Posted 1 year ago on Oct. 23, 2011, 7:45 p.m. EST by john23
This content is user submitted and not an official statement
Redistribution of Wealth- Occupy Wall Street
Increasing the money supply is an ingenious way of stealing money from the middle and lower class and redistributing it to the upper class and people don’t realize it. Say you have $1,000 in your bank account and the money supply is increased (by quantitative easing, lowering interest rates artificially, or fractional reserve banking – each of these increases the money supply). You still have your $1,000 in the bank, why should you care what the money supply is doing? The problem is increasing (or inflating) the money supply causes prices to rise (we’ve seen this with food and energy prices recently), so your $1,000 can’t buy what it used to. It is exactly the same as someone keeping prices the same and physically stealing part of your $1,000 you have in the bank. The amazing thing about it is you don’t know it’s happening – you’re being stolen from without your knowledge. Even more amazing is it’s delayed. So if you add $1 trillion dollars to the economy it will take awhile for prices to begin to rise and you to realize you can’t buy as much. By this time you don’t attribute the rising prices to the creation of new money. It is theft, plain and simple. The genius of increasing the money supply can be compared to you stealing money out of someone’s bank account, but the bank accounts balance doesn't change because of it and hence the person never suspects fraud.
The real kicker is who benefits the most - the institutions lending out the new money first. Say you’ve counterfeited a million dollars – it’s not in the money supply yet it’s at your house (this is the same as the Fed increasing the money supply). You are then able to buy 4 houses with this fake money for the current price of the houses on the market. You buy the houses and over the course of a few months inflation occurs because you inflated the money supply by a million dollars when you added it to the economy by buying the houses with your counterfeit money. This causes prices to rise-including the prices of the houses you bought which is ok with you because you already bought them. So because you were the first person to inject the money into the economy you benefited a little from it as your houses are now worth a little bit more. Any time the money supply is increased it’s the people who receive the money first that benefit the most. Who receives the money first in the real world? The institutions that handle the money. Think of this as an incremental transfer of wealth. The further you are from the newly created money the worse off you are. This is because by the time the money has trickled down to you prices have already begun to rise and yet your paycheck hasn’t increased to make up for the rise in prices.
Many people are extremely concerned about the increasing separation of wealth in this country (rightfully so) and they should concentrate the majority of their efforts on this criminal process. This process erodes middle and lower class wealth and redistributes it to the upper class. In any instance where the money supply is increasing (artificially lowering interest rates, quantitative easing, fractional reserve banking) the middle and lower class are being stolen from. It's stealing from the poor and giving to the rich in a stealthy fashion which doesn't raise eyebrows because of the complexity of the process. What makes this process possible? The Federal Reserve and the lack of a gold standard.
A gold standard stops the governments ability to inflate the money supply, and that is the sole reason for the antagonism against it. Do your research and come to your own conclusions. End-The-Fed www.hmscoop.com