More Inflation & Taxes From the Federal Reserve
This news that the electronic printing press has been dusted off and is starting to hum should bring a queasy feeling to your stomach. When investors buy government debt, they do so with dollars already in existence. When the Fed buys government debt, it creates new dollars to do so. An influx of new dollars decreases the value of existing dollars (including your wages, stocks, and other financial assets). And because these new dollars are not distributed evenly through the society (they are spent by government), your financial wealth is reduced. This is the worst kind of inflation.
What happened this week is both inflation and a tax increase. Yet no mainstream media report will discuss it in this fashion. There is no uproar because this tax increase is 1) essentially invisible, 2) cloaked in “this will help the economy” language, and 3) people don’t fully understand it.
It is obvious the Federal Reserve is creating inflation and taking your wealth, it’s just up to people to do something about it. Ending the Fed would bring discipline back to the system but outside of this, one way to protect yourself is to purchase gold, silver, artwork, or other commodities whose supply is limited.