The Federal Reserve and American Freedom!
If we accept the philosophy of Thomas Jefferson as our reference point for American Freedom (decentralized economics), then the philosophy of Ben Shalom Bernanke and the Fed would reveal the opposite (centralized control of the American economy). Jefferson was the key founding Father of our money system as revealed in the Coinage Act of 1792. Jefferson also was not a proponent of a strong Central Bank with dictatorial powers (as today). If Americans desire individual freedom and a free market economic system (going forward), then they need to reject the Central Planning of the Fed (as represented by the actions of our Fed Chairman and his Committee).
In today’s Wall Street Journal (opinion section) there appeared an article entitled ‘The New Central Planning’…by a Mr. Hummel, associate professor of economics at San Jose State University. This article gave a critique of the Federal Reserve (and its history) after a review of Ben S. Bernanke’s recent book, The Federal Reserve And The Financial Crisis, published February 24, 2013. Ben reveals, in his book, his general monetary philosophy and why he resorted to quantitative easing (which he calls ‘asset purchases’) as a measure to solve a liquidity crisis. Ben reveals that the 2008 crisis was not a solvency crisis but merely a liquidity crisis. This, to me, is shocking when we think about the effects (history) which emerged after the real estate bubble popped in 2008. The issue (after we witnessed the deflation in values which emerged in 2008-09) was really a solvency crisis… which was then covered up with new injections of liquidity (official counterfeiting of our dollar by Ben and his FOMC committee). Why did the Fed absolve themselves completely?
Mr. Hummel reveals that Ben and his fiat money regime has done no better than the historical gold standard in taming the general business cycle. Furthermore, Ben claims in his book that the housing boom was caused primarily by the international flow of funds (capital). He seems not to understand that the policies of Greenspan and our Politicians were really the cause (low-interest rates and easy financing for mortgage loans and all types of sub-prime loans). As a valuation consultant during this entire period (2000-2008), I witnessed the over financing of countless real estate properties and the many home equity loans which were promoted by those who felt that ‘values’ would not decrease. I witnessed the policies of our Fed and their mindset that all their actions were sound and appropriate. In reality, all their policies were extremely unsound and eventually led to the 2008 financial crisis (and the subsequent deflation of most real estate values).
What we now witness with the operations of Mr. Dudley (President of the New York Fed and Vice Chairman of the FOMC) and Mr. Bernanke (Chairman of the Fed and the FOMC) is a philosophy of Central Planning for all our monetary/economic activity. This philosophy is totally anathema to the philosophy of Thomas Jefferson and those who support a Free Market Economy controlled by market participants. Today, we witness the official counterfeiting of our dollar (euphemistically called ‘quantitative easing) by mostly the actions of the above two policymakers. Why are mostly TWO policymakers controlling the entire monetary system of America? Why is Ben Bernanke not aware that he is now the Central Planner for the entire American economy? His new book reveals (with picture on the cover) that HE is our Central Planner and that HE was the key policymaker which implemented all the counterfeiting actions (QE) since the 2008 crisis (what the media and pundits call ‘quantitative easing’).
Our entire economic system has now evolved into a system of manipulation/control and central planning. High speed computers are now used to inject liquidity into the system. Liquidity is funneled to select entities that Bill and Ben desire to be recipients. Large Dealer Banks and TBTF Entities receive mostly ‘free’ dollars (now digits in the computer screen) to further manipulate the monetary system. Is this Free Market activity? Would Thomas Jefferson and those who support a Free Market Economy approve of these operations by our Fed and the Two key policymakers above? I don’t think so! What has evolved since the closing of the Gold Window in 1971 is a Centralized/Computerized monetary system which is administered by select Central Planners. Our monetary unit is now a digital unit within the computer screen. Virtual reality has replaced Space/Time reality (gold/silver). Americans need to get informed and educated on the nature of our current monetary/economic system.
The WSJ article by Mr. Hummel and the book by Mr. Ben S. Bernanke reveal that we now live with Central Planning (a form of dictatorship) over our American Economy. This is totally anathema to our history and our Founding Fathers philosophy. Do Americans desire a dictatorship over our economy going forward? Should mostly TWO policymakers (not elected and independent of the voters decisions) control, manipulate, and create our economic future? Is this the American Way? Personally, I don’t think so! What is now needed is a WAKE UP call to all Americans. Every American needs to ‘dig’ into the history of our economic system and become knowledgeable about what has evolved.
Watch the future actions of Ben Shalom Bernanke and his Federal Open Market Committee (called the FOMC). Notice that Ben is mostly implementing policy on his own behalf (as revealed these past 5 years). Ben seems to control the voting within the FOMC committee and this allows him the final decision on all future operations of the Fed. Mr. Dudley, at the New York Federal Reserve Bank, also seems to provide major input into all actions and operations of the FOMC. Mr. Dudley is a permanent member of the FOMC and also the manager of the Computer Desk (which implements FOMC operations in real-time). Notice that these TWO policymakers can create operations (like quantitative easing) by their own internal decisions (consciousness). Is this the new American Way going forward? Personally, I hope not! We need to abolish the Fed at some point down the road. Sooner is better than later! That is my missive for today! I am: https://kingdomecon.wordpress.com.