Ron Paul is right, audit the Fed, then disband it.
The Federal Reserve does lots of stuff like this. They know that they will probably never get audited and they know that the American people don’t understand all of this financial stuff, so they get away with it.
But what if something came along and suddenly interrupted the shell games that the Fed is playing?
Well, that is exactly what this debt ceiling debate threatens to do. The chart below shows that the amount of U.S. government securities owned by the banks has increased exponentially since the beginning of the financial crisis. This is not an accident… Study the chart carefully, spot the shell game yet?
Of course all of this is one giant Ponzi scheme, but up to this point the Federal Reserve has gotten away with it.
Meanwhile, average Americans were getting the short end of the stick because all of this new money has been causing the price of food and the price of gas to go up.
But now QE2 has come to an end. So does that mean that “quantitative easing” is going to be completely over?
No, not really. The shell game continues.
The Federal Reserve has announced that it is going to continue to purchase U.S. government debt using the proceeds from maturing debt that it already owns. It is being projected that the Federal Reserve will purchase 300 billion dollars in U.S. government debt over the next 12 months using this method.
This isn’t being called “quantitative easing”, but that is essentially what it is. In fact, one CNN article is calling it “QE2.5″….
QE2 is just about done. But the Federal Reserve will still be buying massive amounts of long-term Treasuries.
In fact, the Fed’s purchases over the next year will likely be at least $300 billion. That’s half the size of QE2 — even if QE3 never takes place.
But “quantitative easing” is just one example of a shell game run by the Fed. There have been lots more.
For example, during the financial crisis the Federal Reserve started loaning gigantic amounts of cash to the big banks for next to nothing.
The big banks took a lot of this cash and invested it in U.S. Treasuries. U.S. Treasuries typically only pay a couple of percentage points, but when you can borrow massive amounts of nearly free money suddenly they become extremely profitable.
Instead of loaning out large amounts of money to all of us to get the economy rolling again, the big banks just parked huge amounts of cash in U.S. Treasuries and watched the risk-free profits come rolling in.
In this way, the Federal Reserve helped big banks make a ton of money and they in turn supported the exploding federal government debt load at the same time.
How long will it last, until the people wake up.
So what is the answer?
We need to entirely scrap the current tax system and come up with something that works in the 21st century.
But we all know that is not going to happen.
Meanwhile, our economy continues to unravel. According to the Department of Labor, the unemployment rate rose in 210 metro areas during the month of May, and it only declined in 131 metro areas.
Consumer confidence in this country has hit a seven-month low, and average Americans are becoming increasingly anxious about the state of the economy.
Unfortunately, most of our politicians don’t seem to have any answers and the Federal Reserve is just trying to keep their shell games going.
Every single day the U.S. economy is getting weaker. Every single day we are going into more debt. Every single day we get closer to the collapse of the entire system.
Time is running out.
