spacer.png, 0 kB

Newsflash

CHINA CURRENTLY HAS OVER A $1 TRILLION IN FOREIGN CURRENCY EXCHANGE RESERVES AND FULLY ONE THIRD OF THIS IS IN U.S. DOLLARS.  AT WHAT POINT POINT DO THEY DUMP THESE DOLLARS?
 
Richard Russell's Thoughts on the Fed & Inflation PDF Print E-mail
RICHARD RUSSELL OFFERS HIS THOUGHTS ON THE FEDERAL RESERVE SYSTEM AND MONETARY INFLATION AND HOW THIS SYSTEM WILL EVENTUALLY DESTROY US.

Richard Russell on the Fed and Inflation

Richard Russell has been editing his Dow Theory Letters since 1958 and brings great wisdom to the investment world. Here are his thoughts on the Fed and inflation from his March 27, 2007 Remarks, which come with a subscription to Russell’s Dow Theory Letters, $250 a year.

Russell deals primarily with the stock market, but he became a gold bull in 2000, the timing of which illustrates Russell's insight into the precious metals markets. He was also a gold bull in 1970s. For more about Russell’s Dow Theory Letters, visit www.dowtheoryletters.com.


March 27, 2007 -- I still can't get over the whole Federal Reserve racket. Consider the following -- let's take a situation where the US government needs money. The US doesn't just issue United States Notes, which, of course, it could. These Notes would be dollars backed by the full faith and credit of the United States. No, the US doesn't issue dollars straight out of the US Treasury.

This is what the US does -- it issues Treasury bonds. The US then sells these bonds to the Fed. The Fed buys the bonds. Wait, how does the Fed pay for the bonds? The Fed simply creates money "out of thin air" (book-keeping entry) with which it buys the bonds. The money that the Fed creates from nowhere then goes to the US. The Fed holds the US bonds, and the unbelievable irony is that the US then pays interest on the very bonds that the US itself issued. The mind boggles.

The damnable result is that the Fed effectively controls the US money supply. The Fed is just an agency of the US, it's not even a branch of the US government. The Fed is not mentioned in the Constitution of the United States. No Constitutional amendment was ever created or voted on to accept the Fed. The Constitutionality of the Federal Reserve has never come before the Supreme Court. The Fed is a private bank that keeps the US forever in debt -- or I should say in increasing debt along with ever rising interest payments.

How did the Fed get away with this outrage? A tiny secretive groups of bankers sneaked through a bill in 1913 at a time when many in Congress were absent. Those who were there and voted for the bill didn't realize (as so often happens) what they were voting for (shades of the shameful 2002 vote to hand over to President Bush the power to decide on war with Iraq).

The Fed is an engine of inflation. It inflates a little or it inflates a lot. The Fed was conceived to inflate, with the idea that the Fed would never allow the US to sink into recession or depression. The thesis was that the Fed would render the US money supply "elastic," meaning that the Fed could expand the US money supply at will.

I might add that if the US issued its own money (which it certainly could do), the government could pay for all the items that the US spends money on. This would literally eliminate that need for a federal income tax. But with the Federal Reserve in control, we US citizens, you and I, are robbed of the fruits of our labor in two cruel ways. One way is via perpetual taxation. The other way is via perpetual inflation.

The only alternative the US citizen possesses is to own gold. Gold is wealth that the system cannot destroy, since gold is tangible, intrinsic money. Of course, the government and the central banks would dearly love to eliminate gold from the monetary system. If the government could, it would completely dominate and never have to compete with its nemesis -- real money or gold, which is earned by men's sweat and enterprise.

Since fiat money is essentially an incredible fraud, the system must eventually destroy itself. It's not a matter of whether, it's simply a matter of when and how.

In the meantime, you and I have to operate in today's world. That means we work for Federal Reserve Notes (dollars). We buy our food with dollars, we buy our homes with dollars, we enact all our transactions with dollars. But we hold gold because we know that ultimately, the dollar is doomed.

Wait, I don't mean that the dollar will necessarily be extinct in our lifetimes. No, the dollar will die a slow, probably a very slow death. It will be death by inflation. In other words, the dollar will, over the years, lose an increasing amount of its purchasing power.

Another irony is this -- essentially, holding gold is a rich man's escape. The reason is that gold doesn't pay interest, and it doesn't pay dividends. The rich man can hold a large amount of gold, and it doesn't affect his life style. The poor man, the middle class man, can't afford to hold a significant portion of his assets in gold. No, the average American remains at the mercy of his government and the Fed. He's doomed to see his savings (assuming he has any savings) taxed away or inflated away.

They asked Willie Sutton, the famous bank robber, "Willie, why did you rob banks?" Willie answered, "Because that's where the money is." By the same token, you might ask any one of the Fed's governors, "Governor, why do you work at the Fed?" And the answer might well be as follows (assuming that he decided to be honest), "I work at the Fed because the Fed creates and controls the money."

Alan Greenspan was once a fervent believer in gold as the basis for money. In fact, the following two paragraphs are from Greenspan's famous essay on gold ("Gold and Economic Freedom") written in 1966 --

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." [quoted on page 58 in America's Financial Reckoning Day].

So you might ask, "What happened? Thinking the way he did, how could Greenspan have ever accepted the job of being head of the Federal Reserve?"

My answer -- the love of power and fame. In his guts, Greenspan obviously knows full well the meaning of gold. He just sort of ignored it for the eighteen years that he was head of the Fed. After all, the Federal Reserve system was the only system we had. Greenspan simply operated within the system.

 
< Prev   Next >
spacer.png, 0 kB
spacer.png, 0 kB
spacer.png, 0 kB
cheap cialis online
viagra pharmacy
inexpensive viagra
canadian rx viagra
discount drug propecia
best doses for propecia
cialis cheapest
cost of viagra
how to buy cialis
next day viagra
buy viagra canada
fast viagra usa
fast cialis online
buy pfizer viagra in canada
canada cheap propecia
online pharmacies
viagra canadian pharmacy dosage
cialis brand name
order generic levitra
cialis pills
canadian pharmacy viagra legal
cialis gel
canadian healthcare viagra
cialis fast delivery usa
buy viagra online
buy propecia cheap
cialis from india
viagra online delivered next day
buying viagra without prescription
buy viagra lowest price canada
viagra on sale
levitra sex pill
where to purchase viagra
viagra uk delivery fast
best deals on cialis pills
pfizer viagra online
pfizer viagra 50 mg online
buy online prescription viagra
buy cheap cialis online
levitra in mexico
canadian viagra
viagra india
cialis buy purchase fast delivery
levitra uphs
cheap viagra 100mg
propecia studies
cialis mexico
cialis cheap delivery
generic viagra 10mg
viagra dose
viagra buy uk 50mg
buy drug propecia
online presription for viagra
best price propecia canada
generic levitra online
viagra for men
cialis
overnight viagra delivery
canadian cialisis
cheap levitra no prescription
buy cialis online without prescription
buy cheap generic levitra online
viagra price germany
buy pfizer viagra online
canadian pharmacy no prescription needed viagra
purchase cialis overnight delivery
generic propecia without prescription
cheap levitra without prescription
buy cheap propecia online
cheap onlin viagra in usa
pharmacy discount.com
cialis okay for women
cialis brand name
how to buy cialis in canada
brand por cialis online 100mg
cheap viagra next day delivery
cheap viagra from canada
levitra online
get viagra fast
daily dosage cialis
buy cialis online, canada
when will viagra be generic
viagra order
best price cialis
generic levitra overnight delivery
buy pfizer viagra without prescription
online viagra
levitra from canadian pharmacy
is it legal to buy viagra from canada
generic levitra usa
cial is price
cheapest overnight cialis
viagra online shop france
cialis 20 mg tablet
where to find cialis
buy viagra
viagra without prsecription
canadian cialis
cialisis in canada
daily cialis for sale
prescription for cialis online
viagra uk
brand viagra canada online
cialis soft
viagra from uk
best online cialis
ordering cialis online
viagra canadian
cialis
cialis pills online
get viagra fast
indian levitra
viagra online in canada
cialis generic
get cialis online
buy 100 mg cialis
cialis overdose
canadian online pharmacy no prescription
cialis germany
prespitionless viagra
buy levitra online without prescription
levitra tablet
levitra online
generic viagra propecia
non generic levitra
buy cialis cheap
herbal viagra
order viagra uk
best discount cialis
overnight cialis
discount viagra
viagra online australia
buy cialis online sildenafil
generic cialis 100
where can i buy propecia
cialis samples
cheap viagra 50mg
levitra cost
canada cialis
purchase cialis overnight delivery
viagra for less in the usa
order viagra 25mg online canada
5 mg cialis
viagra 100 mg
levitra buy online
brand cialis
fast dilivery viagra to canada
cheap levitra online
cialis vs viagra
viagra cheap fast shipping
viagra on line canada
order sildenafil online with no prescription
women does viagra work
buying viagra online uk
cheapest price propecia
buy pfizer viagra in canada
buy viagra next day delivery uk
viagra pfizer
were to buy viagra
purchase cialis us
viagraovernight
cialis from mexico
canadian viagra online
cheap viagra in india
cheap canadian pharmacy
online prescription propecia
bio viagra herbal
buy viagra online in uk
where is propecia manufactured
generic levitra
canadian generic cialis
cialis from mexico
cialis soft
buy cialis online pharmacy
online us viagra
cialis 5 mg buy
purchasing cialis
buy cheap viagra online now uk
cheap generic viagra india
replacement for viagra
levitra 20 mg
cialis next day delivery
pfizer viagra canada
generic-viagra
propecia sell england
propecia.com
order viagra uk
buy cialis online canada
cialis online
purchase cialis
viagra for sale without a prescription
levitra uk
where can i find viagra
buy generic levitra from uk
buy canada tadalafil
womens viagra
viagra buy online
generic levitra vardenafil
price cialis
viagra purchase
buy levitra
cialis 5 mg / canada / cheap
discount viagra
own brand cialis
online order propecia
how to get viagra from canada
buy viagra and receive it in canada fast
how much to buy viagra in pounds
buy propecia pills
viagra uk shop
online prescription for viagra
buy propecia uk
generic levitra cialis
viagra online paypal
viagra subscription
canadian cialis online
levitra
high quality cialis
propecia pills
buy online propecia
drug generic propecia
cheap viagra canadian pharmacy
best propecia
australia healthcare online viagra
cial is discount
cialis soft tablets
generic viagra india
viagra jelly
buying generic cialis mexico rx
new canadianmeds
cialis iop
buy real viagra online without prescription
viagra prices
cheap viagra fast shipping
cheap viagra on line
propecia fast no prescription
cialis cheap
viagra for her
cialis endurance
proprecia how to buy
tennessee online pharmacy propecia
indian viagra
cialis 100 mg
propecia without a prescription
best price for propecia
natural viagra
free viagra without prescription
purchase viagra in canada
genuine cialis pills
cialis daily price
cheap viagra or cialis
genuine cialis online
cialis professional 100 mg
viagra 50 mg
buy pfizer viagra online no prescription
generic propecia mastercard
discount levitra rx
spacer.png, 0 kB