The updated total bailout commitments add up to over $8
trillion now. This translates into a monetary base increase of
75 percent over the last two months. This money does not come
from some rainy day fund tucked away in the budget somewhere—it is created from thin air, and devalues every dollar in
Dumping money on an economy, as they have been doing, is
not the same as dumping wealth. In fact, it has quite the
One key attribute that gives money value is scarcity. If
something that is used as money becomes too plentiful, it loses
value. That is how inflation and hyperinflation happens. Giving
a central bank the power to create fiat money out of thin air
creates the tremendous risk of eventual hyperinflation.
Most of the founding fathers did not want a central bank.
Having just experienced the hyperinflation of the Continental
dollar, they understood the power and the temptations inherent
in that type of system. It gives one entity far too much power
to control and destabilize the economy.
Our central bankers have had a tremendous amount of
hubris over the years, believing that they could actually manage
a paper money system in such a way as to replicate the behavior
and benefits of a gold standard. In fact, back in 2004 then Fed
Chairman Alan Greenspan told me as much.
People talk about toxic assets, but the real toxicity in
our economy comes from the neo-alchemy practiced by the Federal
Just as alchemists of the past frequently poisoned
themselves with the lead or mercury they were trying to turn to
gold, today’s bankers are poisoning the economy with accelerated
fiat money creation.