Quote:
Originally Posted by SebC
What do you want? A money supply that can't grow with production (deflationary, people avoid buying things because everything gets cheaper over time)? A money supply controlled by the US government?
How are savings being destroyed anyways? Is there rampant inflation?
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Credit is just another resource for the production of goods or services. There is nothing magic about it. It is most efficiently allocated by the supply and demand pricing mechanism of a free market. We don't fix the price of equity capital, labor or raw materials because we know price fixing allocates resources inefficiently. Fixing a price to low creates shortages, and fixing a price to high creates a glut. Having a central bank impose an artificial price and quantity of credit is not in the public interest. It is only in the interest of undisciplined governments and their banking cohorts. The core of this hoax is our accepting the notion that the price and quantity of money must be managed by someone wiser than market forces.
This hidden banker tax is manifested in many ways. One of the worst ways we pay the tax is in a regressive form of inflation. Governments like the hidden tax of inflation because it softens the discipline of having to balance the books. Central bankers like inflation too. It creates the appearance of a false prosperity and allows them to prop up the collateral supporting the private banking system. When Bernanke says he wants to target a 2% inflation rate he is truly saying he wants to confiscate nearly 25% of your cash every decade. But as everyone# experiences their own unique inflation, it is the poor who suffer most.
When a central banker says he is trying to help make credit available, run the other way. Every benefit has a cost. There is no free lunch. We have been tricked into believing monetary policy is operated in the interest of the people. The reflationary propping up of these assets only serves bankers and overleveraged investors. Reflationism does nothing for the average guy. Inflation strikes first at the cost of food and energy. The billions of people world wide who spend a large proportion of their income on food and energy are literally starved and frozen to# death to support this global elite cabal.
http://www.zerohedge.com/news/guest-...r-tax#comments
I would add a couple of points to this. Seniors or anyone on a fixed income are further hurt in that they are forced into taking on more risk to make their savings work for them.
Zirp is a trap that is nearly impossible for a government to escape from. If the US raised rates, the interest payments would quickly overwhelm the country's finances...
The last point, it lets governments finance war and huge military expenditure. Vietnam was only possible with USA off of the gold standard. Most other large wars have a similary funding model.