Guest Post: The Rot Runs Deep 1: The Federal Reserve Is A Parasitic Wealth Transfer Machine [oftwominds]


Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The Federal Reserve is a wealth transfer machine, skimming wealth from the productive many and transferring it to the parasitic few.

Today I launch a series entitled “The Rot Runs Deep” that examines the moral and financial rot at the core of American finance, politics and culture. We have reached a unique junction of American history: the confluence of Big Lie propaganda, neofeudalism and the worship of false financial gods.

The Big Lie propaganda machine of corporate media and the Central State has perfected Orwell’s nightmare vision of centralized media and a fascist centralized State which turn lies into self-serving “truth.”

Since the Federal Reserve is once again expected to “save” a crumbling, exploitative Status Quo, let’s use the Fed as an example. The propaganda machine would have us believe that the Federal Reserve, the privately owned central bank of the U.S., has “saved” the Status Quo from financial ruin on numerous occasions by “smoothing out” the business cycle (credit expands and contracts) and by “stimulating aggregate demand” by lowering interest rates and pumping money into the economy (quantitative easing).

We are constantly prompted to worship the Federal Reserve’s supposedly god-like powers to rescue a corrupt and venal Status Quo from the black hole of recession and collapse, and this Big Lie masks its real nature: The Fed is nothing but a parastic wealth transfer machine, skimming wealth from the many and transferring it to the few.

In effect, the Fed is the “enforcer” of neofeudalism in America: the feudal Lords of Finance control the for-sale political system and skim tribute from the 99.5% toiling in the fields below their castles. The Fed enforces this parasitic transfer of wealth by manipulating interest rates to enrich the banks and provides “free money” to the Financial Lords which is then used to buy assets and lend at interest.

The mechanisms of the Fed’s parasitic transfer of wealth are well-known. Here’s one: the Fed “loans” money to the Feudal Lords at 0% interest. the Lords then loan this free money out to peasants, students and other debt-serfs at high rates of interest. The interest “earned,” courtesy of the parasitic Fed, is theirs to keep.

If they can’t find enough debt-serfs who can pay more interest, they can always deposit the free money back at the Fed and earn interest from the Fed itself.

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