Also posted at zerohedge.com
Submitted by G at Knowmadiclife blog,

Everything the Fed does ultimately leads to less economic activity, less savings and more debt resulting in poverty for Americans, not prosperity.  Debt is not prosperity. Debt is poverty and economic slavery.

Why are you working harder but getting poorer?

Let us analyze the effectiveness of the Fed’s only policy tool of printing money since the onset of the great financial crisis in 2008 by looking at:

  • Economic activity as measured by human action – the real source of all wealth
  • Earnings
  • Savings
  • Debt
  • Poverty
  • Government dependency

 

How can Americans ever be expected to reverse the slide into debt-slavery if real wages are stagnating? Even when using the official government inflation numbers which understate the real level of price inflation (CPI-W until 2009 and CPI-U from 2010) real wages in America have been flat at best since 2008.

Did you notice the mysterious vertical jump in the data series between December 2009 and January 2010? It was here when the government changed the inflation index it uses to calculate real wages from the CPI-W to the CPI-U. This change from one bogus number to a different bogus number resulted in an instant jump in real wages – further distancing the illusion from reality. Why are no mainstream economists telling us about this?

This arbitrary change in the inflation formula used to compute real wages is a great example of how government numbers do not reflect real economic activity. In reality, these numbers are completely meaningless in the real world. These numbers only have value in the illusionary matrix created by the Intellectual Idiots and the central planners for us to live in. It is smoke and mirrors to hide the ongoing failures of the central planners and the Intellectual Idiots advising them.

 

Artificially low interest rates discourages savings and increases spending by causing the cost of daily living to increase. We end up spending more than before for the same goods. Combine this with the government purposely understating the real level of price inflation and voila! – we magically have economic growth – at least the illusion of economic growth. In reality, we are getting poorer just to maintain the same standard of living. Consumption leads to poverty. Poverty leads to dependency on the state – economic slavery – debt slavery.

 

Stagnant wages combined with rising price inflation has forced many Americans to rely on debt just to make ends meet. This is not a sign of economic growth as the MSM and statist economists would have you believe. Most of the time reality is the opposite of what they are telling you. You have to think for yourself to know the truth. When you think for yourself the truth becomes apparent – Americans are going deeper into debt because they are broke not because they are prospering.

 

 

Is this what an economic recovery looks like? Of course not. Do not let the teleprompter reading propagandists on TV fool you. They are simply highly educated in that which is false. You know better than them.

The Fed’s policy of money printing has resulted in less economic activity, no wage growth, less savings, more debt, increased poverty and increased dependency on the government for Americans than when the GFC started! Americans are now economically worse off than they were in 2008.

The recession never ended. The central planners have simply hidden the deteriorating economic reality from us by money printing resulting in nominal price increases – in combination with misleading official unemployment and inflation figures. As long as the money printing continues things will continue to get worse, not better.  This leads us to one curious question: if the Fed knows reality is deteriorating and it’s monetary policies are causing this deterioration to accelerate, what is the endgame the government and the Fed have in store for Americans?

What is the road back to prosperity?

There is an easy solution that takes us away from this road to debt-slavery and puts us back on the road to prosperity. That road to prosperity for Americans is ending the Fed’s interest rate manipulation and letting the free market determine interest rates, or the “price” of money (Dr. Robert Murphy does an excellent explanation of this in this video). In a free market the interest rate is the price of money – it reflects the point where the supply of savings and the demand for debt in the economy balance. As interest rates rise Americans will be incentivized to spend less and to save more. Saving leads to prosperity. Prosperity leads to independence from the state – economic freedom.

The debt will liquidate and the money supply will contract, or deflate. This money supply deflation will allow the value of money to increase rather than decrease. Prices of things we buy will begin to fall rather than increase – making us wealthier. Real wages for Americans will begin to rise again. The American middle class will begin to grow again as it’s earnings is worth more, saves more and earns more on that savings.

As prices fall capital investment that previously was not seen as profitable will become profitable. Capital investment based on real consumer demand will pick up. Because this will be real economic activity based on the real market price of money (interest rate) and real consumer demand the destructive extremes of the Fed created boom-bust business cycle will ease considerably.

To find that road to prosperity we must first begin with reforming the Fed’s toxic policies designed SOLEY to profit the banks, it’s owners and shareholders (here and here and here)

That reformation starts with ending the Fed’s monopoly on the US money industry. Free up the money industry to competing currencies with legislation such as the Free Competition in Currency Act (explained by Professor of Economics at George Mason University Dr. George White here and by Congressman Dr. Ron Paul in this video). Give Americans freedom of choice in currency – examples would be gold and silver back currencies. If the Fed’s debt, our US dollar, is so great for Americans it should have nothing to worry about regarding competition from barbaric relics such as gold and silver, right?

Why are all the Fed’s policies leading towards economic slavery of the American people? Ignoring these policies will not change the inevitable economic outcome resulting from these policies. You can ignore reality but you cannot ignore the consequences of ignoring reality.

Why are YOU allowing this to be done to you?

Do you want to learn more about the Fed and sound money? More resources than you can shake a stick at are available at this Federal Reserve Knowledge Bomb or the Knowmadic Life website – check out the Recommended Reading, Documentaries and Site Links sections. Or you can go for the mother load of information at The Mises Institute at www.mises.org.

From knowledge comes awareness. From awareness comes freedom.