Econ Militia: The Federal Reserve System Is A Ponzi Scheme

It takes just 5 and a half minutes to lay out the case against the Federal Reserve System's massive purchases of Treasury bonds. The Ponzi scheme they've undertaken is profound, dangerous to our civil liberties and potentially deadly to our economy. The chance of a recession returning is increased by deficit spending, and Glenn Beck's fear of a global depression look all too real when you examine the actions of the Fed.

We've spent a few episodes providing background on central banks and the Fed, and we've talked about the rock-star status Ben Bernanke has been given. We learned about the Democrat-led Congress of 1912 railing against banks, and how they corrupted the idea of the central bank into a machine for social policy. But this most recent expansion of their "work" is obscene.

In 2010, more than 40 percent of the Federal budget will be funded through Treasury bonds. In 2009, more than $3 trillion in Treasury bonds were floated.

The largest buyer, by far, was the Fed. CNBC reported that more than 80% of Treasuries in 2009 were bought up by the Federal Reserve Bank. We're buying our own debt to fund an ever expanding Federal government, and the cycle has the head of the snake eating its own tail.

US Representative and former presidential candidate Ron Paul is correct: we need transparency. Despite the entrenchment of Nancy Pelosi, Harry Reid and Joe Biden, the American population needs to see the books, and uncover the trillions of dollars beige funneled through the Fed to enact economic and social change far beyond the wishes, understanding and better interests of the American people.

Tell truth to power. Hear the real story. Think for yourself. Join the conversation at econmilitia.com.

And now - visit us with our new blogging partner at americanpulse.us.

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[ExtractCarrot]

In that case I'm not sure why you make it sound as if the Obama administration has anything to do with it. The only thing the Obama administration has done wrong is to -not- bring any reform concerning central banks. The Obama administration has had many good achievements, but the greatest achievement so far is the health care reform. Who knows maybe Obama will even dare to tackle the Fed reserve which would be political suicide due to the massive lobbying that would occur against such reform.

[EconMilitia]

Realize that few economists are supportive of deficit spending, and before the health care bill was passed more than 47% of the Federal budget according to GAO was funded through deficit. This means we need to borrow nearly half of our annual budget to continue operation, and our manner of borrowing is exclusively through the issuance of Treasury bonds. This is key to furtherance of the Ponzi scheme that is our Federal budget.

[ExtractCarrot]

You guys seem to favor the Republican Party, am I correct?

[EconMilitia]

We favor a balanced Federal budget, and one more closely aligned with the idea of limited government. Certainly that's not the GOP of late! That it's absolutely not the Democrat party, though, is perhaps more relevant, since they currently control both houses of Congress and the White House.

We crack "Mission Accomplished" jokes as often as "Let me be clear" jokes.

[vinayakaya]

Excellent video! Very lucid and clear.

[EconMilitia]

Thanks!  We appreciate your feedback.

[Neuromancer1943]

why would other interest rates rise if bond rates rose?

[100CommonCents]

this deserves far more than 660 views!

[ExtractCarrot]

I completely agree with that notion. There shouldn't be any deficit spending (unless absolutely necessary) and the debt should be floating around 0, not at 60% of the GDP as most countries seem to accept as their new standard. I don't see how this can be sustainable in the future, sure it's not a bad thing to lend- as long as the economy is growing, but what happens if one day the economy stops growing and even declines? Btw, I would like to buy some US treasury bonds, you know where I can buy?

[ExtractCarrot]

In that case I'm not sure why you make it sound as if the Obama administration has anything to do with it. The only thing the Obama administration has done wrong is to -not- bring any reform concerning central banks. The Obama administration has had many good achievements, but the greatest achievement so far is the health care reform. Who knows maybe Obama will even dare to tackle the Fed reserve which would be political suicide due to the massive lobbying that would occur against such reform.

[ExtractCarrot]

Not bad, not bad. Where did you study economy?