2. History of Monetary Policy US
I believe that banking institutions are more dangerous to our liberties than
standing armies. If the American people ever allow private banks to control
the issue of their currency, first by inflation, then by deflation, the banks
and corporations that will grow up around [the banks] will deprive the
people of all property until their children wake-up homeless on the
continent their fathers conquered. The issuing power should be taken from
the banks and restored to the people, to whom it properly belongs. –
Thomas Jefferson
First Bank of the US 1791-1811. Burr Hamilton duel
Second Bank of the US 1816-1836.
3. History Monetary Policy Cont
Gentlemen! I too have been a close observer of the doings of the Bank of
the United States. I have had men watching you for a long time, and am
convinced that you have used the funds of the bank to speculate in the
breadstuffs of the country. When you won, you divided the profits
amongst you, and when you lost, you charged it to the bank. You tell me
that if I take the deposits from the bank and annul its charter I shall ruin
ten thousand families. That may be true, gentlemen, but that is your sin!
Should I let you go on, you will ruin fifty thousand families, and that would
be my sin! You are a den of vipers and thieves. I have determined to rout
you out, and by the Eternal, (bringing his fist down on the table) I will rout
you out!
–Andrew Jackson
4. Federal Reserve
1913 Federal Reserve Act
1913 Income Tax also put in place coincidence?
In 1836 a dollar was worth $3.03
In 1913 a dollar was worth $3.37
A dollar’s purchasing power increased by 11% in that time
In 2010 a dollar was worth $.153
In that time frame the value of the dollar decreased by 95%.
Dual mandate instituted after WW2 price stability and full employment
How is decreasing the value of the dollar by 95% price stability?
5. Fed Bubbles
Stock Market Bubble of the 1920’s
Easy money to help prop up British pound to avoid devaluing of their
currency.
Increase in money supply almost exactly matched increase in stock
indexes.
1928 Benjamin Strong dies successor realizes the need for tightening
bubble bursts.
Tried to pump out money during Depression, but prices still fell would
have fell more if not for the Fed.
Tech stock bubble 1990’s Greenspan put
7. Response to Current Slump
Print Money
QE1 $1 trillion Nov 2008 March 2009
QE2 $600 billion Nov 2010 June 2011
QE3 $1.6 trillion Sept 2012 Oct 2014
Real Median Income 2008 $55,313
Real Median Income 2014 $53,657
8. Paradigm Shift
Are recessions bad?
Fix mal investments of booms
Economic recession 1919-1920 the one they don’t want you to know about
Harding President Sec of Commerce Hoover
1919 12% unemployment 1920 6% unemployment 1921 3%
unemployment
2010 10% unemployment probably 20% if calculated the same way as
1919
2016 5% unemployment probably 10% if calculated the same way
9. Paradigm Shift (cont)
Buy a gallon of gasoline for a quarter in the 1950’s in 2012 you still could but
you need the same quarter made out of silver.
In 1964 the minimum wage was $1.25 or five silver quarters an hour in 2015 5
silver quarters had a melt value of $15.15.
1900 government at all levels 3% of GDP Today just over 40% of GDP.
US debt $19.1 trillion 2016 US GDP 2015 $18.1 trillion
US debt 106% of GDP 2016 1900 7.5%
2006 Greece reached a debt to GDP ratio of 106% within 4 years they had a
sovereign debt crisis
1913 highest income tax bracket 6% on incomes above $32.5 million a year in
2013 dollars. Also no FICA
2016 lowest bracket 10%. 7.65% FICA Obamacare surcharge over $400K.
10. Additional Resources
YouTube Fed Unspun Peter Schiff
The Great Wave: Price Revolutions and the Rhythm of History by David
Hackett Fischer
The Creature from Jekyll Island by G Edward Griffin
America’s Great Depression by Murray Rothbard
![History of Monetary Policy US
I believe that banking institutions are more dangerous to our liberties than
standing armies. If the American people ever allow private banks to control
the issue of their currency, first by inflation, then by deflation, the banks
and corporations that will grow up around [the banks] will deprive the
people of all property until their children wake-up homeless on the
continent their fathers conquered. The issuing power should be taken from
the banks and restored to the people, to whom it properly belongs. –
Thomas Jefferson
First Bank of the US 1791-1811. Burr Hamilton duel
Second Bank of the US 1816-1836.](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)