If you’re a current subscriber, log in below. If you would like to subscribe, please click the subscribe tab above.
Username and Password Help
Give Me Liberty
Theft through inflation
Many of the founding fathers were opposed to the formation of a central banking system; the fact that England tried to put the American colonies under the monetary control of the Bank of England was seen by many as the “last straw” of oppression, which then eventually led to the American Revolutionary War.
However, in the Articles of Confederation, ratified in 1781, Congress gave itself the sovereign power to generate bills of credit. Then, in 1787, our Congress penned into Article 1, Section 8 of the United States Constitution that “Congress shall have the power to coin (create) money and regulate the value thereof.” …Over the next 126 years, Congress experimented with first the Bank of North America, the First Bank of the United States, the Second Bank of the United States, a “Free Banking” Era, different National banks, and then the Federal Reserve System.
Before the Federal Reserve Bank was created, and in the early days of The FED, all paper U.S. dollars were backed by gold. Each note was in essence an “I.O.U.” for the printed amount on the note, payable in gold. New Federal Reserve notes printed beginning in 1928 were redeemable as per the following legend in the upper left corner of the note: “Redeemable in gold on demand at the United States Treasury, or in gold or lawful money at any Federal Reserve Bank.”
According to the “Inflation Calculator,” the inflation from 1913 to 2021 is 2,675.5%, or $1 in 1913 is now $26.76, or in reverse, what costs $100 today only cost $3.74 back in 1913.
In 1913, a congressman was paid a salary of $7,500 per annum, and in 2021, they’re paid $174,000 per annum, or an increase of 2,320%.
Silver in 1913 cost $0.58 per ounce, and in 2021 now costs $23.18 per ounce, or an increase of 3,996.5%, while according to inflation, $0.58 in 1913 should only now be worth $15.52, a difference of $7.66.
On March 25, 1964, Secretary of the Treasury C. Douglas Dillon announced that Silver Certificates would no longer be redeemable for silver dollars. Subsequently, another act of Congress dated June 24, 1967, provided that Silver Certificates could be exchanged for silver bullion for a period of one year, until June 24, 1968.
Gold in 1913 cost $20.67 per ounce, while that same year the “double-eagle” $20 gold coin contained .96750 troy ounces of pure gold, right at exactly $20 in gold. In 2021 gold now costs $1,787.50 per ounce, or an increase of 8,647.7%, while according to inflation, $20.67 in 1913 is now worth $553.03, a difference of $1,234.47. In June of 1933, President Franklin D. Roosevelt removed the United States from the gold standard.
Since the creation of the Federal Reserve in 1913, the U.S. dollar has lost more than 96% of its value. Under the guise of “macroeconomic management,” the Federal Reserve is a key component of a massive wealth redistribution apparatus through inflation. This inflation tax does not affect financial elites who receive new money created by the Federal Reserve before the Fed’s actions have diminished the dollar’s purchasing power, but has hurt middle- and working-class Americans whose purchasing power is continuously reduced by the Federal Reserve. The inflation tax is not just the most hidden, but the most regressive of taxes.
The Federal Reserve is in essence a wealth redistribution apparatus for the most-high in government and banking. The FED redistributes vast amounts of wealth using “inflation,” taking the value of the U.S. dollar from “We the People” and rewarding those who have access to money first, before that money is later trickled down to the masses.
We should not ask why fast-food workers should earn a minimum wage of $15, but instead ask our Congress why the purchasing power of the United States dollar is now essentially worthless.
For more reading on basic economics, check out “The Wealth of Nations” by Adam Smith, “The Law” by Frederic Bastiat, “Intro to Economics” by Carl Menger, “Economics in one Lesson” by Henry Hazlitt, “Road to Serfdom” by F.A. Hayek, “What is a Free Market” by Murray Rothbard, “Basic Economics” by Thomas Sowell, and “Living Economics” by Peter Boettke.