Archive for the ‘Federal Reserve’ Category

How the US Dollar is Being Devalued More by the Feds

by IRA Rollover in Federal Reserve with Comments Off on How the US Dollar is Being Devalued More by the Feds

An extra $1.1 trillion is planned to be spent by the Federal Reserve on mortgage-backed bonds and securities over the following year. For this to happen, money will continue to be printed by the Fed, which will continue inflation that to our national economy has become natural. Today, there is a 2% yield on a ten year Treasury note. However, the rise in inflation will not be matched by this increase and the Federal Reserve Note’s value will continue to disintegrate. Also, since the ability to convert the dollar to gold was ended by President Nixon in 1971, a dollar’s value has disintegrated by 577% according to one estimate and 559% by another. This trend is expected to continue into the future under Federal Reserve policies.

Bringing Back Gold as Legal Tender by Central Banksira backed by gold

The Austrian School of Economics, once thought of as not conforming to the rules, is now becoming recognized and accepted more to sovereign wealth and central bank funds.

  • There are profound consequences in how money is being put back into circulation.
  • The increase in money supply and credit should be measured through inflation instead of consumer price index defining it.

These two Austrian School principles have provided a basis to demand the legal tender of gold or the SDRs or Special Drawing Rights with it. The amount of SDRs has increased by 50% in worldwide circulation over the past couple years. Understandably; this is inflationary and countries that have large SDRs reserves are looking to protect their wealth by allowing gold in the SDR market.

Defining SDRs
SDRs are made up of 4 reserve currencies that are used by IMF countries which include the euro, the United States dollar, the British sterling and the Japanese yen.

“The Great Recession” Remaining Impact

The 2007 global economic decline that accelerated in September of 2008 caused a disaster liquidity which attacked financial institutions all over the world. The expectation for limited global growth in the future as well as the Eurozone crisis contributes to ‘The Great Recession.’. In the US, a course of action for addressing the crisis has been a continued Keynesian economic activity, which results in inflation increase due to the growth in money supply.

Wealth Protection

The collective net worth of Americans began to shrink by over 25%, back in June 2007 through November 2008. Plummeting stock prices and home values was a reflection of this decline. The second biggest American household asset which is retirement also decreased by 22% from 2006 through the mid-2008.

So, how can you protect your wealth from market contractions and inflation? Resilient IRAs that are backed by gold, that is how. With people now thinking more about diversifying their assets apart from their current currency reserve, gold is an option for individuals just as much as it is for governments. It keeps its natural value while displaying a thousand year old proven track record. Reserve currencies, however, have been shown to decline over time in value due to policy decisions that take away from the currency’s worth. Investing your assets into IRAs backed by gold can protect your wealth.

How the Federal Reserve has evolved over the time

by IRA Rollover in Federal Reserve with Comments Off on How the Federal Reserve has evolved over the time

federal reserve

Many people will never actually search this – Hence its our duty to inform our readers about the interesting history that Federal Reserve has gone through. A long time ago in a galaxy far, far away:

1791 – 1816

The First Bank of the United States was created by Congress in 1791, under the guidance of US Treasury Secretary, Alexander Hamilton. The First Bank’s charter’s renewal was rejected by Congress in 1811. The Second Bank of the US was charted by Congress in 1816.

1836 – 1913

Under the authority of Andrew Jackson, the president at the time, the US Congress voted to refuse renewal of the Second Bank’s Charter in 1836. During the period between 1836 and 1865, there was a brief rise in “free banks,” where notes were distributed to customers who could redeem them in for silver or gold. Bank runs were fairly well spread back then. President Woodrow Wilson passed the Federal Reserve Act in 1913 and the US President Chose a board of seven members to lead twelve reserve banks.

1929 – 1933

In October of 1929, the Great Depression which is still famous today rocked the country. The nation found itself wavering, since it was already at odds about banking reforms. Over the span of 1930 through 1933, around 10,000 United States banks failed. In 1933, the Glass-Steagall Act was passed by Congress, which required the dividing of commercial banks and investment, and all Federal Reserve notes required collateral of government securities. The Federal Deposit Insurance Corporation or FDIC was established in the same year by the Glass-Steagall Banking Act. The Fed was also provided with a few new powers. President Franklin Delano Roosevelt recalled silver and gold certificates, which was a huge blow and killed the gold standard effectively.

1951 – 1999

There was an agreement in 1951 between the US Treasury and the Federal Reserve that overturned the earlier organization of the treasury through a promise of low-cost securities through the Fed. Basically, this meant the Fed’s fixed rate monetization was done away with. Congress, acting in response to a double-digit runaway inflation, made a ruling in 1978 that the Federal Reserve Chairman would have to testify before them twice a year. Then in 1980 a law known as the Monetary Control Act, initiated a period of reforms in the present-day banking industry.

Following that in 1987, Fed Chairman Greenspan helped the country ward off a major crisis following the crash in the stock market referred to as Black Monday. The Gramm-Leach-Bliley Act overturned the Glass-Steagall act in 1999, and banks were allowed to provide a wide range of financial services like investment and insurance instruments.

We had planned to break this further into many more years but then face it – not everyone likes history lessons !!