Say Goodbye to the Purchasing Power of the Dollar…Mr. Bernanke goes to Crazytown

Monday, March 25, 2013
By Paul Martin

by Adam Taggart
Peakprosperity.com
Sunday, March 24, 2013

On a long solo car trip last week, I listened to several podcasts to pass the time. One was a classic: The Invention of Money, originally released by NPR’s Planet Money team back in January of 2011. I highly recommend listening (or re-listening) to it in full.

The podcast is an effective reminder of how any currency in a monetary system is a fabricated construct. A simpler way to explain this is to say it has value simply because we believe it does.

Through the centuries – in historic cultures like that of Yap Island who used giant, immovable stone disks for commerce, to today’s United States, whose Dollar fiat currency exists primarily in digital form – “money” is able to be exchanged for goods and services because society agrees to accept it (at a certain rate of exchange).

But what happens when a society starts doubting the value of its money?

Fed, the Great & Powerful
The podcast goes into the mind-blowingly simple process by which new money is created in America by the Federal Reserve (or the “Fed”). That is to say:

The Fed holds a meeting
Those in the room decide how many more dollars they think the world needs
Someone walks over to a computer and adds that many dollars to the banks, with a few clicks of the keyboard

The Rest…HERE

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