Where Are the Handcuffs?

The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.

The law says, quite clearly, that such action is ILLEGAL:

The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates. [Emphasis added.]

The black letter of the law mandates stable prices. “Stable,” by the way, is defined as:

a : firmly established : fixed, steadfast <stable opinions>

b : not changing or fluctuating : unvarying <in stable condition>

Quite simply, the Federal Reserve is commanded, by law, to maintain stable (i.e. not fluctuating or changing) prices. Failure to do this is a clear violation of the law.

Now, there is no way to argue that debauching the dollar by 33% over 20 years will maintain stable prices because the economics of the situation is very simple: If you increase the supply of money without a consequent increase in the production of consumer goods, prices will increase. That is, prices will not be stable. The laws of supply and demand always apply, and money is no exception. Increasing the amount of currency in a system will, ceteris parabis, lead to an increase in nominal prices. Always.

As such, the Federal Reserve System is in clear violation of its charter. It should have its charter revoked and be disbanded, and those who acted to violate its charter should be arrested for violating the law.

Leave a Reply




You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>