John Dillenger: Banks. That's Where the Money Is.

The Fed: CDs. That's Where the Money Is

Well, it's now apparent. American insured savings accounts were FDIC insured up to $100,000 against everything except Alan Greenspan and his (wink) "Federal Reserve" – a government created monopoly of bankers.

An insured Certificate of Deposit of $50,000 today, earning the 1-year average interest rate (2.04%) and shrinking by a disclosed Congressional banking committee inflation rate (12%) will be worth $45,020 one year from now, before taxes. At the same time, prices and inflation continue to rise.

Banks such as Wells Fargo, who are reporting hefty "earnings," were not asked by Mr.Greenspan to help shoulder his "economic boost." Enjoying deregulated good times, they make more interest profit on loaning out savers' money (property), than savers do on owning the money.

Incredibly, Mr. Greenspan, that government protected old fox, is expected to enter the counting shed once again for his twelfth consecutive raid on savers' nest eggs, stealing the eggs, and the nests as well.

How so? As said, the average 1-year interest earnings on a CD is 2.04 percent (internet bank report 1-02). Core rate price inflation is 3.5 percent – per "government math," of course. Actual inflation – measured by your pocket calculator – has been running 12 percent as revealed by Congressman Ron Paul of Texas, a member of the House Banking Committee speaking at a meeting of the Center for Libertarian Studies in San Mateo, California.

And at the same time savers' rates are being driven down, Mr. Greenspan has been watering down savers' hard-earned principal by inflating the money supply – pouring 8 percent more fiat money into the economy per year, according to data from economist Gary North.

Now, data presented to the U.S. House of Representatives by Congressman Paul on September 6 reveals that "True inflation, measured by the money supply, is rising at a rate of greater than 20 percent, as measured by MZM (MZM is a money measure used by the FED to track money supply in its "system)."

So, really, it wasn't the Grinch who stole Christmas 2001 – it was the FED. By raiding Mrs. Jones' Christmas savings account to provide cheap, economy boosting loans to its stock market friends, it crippled the consumer. Mrs. Jones just didn't have the money.

Of course, Mrs. Jones could have spent her shrinking principal (or borrowed), as Mr. Greenspan wanted, and hoped later for government alms to stave off the bear at her door. But, Mrs. Jones didn't buy that either.

Columnist and author James Brovard points out that because of Mr. Greenspan's actions some retirees who use their small interest and IRA earnings to supplement their "Social Security" are losing their homes, unable to meet the mortgage payments.

For security, says Brovard, these folks sacrificed higher returns for 20 years to avoid the risk in stocks and bonds: Now, Mr. Greenspan, by interest manipulation, is trying to drive them into risky schemes at a time in their lives when they no longer have the years left to recoup losses.

It was "faith in the system" that fueled the average American's confidence to "save for a rainy day." It was this faith that made thrift a way of life for generations, that fueled lifetime investments in free enterprise. It was faith in our economic history that allowed Ben Franklin to postulate, "A penny saved is a penny earned." It was the same faith that made America, as Mr. Brovard points out, a nation of savers, not players in the stock market.

Faith in the system is now in jeopardy – thanks to the government corporate cabal and its mouthpiece, the FED, and by the President, who appoints the FED chair. Rules have been changed; terms have been redefined. Personnel and professionals now are "human resources," savers are "human capital," and investors are "human stock", i.e. sitting ducks, fleeced sheep, skinned rabbits, plucked chickens, corralled cattle…

The famed Nobel Prize economist F.A. Hayek said that when government planners intervene in money markets they must choose between the interests of some individuals and groups and the interests of other individuals and groups.

"In the end," he wrote in his classic book u2018The Road to Serfdom,' "somebody's views will have to decide whose interests are more important; and these views must become part of the law of the land, a new distinction of rank which the coercive apparatus of government imposes upon the people."

America's "watchdog" press obviously agrees with the Fed's selection of winners and losers. What's more, from business pages to talk shows to the nightly news, each Fed rate cut arrives as "good news" for all, omitting the embarrassing possibility that not everyone benefits. The only point to consider, muse the pseudo sophisticated news hounds, is "did the Fed go far enough on this one?"

REFERENCES:

1. money-rates.com, internet bank report (1/2/02)
2. Foundation for Rational Economics and Education, "The U.S. Dollar and the World Economy," address by Rep. Ron Paul (R-TX) before U.S. House of Representatives. 9/06/01
3. "Pushing on a String?" by Gary North, LewRockwell.com
4. "Moore's Law, Pareto's :Law, and Greenspan's Dilemma" by Gary North, LewRockwell.com
5. Interview with James Brovard, KSFO Radio Host Brian Wilson
6. San Francisco Chronicle, Business Section, 1/1/02, pg B2, "Christmas Sales…"

January 16, 2002