Central Banks Are Doomed, Thanks to the Fed's Criminality

Untouchable status means that the organization gets a free ride in society. Its mistakes are overlooked. Its deviations from established standards are overlooked. It is immune from the usual criticisms that all other institutions are subjected to.


These organizations are at the center of the social order. They are immune from politics, because they are the basis of power.... It is considered unthinkable that society could function without an untouchable institution. The organization is so deeply ingrained in the thinking of the intelligentsia that leaders are literally unable to imagine how society could exist without it.... Yet at some point in a nation's history, society and politics did without every presently untouchable organization. It was not only not untouchable, it did not exist.

There are two such organizations in the West today: the public school system and the central bank.

THE PUBLIC SCHOOLS
The Powers That Be do not send their children into compulsory tax-funded schools. So, those at the top buy their children's way out. The power elite maintains control through the compulsory school systems which their wealth allows them to escape.

CENTRAL BANKING
The twentieth century was the century of central banking. Almost every nation had a central bank in 1999. Central banking is untouchable. Except for Austrian School economists and fiat money Greenbackers, no one calls for the abolition of central banks. To get involved in opposition to central banking is like applying for membership in the Black Helicopters Society.

Congress legally is in charge of the FED. Yet it has yet to audit the FED, with a comprehensive audit of the gold holdings. It does not set policy for the FED. "Where is the government's gold?" "In our vaults." "How do we know?" "Trust, but don't verify."The Board of Governors of the FED is the only governmental agency that is legally independent of the government, and is praised by the nation's opinion leaders for this independence. That is to say, the FED is the most anti-democratic agency in the country. It is not just that politics has no control over it.

Here is an institution whose publicly appointed agents are paid by the government, yet whose 12 regional banks are privately owned, and no one in Congress knows by whom. These 12 regional banks have the power of civil governments, yet they are immune from civil government. No Congressman or local politician dares call for public representation on their boards. There is no other institution like this in the nation.

The Greenback movement began in the 1870s. These people have always been on the fringes of American politics. They are advocates of pure fiat money issued by the federal government. They got their name from the green paper bills issued by the Union in the Civil War. They oppose the gold standard. They oppose banks. They oppose the FED.Voorhis was a Greenbacker who wrote a book on this: Out of Debt, Out of Danger.

WHEN QE3 TURNS INTO MASS INFLATION

A recession looms, despite Bernanke's assurances to the contrary. The fiscal cliff looms on January 1: the expiration of Bush's tax cuts. The prospect of an annual deficit approaching $2 trillion looms. Social Security is running a deficit. Asia may stop buying Treasury debt. Then what?

Inflate or die.

The FED will try to play the boom/bust game one more time. This has worked for 60 years. But the annual deficit was not $1.2 trillion. Social Security was not in deficit mode. The Baby Boomers were not retiring. Foreign central banks were not holding 40% of the public debt.

By Gary North