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Interesting what you find....

When you actually READ your email! I received this from Downsizer Dispatch this morning and finally got around to reading it. Time to contact your representatives AGAIN!

Quotes of the Day:
"To better understand moral hazard, consider the case of a gambler going to a casino. If he bears the losses, his bets will be constrained by that risk. If someone were to guarantee him against loss, but allow him to keep the profits, the gambler would have an incentive to make the riskiest possible bets. He gains all the profits but bears none of the losses. One might designate such a system as “casino capitalism.” Current Fed policy has encouraged casino capitalism in the housing market.
-- Gerald P. O'Driscoll Jr.

“When . . . moral hazard is present, credit flows rapidly into inelastically supplied assets, such as real estate. Rapid appreciation is the result, until the inevitable albeit belated regulatory crackdown stops the flow of credit and leads to an asset-price crash.”
-- Ben Bernanke, Federal Reserve Chairman

Subject: The Fed is destroying your money, RIGHT NOW

In a continuing effort to rescue and reward those who made bad financial decisions, the Federal Reserve is making you pay yet again, in another way, on top of the Big Bailout.

Apparently, the $700 billion Big Bailout wasn't a large enough payout to America's poorly run companies. Still more of your hard earned money is needed. The federal government will take this new pound of flesh in the form of a massive inflation tax.

You pay an inflation tax whenever the Federal Reserve creates new dollars. This causes every dollar you hold to be worth less than it was before.

Those who get this new money first will become vastly richer, at your expense, because they'll get to spend the money before it causes prices to rise.

Who gets the money first? The banking system -- the very institutions that profited from the government policies that inflated the housing bubble. First they profited from the bubble, and now they're going to profit from the bubble bursting too.

How many new dollars has the Fed created? Nearly half a trillion dollars in the space of just two weeks. This increase in the money supply is unprecedented.

The Federal Reserve is taking this action because the Big Bailout was constructed on an inherent contradiction. How could the government solve the supposed problem of tight credit by borrowing $700 billion to bailout the credit system? Money borrowed by the government cannot be borrowed by others, which must inevitably tighten credit in the private economy. Of course . . .

The $700 billion will flow back into the credit system as the government buys up distressed assets from banks and mortgage companies, but only after a delay, and what if, as many have predicted, the $700 billion isn't enough? The Federal Reserve intends to "solve" and "forestall" these potential problems by creating massive amounts of new dollars.

But this won't change the fact that too many house have been built, and that houses are overpriced -- both of which occurred because of government polices that focused previous credit inflation in the housing sector. They won't cure the disease by re-introducing the bacteria that caused the disease in the first place.

Expanding the money supply will do nothing to clear the housing market. Only time and falling prices can do that. Instead, all this new money will simply flow into other sectors of the economy, creating yet another bubble.

Of course, those who support this monetary inflation claim that the Fed will be able to reabsorb the new dollars later. They're right, the Federal Reserve adds and subtracts from the money supply all the time. But here again there is another contradiction . . .

We're told that the Fed must inflate the money supply in order to combat deflation, but if the Fed reabsorbs the new money later, THAT WILL BE DEFLATION. Why would deflation be bad now, but good later?

This kind of sloppy thinking is how we got into this mess in the first place. The Fed, under Alan Greenspan, inflated the supply of money and credit in 2001. This helped cause bubbles in the stock market and the housing market, which then burst when the Fed later reduced the flow of money and credit to avoid a general rise in prices.

We're about to repeat the whole process over again. And you will once again pay the price.

It's a simple fact, if not for the Federal Reserve and the federal government you would be vastly richer than you are now. Instead, you're constantly robbed by government policies that reward those with political influence -- influence gained as a result of riches obtained at your expense. We must redress this imbalance.

You must gain political influence of your own. And the only way to do that is to build a huge army with which to overwhelm Congress and end the policies that rob you of the wealth that would otherwise be yours. Meanwhile, as our army grows, we must continue to apply pressure on Congress to adopt better policies. Congressman Ron Paul has provided us with two bills that would move things in the right direction.

The "Honest Money Act" and the "Free Competition in Currency Act," would end the Federal Reserve's monopoly control over what American's use as money. This would force Federal Reserve Notes to compete with other potential forms of money, such as gold, and thereby constrain their ability to create new dollars. Please send Congress a message supporting these bills. http://www.downsizedc.org/etp/campaigns/85

Use your personal comments to tell your representatives that you're aware the Federal Reserve has recently inflated the money supply by nearly half a trillion dollars. Tell them that you know that this will create new bubbles, and make your own wages and savings worth less. Tell them you want to end the Federal Reserve's monopoly control over your money.

You can send your message using our Educate the Powerful System. http://www.downsizedc.org/etp/campaigns/85

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Thank you for being a part of the growing Downsize DC army.

Perry Willis
Communications Director
DownsizeDC.org, Inc.

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