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The Federal Reserve: Our Policy Is To Steal From You

Inflation is theft in more ways than one: it also steals our liberty. We know two things: 1) the official policy of the Federal Reserve is to engineer and maintain inflation and 2) inflation is theft. As I have recounted here many times, in nominal terms, it looks like average wages (earned income) in the U.S. have been rising smartly for decades. But measured in purchasing power, i.e. adjusted for inflation, earned income has declined for most workers, especially in the past three years. Measured in purchasing power, i.e. the number of gallons of gasoline or loaves of bread an average worker could buy with one hour of labor, American workers have experienced a steady decline in the value of their labor for the past 40 years. Whenever a pundit scoffs at the idea that the dollar might lose 95% of its value, readers remind me it already has lost 95% of its value in the past century. The dollar has lost most of its value just in the past 45 years; according to the BLS inflation calculator (which very likely understates real inflation), it takes $7 2011 dollars to buy what $1 bought in 1966, at the top of the post-war Bull market. Can we buy 7 times more goods and services now? Or can we actually only buy 6 times more goods? If so, then our earnings have actually declined by 15%. Put another way: 15% of our earnings have been effectively stolen via inflation. The Federal Reserve robs savers every day of millions of dollars, which it then transfers to the "too big to fail" banks by paying interest on those banks' reserves. Savers earn .01% on their cash while banks are paid 2% interest. The difference is what is stolen from savers and funneled to the banks.

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