I'm finishing a novel and thought I would start a blog. Most of my posts will involve freedom or writing issues. Since I spend a great deal of time with my grandson, Preston, who's 20 months old, I wouldn't be surprised to find an item or two about him on this site, as well.
I write because I feel strongly about the continuing decline of freedom in our lives. The State is the organization responsible for our loss, but who is responsible for the State?
The State exists as a way for some people to get something for nothing "legitimately," which under other circumstances would be called theft. In my novel I address this issue through the venue of our monetary and banking system. We have a fractional-reserve banking system and fiat currency, both supported by the federal government. Control of the banking system lies with the Federal Reserve, which is seen by many people as the country's first line of defense against inflation.
In fact, however, the Fed is the sole cause of inflation in our country. The Fed was foisted upon us in 1913 to protect banks from the crises resulting from their practice of issuing more money substitutes -- paper bills and demand deposits -- than they had gold in reserve. By itself the Fed could not succeed. It had to get rid of gold first, and of course that required government intervention.
Roosevelt severed the dollar's connection to gold domestically in 1933, and Nixon completed the crime in 1971 when he did the same internationally. Like all national currencies, the American dollar is no longer defined in terms of gold and cannot be redeemed for gold coins or bars. The dollar cannot be redeemed for anything. Because gold can't be created at will, it puts a limit on how much a bank can inflate with impunity. With the requirement for gold redemption removed from the dollar, banks could inflate at will.
See the inflation calculator here to see what the Fed's policy of inflation has done to the dollar since 1913.
See this inflation calculator to get a rough estimate of how the dollar fared without the Fed prior to 1913.
From an Alan Greenspan speech, December 19, 2002:
. . . the price level in 1929 was not much different, on net, from what it had been in 1800. But, in the two decades following the abandonment of the gold standard in 1933, the consumer price index in the United States nearly doubled. And, in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, had allowed a persistent overissuance of money.Who is responsible for the "persistent overissuance," Alan? And who got the money that was persistently overissued? And for what purpose was it used?