Brave New World, Same Old Story
101 years after the original JP Morgan bought out a failing financial company in order to prevent an economy-troubling panic on Wall Street, the scion of JP Morgan arranged a saving buyout of the failing Bear Stearns, Inc. financial institution from the same motivation.
The problem is, that first buyout by the first JP Morgan took place with JP Morgan’s actual money, and in the golden days before the creation, just six years later no less, of the Federal Reserve. This time around, JP Morgan Chase acted in concert with the U.S. Treasury Department and, yes, it largely made use of the Federal Reserve’s money.
In actual fact, the financial giant used leveraged the Federal Reserve’s literal money tree (its printing press) and its magic check book by which the nation’s not-federal central bank creates money (the Fed has a check book, but no checking account).
As this writer watches the interest rate paid to him by his money market account plummet as the Fed takes actions to slash interest rates in the hopes of stimulating consumerism, the central bank is saturating the free market with money in the form of loans to troubled banks and the permitting of the leveraging of its magic money…which is a formula for increasing inflation, which has been blessedly low in the U.S. for a fairly long time up til now.
If the market’s rate of inflation increases while the interest rates people can earn on money market and other such accounts decreases, then what that means for you, dear reader, is that your money is losing value in your very hands. You are now receiving diminished compensation for delaying consumption while your ability to consume is simultaneously eroding.
To make matters worse, this action has flung wide the doors onto a dangerous, destructive conceptual landscape, as it sets a precedent for the government to step in and demand that banks and financial institutions do whatever it tells them to do, for whatever reason it conjures up.
Already, the damned Lefties have raised the predictable, all too predictable hue and cry up on the Hill for the government to do even more. And the government is going to do just that, rolling back ever more our people’s ability to create wealth, eating ever more into personal freedom.
This was not possible 100 years ago. It was not even possible last year. But the government and its big finance lobbyist bedmates together ghosted a mortgage lending bubble into manifestation…just as in 1913 they ghosted the Federal Reserve into existence.
What I suspect were the true intentions behind the creation of the Federal Reserve, at least for some—the shrewdest—of those who were behind its conception, are now coming to pass. This passage may be slow, but it’s huge.
Welcome, Mustapha Mond. You have been ushered in.
Tags: Federal , Reserve , Brave , World , Money , Economy , Interest
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