Freedom Fatality Of The Fed

In a recent interview, I referred to the Fed as a disgusting institution. I want to explain why I believe that to be the case, as I do not like to disparage anyone or any entity indiscriminately or capriciously—only when absolutely necessary. To be clear, central bankers may not be nefarious in nature, but their product is iniquitous.

Any entity whose very purpose for existence is to destroy markets is inherently disgusting and, in the end, one that ends up being evil.  At its core, the Fed is Robin-Hood in reverse; stealing from the poor by destroying their purchasing power to give to the rich by inflating their asset prices. The Fed, along with all central banks, are inherently freedom killers, middle-class eviscerators and economic destabilizers; regardless of stated intentions. If that wasn’t bad enough, the problem now is that the Fed has usurped markets to the point of no return.

The Fed’s very mandate encompasses the unholy operation of obliterating price discovery in its paramount function of determining what money actually costs. This process should only be the purview of the free market.  Of course, the level of interest rates does indeed affect all other asset prices. But the Fed wasn’t content with just an indirect influence on asset prices. It eventually morphed from its initial focus on rescuing troubled banks, to ensuring stable prices and full employment. And then turning to its ultimate purpose of promoting perpetual bull markets in stocks, bonds and real estate. But the Fed isn’t even satisfied with that, it is now actually also in the business of ensuring the U.S. embraces a government that promotes egalitarian socialist principles and rejects its capitalist roots.

This function is by no means exclusive to America. In fact, such views originated in socialist Europe and are clearly manifest in the European Central Bank.

Photo by Charlotte Venema on Unsplash

How far from reality and embracing free markets is the ECB?

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Michael Pento is the President and Founder of Pento Portfolio Strategies, produces the weekly podcast called,  more

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William K. 2 weeks ago Member's comment

Quite a well written analysis, M P. Thanks for filling in some details. But the really disturbing part is that it is all true! And the effect of inflation has seldom been explained that concisely and clearly in so few words.

That explanation spells out entirely what the motivations for the actions of the federal reserve bankers has been all along. It was not simply lack of competence and understanding about cause and effect, it wa rather a total lack of integrity and honesty. Harming the whole nation for the benefit of their "friends."