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Everything Points To the Federal Reserve As The Cause Of the Economic Crisis

By: Curtis Ophoven

9/24/2009 - 25 Comments

Every day I seem to read someone else that has made the connection that the Federal Reserve is the source of the global economic crisis.

Ron Paul has a long standing history of pointing out that the Federal Reserve is the source of the economic problems, while almost all have ignored his claims. 

Today Robert Kiyosaki released his new book, “The Conspiracy of the Rich” in which he said points out that the Federal Reserve is the source of inflation, which has distorted the financial system of the world and led to the economic crisis.  

The Federal Reserve rules the world by controlling the value of money used around the world.  

"The Conspiracy of the Rich"

 

 

Yesterday, Sarah Palin attack the Federal Reserve for creating asset bubbles and encouraging excessive risk-taking that hurt working-class Americans.

On Monday, Peter Schiff’s new book, “Crash Proof 2.0” points out that the Fed is responsible to maintain the value of the dollar, which they have not done.  Peter is now running for Senate in the state of Connecticut with one goal – “Stop the Fed” and the runaway spending with it.  

Inflation is the wrench in the system causing the free market to perform poorly, while the government continues to accelerated inflation because they benefit from inflation in so many ways

"Crash Proof 2.0"

 

Then, last week Congressman Ron Paul released his new book, “End the Fed”, which is entirely dedicated to pointing out that the Federal Reserve is the wrench in the system.  

Inflation is the wrench in the system causing the poor to get poorer and distorting the market. 

"End The Fed". 

 

Also, Thomas Woods new book "Meltdown" came out in February and is perhaps the best explanation of why the stock market crashed and how government bailouts have made things worse.

The inflationary policies of the Federal Reserve caused the free-market to go astray and result in boom-bust cycles.

"Meltdown"

 

I myself have written about how the Federal Reserve had created the recession and how they are now leading the international banking community into a snake pit – without a rope.

There is a bill on the table in the congress threatening to audit the Federal Reserve, which needs to happen so that the truth can come out and the dollar can be saved.

Momentum is building against the Federal Reserve.  The Federal Reserve is run by the richest people in the world and they control the value of the dollar, which is the Reserve Currency of the world. 

The Federal Reserve was created in 1913 and is suppose to be independent of the political leadership, but they have not acted like it since the late 1970’s when Paul Volckers was the Chairman. 

Of course the reason that the Federal Reserve has distorted the market with massive inflation is because of the out of control spending by congress and the president for the last 20+ years.   If the Federal Reserve stood up to congress and the president and said NO we will not continue printing and borrowing money anymore, then congress and the president would be forced to stop spending.

And when that day happens and the Fed stops increasing the currency supply, nobody is going to be happy either because we will finally be face to face with the mother of all recessions and a contraction in the supply of money.

The alternative is to continue on the path of hyperinflation which leads to the collapse of the entire financial system as we know it today. 

Pick your poison.  I say we stop the Inflation, but either way it's not going to end very well.

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Reader Comments

Comment 1
jon Says: on Thursday, September 24, 2009 5:32:35 PM

if they stop printing money and raise interest rates, we would have a depression

Comment 2
just a guy Says: on Friday, September 25, 2009 6:41:46 PM

I see some manufacturing sectors in the USA are starting to grow at explosive rates:

http://dallas.bizjournals.com/dallas/stories/2009/09/21/smallb1.html
"When Walton McCarthy started building bomb shelters in 1978, he found the concrete shelters inadequate for protecting against nuclear attack. He devised a modern-day shelter that is airtight, fully self-contained and able to protect against natural disasters as well as nuclear, chemical and biological weapons."

"Now, demand for the shelters is so high that he has not been able to match it with production and he is increasing his manufacturing facility by 50,000 square feet to meet the demand."


Comment 3
stephen Says: on Saturday, September 26, 2009 10:42:15 PM

The US is too dependent on Japan and China buying up the country's debt and could face severe economic problems if that stops, Tiger Management founder and chairman Julian Robertson told CNBC.

CNBC.com
Julian Robertson, founder of Tiger Management

"It's almost Armageddon if the Japanese and Chinese don't buy our debt,” Robertson said in an interview. "I don't know where we could get the money. I think we've let ourselves get in a terrible situation and I think we ought to try and get out of it."

Robertson said inflation is a big risk if foreign countries were to stop buying bonds.

“If the Chinese and Japanese stop buying our bonds, we could easily see [inflation] go to 15 to 20 percent,” he said. “It's not a question of the economy. It's a question of who will lend us the money if they don't. Imagine us getting ourselves in a situation where we're totally dependent on those two countries. It's crazy.”

http://www.cnbc.com/id/33004753


Comment 4
sally Says: on Saturday, September 26, 2009 10:43:51 PM

I am suprised you don't quote the book The Dollar Crisis.

Sept. 23 (Bloomberg) -- U.S. budget deficits will continue to pile up in the next decade, eventually reaching an unsustainable level that may result in an economic collapse, according to Richard Duncan, author of “The Dollar Crisis.”

The U.S. has little chance of resolving its deteriorating financial position because the manufacturing industry continues to shrink, leaving the nation with few goods to export, said Duncan, now at Singapore-based Blackhorse Asset Management.

In “The Dollar Crisis,” first published in 2003, Duncan argued that persistent current account deficits by the U.S. were creating an unsustainable boom in global credit that was destined to break down, resulting in a worldwide recession.

“The bad news is at the end of a 10-year period we’re still not going to have fixed the problem,” Duncan said in an interview in Hong Kong yesterday. “Eventually it will lead to high rates of inflation well down the line and really destabilize things to the point where there may be irreparable damage. A kind of ‘Fall of Rome’ scenario.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ6jnKWHrQgI


Comment 5
steve Says: on Saturday, September 26, 2009 10:45:33 PM

Federal Reserve Admits Hiding Gold Swap Arrangements (& manipulating the price of gold)

MANCHESTER, Conn.--(BUSINESS WIRE)-- "The Federal Reserve System has disclosed to the Gold Anti-Trust Action Committee Inc. that it has gold swap arrangements with foreign banks that it does not want the public to know about.

The disclosure, GATA says, contradicts denials provided by the Fed to GATA in 2001 and suggests that the Fed is indeed very much involved in the surreptitious international central bank manipulation of the gold price particularly and the currency markets generally."

http://finance.yahoo.com/news/Federal-Reserve-Admits-Hiding-bw-2550373789.html?x=0&.v=1


Comment 6
Mo Says: on Saturday, September 26, 2009 10:48:33 PM

This article explains how the curency traders at the biggest world banks make billions playing with global interest rates to the detriment of each country's citizens:

http://www.321gold.com/editorials/willie/willie092409.html
"The Gold Carry Trade served its purpose, enriching Goldman Sachs beyond its wildest dreams. They even orchestrated an IPO stock event in order to cash in but retain control from their own deep bounty. Gold descended from $400-450 per ounce down below $300, hitting the depth a year after Rubin’s yeoman service. The USDollar peaked at the same time that gold bottomed. Now with insolvency of the US banks and US households, comes insolvency of the USGovt and the absence of its gold collateral for the USDollar itself, the consequence of Wall Street plunder and pillage."

Comment 7
gold bug Says: on Tuesday, September 29, 2009 9:30:26 PM

The Fed admits to manipulating gold:

http://www.zerohedge.com/article/smoking-gun-fed-controlling-gold
"On June 3, 1975, Fed Chairman Arthur Burns, sent a "Memorandum For The President" to Gerald Ford, which among others CC:ed Secretary of State Henry Kissinger and future Fed Chairman Alan Greenspan, discussing gold, and specifically its fair value, a topic whose prominence, despite former president Nixon's actions, had only managed to grow in the four short years since the abandonment of the gold standard in 1971. In a nutshell Burns' entire argument revolves around the equivalency of gold and money, and furthermore points out that if the Fed does not control this core relationship, it would "easily frustrate our efforts to control world liquidity" but also "dangerously prejudge the shape of the future monetary system." Furthermore, the memo goes on to highlight the extensive level of gold price manipulation by central banks even after the gold standard has been formally abolished. The problem with accounting for gold at fair market value: the risk of massive liquidity creation, which in those long-gone days of 1975 "could result in the addition of up to $150 billion to the nominal value of countries' reserves." One only wonders what would happen today if gold was allowed to attain its fair price status. And the threat, according to Burns: "liquidity creation of such extraordinary magnitude would seriously endanger, perhaps even frustrate, out efforts and those of other prudent nations to get inflation under reasonable control." Aside from the gratuitous observation that even 34 years ago it was painfully obvious how "massive" liquidity could and would result in runaway inflation and the Fed actually cared about this potential danger, what highlights the hypocrisy of the Fed is that when it comes to drowning the world in excess pieces of paper, only the United States should have the right to do so."

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I wish that Ron Paul would would put out a documentary type film. I say that because I believe the main stream would appreciate what he has to say but he just doesn't get enough main stream exposure.

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The Case Against the Fed

This book, written by Murray Rothbard, an economist and historian of fairly well known repute, is a scathing attack on not only the Federal Reserve, but the interests that created this institution. Rothbard explains how the Federal Reserve is the true source in the destruction of wealth, which has led to the destruction of the middle class and continues to sift money into the hands of the wealthiest.

Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse

In discussions of today's economic meltdown and what to do about it, the Federal Reserve is a stealth helicopter: it never shows up on the radar. With the exception of a few esoteric specialists and those Ron Paul Revolutionaries who burst into chants of "Abolish the Fed!" Historian Thomas Woods notes in this important book, the Federal Reserve bears a large part of the blame for the mess we're in. In the first part of "Meltdown," Woods shows how both in theory and in practice, Fed policy fueled an artificial boom and is now leading us to a much larger meltdown.

Crash Proof

Peter Schiff has predicted the economic hardship more accurately then any other economist in the world in this book. Everything from the housing crash to the credit crunch to the stock market. Peter has a plan to help you servive the crash. Peter explains why the Wall Street investment firms are still trying to sell you stocks, and was the house prices are likely to continue to decline for years to come.

What Has Government Done to Our Money?

Rothbard gives us an exceptionally clear, detailed description of what money is and how it has come to be manipulated by governments and central bankers into almost worthless inflationary fiat paper currency. He then explains how gold became the most respected and trustworthy currency of choice and the prospect of either hyperinflation or the greatest depression the world has ever seen may be arriving in the very near future.