VRA Update: What EVERYONE Should Know About the Federal Reserve
/“I strongly oppose an audit of the FED”
FED Chair Janet Yellen, to Congress (last week).
Well…I am imagine that you do Janet…just as a child opposes parental oversight.
If you’ve followed my work for any length of time at all, you know that I’m not a big fan of Central Banks, especially the biggest and baddest of them all, The US Federal Reserve System, or the “FED” as its most commonly referred to. The FED has had one primary mandate since inception in 1913, and that mandate is to protect the value of our currency, the US dollar. Of course, they have failed miserably at this one job and here’s the proof. If you had put one million US dollars in a safe deposit box in 1913, you would have lost a full 97% in purchasing power today…with a present day value of just $40,000. Instead, had you placed that $1 million into gold at roughly $19/ounce (1913 price), today you would have in excess of $70 million!
Nothing I could ever say can make the case against the FED more clearly than this example…and it’s also the reason the middle class has been destroyed. Currency inflation is the destruction of the value of our money due to the printing press…and it’s only getting worse.
The good news is that there are simple, yet incredibly powerful ways to profit from the FED’s madness. These are the exact strategies that I lay out in the VRA on a regular basis, and continuing to dollar cost average into precious metals is something that anyone and everyone can do. Got Gold and Silver?? You’ll be glad you own them in the years to come.
Most Americans assume the FED is a powerful government institution that seeks only to safeguard the dollar, boost the economy and drive employment higher.
That's what the FED wants you to think.
The illusion of the Fed as a stabilizing, positive government entity has more or less existed since its creation under dubious circumstances in 1913.
"It not only avoided the word bank, it cleverly implied federal, or government, control over the establishment of a pool of reserves that would backstop the new banking 'system.
Congress has played along the entire time, first by approving the legislation that created this beast and later by endowing the Fed with its "dual mandate" to combat both inflation and unemployment.
The real reasons the Fed was created, and many of the things it does to this day, would shock many Americans.
Michael Snyder writes on his website, The Economic Collapse, the Five Shocking Facts About the Federal Reserve
1. It's Not Really Part of the Government Few people realize that the Federal Reserve didn't even exist until about 100 years ago. It was cooked up by the top Wall Street bankers of the time in a secret meeting on an island in Georgia (A book about it is actually titled "The Creature of Jekyll Island", by our friend G. Edward Griffin). The bankers wanted a central bank partnered with the government to serve as a backstop for their institutions, which then were prone to panics and bank runs. The 12 regional banks that make up the FED are not owned by the U.S. Treasury, but by the nation's private banks. According to Factcheck.org, "about 38% of the nation's more than 8,000 banks are members of the [Federal Reserve] System, and thus own the Fed banks."
2. The Federal Reserve's Primary Purpose is to Serve the Banks While the stated purpose of the Federal Reserve is its congressional "dual mandate," in practice serving the needs of the big banks still comes first. "Central banks - of which the Federal Reserve is, by far, the world's largest and most powerful - serve banks first and foremost. Secondly, they serve their host governments. They are the ultimate tool of the rich and powerful."
During the years of the financial crisis, for example, in addition to the well-publicized bailouts, the Fed made $16 trillion in little-known loans to more than a dozen big banks. According to a Government Accountability Office document, some of the major beneficiaries included Citigroup Inc. (NYSE: C), which received $2.513 trillion in loans; Morgan Stanley (NYSE: MS), $2.041 trillion; Merrill Lynch, $1.949 trillion; Bank of America (NYSE: BOA), $1.344 trillion; Bear Stearns, $853 billion; Goldman Sachs Group Inc. (NYSE: GS), $814 billion; and JPMorgan Chase (NYSE: JPM), $391 billion.
As usual, Wall Street and the Big Banks were bailed out….with NOTHING for Main Street!
3. The Federal Reserve is Paying Big Banks Billions in Interest
To fund its massive quantitative easing (QE) program, the Fed has encouraged banks to deposit excess reserves in the Fed's accounts. The big banks have been more than happy to comply, as they get paid interest on any money they park at the Fed. Last year, the Fed paid out about $5 billion in interest to the big banks; Bloomberg News has estimated that the annual payments to the banks could soar as high as $77 billion a year by 2015, depending on how much interest rates rise by then.
4. The Fed Has Destroyed the Dollar The Federal Reserve has utterly failed in one of its mandates - to manage interest rates to control inflation. Since its creation in 1913, inflation in the U.S. has eaten away 97% of the value of the dollar. So the same item that cost $100 in 1913 would cost nearly $2,300 today. And the problem has grown worse over time; the dollar has lost 83% of its value just since 1970. Since the financial crisis, the Fed has accelerated the process with inflation-fueling policies like QE and zero interest rates.
5. The Federal Reserve Enables Government's Profligate Spending Washington could never have accumulated its $16.85 trillion national debt - which in recent years has grown at a rate of more than $1 trillion a year - without the help of the Federal Reserve. The Fed is essentially the mechanism through which federal debt is created and monetized, making it easy for the government to spend trillions of dollars beyond what it collects in taxes. It's little wonder that Washington looks the other way when the Fed is giving special treatment to the big banks.
The good news is that there are simple, yet incredibly powerful ways to profit from the FED’s madness. These are the exact strategies that I lay out in the VRA on a regular basis, and continuing to dollar cost average into precious metals is something that anyone and everyone can do. Got Gold and Silver?? You’ll be glad you own them in the years to come.
It’s time to audit the FED! I encourage everyone to support Rand Paul’s Audit the FED legislation. Rand’s father, Ron Paul (Texas legend), began pushing for this MANY years ago, and now his son has proudly picked up the mantle.
Until next time, thanks again for reading…
Kip Herriage
VRAletter.com
@kherriage (twitter)
