Federal Reserve Bank's Mantra To America's Destruction: Punish Productive Savers, Reward Debtors [Who Are Slaves To The Thieving Banking Cartel]
Posted by freedomforall 1 month, 3 weeks ago to Politics
Excerpt:
"Fed policy is simply a one-way ratchet. If inflation exceeds its utterly arbitrary 2.00% target, there is no off-setting correction and restoration of purchasing power. Effectively cumulative inflation is written off as a bad debt.
Unfortunately for main street households and businesses, this embedded inflation-ratchet policy assumes inflation is an equal opportunity cipher. That is to say, even at the Fed’s sacrosanct 2.00% target, the cost of goods and services goes up 2.00% and so, purportedly, wages, rents, profits, interest and all other forms of income rise in lockstep. No one is worse for the inflationary wear—households and businesses just need to keep adjusting both sides of their income statements and balance sheets by the Fed’s preferred PCE deflator and all will be copacetic.
That’s absurd on its face, of course. Right from the get go its obvious that borrowers would get a windfall of depreciated debts and savers would suffer severe confiscation of wealth over even a quarter century—to say nothing of the one and two century debauch of the silver Denarius and dollar shown above. In fact, after 25-years at the Fed’s precise 2.00% target, borrowers would be 40% richer and savers 40% poorer than under a regime of true price stability.
Why in the world today’s central bankers insist upon punishing savers and rewarding borrowers is no mystery. They embrace lock, stock and barrel—whether they acknowledge it or not—the horrid Keynesian fallacy that capitalism is inherently defective because humankind is wont to excessively save and hoard when they should be spending freely and living high on the hog.
It’s really that simple. Even a decent regard for the truism that economic growth and wealth gains are a function of savings and investment would negate the Fed’s pro-inflation policy on its face. Yet as it has happened, the drastic bias of central bank policy in favor of borrowers in all sectors—government, business, households and finance—has essentially extinguished America’s generation of net national savings."
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The Fed = Death To America
"Fed policy is simply a one-way ratchet. If inflation exceeds its utterly arbitrary 2.00% target, there is no off-setting correction and restoration of purchasing power. Effectively cumulative inflation is written off as a bad debt.
Unfortunately for main street households and businesses, this embedded inflation-ratchet policy assumes inflation is an equal opportunity cipher. That is to say, even at the Fed’s sacrosanct 2.00% target, the cost of goods and services goes up 2.00% and so, purportedly, wages, rents, profits, interest and all other forms of income rise in lockstep. No one is worse for the inflationary wear—households and businesses just need to keep adjusting both sides of their income statements and balance sheets by the Fed’s preferred PCE deflator and all will be copacetic.
That’s absurd on its face, of course. Right from the get go its obvious that borrowers would get a windfall of depreciated debts and savers would suffer severe confiscation of wealth over even a quarter century—to say nothing of the one and two century debauch of the silver Denarius and dollar shown above. In fact, after 25-years at the Fed’s precise 2.00% target, borrowers would be 40% richer and savers 40% poorer than under a regime of true price stability.
Why in the world today’s central bankers insist upon punishing savers and rewarding borrowers is no mystery. They embrace lock, stock and barrel—whether they acknowledge it or not—the horrid Keynesian fallacy that capitalism is inherently defective because humankind is wont to excessively save and hoard when they should be spending freely and living high on the hog.
It’s really that simple. Even a decent regard for the truism that economic growth and wealth gains are a function of savings and investment would negate the Fed’s pro-inflation policy on its face. Yet as it has happened, the drastic bias of central bank policy in favor of borrowers in all sectors—government, business, households and finance—has essentially extinguished America’s generation of net national savings."
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The Fed = Death To America
As a result a "decrease" in inflation is heralded as a success, as though that means prices are going down. They even add to that by cherry-picking one or two items that are temporarily down (gas, most recently). But with inflation still at 3% they never mention that the other prices are up so much that it more than makes up for any savings at the pump.
The only thing that brings prices DOWN is a recession, and that is treated like worse than a zombie apocalypse.
D.C. NIFO
It's the only way to be sure.
most knw nothing of the SCOTUS rulings that you are not owed Social Security, they still claim it is theirs by some right
Savers (in currency) are not the only ones suffer. In fact, in such an environment, nobody in their right mind would have savings in the currency. They would be using their currency as fast as possible to buy tangible assets that don't depreciate or even produce a ROI, such as gold or businesses.
The borrowers do win, but at the expense of themselves and everybody else. The reason for that is because borrowing is usually done with newly printed money, so, it contributes to the inflation. Then, when the loan is paid back, it is paid back with devalued currency which is supposedly easier earn than it was previously.
Except that is not entirely what happens. Inflation goes up faster than wages, so, if one was going to pay back the loan with their increased wages, that wouldn't actually work as well as they may think. Additionally, inflation will make all their other costs go up, so, they aren't exactly going to be in the position to have extra income that they can use to pay off their loan. So, I doubt the borrowers are winning by much in this case.
The big winners in this situation are asset holders. Assets go up in price with inflation much better than wages. If a borrower uses their loaned currency to buy some non-depreciating property, wait, and then sell it, they can pay off their loan and still have some cash left over. Except they are also not winning by that much because they have to pay capital gains taxes, and the extra cash they've got has a lower purchasing power.
The even bigger winner in this situation is the state. When assets are sold, there is a capital gains tax that the government collects. The worse the inflation, the more 'fake' gains exist. These gains wouldn't normally exist if there was no inflation, but with inflation they are able to slowly drain the wealth of the asset holder class. Additionally, they are also the biggest borrower and they don't have to pay back their loans, they just roll them over eternally. Fucking parasites.
The big losers in this situation are actually not the savers but the wage earners. Wages never go up as much as they should. So, these people always fall behind until they go bankrupt and get completely destroyed.
So, why doesn't anybody save in this situation? Simple. Most people are wage earners and don't have much of a disposable income. What are you going to be saving when you can barely afford the necessities? You are going to be the borrower just to keep up.