On Thursday, when President Barack Obama began his press conference, the news media dutifully cut away from the confirmation hearings of Janet Yellen, nominated to succeed Ben Bernanke as chair of the Federal Reserve.
They preferred to cover a lame duck president to a woman who in a few days will become the most powerful person in the world as our planet's queen of money.
The Federal Reserve is America's central bank and controller of the whole world's reserve currency, the U.S. dollar. When a Fed chair speaks, stock markets around the world can plummet and economies can crumble.
She will in many ways control much of the world's economy, and arguably have more power over money than the president.
The Fed is a cartel of private, for-profit banks, that in 1913 was chartered to "furnish an elastic currency" that Progressive politicians could spend without limit, unlike the old gold-standard dollar that prevented them from overspending and limited the size of government, as Craig R. Smith and I explore in our new book,
"The Great Withdrawal: How the Progressives' 100-Year Debasement of America and the Dollar Ends."
The Fed has the authority to conjure as much money as it wishes out of thin air — which the U.S. Mint then prints, or banks and governments simply accept as computer digits, as real U.S. dollars.
The Fed in recent decades has acquired vast new powers and become almost a government unto itself.
Half a century ago, cowardly politicians found it easier to leave decisions about civil rights and other political hot potatoes to lifetime-appointed judges. In the 21st century, when cowardly politicians are afraid to raise taxes, the government looks to Fed money-conjuring to create revenue via the "invisible tax" of inflation.
The Fed has so debased our money that today's U.S. dollar has only two pennies of the purchasing power of a 1913 dollar, and this debasement has stolen trillions of dollars of value over the past 100 years from the earnings and savings of working Americans.
Today the Fed pumps more than $1 trillion a year in easy money stimulus to prop up the housing sector and levitate the stock market casino, a policy that Janet Yellen, the current Fed vice chair, said on Thursday that she will continue.
The Fed, which originally was supposed to be free from politics and keep the U.S. Dollar's value steady, has become a major power in our politics.
By manipulating interest rates and the money supply, the Fed can help to defeat or elect presidents, and to enrich or impoverish whole economic sectors here and abroad. Would Yellen, the former head of President Bill Clinton's Council of Economic Advisors, ever misuse such power?
Fed money is what allows our politicians to spend as much as $3.8 trillion in 2013 while taking in only $2.77 trillion in tax revenues.
The Fed is now mandated to stabilize the U.S. dollar's value, but also to maximize employment, which usually means printing lots more paper money, which devalues through inflation the dollars people have spent their lives earning.
Unofficially, the Fed is expected to conjure perpetual prosperity, make business cycle ups and downs disappear, levitate the stock market with abundant low-interest money, and thereby enrich speculators and re-elect politicians. This enables government growth and welfare dependency.
Fed spending has addicted our economy, and made it dependent on cheap money and its drug-induced illusion that we are solvent.
If the Fed cut off such stimulus, our economy could collapse. But if the Fed keeps printing, our economy will overdose, inflation will devour the dollar's value, and everyone's savings will be destroyed.
Can Yellen reduce the dose of funny money America's been hooked on, control our detox from easy-money addiction, and get us through drug withdrawal?
America did not need a Federal Reserve in 1913 and would become more prosperous if we returned to honest, unpoliticized money today.
Lowell Ponte is co-author, with Craig R. Smith, of "Crashing the Dollar: How to Survive a Global Currency Collapse"; "The Inflation Deception: Six Ways Government Tricks Us . . . And Seven Ways to Stop It"; and "Re-Making Money: Ways to Restore America's Optimistic Golden Age." His new book is "The Great Debasement: The 100-Year Dying of the Dollar and How to Get America's Money Back." Read more reports from Lowell Ponte — Click Here Now.
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