David Redick
Activist Post
January 26, 2011
Now that Rep. Ron Paul (R, TX-14) has become Chairman of the House Financial Services Subcommittee, which provides congressional oversight of our central bank, the Federal Reserve System (Fed), the managers at the Fed are facing the dreaded time when they may have to reveal the secret dealings that they use to help their political and banking friends worldwide.
Vanity and job security are a big part of what guides Fed managers. They love the power and prestige of their jobs, and do whatever is needed to please the politicians who put them there. Of course, most of them are ‘true believers’ in the need for their control of ‘monetary policy’, despite the horrible record of the Fed, which has caused the US Dollar to lose over 95% of its value (purchasing power) causing prices to rise (price inflation) since the illegal, unconstitutional, creation of the Fed in 1913. The main reason for this decline is expansion of the money supply (monetary inflation) caused by creation of fake ‘fiat’ money; where ‘face value’ is decreed by the government, even though the material it is made of may have more or less market value.
- A d v e r t i s e m e n t
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Most countries have central banks, but ours is the only one that is a private corporation owned by other banks; more on that below. Rep. Paul has made his concerns and solutions clear in his popular September, 2009 book End the Fed, as I have in my December, 2010 book Monetary Revolution-USA. As in these books, this essay will show why sound money (coins made of, or paper backed by, a commodity such as gold or silver) ends the so-called need (and means) for the counter-productive meddling of ‘monetary policy’ and fake money by the Fed in our nation’s economy.
The first salvo in their fight for survival was an article by Paul Hobby (Chairman of the Houston branch of the Dallas Fed) Hands Off the Fed in the Houston Chronicle on Jan. 22, 2011. In his defense of the Fed from expected criticism by Rep. Paul, he said, ‘No one who studies the global economic issues today would forfeit this nation’s ability to conduct monetary policy through a central bank’, and ‘Because the dollar is a fiat currency, confidence is the only backstop, and aggressive monetary policy provided that confidence at a decisive moment.’ Kudos to Robert Wenzel for his January 23, 2011 article Is This the Best the Fed Can Do in Its Defense? where he challenges Hobby’s article and describes the false statements and counterproductive conduct by the Fed.
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I say, yes indeed our ‘Fed Notes’ (dollars) and base-metal coins are ‘Fiat and based on confidence’, and that’s why we have the FDIC (Federal Deposit Insurance Corp.) to give depositors false ‘confidence’. With sound money, no FDIC, central bank, or legal-tender laws are needed, and poorly managed banks are subject to insolvency and bankruptcy. No more bailing-out of greedy bankers (also political buddies) who use high-risk deals and high-leverage fractional reserves to increase profits. The sound money approach produces more personal responsibility by depositors to keep an eye on their bank and move their deposits to another one if they don’t like its policies. The incentives are positive for both the depositor and bankers. We now have ‘nanny’ government serving this watchdog role, which creates the corruption and failure we see around us today.
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