economy

THE ECONOMY

Posted on Posted in Issues

The Economy
A healthy economy is driven by what consumers want. Those businesses providing useful products and services will thrive, while those who do not deliver this as successfully will not do as well. When the economy is good, people will be able to save more, which will, in turn, provides the necessary capital for banks to make more loans. This will naturally lower interests rates as banks have more money on hand to loan (more supply). When the economy is not as good, people will save less and banks will therefore have less money to loan, driving interests rates up (less supply). This process encourages people to invest and make purchases during a healthy economy and discourages them to do these things when the economy is not as good. When the free market is allowed to operate in such a transparent manner, it is much easier for consumers to make better, more informed decisions. Unfortunately, there are powerful men who believe that not only do they know what is best for the economy, but more importantly, that they can control it.

Many of elected officials believe in this principle of planning the economy – ie. “Central Economic Planning”. This is the belief that the central bank of the united states, called the “federal reserve” bank (a monopoly of non-government, privately held banks) can somehow control the economy. They believe that the free market needs to be controlled and manipulated and that the heads of these banks know what the economy needs better than actual consumers. When the economy is not doing as well, the federal reserve engages in price fixing by artificially lowering interests rates in order to attempt to help the economy. When they lower rates to levels the free market would never see, it creates very “easy credit” where people can borrow money for pennies on the dollar. Since rates are so low, people get car loans, car leases, buy things and put it on their credit cards and buy homes. All of this money being spent stimulates the economy and new jobs are created and demand soars for many products and services. Everyone is happy. The banks, wall street, investors, big companies, the politicians are happy with their campaign contributions and their cushy job with the big banks when they retire from politics. Everyone seems to be enjoying this “boom.” Sounds great, doesnt it? There is one small problem.

Remember that this soaring demand was artifically created by low interest rates. The money people are spending is not theirs, it does not come from real savings or because people were earning more money from their jobs. The policies of the federal reserve encourages people to spend rather than save. Why would they save when they have lowered interests rates to almost 0? Setting interest rates this low is horrible for anyone who saves their money or who is on fixed incomes, but great for everyone else, especially the big banks who make millions of loans.All of this new money (credit) added to the money supply, means that people now need more dollars to pay for the same thing. When you print money from thin air, it devalues the currency that is already in existence. Simultaneously, this false “demand” creates higher prices. Over time, our money become worth less and less, prices continue to rise, which slowly, over time, lowers our standard of living. This is exactly what is happening today. The number of Americans on food stamps is 1 out of every 7. The dollar has lost 98% of its purchasing power since the federal reserve was enacted in 1913.

Easy, cheap money entices people to borrow. When the Federal Reserve decides that the economy is “healthy” and raises rates, the bomb drops on all these people who took the loans or bought the new car or house. This access to easy money is responsible for the enormous booms and busts we have experienced, from real estate booms to stock market crashes. Over 4 million people lost their homes over the past few years because of this easy money and credit. They were totally unaware that they were enticed to borrow and spend at the worst possible time. Over 4 million foreclosures, because our government decided to play god and decide that “every American deserves to own their own home.” The banks, who over extended themselves by making all of these bad loans, get bailed out by the taxpayer, instead of going bankrupt like the free market would dictate!

The Solution

Money Backed By Gold (sound money)
When money is not backed by something valuable, it is simply a piece of paper. It therefore only has value because we all agree on this value. But the only reason we agreed the paper had value in the first place was because the paper used to be a receipt, a representation of that thing of value. We abandoned the gold standard entirely in 1973 and since then our currency is only worth something because we all agree it has value. What we do not realize is that this value is shrinking every single year because the federal reserve keeps printing more and more. We never agreed on that. When money is backed by gold, no one can just print more of it. This eliminates the vicious cycle of easy money which creates the huge booms and bust and instability in our economy. It also eliminates the sky high inflation. Prices are kept stable and actually decrease over time. Since we can no longer just print money, we have to live within our means and we will no longer amass a huge debt, freeing generations from being a slave to this madness. We will no longer be able to fight unjust, undeclared wars and be the policeman of the world. We will only go to war when absolutely necessary and only when the people and congress declare it. Our national defense will be so much stronger when we bring the troops home to protect our own country and stop spending $1 trillion a year overseas maintaining our empire.

Eliminate The Fed
The solution is to allow the free market to set interest rates, NOT the federal reserve. When banks have more money, it is only because people are actually saving. When more people are saving, the banks have more money. When the banks have more money (more supply), they can now lower their interest rates, attracting more borrowers and making more loans. When people are saving less because of a weaker economy, the banks have less money (less supply) and therefore interest rates go up. This is not a bad thing! People should be DISCOURAGED from making loans, buying cars and houses and putting things on their credit cards when the economy is weak. This is the beauty of the free market. When the Federal Reserve can no longer just print money at will, we will be forced to only go to war when our national security is threatened, instead of spending over $1 trillion trying to to police the world.

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