Federal Reserve Sees No Inflation

The Federal Reserve Board members are good at maintaining the illusion that #1 they know what they are doing and, #2 they see no reason to believe that there is any credible threat of inflation.

There was a time when the United States maintained that the U. S. Dollar was rock steady, backed by both gold and silver. After Lyndon Johnsondrove the united States very close to bankruptcy, he was deposed., LBJ was extremely unpopular because he had lied … “We are not about to send American boys 9 or 10 thousand miles away from home to do what Asian boys ought to be doing for themselves.” That war ultimately cost the lives of over 50,00 lives of American soldiers.

When Richard M. Nixon took over as President, at least he had the testiculos to do what needed to be done. Nixon sent bombers to lay waste the Ho Chi Minh trail as it ran through Cambodia. Puppets of Communism marched in the streets of America , and screeched as to how these bombings were illegal. Nixon also mined the port of Hai Phong to prevent the off-loading of arms and munitions coming from China.

Nixon wanted to stop the war in Vietnam. He understood how to do it. He was dismayed by the protestors. He wanted to understand them. When these protestors occupied the mall that is central to Washington, DC, he eluded the Secret Service to go to the protestors to seek out their views. What Nixon found was that the protestors had no views. They were simply there to protest. What Nixon found were children who wanted to be a part of History, but who had little understanding of History. Fortunately, the Secret Service found “Flashlight” (code name for Nixon) before any harm came to him physically.

What monumental fiscal fact that faced Richard Nixon was that the National Debt, buoyed up by the cost of financing Johnson’s war in Vietnam, exceeded the value of all the gold in Fort Knox.

At that point, it was fraud to state that the American currency was backjed by precious metals. At the time, gold was pegged at $35.00 per troy ounce.

Can a President be damaged emotionally through the realization that, in large part, those who publicly oppose him have among them no shred of mental reasoning. Nixon expected people to be reasonable and rational. What Nixon found was something else.

Those “protestors” with whom he interacted, had no idea as to why they were there.

That said, removing the United States currency from any backing by precious metals made the various “Money Supplies” subject to control on the part of the Federal Reserve Bank. Initially, the Money Supply would depend upon the rate of interest that bamks had to pay the Fed to borrow money, the reserve requirments and one othe factor that I cannot remember.