Playing with Fire: Money, Banking, and the Federal Reserve

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Playing with Fire: Money, Banking, and the Federal Reserve

Summary

The Federal Reserve’s policies and interventions have exacerbated economic instability and inequality, undermining financial freedom and promoting cycles of inflation and crisis.

Federal Reserve’s Impact on Economy

The Federal Reserve, created in 1913 to stabilize banking, has instead become an “arsonist” that manipulates the money supply, creating winners and losers with the government and large corporations benefiting while average Americans pay through inflation and stagflation.

The Fed’s fractional reserve banking system allows banks to create money out of thin air by lending out a portion of deposits, leading to potential bank runs when depositors withdraw funds en masse.

Monetary Policy Consequences

Fed policies of printing money and lowering interest rates create asset bubbles in housing and stocks, leading to crises when bubbles burst, with the Fed’s response being to create even more debt and bubbles.

The Fed’s intended 2% annual inflation rate acts as “monetary shoplifting”, effectively taking 2% off the top of people’s earnings, with the government being the first spender of new money.

Expanding Federal Reserve Power

Since the 2008 Financial Crisis, the Fed’s expansion of power through money printing and bailouts has led to increased inflation, inequality, and impoverishment of ordinary Americans.

The proposed central bank digital currency would allow the government to monitor and control individual spending, potentially neutralizing certain purchases and posing a threat to American citizens by giving the government unprecedented power over the economy.