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Will the Federal Reserve Cause the Next Riots?

This article was originally published by Ron Paul at The Ron Paul Institute for Peace and Prosperity

Federal Reserve Chair Jerome Powell and San Francisco Fed President Mary Daly both recently denied that the Federal Reserve’s policies create economic inequality. Unfortunately for Powell, Daly, and other Fed promoters, a cursory look at the Fed’s operations shows that the central bank is the leading cause of economic inequality.

The Federal Reserve manipulates the money supply by buying and selling government securities. This means that when the Fed decides to pump money into the economy, it does so by putting it in the pockets of wealthy, and oftentimes politically-connected, investors who are able to spend the new money before the Fed’s actions result in widespread inflation. Wealthy individuals also tend to be among the first to invest in the bubbles that form when the Fed distorts interest rates, which are the price of money. These investors may lose some money when the bubble bursts, but these losses are usually outweighed by their gains, so they end up profiting from the Fed-created boom-bubble-bust cycle.

In contrast, middle-class Americans lose jobs as well as savings, houses, and other assets when bubbles burst. They will also not benefit as much as the rich and well-connected from government bailouts and stimulus schemes. Middle- and working-class Americans also suffer from a steady erosion of their standard of living because of the Fed’s devaluation of the currency. This is the reason why so many Americans rely on credit cards to cover routine expenses. The Federal Reserve is thus the reason why total US credit card debt is almost one trillion dollars.

Big-spending politicians are also beneficiaries of the fiat money system. The Fed’s purchases of US debt enable Congress to massively increase welfare and warfare spending without increasing taxes to politically unacceptable levels. The people pay for the welfare-warfare state via the Fed’s hidden and regressive inflation tax.

Low interest rates also benefit politicians by keeping the federal government’s interest payments low. This is an unstated reason why the Fed will keep interest rates near zero or even lower interest rates below zero.

In response to the government-caused economic collapse, the Federal Reserve increased the money supply by about a trillion dollars from mid-April to early June. In contrast, it took the Fed all of 2019 to grow the money supply by 921 billion dollars. Even before the lockdown, the Fed was massively intervening in the economy in a futile attempt to prevent an economic crisis.

A coming crisis will likely be triggered by a collapse in the dollar’s value and a rejection of the dollar’s world reserve currency status. The economic collapse will be worse than the Great Depression. This will result in widespread violence along with government crackdowns on liberties, accelerating the US slide into authoritarianism. The only way to avoid this is for Congress to make drastic cuts in spending — starting with defunding the military-industrial complex — and to audit then end the Fed.

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The Federal Reserve Will Likely Cause the Next Crisis

Federal Reserve Chair Jerome Powell and San Francisco Fed President Mary Daly both recently denied that the Federal Reserve’s policies create economic inequality. Unfortunately for Powell, Daly, and other Fed promoters, a cursory look at the Fed’s operations shows that the central bank is the leading cause of economic inequality.

The Federal Reserve manipulates the money supply by buying and selling government securities. This means that when the Fed decides to pump money into the economy, it does so by putting it in the pockets of wealthy, and oftentimes politically-connected, investors who are able to spend the new money before the Fed’s actions result in widespread inflation. Wealthy individuals also tend to be among the first to invest in the bubbles that form when the Fed distorts interest rates, which are the price of money. These investors may lose some money when the bubble bursts, but these losses are usually outweighed by their gains, so they end up profiting from the Fed-created boom-bubble-bust cycle.

In contrast, middle-class Americans lose jobs as well as savings, houses, and other assets when bubbles burst. They will also not benefit as much as the rich and well-connected from government bailouts and stimulus schemes. Middle- and working-class Americans also suffer from a steady erosion of their standard of living because of the Fed’s devaluation of the currency. This is the reason why so many Americans rely on credit cards to cover routine expenses. The Federal Reserve is thus the reason why total US credit card debt is almost one trillion dollars.

Big-spending politicians are also beneficiaries of the fiat money system. The Fed’s purchases of US debt enable Congress to massively increase welfare and warfare spending without increasing taxes to politically unacceptable levels. The people pay for the welfare-warfare state via the Fed’s hidden and regressive inflation tax.

Low interest rates also benefit politicians by keeping the federal government’s interest payments low. This is an unstated reason why the Fed will keep interest rates near zero or even lower interest rates below zero.

In response to the government-caused economic collapse, the Federal Reserve increased the money supply by about a trillion dollars from mid-April to early June. In contrast, it took the Fed all of 2019 to grow the money supply by 921 billion dollars. Even before the lockdown, the Fed was massively intervening in the economy in a futile attempt to prevent economic crisis.

A coming crisis will likely be triggered by a collapse in the dollar’s value and a rejection of the dollar’s world reserve currency status. The economic collapse will be worse than the Great Depression. This will result in widespread violence along with government crackdowns on liberties, accelerating the US slide into authoritarianism.

The only way to avoid this is for Congress to make drastic cuts in spending — starting with defunding the military-industrial complex — and to audit then end the Fed.

Copyright © 2020 by RonPaul Institute. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are given.

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Do NOT Fall For It: Centralized Digital Currencies Will Only Enslave You Further

The solution to the dollar’s demise being parroted by mainstream media and governments is a centralized digital currency.  Don’t fall for it! The real solution is to move completely away from centralized banking and into a fully free market if we ever expect to have the chains fastened around our necks by the elites released.

We have been under the control of the Federal Reserve, the United States’ central bank for over a century. During that time, the U.S. has descended into communism as the free market was systematically decimated to help the wealthy elitists while leaving the slaves poor, destitute, and dependent on that very system.  Instating a digital centralized currency won’t be better either, in fact, it could very well be worse.

If you don’t know how the Federal Reserve works and how it has been used to enslave the public for over 100 years:

Centralization has been the problem in our society, and should never be looked at as a solution to itself. In fact, even Market Watch has reported that central bank digital currencies would ‘increase the government’s grip on money’ with few benefits for the rest of us.  If this ever happens, and people participate in a centralized digital currency, expect the government to be able to take what they want, when they want, and deny transactions for any reason.

This is why central bankers hate Bitcoin. They cannot control it, because it’s decentralized, they cannot stop or force transactions, they cannot take Bitcoin from you when they want, and they cannot see who is making the transactions. They have no control, and they know it, which is why regulations have been futile. That’s the way to a free market system.

The entire NWO comes back to the Federal Reserve, and the pricks who own it, and therefore think they own everyone on Earth.

It All Comes Back To The Federal Reserve: The NWO Is Being Shoved Down Our Throats

If you haven’t figured this out yet and made plans to exit the central banking system (which is rigged, controlled, and set up to steal your money while enriching those who own it), you may get a really rude awakening when they force a digital currency on us all.  If you accept a centralized digital currency, know that they will own you. If you are upset with your degree of slavery now, just wait…it’s going it much more ugly as they roll out these new currencies.

Everyone keeps asking what the solution is. It’s simple, but most don’t want to hear it.  The system requires your compliance to function. Remove that. Go to decentralized systems. Barter, Bitcoin, precious metals, etc. Stop participating as much as you can and break free from the Matrix.  The elitists need a good percentage of people to comply to enslave everyone, and once you figure it out and your mind is free, you will understand that removal from the system, while sometimes painful because it’s all you’ve ever known, is the only solution.

They will not set you free. You must free yourself. You are the hero you’ve been waiting for.

Robert Kiyosaki: What The Elites Don’t Want You To Know

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Here Is The Stunning Chart That Blows Up All Of Modern Central Banking

This article was originally published by Tyler Durden at ZeroHedge. 

Several years ago, when conventional wisdom dictated that to push inflation higher and jumpstart lethargic economies, central banks have to push rates so low as to make saving punitive and force consumers to go out and spend their hard-earned savings, several central banks including the ECB, SNB and BOJ crossed into the monetary twilight zone by lowering overnight rates negative.

Then, year after year, we would hear from the likes of Kuroda and Draghi how the BOJ and ECB will continue and even extend their insane monetary policy, which now includes the purchase of 80% of all Japanese ETFs…

… until the central banks hit their inflation targets of 2%.

And yet, year after year, the BOJ would not only not hit its inflation target but appeared to drift ever lower, as did the ECB, SNB, and any other bank that had gone NIRP, confounding all economists and central bankers: why has this happened if rates were negative? Why were consumers not taking their money out of the bank and spending it, pushing inflation higher?

Nobody had an answer, until in late 2015, we offered a glimpse into what was structurally flawed with this “model”: using a report by Bank of America, we showed that not only had household savings rates not declined in countries with negative rates, they had in fact risen. There was a simple reason for this, as the BIS had highlighted: ultra-low rates may perversely be driving a greater propensity for consumers to save as retirement income becomes more uncertain.

What logically followed from this is that inflation would also track rates lower, resulting in a crushing blow to economic orthodoxy where the only weapon central banks had left to spark an economic – read inflationary – recovery was to ease monetary conditions even more in hopes that eventually they would drop low enough to spark the long-awaited recovery.

It never happened, even though amusingly it was all the way back in 2015 that we predicted – correctly in retrospect – just what the monetary endgame is:

Fear not: when even “moar” QE and NIRP do not work, and the economists of the ECB admit the “monetary twilight zone” was a disaster, there is one last “tool” they can and will use – helicoptersBecause when it comes to printing money, whether in digital reserve format, or physical paper format, there is literally no limit how much can and will be created to achieve what is the endgame of the current monetary dead end: the total destruction of fiat as a store of wealth in order to preserve the global equity tranche while wiping away a few hundred trillion in debt.

Thanks to COVID-19, we have now moved beyond merely the “twilight” and are now in the “helicopter” zone.

But what about the relationship between rates and savings, and by extension inflation? After all, that is the topic of this post. Well, we can now confirm that our intuition from 2015 that negative rates are not only not inflationary but outright deflationary, and encourage consumers to save even more, was correct all along.

Below we post a chart from the latest Research Investment Committee report by BofA titled “Stagnation, stagflation or elevation”, which with just one image blows up everything that is flawed with monetary policy. It shows that while lower rates indeed stimulate spending and lead to lower savings, this effect peaks at around 4% and then goes negative. In fact, the lower yields – and rates – drop below 4% – not to mention to 0% or below – the lower the propensity to spend and the higher the savings rate!

There is another reason why this chart of such epic importance: it confirms what so many have known but were afraid to voice as it ran against decades of flawed economic theory: it demonstrates without a shadow of a doubt, that hyper-easy monetary policy is not inflationary but is deflationary. Which is catastrophic for central banks, who publicly state that the only reason they are pursuing ultra-easy monetary policy which includes QE and negative rates, is not to goose the market higher (even though by now we all know that’s the real reason) but to stimulate inflation.

This is how Bank of America summarizes this stunning observation:

As low growth & inflation make low-risk-asset income scarce (e.g. from government bonds), households are forced to reduce consumption and increase savings in order to meet retirement goals.

Forced saving further depresses demand in a vicious cycle.

This means that the lower (and more negative) central banks push rates, the lower (not higher) the spending, the higher (not lower) the savings rate, the lower the inflation, the higher the disinflation (or outright deflation), which in turn forces central banks to cut rates even more, to add QE, yield curve control, buy junk bonds, buy ETFs, or pursue any of a host of other monetary policies that are even more devastating to consumer psychology, forcing even more savingsresulting in even more disinflation, causing even more intervention by central banks in what is, without doubt, the most diabolical feedback loop of modern monetary policy and economics.

Said otherwise, monetary easing is deflationary. Let that sink in.

In effect, what the chart above shows, is that once trapped by NIRPthere is no way out, and the more central banks pursue inflation to offset deflation via monetary policy, the more pronounced the deflationary outcome resulting in even more central bank deflationary “stimulus”!

Meanwhile, as central banks spark even more deflation with their policies, the one place where all those trillions in liquidity they conjure out of thin air ends up in, is what was once known as the “market” and is now, in the words of BofA the “fake market” or as DB calls it “administered markets“, leading to ever-higher fake asset prices, and ever greater wealth and income inequality, which ultimately tears the fabric of society itself.

In fact, just look at what’s happening to America right now: rioting, looting, pillaging, Americans fighting other Americans and while the media is spinning self-serving narratives that frame the bad guy as Trump, or China, or Russia, or this political party, or that, or some social movement, the truth is that the culprit behind the upcoming collapse of the US is just one, the same one that Thomas Jefferson warned the brand new nation about more than two centuries ago:

I believe that banking institutions are more dangerous to our liberties than standing armies. The issuing power of currency shall be taken from the banks and restored to the people, to whom it properly belongs.

If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.”

And sure enough, looking at what’s happening in any major city today, we see a lot of homeless and desperate people. And as a further reminder, the Fed – as the Bank of England was so kind to remind us – was and remains a private institution, no matter its claims otherwise.

Source: Bank of England

Now if only someone could explain to all those millions of angry Americans that the source of virtually all of society’s ills is to be found in the building below (which just happens to house an unknown amount of freshly printed dollar bills), it would be a much-needed start to the reset the US so desperately needs to avoid complete destruction.

 

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