Idaho's Weekly Journal of Local & National Commentary  Week 1614


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by Free Market Duck

Fed Reserve, America’s legal counterfeiting ring

Aug 5, 2009

 “Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth.” – Alan Greenspan, published in Ayn Rand’s Capitalism: The Unknown Ideal, 1967, and The Objectivist, July 1966

 Boise, ID – Whoa, girl friends, gather ‘round, shut up, pull up the floor and pour yourselves another hot cup of Rocket Java.  Before former Federal Reserve Chief Alan Greenspan went over to the Dark Side of The Force, namely, Keynesian socialist economics, he was a free market economist who blasted the Welfare State, revealing that the true function of America’s Federal Reserve central bankers is to act as a “legalized” government counterfeiting ring whose “shabby little secret” is to rob the people with clever complicated mechanisms whose series of complex steps involve the member banks issuing and pretending that government bonds, not backed by anything, are treated as if they were an actual deposit of gold, which they are not.

   Read on and have your barf bucket handy.  You’ll need it as you discover that this is exactly what every administration since the inception of the Federal Reserve in 1913 has been doing, with President Barack Obama’s current administration running its Welfare State on steroids.  Says Alan Greenspan in Ayn Rand’s above-mentioned publications:

   “… But the opposition to the gold standard in any form – from a growing number of welfare-state advocates – was prompted by a much subtler insight: the realization that the gold standard is incompatible with chronic deficit spending (the hallmark of the welfare state). Stripped of its academic jargon, the welfare state is nothing more than a mechanism by which governments confiscate the wealth of the productive members of a society to support a wide variety of welfare schemes. A substantial part of the confiscation is effected by taxation. But the welfare statists were quick to recognize that if they wished to retain political power, the amount of taxation had to be limited and they had to resort to programs of massive deficit spending, i.e., they had to borrow money, by issuing government bonds, to finance welfare expenditures on a large scale… Thus, government deficit spending under a gold standard is severely limited.

   The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. They have created paper reserves in the form of government bonds which – through a complex series of steps – the banks accept in place of tangible assets and treat as if they were an actual deposit, i.e., as the equivalent of what was formerly a deposit of gold…

   The law of supply and demand is not to be conned. As the supply of money increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy’s books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

   In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold… The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists’ tirade against gold. Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.” – FM Duck

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