Saturday, April 23, 2016

"In 1913, on Christmas Eve, Congress passed the Federal Reserve Act, setting up America’s central bank. Only then did economists get their hands on the economy’s throat. The dollar was worth about the same thing it had been worth 100 years before .. a hundred years later, it is worth only 3 cents. And only 16 years after economists took their positions at the Federal Reserve came a depression worse than anything the nation had ever seen – at least, it was worse after government economists finished with it. The Great Depression may have been an accident, but debasement of the dollar was not an accident. It was policy. Economists, led by Keynes, had the idea that they could spur the economy forward by creating phantom demand – in the form of additional units of purchasing power. The gold standard stood in the way; it was abandoned like a bad neighborhood. First, temporarily, then partially, then, in 1971, completely. The first consumer credit boom came in the ’20s… leading to the Great Depression. By the 1980s, Americans had lost their fear of debt. Consumer credit boomed. Then it bubbled. Economists didn’t understand what was going on. They rarely do. But they had created a hundred-year flood of consumer debt."
- Bill Bonner
link here to the essay

1 comment:

Anonymous said...

Not my nation ... I am going to New Zealand, and gonna sell cheese to the Chinese. Hopefully i will get there before Islamic State take over the USA (at a bargain price).