Thursday, February 19, 2015

Reason #3: Why End The Federal Reserve

Do you remember the broad game, Monopoly? There is a great correlation with it and the Federal Reserve. Let's go back to yesteryear and you are having a family game night. Dad introduces everyone to the game of Monopoly. He explains the rules which basically is to eliminate your competition by winning all the money and property until you are king of the hill, top dog, number one!
The game moves along with your favorite piece. I like the car. You land on the Baltic States and you buy. Later, Dad lands on your property. You charge him a toll. You collect rent. Still later, dad lands on your sister's property. She collects rent too. Finally, dad lands on Mom's property and she extends her hand for rent due. Dad isn't doing well. The odds say that he will be the first one eliminated.
Now, compare the US government to Dad. The US spends more than it collects every year and at the same time, the US dollar is the world's reserve currency. This means it has universal usage. This is why all commodities get transacted in dollars. This makes dollars special, but the distributor of those dollars, spends recklessly.
It has its citizens so fooled that when the monthly balance it released, our stock market rises because the deficit was only $44 billion for the MONTH! Now, one would think in the game of life(not the other board game)that the US will eventually lose its status as the world's reserve currency if it keeps spending more than it collects. No, dear reader and this is the conundrum of life and money. Before I continue with reality, let us return to the board game.
When last visited, dad was losing his shirt. Then, he lands on a solid piece of property, Park Place. He wants to buy it, but you laugh because he can't afford it. No, children and family of Dad. He throws out cash and the wad that he counts the correct amount, appears larger than the three people that he is competing against. How can this be? Dad is cheating. He prints money out of thin air for whatever he needs and any amount. Bottom line: you don't want to play with a rig game and family game night ends along with other doubts about dad and his beliefs.
This is how many countries in the world see the US. We print in excess. The value of the dollar has fallen over 95% since the Federal Reserve came into power. When we devalue, we export inflation because everyone else has to buy dollars to trade. They are hoping for another system, but since none is on the horizon, they don't rock the boat. However, there is deep resentment and if another currency should seek to be number one, they may join. Then, our dollar will fall even further and our economy will be hit hard with inflation  A gallon of gas could rise to five dollars. Just double and triple the price you pay for food, utilities and clothes. If this ever happens, you can thank the Fed, which is why I say, End the Fed!