Jerome Powell may very well be losing his effectiveness as Federal Reserve Chairman. While the role is often criticized for its lack of genuine value, it primarily serves to undermine the wealth of wage earners and savers, favoring member banks instead.
As Powell struggles to manage inflation, the appeal of providing credit at fixed rates diminishes. Currently, consumer price inflation—indexed by the Consumer Price Index (CPI)—is climbing at an alarming annual rate of 4.2 percent, surpassing the interest rate of a 30-year fixed mortgage, which stands at 3.1 percent.
It’s not hard to predict a CPI exceeding 6 percent in the near future. At that inflation rate, how viable is a home loan offering a mere 3 percent return for banks? This looming scenario highlights why Powell is facing significant challenges.
Since long before his tenure, Powell has aligned himself with conventional expectations. He has consistently expanded the Fed’s balance sheet to support extensive government deficits and stabilize the mortgage market. Continue reading
A notable advantage of the U.S. government’s stimulus efforts has been the inflation of stock portfolios. This has resulted in significant benefits for certain state governments. Take Connecticut, for instance; its projected budget surplus for this year is $470 million.
Such an achievement is impressive, particularly when the state’s rainy-day fund is expected to reach a record $4.5 billion. Additionally, federal coronavirus relief is injecting an estimated $6 billion into the state’s coffers.
However, this budget surplus doesn’t satisfy the ambitions of lawmakers in Connecticut. They are determined to target high-income earners in hopes of redistributing wealth. Proposed legislation includes a “surcharge” for individuals earning over $500,000, imposing a combined capital gains tax rate of 8.99 percent.
But it doesn’t stop there. The state legislature aims to introduce a “consumption tax” that would impose a 0.7 percent fee on the adjusted gross income of those earning over $500,000. This rate is set to increase to 1.4 percent for individuals earning $2 million and reach 1.5 percent for those making over $13 million. Continue reading
Bad ideas are proliferating in the political landscape, similar to how lobbyists flourish in Washington. It’s challenging to navigate any conversation without encountering an array of misguided concepts. Ironically, the most flawed ideas often gain popularity.
Consider products like Mickey’s Fine Malt Liquor—widely consumed despite its harmful effects—illustrating how people can overlook danger. Similarly, central banking has arguably siphoned more wealth from hardworking individuals than any other notion. The Federal Reserve’s indirect tax methods have exploited the American public for over a century.
Why do poor ideas receive such wide acceptance? Perhaps it’s because they usually promise a return without effort, creating the illusion that one can prosper off the unearned benevolence of others. This flawed thinking fosters a belief that one can extract more from their retirement investments than they contributed.
Such empty promises are appealing and serve as rallying cries for politicians seeking re-election. Yet, it raises troubling questions: How is it possible to maintain a strategy of increased spending and lowered taxes, continually bridging the gap with exorbitant debt? Continue reading
“The way to Hell is paved with good intentions,” asserted Karl Marx in Das Kapital.
The philosopher criticized capitalists for employing their own money to generate further wealth. Yet Marx’s analysis was flawed—what truly paves the way to ruin is not merely good intentions. Grift, corruption, deceit, and counterfeit currency constitute this slippery path, with good intentions merely sprinkled in as a facade.
To grasp the current rise in price inflation, one must recognize this fundamental principle. The U.S. operates under a fraudulent currency manipulated by central authorities, aligning with Marx’s vision outlined in Plank No. 5 of his Communist Manifesto:
“No. 5. Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.” Continue reading
