Deposit “insurance” is funded by taxes and inflation. Bypass all that. Legalize privately-produced moneys.
Fed Chair Jerome Powell messages that banking is sound. Treasury Secretary Janet Yellen messages that she won’t extend “insurance” to all depositors always. And yet as Silicon Valley Bank failed, Signature Bank was closed by regulators, and hundreds more failures loomed, Powell and Yellen claimed they had power to take our money so they could give all depositors their full deposits back.
There’s no free lunch. The Fed reaccelerated the creation of government money—taking purchasing power from everyone, subsidizing zombie parasites at the cost of not gaining future increases in value-adding that would benefit everyone, and taking interest payments forever from taxpayers.
This all started when congresses and presidents created and nurtured the Fed so that it could create money that these politicians could borrow and spend to get reelected.
All these politicians and bureaucrats aren’t cleaning up their own acts, they’re cleaning us out. We need better plans of our own.
The Path to Here
For years, government people have blocked free people from producing sound money. Government people then funded massive expansion of governments by empowering cronies in banking to create a flood of value-destroying government money. The resulting tidal wave successively drove up stock prices, powered crony tech companies, drove up product prices, and was ready to drive up wages.
Allowing these rises in asset and product prices to be partially compensated for by delayed rises in wages (labor prices), though, turned out to be a bridge too far for the governments’ control-hungry people. That would start a “wage-price spiral.” People who rely on wages couldn’t be allowed to catch up with people who rely on taxes, government borrowing and spending, or stock investments. The Fed took action to drive interest rates up right away.
But then the fallout reached the crony bankers. When interest rates were low, the bankers had sopped up allegedly risk-free government bonds. When the Fed rapidly increased interest rates, the bankers were stuck holding bonds whose value rapidly plummeted.
The bankers couldn’t sell the bonds for enough money to fund withdrawals of their own money by business and individual large depositors, so these depositors called for politicians to bail them out. Bureaucrats leapt in to protect these concentrated interests. Progressive politicians saw this as a new front to advance on. No politicians, so far, have worked to stop the bureaucrats and eliminate the root-cause spending and Fed.
The Paths Forward
Individuals can take private actions to try to make their holdings secure. If they’re willing to bet that we’re in a normal business cycle, they can buy stocks. If they see that we’re in a crisis, they can buy gold.
In parallel, individuals can try to push politicians to knowingly do what’s constitutional even though that would upend the status quo. For instance, individuals can pressure state legislators and governors to secure state residents’ constitutional right to use gold as legal tender. Also, individuals can pressure congresspeople and presidents to repeal the statutes that unconstitutionally grant power to the Fed.
Individuals can engage the few politicians who understand how this will play out to sponsor or co-sponsor a bill to repeal the legal-tender laws.
Progressives will find this bill hard to even understand, much less to message against. How could ending the government monopoly on money hurt anyone? Who would follow and believe messaging that made such a claim? If Progressives think much at all about this, they’ll choose to ignore it so their actions don’t give it free publicity. They’ll stay focused on expanding governments and government control.
Individuals can win over majorities of politicians by expressing their enthusiastic support for passing and signing the legal-tender-laws repeal bill. These politicians might view this bill as odd or quixotic, but they will also view it as harmless and worth voting for to draw in new supporters.
The immediate impact of repealing the legal-tender laws will be nil. People living today have always accepted dollars for payment and won’t have widespread alternative moneys available yet. In the near-term, people will keep using dollars like they always have.
And yet with computers and communications technology ubiquitous today, the handling of alternative moneys will be an obvious option for payment services to add, whether to add value or to keep up with competitors. This will be the start of a literal gold rush and a much-larger figurative gold rush. Privately-produced moneys won’t get fraudulently inflated, won’t cause government money errors, and won’t cause bank failures—they’ll be good, safe money.
Once alternatives to inflated Fed money come into use, they will create new winners who will build their own political support, making them self-sustaining. The Fed will increasingly get drained of its power to create money, loan it to governments, swell government spending and regulation, and produce government-money error cycles.
The Fed will end up rendered irrelevant, and deposit “insurance” property-grabs will end up a relic of a sorry past, without no need for frontal assaults on the Fed citadel and the accompanying resistance, losses, delays, and probable failures.
What are individuals waiting for—to understand the solution? Done! Sponsors and co-sponsors, let’s roll.