming me for the wrong reasons, let me be clear: I am perhaps using the word "freedom" with a specific, technical definition. Freedom in this context means liberty to do anything I wish with my property as long as I do not violate the equivalent liberty of anyone else. However, my heart is not bleeding for any downtrodden masses. I need freedom, and do not give priority to anyone else.

My goal is selfish, and I am not shy about it. It is my freedom that matters to me. When it comes my time to be ripped off or to be enslaved or to die, no one else will care half as much as I do. The same applies to every living moment of my life. I care about it and do not expect anyone else to do it for me.

I could recite all manner of law that should be repealed, but the ones that need cleaning up the most are those that deal with money. Money should be gold. Banks should have to maintain 100% reserves against loans, their own capital and not earn interest on my checkbook money. The strange bed-fellowship of banking and government must be ended — fascism of the worst kind. Repeal laws until banks are made to operate under the same laws as any other business. Keep repealing laws until the Pursuit of Happiness is possible again, the Liberty that the rational life of a human is within reach. Return my life to me.