As the Federal Reserve continues to create money out of thin air, in its effort to stimulate the economy, it has guaranteed catastrophic economic collapse. Sound economic theory advises us that this endeavor is completely futile but Fed Chairman Ben Bernanke is so incompetent as an economist, and arrogant as a Fed Chairman, that he believes his actions can override market forces. Bernanke also believes he can time exactly when to turn off the money creation machine and prevent severe inflation or even hyperinflation. But it should be obvious he is already too late as commodity prices are now in full bull market mode, a strong indication of fading confidence in the dollar.
The coming economic collapse should not, however, be blamed on Chairman Bernanke alone, even if he the worst chairman in recent history. The problem is systemic. It is because we have a central bank such as the Federal Reserve System that our money and banking system is unsound and, consequently, so is the entire economy. The Federal Reserve is after all nothing more than a government sanctioned cartel of private banks. And fraud has in fact been institutionalized by this system. More can be learned about the history of the Fed in G. Edward Griffin’s The Creature from Jekyll Island. Griffin documents in this book how the Federal Reserve came into existence and what its true purpose is (it’s not what you think).
Since the U.S. went off its quasi-gold standard in 1971 there has been no restraint on how much money the Fed can create. And this type of monetary policy also accommodates the big spenders in Congress, as they are not required to tax or borrow to fund their government largess. Instead they can rely on the Fed predictably to monetize the spending by creating yet more money and more debt. But the resulting increase in prices and loss of purchasing power of our money is actually a hidden tax as the inevitable consequence of all this money creation is the devaluation of the dollar (which is an act of counterfeiting) and a total U.S. economic collapse.
Now other countries are becoming weary of holding the dollar. The National Inflation Association recently reported: “China is so disturbed by the inflation being created by both the Federal Reserve and ECB (European Central Bank) that they are looking to abandon both currencies and position the yuan as the next reserve currency.” Guess what will happen to the dollar as countries like China who hold about a trillion dollars of our debt attempt to get out from under it. All those dollars will come back home to the United States where they will overwhelm prices and drive them through the roof, precipitating a massive U.S. economic collapse.
But there is hope. Fortunately the Federal Reserve has been under more scrutiny than ever before, thanks in large part to Congressman Ron Paul, who frequently confronts Bernanke in monetary panel hearings. You can watch Ron Paul ask Ben Bernanke for a definition of the dollar in a video here, in which he offers no real answer, as usual. Ron Paul has introduced a bill to audit the Fed several times over the years but in the last session of Congress he introduced it as H.R. 1207 (Federal Reserve Transparency Act of 2009), which garnered an unprecedented 320 cosponsors in the House of Representatives. Ron Paul also wrote the book End the Fed, an uncompromising critique of the Fed that goes further than advocating an audit – he calls for the Fed to be abolished, as it is an unconstitutional, immoral, and anti-liberty institution.
The book has been well received among the libertarian community as a call to finally end the source of the business cycle and the impending economic collapse. If you’re skeptical of why the Fed should be abolished (as I was), read End the Fed and you will be thoroughly convinced.