Fraud by any other name

If Ben Bernanke were a CEO he would be tossed in jail under Sarbanes-Oxley for defrauding his shareholders (the American people). But, fortunately for him, government officials are immune from the laws that the rest of us have to follow. Bear Stearns is bankrupt--and they should go belly up. That's what would happen to the average person if they made the kind of investments Bear Stearns made. But, the Federal Reserve Act was designed by bankers, for bankers, that they should not perish from the earth--especially the big banks.

So Ben Bernanke and his fellow counterfeiters at the Fed are revving up the electronic printing presses. $200 Billion here, $200 Billion there, and pretty soon you're talking about real money. Except it isn't real. It's fake.

Counterfeiting has been a problem for all of history. Look at the ancient prohibitions we find in the Old Testament:

1. Leviticus 19:36
   Use honest scales and honest weights, an honest ephah and an honest hin. I am the LORD your God, who brought you out of Egypt.
   
   
2. Deuteronomy 25:13
   Do not have two differing weights in your bag—one heavy, one light.
   
   
3. Deuteronomy 25:15
   You must have accurate and honest weights and measures, so that you may live long in the land the LORD your God is giving you.
   
   
4. Proverbs 11:1
   The LORD abhors dishonest scales, but accurate weights are his delight.
   
   
5. Proverbs 16:11
   Honest scales and balances are from the LORD; all the weights in the bag are of his making.
   
   
6. Proverbs 20:10
   Differing weights and differing measures— the LORD detests them both.
   
   
7. Proverbs 20:23
   The LORD detests differing weights, and dishonest scales do not please him.
   
   
8. Micah 6:11
   Shall I acquit a man with dishonest scales, with a bag of false weights

The Founders of the United States also were concerned about such things and thusly gave Congress the power...

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States.

These efforts were intended to prevent fraud, whether it was by falsifying the amount of wheat one was selling or the amount of gold. The trouble is that the Fed can just keep printing more greenbacks for the explicit purpose of bailing out the banks and the financial sector and it's the rest of us who suffer the inflation from it.

If you want a tax that the truly rich are immune from, inflation is it. The Fed creates money out of thin air and puts it into circulation by purchasing debt in the open market. Who usually owns this debt? The big banks. The big banks, being the first recipients of this money, rush out to lend or spend it before prices adjust. The act of lending and spending it is precisely what causes the inflationary pressures. Demand is artificially inflated and prices follow. But the banks spent it before prices rose. They win. The rest of us lose.

Since Paul Volcker became Chairman of the Federal Reserve, the Fed has been revered--almost worshiped--by the American public and especially Wall Street. We had finally reached that glorious Utopia that was immune from recession and inflation. We had bullet proofed the economy, thanks to the brilliance and omnipotence of the Central Bank.

But that dream is over. The dollar is in free fall against foreign currencies, with no signs of a bottom. Commodities prices are soaring, and we are all feeling the crunch. The Fed is only going to make it worse. They will rescue the banks at our expense through outright fraud.

Don't expect the SEC to prosecute them, though.

This crisis, probably the worst since the Great Depression, is evidence that we must wrest control of our money from the government. It's time to revoke the Federal Reserve's charter and return to a hard money standard. It's the only way to keep an honest currency. Sure things have been good for the last 30 years, but if this crisis undoes two decades of progress, will it really have been worth it? I do not think it is ethical to take the position "eat drink and be merry for tomorrow we die," when we are eating and drinking at the expense of our children.

As a member of Generation Y, I am quite offended that the previous two generations have run up a big bar tab and left it for me to pay. The tab will just keep going up. If Barack Obama is elected president, the tab will go up exponentially. We don't have much time.