Fed Policies Steal From Wage-Earners, Savers

When Federal Reserve comes to the "rescue," you're being robbed

Image Credits: Public Domain / U.S. Air Force photo by Staff Sgt. Teresa J. Cleveland.

We’re being robbed!

And most of us don’t even realize it.

When the stock market tanked late last year, the Federal Reserve came to the rescue. First, we had the “Powell Pause” and then we got two interest rate cuts. More recently, the Fed launched a new quantitative easing program – although the central bank isn’t calling it QE.

It’s a massive expansion of money and credit. This is always the “solution” applied during any economic downturn. But as GoldMoney head of research, Alasdair McCloud, put it in an article published at the Mises Wire, all of this stimulus is really nothing more than a redistribution scheme that steals from wage-earners and savers — average people like you and me.

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As McCloud put it, the purpose of the expansion in money and credit is “to somehow persuade economic actors that things are better than they really are, and to stimulate those animal spirits.”

“You’d think that with this policy now being continually in operation that people would have become aware of the dilution fraud. But as Keynes, the architect of it all said, not one man in a million understands money, and in this he has been proved right.”

McCloud chronicles the maneuverings of the Federal Reserve and the EBC. These central banks have managed held interest rates artificially low and pumped up their balance sheets to create the illusion of prosperity.

And it certainly has been a boon to bankers, stockbrokers and the political class.

“Due to the flood of new money the yields on government debt have been depressed, giving holders of this debt, principally the banks, a nice fat capital profit. But that is not the purpose of all this monetary largess: it is to make it ultra-cheap for governments to borrow yet more and to encourage banks to expand credit in their governments’ favor. Just listen to the central bankers now encouraging governments to take the opportunity to ease fiscal policy, extend their debts and borrow even more.”

Of course, all of this comes at a cost and we’re the ones paying it.

“Unfortunately, there is no such thing as a perpetual motion of money creation, and someone ultimately pays the price. But who pays for it all? Why, it is the wage-earner and saver and anyone else with deposits at the bank. They are also robbed of the compounding interest their pension funds would otherwise receive. These are the very people who, in a bizarre twist of macroeconomic logic, we are told benefit from having the prices of their everyday purchases continually increased.

Attempts to measure the supposed benefits of inflation on the general public are in turn dishonest, with the true rise in prices concealed in official calculations of price inflation. Suppressed evidence of rising prices is then applied to estimates of GDP to make them ‘real.’ For the purpose of measuring the true condition of an economy these official statistics are taken as gospel by both the commentariat and investors.

We cannot know the accumulating economic cost of cycles of progressively greater monetary inflation, because all government statistics are based on the lie that money is a constant, when in fact it has become the greatest variable in everyone’s life. The transfer of wealth from all consumers through monetary debasement is an act of impoverishment, and to the extent it is not offset in other ways the economy as a whole suffers.”

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