Miles Franklin sponsored this article by Gary Christenson.
The opinions are his.
Christopher Whalen wrote “ Trump is Right to Blow Up the Fed .” He stated: “Anybody who cares to read the 1978 Humphrey Hawkins law will know that the Fed is directed by Congress to seek full employment and then zero inflation. Not 2 percent, but zero. Yet going back a decade or more, the Fed, led by luminaries such as Janet Yellen and Ben Bernanke, has advanced a policy of actively embracing inflation.”
From the Federal Reserve’s web site : “The Congress established the statutory objectives for monetary policy—maximum employment, stable prices , and moderate long-term interest rates—in the Federal Reserve Act.”
Prices during ZERO inflation never double.
Prices during 2% inflation double in 35 years.
A new truck fifty years ago cost $2,500, and today it costs $50,000. This is a compound rate of inflation of 6.2% per year. Yes, the truck is better, but that doesn’t reduce the dollars you must pay.
Motel Six rented no-frills rooms for $6 fifty years ago. Today they cost $50.00 plus higher taxes. The rate of inflation is 4.3%.
A postage stamp fifty years ago cost $0.06. Today that stamp costs $0.55. The rate of inflation is 4.5%.
Cigarettes in 1913 cost $0.10 per pack. Today the cost is $6.00 to $10.00, depending upon the tax load. The rate of inflation is about 4.4%.
Gold in 1913 sold for $20.67 per ounce. Today gold sells for about $1,300. That rate of inflation is 4.0% per year for 105 years.
A house in 1913 cost… you see the pattern. Except for televisions and computers, almost everything costs more than 10 years ago, considerably more than 20 years ago, far more than fifty years ago, and outrageously more than in 1913.
1) Prices were stable for the one hundred years before the Federal Reserve’s “takeover” of the money supply in the U.S. The rising prices problem occurs because of Fed policies, not time.
2) The above are examples of price inflation. You can add 999 more from your personal experience. The official numbers from the government are… well… untrustworthy.
3) Prices rise more rapidly than the Humphrey Hawkins law (zero percent) specifies.
4) Prices rise more rapidly than the 2% inflation target that the Fed endorses. [Why 2% instead of 3.96% or 0.22%?]
5) Congress could vote to audit the Fed. It does not.
6) Congress could demand the Fed follow law. It does not.
7) Congress could dissolve the Fed and return to a modified gold standard. This would encourage government accountability, stable prices, and decrease Wall Street’s influence over our lives and economy. For obvious reasons, it does not.
The Fed (and other central banks) engaged in massive Quantitative Easing—bond monetization or “printing currencies” for the past decade. Other central banks created currencies and bought bonds, stocks, ETFs, gold and politicians with their created “from thin air” currency units. QE works well for the financial and political elite, but not for “Main street” USA, the French “Yellow Vests” or most of the bottom 90%.
Continue reading “Babylon is Falling”