By Me, Silentboom,
The business cycle is a term used by Austrian economic theorists. They determined that the business cycle is not a natural occurrence in the free market but rather a controlled and manufactured problem at the hands of central planners. Our Federal Reserve is that central planner and was never intended to exist by the founders. They believed the markets should set interest rates dependent on the individual conditions. The Federal Reserve has the power to print money (inflate) the money supply. As this new money is added to the money supply the people close to that new money (banks, wall street, government) get to use it at full value. As time passes that added money dilutes the value of everyone's money as the money supply grows. This reduces it's purchasing power and raises prices which most affect the elderly and others on fixed incomes. This is not the only inflation that occurs though, the fractional reserve banking system creates money by the wave of a pen when loans are given out, this is also added to the money supply further devaluing the dollar and causing more people to seek loans and not save. Why save when the value of the dollar is declining and the value of real world items is increasing in relation and also due to the bidding up by the spending of the new money. It's a system that grows more and more evil as the central planners (the fed) keep the interest rate artificially low and the credit expansion grows exponentially. This is exactly what has happened. Now we are facing the correction of the inflated prices which must be done. You cannot re-inflate this bubble once it leaks. The Bailout is an attempt to re-inflate this bubble and will fail and ultimately brings the destruction of the dollar as it is abandoned by the world market. Regulation is not the answer, for the best regulation is free market competition. The more you look into it, the more you see that the lack of competition in the market which allows companies like Freddie and Fannie to rise to power is due to manipulation(lobbying and such) of the regulations which should not exist in a truly free market with honest money. Free market, Free people, even wealth distribution with small rich and poor classes and honest banks bring the most efficient, fair, and prosperous results to us.
"From now on, depressions will be scientifically created."
-- Congressman Charles A. Lindbergh Sr. , 1913
I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs
-Thomas Jefferson, Letter to the Secretary of the Treasury Albert Gallatin (1802)
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