The real winner of the 2012 election

Barack Obama won the election, and Mitt Romney lost? Not so. Find out who really won, and more importantly, who really lost. Photo: Senator Nelson Aldrich - The Library of Congress

NEW YORK, November 7, 2012 — Contrary to popular belief, the winner of the 2012 election is not Barack Obama. No. From the beginning of the race, there was another candidate who was also an incumbent, but unannounced to the public.

Early this morning, the media told us the winner is President Obama, but that’s a lie. Well, lie is a strong word; perhaps it’s more accurately a “snow-job.” 

The real winner emerged in August, the day Mitt Romney won the GOP nomination. The real winner of the 2012 election is the Federal Reserve.

Guess who lost the election? American Citizens. We lost BIG.

Exit polls in North Carolina showed that the economy was the number one concern of voters this year (59%). 

Question:

“What is the biggest economic problem facing people like you?”

Answers:

“Housing market” (6%)

“Unemployment” (30%)

“Rising Prices” (45%)

Rising prices. Forty-five percent. 

Americans are rightfully concerned about rising prices (inflation), but based on the presidential candidates they vote for, it is clear that they are simply ignorant about the cause of those rising prices. Issues like rising prices are glossed-over by the TV talking heads, and people’s eyes glaze over when talk turns to macroeconomics. 

Americans don’t spend much time thinking about economics, and the media and the candidates fail to discuss economic issues clearly or intelligently. Americans obviously do not understand the cause of inflation, and that’s the way the Federal Reserve wants it.

In a series of episodes reminiscent of an Austin Powers movie, the federal government created the Federal Reserve amidst a tangle of powerful connections, in the shaddow of vast sums of money and concentrated power, and under cover of late night, incognito train rides culminating in ten days of secret meetings on a secure island to discuss the necessary components of a central bank. 

The year was 1910, and German super-banker Paul Warburg played the role of “Dr. Evil.” The central bank they created eventually came to dominate the U.S. Government and its economy. 

Warburg’s goal was to get the U.S. Congress to legislate the creation of a European-style central bank. He was aided by his “legion of doom”:  Frank Vanderlip (National City Bank), Harry Davidson (JP Morgan), Benjamin Strong (Banker’s Trust Co.), A. Piatt Andrew (Assistant Secretary of the U.S. Treasury), along with republican Senator Nelson Aldrich.

Aldrich, once an opponent of central banks, was “converted” to the central bank model after spending time in Europe, as chair of the National Monetary Commission. Aldrich’s daughter was now married to John D Rockefeller Jr. (1901), entrenching the Aldrich family into the Rockefeller lifestyle. 

Senator Aldridge originally introduced legislation to create a central bank in January, 1912. That effort failed. Congress saw the Aldrich Bill for what it was: an open attempt by a senator for financial interests that would allow a banking cartel power-grab over the U.S. Government.

In 1912, Democrats Carter Glass and Robert Owen re-introduced the bill, with some modifications. The Glass-Owen bill called on government to create a Federal Reserve Board to act as a public entity. The bill provided autonomy for the regional reserve banks, and gave the Federal Reserve the authority to print notes deemed legal tender for all debts, public and private. 

The House and Senate, now in Democratic control, passed the bill in December, 1912.  

The Federal Reserve Bank of the United States is a public cartel of private member banks. It has no ties to the Federal Government, other than minimal congressional oversight. According the Fed’s website, their Congressional mandate states they enact policies that ensure maximum employment, stable prices, and moderate long-term interest rates.

Since 1971, when paper money was decoupled from gold, the amount of money in circulation has depended on interest rates, bank reserve requirements, Fed open market operations, and the amount of paper money printed (done by the Treasury, not the Fed). When the Fed wants to increase the amount of money in circulation, it can buy bonds (with electronic money) or allow banks to loan out a larger percentage of their deposits.

When more money goes into circulation relative to what the economy produces, prices rise. The Fed can increase interest rates to put downward pressure on inflation (it makes money “tight”).

A growing money supply without an equally growing economy lowers the value of money; it inflates the amount of money required to buy a product.

On the contrary, falling prices (deflation) can be and often is a good thing. Deflation means consumers need less money to buy the same goods. Our country enjoyed nearly 100 years of price stability (with sharp inflation during the Civil War and deflation afterwards) before it created the Federal Reserve, all while growing to be the largest and most powerful economy in the world. 

Since the US government created the Federal Reserve, the dollar has lost over 90% of its purchasing power, and prices for goods that really matter (gas, groceries) have gone up year after year. Oil across the globe is traded in U.S. dollars, and inflated prices influence the true price of oil. Other countries are becoming aware of this fact, and in early September of 2012, China announced it would stop using U.S. dollars to pay for oil imports.

Now that Obama has been re-elected, the Federal Reserve has won. Its victory ensures its untouchable status for four more years. It’s clear that neither of the two candidates wanted to even look at the Federal Reserve, even with its ten-year stellar record of keeping unemployment low and prices stable. Neither Mitt nor Obama made mention of the Federal Reserve in any of the debates. The two candidates who demonstrated real understanding about the Federal Reserve during the GOP debates, Ron Paul and Gary Johnson, were effectively escorted off the stage and marginalized. It was at this time that the Federal Reserve declared victory.

Since the elected President has no interest in getting to the real issue of rising prices, the American Citizens lost this election, and Americans will see the loss every day for the next four years at both the gas pump and the grocery store, no matter what policies the administration enacts.

For the next four years, the Federal Reserve will continue to enjoy autonomy, will continue to deploy inflationary tactics such as “quantitative easing,” and will encourage Congress to pass legislation the country cannot afford, driving up the deficit. Prices will continue to rise, and Americans will pay the hidden inflation tax levied by the real winner of the 2012 election: the Federal Reserve. 


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Michael Jaeger

Mike Jaeger's column, Greater than Energy (">Energy") can be found under the Health and Science area of the Washington Times Communities and he has been writing this column since July of 2012.  He occasionally writes pieces on economics and politics as well.  He has expertise in energy, energy markets and energy production and holds a Bachelor of Science Degree in Applied Science and Technology in Nuclear Engineering Technology.

 

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