October 1, 2022

The Federal Reserve Wants You Fired: Ron Paul

The Fed’s efforts to bring down inflation by increasing interest rates will make it harder for average People in america to obtain home mortgages, purchase a car, or even pay their own utility bills.

The Federal Reserve was no doubt troubled by July’s decline in the US unemployment rate to 4. 5 percent and  increase in job openings in order to 11. 2 million. This is because the Fed’s strategy for decreasing the historic  price pumpiing now plaguing the economy — caused by the Fed’s unprecedented low or absolutely no interest  rate policies — is to increase unemployment in order to decrease consumer spending. In his speech to  the yearly monetary policy conference within Jackson Hole, Wyoming, Fed Chair Jerome Powell reiterated his  commitment to increasing unemployment, or, as he describes, “ softening the labor markets. ”    

Powell is correct that reducing price inflation is urgent. He is also correct that doing so will increase  unemployment and slow economic growth. The Fed’s efforts to create down inflation by increasing  interest rates will also make it harder for average Americans to obtain house mortgages, purchase a car, or even pay their utility bills. Those hardest hit by the Fed’s “ softening of work markets” are also the  primary victims of the Fed-created price inflation. This demonstrates the particular insanity and cruelty of the fiat  money system, which usually enriches the elites while improvising the masses.

Well-connected members of the financial elite and crony capitalists benefit from the Federal Reserve’s  money creation, as they are the first recipients of the brand new money. This enables them to boost their  purchasing power prior to the new money has caused general price inflation. When the money  creation has impacted the middle and functioning classes, the economy is definitely racked with widespread price  inflation. Therefore , a small gain in wages is just not enough to compensate for the true price increase. So average Americans suffer from both Fed-created inflation and the Fed’s tries to rein in that  inflation.  

It is amazing that a lot more individuals do not question the concept inflation, recessions, unemployment,   and booms and breasts are necessary features of a sound financial system. Even many otherwise staunch  defenders of free marketplaces maintain a child-like faith in central banking. Some conservatives support  “ reforming” the Fed by making this follow a “ rules-based” monetary policy. These conservatives do not  understand that the problem is the presence of a central bank using the power to manipulate the foreign currency.

Many progressives recognize the damage the Fed does to average People in america when it increases interest  prices. However , their “ solution” is a cure worse compared to disease: make the Fed preserve low interest  rates (and thus high inflation) within perpetuity— or until the ongoing devaluation of the currency via  inflation causes a dollar turmoil, leading to a major economic calamity. The main victims of this turmoil will,   of course , be the very Americans progressives claims to care about.

The Federal Reserve’s failure to fulfill its dual mandate of producing stable prices and full employment,   combined with the damage it inflicts on the American people, make the best case for changing  our monetary policy. A stable currency, safe from manipulation simply by politicians or central lenders,   would provide the basis meant for long term prosperity that advantages everyone, not just the crony capitalists  and the power-hungry politicians. The first steps in this transition are to finally pass audit  the Fed  laws and continue the efforts to pass state laws recognizing precious metals as legal sensitive.

This article first appeared at RonPaulInstitute. org .



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