What happens to businesses when liabilities exceed assets? They go bankrupt, with the spectacular failure of FTX being front-and-center. However, the Federal Reserve is in the same position but unlike FTX, the Fed can create fictitious assets and pretend that nothing is happening.
Economists like to claim that expectations of more inflation lead to, well, more inflation. Such beliefs ignore the fact that inflation is an increase in the money supply and that general price increases result from fractional reserve-created monetary expansion.
Warren Buffett is well-known for his investment acumen, and he often makes public statements in favor of capitalism. But his loyalty to the fiat monetary system undermines everything else that he claims to represent.
While Ben Bernanke has accused free market and sound money advocates of pursuing “discredited” systems, he and his lieutenants were following a truly discredited way of thinking: socialism. The man who supposedly “saved the world” actually destabilized it.
Some economists fear that excessive government debt will lead to an economic crisis and recession. However, the real threat to the economy is Federal Reserve-supported fractional reserve lending that helps to set off an unsustainable boom.
Austrian economists agree that ending the Federal Reserve System would be a major step forward in reclaiming sanity in government spending and bolstering the US economy. Here is one plan to make ending the Fed a reality.
Our current paper fiat money system comes from a long process of building up state power that destroyed private money, ended truly private banking, and abolished the market system of competing currencies. It took 300 years, and we are now facing the inflationary results.
Although tariffs and other issues are getting the most news coverage, a harbinger of recession is looming: the slow collapse of commercial real estate values. This is the result of reckless policies at the Federal Reserve and the Fed cannot fix it.
Thanks to the reckless policies of the Federal Reserve, businesses are now facing the realities of an economy ravaged by inflation. Look for more signs that say “Closing.”
Ryan McMaken and economist Jonathan Newman look at the government's alleged $750 billion gold reserve, how it got there, and why it's time to privatize the gold.
