Future results. Yes, it’s something we’ve all read on our (dwindling) finacial statements. The firms we trust our savings to put that out there as a big disclaimer to get them out of any trouble for showing, 1, 3 and 5 year averages of return. They show you past performance to make you feel good about giving them your money and then slap a big old proviso on it just so there’s nothing that’ll get them drug into court if the future isn’t a perfect mirror image of the past. I wish the same was true of government.
However, it seems that in the case of our fearless leaders past performance is a perfect indicator of future results. Yesterday I sat down for lunch and flipped through the Wall Street Journal. I know its all day old news, but I guess I am one of the few that still does like to read the paper (although I am seriously considering ordering one of the new large format Kindles). My eyes immediately went to the top article
below the fold that explained to me very clearly that the Obama administration is proposing to expand the powers of the Federal Reserve to “to oversee the biggest financial players, give the government the power to unwind and break up systemically important companies — much like the Federal Deposit Insurance Corp. does with failed banks — and create a new regulator for consumer-oriented financial products, according to people involved in the process.” Read that again. I’ll wait.
There are three simple points that every American citizen with at least a dollar (earned or otherwise bequeathed) to their name needs to understand about history so you can understand the path that this change would put us on:
- Despite its name / title, the Federal Reserve is not a government organization. That’s right, it’s run by a board of private bankers with pretty well known names: Chase, Morgan, Rockefeller and Rothschild. This is not some rant about Illuminati, this is just a statement of fact. There is government representation on the board, but it is not run by government nor by extension the people. It has its own self interests at heart. It is not within our democratic system.
- The federal reserve was created in 1913 after the banking panic in 1909-1910 to address banking panics. Again, I don’t want to get into a long history lesson nor do I want to ask you to don your tin foil hat. There’s plenty of pages out there that can help you with either. The simple statement here is that there was a recession in 1909 that caused a bit of a bank run and they politicians (who’s campaign donations happened to come from some bankers) “didn’t let a good crisis go by unused” and used the occasion to get the federal reserve act when most of congress was already on their way home for a recess based on the argument that the only way to prevent another recession was to have a central authority that could help regulate and provide reserve currency to all the other banks.
- Here’s the payoff. The federal reserve is widely believed to have played a major role in prolonging (some say even causing) the ‘great’ depression of 1929 that lasted for more than 15 years. Even the current Fed Chairmen, Helicopter Ben Himself, has said as much himself.
That’s right, the one thing that the Fed was supposedly created to prevent, it actually made worse. Now that couldn’t happen again, could it? Let’s hope not or the last 18 months will end up in the history books like the recession and bank runs of 1909 did – overshadowed by a much larger, more painful event yet to come that the newly empowered Fed will be right in the middle of one way or another.
In the immortal words of the Who…let’s not get fooled again