President Trump and Congress plan to send up to $1,200 to most American adults to help them recover from the economic shock of being told not to work. “Individuals making $99,000 or above or married couples making $198,000 or more would receive no check. People would receive an additional $500 per child.” The so-called stimulus package would total $2 trillion, roughly 9% of the country’s GDP.
Are you curious about the source of the $2,000,000,000,000? Had government put it aside for just such an emergency? Not a chance. Though it’s not clear at this point exactly where the money will come from, it will likely roll off the printing press, the banking industry’s greatest invention.
Long ago, money had its roots in honest production much like other economic activities, such as growing wheat, making cars, or teaching calculus. Money, like cars or ventilators, couldn’t be willed into existence. By virtue of banking fraud, today it can be. So the government will call upon the esteemed bureaucratic entity it created for just such emergencies — the Federal Reserve — and assign it the task of pulling $2,000,000,000,000 from the great vault of its imagination.
Today, under a central banking regime such as ours, money is no object. Today, the Fed gods create it by fiat — “Let there be money.” It is not tied to anything tangible. Yes, the Fed talks of purchasing assets, which are government debt. The government creates IOUs, or debt instruments, and the Fed creates money to buy them. It sounds so very proper. The government then funds certain programs such as the upcoming handout, and night continues to follow day. To the world, an IOU from the federal government is an asset. It’s a prized asset because of its power to shake down those responsible for it — people like you and me.
Let’s be clear. As a parasitical entity government produces nothing, therefore earns nothing. What it calls tax revenue is properly called loot — money lifted from those who work for a living. Governments are looters, and their debt has come to be regarded as assets. Because Americans are wealthy compared to the rest of the world and therefore represent a plump goose, the federal government’s assets are highly prized.
Money was once the most marketable commodity as determined by buyers and sellers engaging in voluntary exchange. Government and central bankers have thoroughly corrupted it to their advantage. Take a look at what a dollar was worth before and after President Wilson signed the Federal Reserve Act into law in 1913. Note: You can’t use the BLS inflation calculator because it doesn’t allow us to compare pre-1913 prices (I wonder why). Using a calculator found here, comparing prices in 1870 and 1900, for example, we discover that:
According to the Bureau of Labor Statistics consumer price index, prices in 1900 are 35.88% lower than average prices since 1870. The U.S. dollar experienced an average deflation rate of -1.47% per year during this period, meaning the real value of a dollar increased.In other words, $1 in 1870 is equivalent in purchasing power to about $0.64 in 1900, a difference of $-0.36 over 30 years. (my emphasis)
And the years from 1870-1900 were some of the most productive in mankind’s history. Workers at all levels could get richer simply by stuffing money in a mattress. Why? Productivity increases outpaced the supply of money.
Comparing prices in 1970 and 2000, on the other hand, we learn that “prices in 2000 are 343.81% higher than average prices since 1970. The U.S. dollar experienced an average inflation rate of 5.09% per year during this period . . .” (emphasis mine)
Central banking is a great racket because almost no one in a position of power sees it that way — and because central bankers take care of people in power. Central bankers are legal counterfeiters protected by the governments they serve and the big banks they bail out. They make some people very rich — early receivers of the newly printed money, before inflation kicks in. By means of the stimulus bill a few regular Americans will soon be among the early birds.
Repercussions down the road? Speculators and other scapegoats (including Trump) are lined up and ready to hang at a moment’s notice. Legal counterfeiting is a scheme that can only self-destruct. It’s virtually immune to intellectual criticism because most economists are in on the racket. Conceivably people could rise up and demand honest money, but they have no idea what honest money is. They won’t find it explained in the government schools they attended. On the contrary, they’re likely to hear the hard stuff once passed around as money has long been considered a barbarous relic. (See Gary North’s article Deadly Assumption #6: Gold Is a Barbarous Relic for a brilliant but brief discussion of gold and government.)
So here we are again, looking to the Fed to buy government debt with money it doesn’t have so that the government can send money it never had to select subjects, all the while assuming enough someones will keep producing goods and services so that the fiat digits can buy real things.
