America’s vast post-WWII military machine fueled by central bank credit
To some of “us”, the rise of central banking and the rise of total war have many connections. And while Occupiers target a portion of the problem (Wall St.) they would gladly give more power to the other parts of the problem (The FED and the Government who are the major players).
Llewellyn H. Rockwell Jr. of the Mises Institute writes an excellent piece partially echoed by other people who have noted the inter-connectivity between Central Banking, Government and War.
In the article the following points are made…
- First, they serve as lenders of last resort, which in practice means bailouts for the big financial firms. The FED does not care about the overall economy except that the financials now comprise nearly 40% of it. So in a sense they care.
- Second, they coordinate the inflation of the money supply by establishing a uniform rate at which the banks inflate, thereby making the fractional-reserve banking system less unstable and more consistently profitable than it would be without a central bank (which, by the way, is why the banks themselves always clamor for a central bank). In other words, the IRS can’t just tack on $10,000 to your tax bill to pay for war. Instead, they use creeping plunder, theft by stealth, also known as inflation.
- Finally, they allow governments, via inflation, to finance their operations far more cheaply and surreptitiously than they otherwise could. By enabling inflation, they enable both war of vote buying (sorry, I mean welfare).
“One can say without exaggeration that inflation is an indispensable means of militarism. Without it, the repercussions of war on welfare (the well-being of a nations citizens, he was not referring to the welfare state) become obvious much more quickly and penetratingly; war weariness would set in much earlier.” Lugwig von Mises in 1919
Mr. Rockwell makes many very good points such as the governments need to abandon the gold standard and sound money before they go to war or the need for easy credit from central banks to cheaply finance war. Other important points to consider.
- Precious metals cannot be created out of thin air, which is why governments chafe at monetary systems based on them.
- Creating money out of thin air…is preferable for governments because it removes the constraints of prudence.
- the process by which the political class siphons resources from society via inflation is far less direct and obvious than in the cases of taxation and borrowing. The government, banking elite and high financiers continue to live off of the productive labor of the masses while.
- Central banks, established by the world’s governments, allow those governments to spend more than they receive in taxes.
- When central banks create money and inject it into the banking system, they serve the purposes of governments by pushing those interest rates back down, thereby concealing the effects of government borrowing.
- the federal government is in fact able to do the equivalent of printing money and spending it. While everyone else has to acquire resources by spending money they earned in a productive enterprise
- because the central bank allows the government to conceal the cost of everything it does, it provides an incentive for governments to engage in additional spending in all kinds of areas, not just war. There “Vision” becomes unconstrained since the money that can be plundered from YOU and the debt can be pawned off on YOU is unlimited.
And now that QE3 is “endless”, what do they have planned for the rest of us?
