The central bank is an institution of the most deadly hostility existing against the principles and form of our Constitution. If the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their property until their children will wake up homeless on the continent their fathers conquered. — Thomas Jefferson
The bottom line: Undisciplined money printing by the Fed enables runaway government spending, paid for by the People via high inflation and a severely diminished standard of living.
Photo Credit: epicharmus
I have felt the same way ever since The Fed seemed to lose its appetite for even pretending to want to protect the value of the dollar. With their recent quantitative easing (money printing) campaign it seems as if they are on a mission to completely destroy it. But that’s really the easiest way out of the giant debt hole the government now finds itself in.
Brian,
I agree with you… that the “forces” of life can be overwhelming. It seems at times that our nation’s leadership is hell-bent on destroying the very thing which they have been give the task of nurturing. Such things in the world one cannot control, but there are many that we can. What we do and how we live are among them.
I have found that a life of honor and integrity offers its own rewards. Not only can one sleep better at night, but one is often rewarded with “the contract”, simply because the person on the other side of the table doesn’t feel like he needs a bath after talking to you.
The world if too much filled with people who are trying to shade the deal to make things flow their way. Let me be clear: overall, people are sensitive to one’s character. If you are doing all you can to work with integrity, they can tell. Personally, I would walk a thousand miles to please one person who is striving with integrity, rather than across the room for someone who is not.
Deep… but I agree.
The problem is that it is not the Fed’s fault it must print money. The government is on a spending spree with nothing to check it. We are going to reach a period of high inflation and a stagnant economy because the government can’t balance a budget and the strain of our national debt is constricting us.
It is also not the mosquito’s fault that it must suck a blood meal from victims to ensure its survival either, but that is no excuse. The only two reasons for the existence of the Fed is: 1) to permit a mechanism for the creation of fiat money out of thin air that can then be used by the government to spend as it wishes; 2) to enrich the bankers who are closest to the issuance of this fiat money. But you’re right, the government can’t spend money it doesn’t have forever because the Fed can’t “print money” forever without destroying the dollar. When the day comes that the buck’s value finally becomes so diminished that nobody wants it, then it won’t matter how much money the Fed prints — and misery will reign over all of us.
Fiat currency works no better than the auto.
I’m not sure what you mean. Andy.
The last time our country operated without a deficit was when Andrew Jackson abolished the Central Bank.
If anyone thinks the Fed is good for America, why won’t they open their books? Beacuse people would be outraged at how they are allowing our treasury to be looted by bankers at the taxpayers expense.
Andrew Jackson actually abolished the National Debt, not the Central Bank, and yes, this was the only time in our history when there was no national debt.
In fact, that’s pretty much how he got elected, by vowing to eliminate the evil that was the national debt.
What’s interesting is he probably felt this way about debt because of his own past financial issues.
No, he also abolished the Central Bank. Technically, he vetoed the re-chartering of the Central Bank in 1832 and withdrew all of the money in 1833. This wasn’t the most brillian move for the economy. But, at least the bankers had to answer to the government back then.
Bravo, Len. I hope to see more libertarian viewpoints from you.
Why, thank you, Joe. You can find them every weekend in my Black Coffee columns.
This might be a good place to mention an alternative to the U.S. dollar – BitCoin: http://en.wikipedia.org/wiki/Bitcoin
Great quote from Jefferson. When I first started reading, I wasn’t aware that it was a quote and was therefore totally convinced that I was reading Len Penzo. It sounds exactly like something you would say. How does it feel to be compared to Thomas Jefferson in only fifty words?
Wow, that’s a nice compliment, Joe! I promise I’ll try my best to stay humble. 🙂
I agree that the Fed under Bernake and Yellen has been very irresponsible, but I don’t think the Fed should be abolished. The reason why there were so many crisis in the 1800s was b/c there was no central bank as a lender of last resort.
Wait a minute, Troy! The Fed has many notable and arguably much bigger “panics” on its resume: the Crash of 1929, the closing of the gold window in 1971, Black Monday in 1987, the bursting of the dot Com bubble at the turn of this century, and the Great Financial Crash of 2008 to name the biggest ones — and coming soon, the Great Currency Crisis of (2018?)! That one will be the biggest of all, because it will result in the implosion of our current financial system — and it will rest solely on the Fed, because that couldn’t happen without the “aid” of a central bank.
The truth is, the period between 1860 and the inception of the Fed in 1913 was the greatest period of real economic growth in American history.
It is impossible to eliminate panics and economic downturns; the business cycle comes with free markets and they serve a purpose — to weed out unproductive businesses and reallocate scarce capital to where it is most needed.
Len,
Our nations undoing has came about by thumbing our nose at the Founders and going against two of the most important issues they believed in!
1. Jefferson said a central bank would eventually destroy us and we are now on the precipice of that.
2. Our demise was sped up greatly by ignoring the Constitution and doing away with gold/silver as our monetary system was mandated to always be such in our Constitution.
Unfortunately our country deserves what’s coming!
Jared
Yes, sadly, it does. The US had two previous central banks prior to the Fed whose charters were not renewed.
The country has proven it can prosper over long periods of time without the Fed — and without destroying its currency in the process.