Classrooms throughout the entire world describe the Great Depression as a stock market crash with vague details without going into the intricate elements of what actually caused the Great Depression of the thirties. It was not because capitalism, it was not because of politics and certainly was not because of Austrian Theory. The Great Depression happened because of the Federal Reserve System.
Since Ron Paul’s 2008 Presidential Primary Campaign, many supporters of the Republican Congressman have taken a great deal of interest in the Federal Reserve, myself included, to really find out about our money supply, the process of printing money and the amount of control the Federal Reserve holds over the United States of America.
With a lot of in-depth information about the Great Depression, Business Cycles, financial terms and so on, where would one start to dismantle the common view that the Federal Reserve is a central bank that is need? I know where I can start, definitions of key terms to be used.
Inflation: a continuing rise in the general price level usually attributed to an increase in the volume of money and credit relative to available goods and services.
Fractional Reserve Banking: is the banking practice in which banks keep only a fraction of their deposits in reserve (as cash and other highly liquid assets) and lend out the remainder, while maintaining the simultaneous obligation to redeem all deposits immediately upon demand.
The Federal Reserve System: is an independent government institution that has private aspects. The System is not a private organization and does not operate for the purpose of making a profit. The stocks of the regional Federal Reserve banks are owned by the banks operating within that region and which are part of the system.
The Great Depression happened because of the increase in the money supply. It is that simple. It is fact. Our next sequel to the Great Depression will happen due to the substantial increase in the money supply. It is amazing how the majority of people speak of inflation as it only means in the increase of prices however, the increase of prices is the result of inflation because of the printing of money out of thin air.
The Federal Reserve System has an extraordinary amount of power and has no Government oversight whatsoever. It’s a fact that the Federal Reserve printed $600 billion before the $750 billion bailout was passed. How come this was not reported? How come this was not discussed in the Congress? Well, many reasons. For one, Congress is full of homunculus little jitterbugs that have no insight on anything except their own pockets. Secondly, the Federal Reserve controls our money supply and, in-turn, pretty much controls everything else then.
Central Banks around the world charge the Government of their respective country an interest, and a partial fee, to print money for that Government. So no matter what, a country will always have debt. Andrew Jackson knew this, and that is why he is the only President in the history of the United States to have near zero debt because he shut down the Central Bank of his day. Where do you think our income tax goes to? Former economic assistant to the Ronald Reagan Administration reported this to several news agencies that our income tax goes directly to the Central Bank to pay off the debt owed to them.
Central Economic Planning, Alan Greenspan and Government caused the current financial calamity because of low interest rates, cheap money and a spending binge on practically everything. This is just the beginning of the current crisis; everything is going to get a whole lot worse. Of course, once again, majority of people blame Capitalism and adhere to the principles of Keynesianism however, Keynesianism was the cause of everything that is going wrong right now.
Supplying cheap money to fat cats on Wall Street is obviously going to create a mess. “If a kindergarten teacher gave her students pixie sticks and soda pop, then she leaves the classroom and comes back and sees all her students fighting, making a mess and acting crazy, who are you going to blame; the kindergarten students or the teacher?”
A lot of supporters of the Obama Administration on the left believe that the economic stimulus of nearly one trillion dollars, which will probably be more just like the bailout package was, is going to help save the economy. It will unequivocally make everything a lot worse. All what Pres. Obama has is a printing press. Has anyone in the media ever asked: Where is the money coming from? It certainly isn’t coming from the United States because the Government does not have any money to give out. So as I have reported ad nauseam since my tenure at this publication began, the Government will either print the money out or borrow it from China, Japan and or Saudi Arabia or both.
The Great Depression of the 1930s could’ve easily been just a moderate recession, because, hey, recessions do happen and it is a good thing because it cleanses out the bad, incompetent people and paves way from the competent ones to succeed. However, the Government and Administrations of Hoover and FDR made the problem a whole lot worse by intervening into something that would have been quick and painless.
I mean, if Pres. Obama thinks he can afford a whole new new deal then he has another thing coming? We can hardly afford the old new deal. This whole economic stimulus package is nothing but a depressant and a causation of more horrible things to come. Capitalism is dead and buried and will never see the stroke of dawn ever again because of all of the hebetudinous and ignorant masses thinking free-market economics, which we have not seen in several decades, was the cause of this financial situation.
There are many articles making the comparisons between Keynesian Theory and Austrian Theory, and made the argument that Austrian Theory is a beautiful philosophy because it is smart and simple: Let people have their personal liberty and economic freedom.
The Government cannot make you a better person because they’re politically correct, intrusive, corrupt and inept to do anything. For example, at the turn of the 20th century, cars were being invented and everybody bought one. But, as time went on, business that relied on transportation were failing. The company that had a large niche on transporting people from point A to point B was going under. The horse-and-buggy business was losing money left, right and center and had nowhere to go but down. What did the Government do? Well, what they’re doing right now. Bailed them out. Obviously the market showed that the horse-and-buggy business was not wanted by the consumer and the car industry was booming and wanted by the consumer. So why would the Government intervene? Keynesianism.
Another good of Government hypocrisy: tobacco farming. Common sense views tobacco farming as majority of cigarette sales. The Government subsidizes tobacco farming however, they have tons and tons of laws prohibiting and discouraging smoking. Does that make sense? Government subsidizes something but then tries to ban it? Huh?
Doesn’t the Government just grind your gears? They grind mine everyday and soon I will die of a heart attack because they make me so angry with each passing day. They tax me, tax me, tax me a little more, tell me what to do, then tax me again, they redistribute my income to others, tax a little bit more, start Government programs that I don’t even use, steal my money into a Canadian Pension Plan (don’t even get me started on that ponzi scheme) and finally tax me again.
Oh, indeed, the quote “The only two infinite things in life are: Death and Taxes,” is the most correct quote in the history of man, yes indeed. The other important quote was by Thomas Jefferson, “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”