Ziad Abdelnour

Albert Einstein once said, “The definition of insanity is doing the same thing over and over again and expecting a different result.” We, the people of the United States of America, appear to have gone insane by allowing the Federal Reserve to bail out businesses here and abroad.

The Fed, itself a private banking cartel, has shown a complete disregard and contempt for the members of Congress who are supposed to be monitoring its activities. It has consistently resisted calls for transparency in its policy formation and its execution of monetary control. The chairman of the Federal Reserve may take a call from the president, but the president cannot tell the Fed what it will and will not do. The president may appoint the chairman of the Federal Reserve System and its Board of Governors, but he does so from a predetermined list of candidates given to him by the Fed itself. Frankenstein’s monster is not only alive but very much in control!

The Federal Reserve was created to prevent banking panics and wide swings in the economy by holding inflation in check and protecting the value of our currency. It was given autonomy to protect it from political influence so politicians couldn’t give away economic perks just to get reelected. The Fed has strongly resisted any effort to apply any kind of oversight to its activities by claiming they are attempts to politicize the Fed, but let’s examine the record.

Nearly every Fed chairman in the past 60 years has manipulated interest rates to brighten the economic outlook for incumbent presidents or newly elected presidents who won by large margins. The purchasing power of the U.S. dollar has fallen 94 percent in the past 100 years. The only way you can create inflation is by creating more money that is backed by the same reserve assets; the Fed is the only entity that can create more money. Ben Bernanke’s quantitative easing (QE) programs have pumped billions of unfunded dollars into the economy, thereby setting us up for massive inflation in the very near future. If this isn’t a form of financial terrorism, it is incompetence of the highest order.

It causes one to wonder what Albert Einstein would think about the “solutions” rolled out to fix our debt problem. Would he find it insane that total credit market debt has actually risen to an all-time high of $53.8 trillion, up $533 billion from the previous 2008 peak? Our leaders have added $6.1 trillion to our National Debt in the last four years, a mere 66% increase.

Ziad Abdelnour

Ziad Abdelnour is President and CEO of Blackhawk Partners, Inc, Founder & Chairman of the Financial Policy Council and the author of Economic Warfare: Secrets of Wealth Creation In the Age of Welfare Politics (Wiley, 2011).