Politics & Philosophy by Dr. Martin D. Hash, Esq.
Why do Libertarians hate The Fed, America's central bank: what does raising and lowering interbank interest rates do that's so damning in their view? It turns out, The Fed also indirectly prints money. The U.S. government can't get “investors” to buy enough Treasuries to cover the budget deficit every year, so The Fed buys them, essentially “printing” money. Under section 14 subsection (b) of the U.S. Code, Federal Reserve banks have the legal authority to purchase Government bonds directly from the Treasury with 0% interest. No real banks hold that debt, it’s just an accounting scheme that holds no one responsible, increases the money supply, and monetizes the debt. Technically, someday the Treasury must pay back The Fed, but never will.
So what if The Fed simply excuses the Treasury notes entirely, just takes them off their Balance Sheet? Who would know or care? In fact, that's what's going to happen sometime in the near future, when The Collapse happens. The Fed is a perfect fall guy; it's independent of government but beholden to them because government sets their salaries, and the Fed Chairman is selected by the President. Plus, their power is spread around to 7 big banks, each with a committee of nameless, faceless bureaucrats to dissipate responsibility. The Fed can take the blame while solving all the problems that imaginary money can solve. Libertarians are wrong; the Fed is a good way to get the most out of money.
Categories | PRay TeLL, Dr. Hash
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