Dear Friends,
It seems to me, Governments the world over, are encouraging profligacy and waging war on thrift. In traditional economics, savers provide the banks with capital that they transmit to firms and people to make investments, the banks are the transmission of the economy, but today money is printed from the air… so who needs savers? If you have some money in savings, even under your mattress, you have much less stress in your life than someone with nothing but debt. This makes you, if you are a saver, someone who is not utterly dependent on others, the government, your parents, or outright charity. Having savings makes someone more independent, savers have the ability to pay for attorneys to fight for their Rights, while spendthrifts do not, and savers can leverage their savings to have more input on how other money is spent. This all adds up to the fact that people who save money tend to be more individualistic, harder to manipulate and more problematic for oppressors, so punishing saving is also punishing political undesirables.
The war on savers is being waged with near zero rates of return, and in some cases real negative rates of return, threatening to seize bank accounts to make banks solvent, turn real earned money into virtual money with no more value than Crypto currencies, and taxes on interest. The real rate of return is the interest rate minus the rate of inflation. When interest rates are near or below the rate of inflation, (and remember the real rate of inflation is often disguised) the real return is at or near zero, throw a tax on the interest without subtracting inflation… and the return on investment goes below zero. Other ways government and banks collude to defraud savers, is when a firm like Wells Fargo is find a BILLION DOLLARS, and no one loses their job, but the bonus checks go out on time. The guilty are rewarded and government gets a fat check, all at the cost to savers, people who went without so they could invest it, and perhaps be able to retire. Gone… into the black hole maw of government greed.
When money can be printed out of thin air, why do we need savings at all, other than of course, to keep up appearances. The Federal Reserve (FED) has a monopoly on printing money in the US, despite Constitutional requirements to the contrary. While the FED does have a connection to government, it is not a government agency, it is privately owned by the banks, chartered to protect the interests of banks and run by bankers. Moreover, the FED can print money out of thin air, and due to the intricacies of the fractional banking system, the corner bank can too. Whenever they make a loan they create money. They don’t have the money in the vault, they make an account in the borrowers name and credit that account with the money. The system goes back to gold banks, they would loan “gold” in the form of leans on the gold in their inventories, usually multiple times on the same gold bars… which today is called hypothecation and rehypothecation.
The independence of savers is something that displeases the elite… bourgeois, new class and political. Nothing makes filet mignon taste better than knowing the little people are eating bugs. If someone has some savings tucked away they can splurge now and then, giving access to gargantuan SUVs, glamping, adult toys like snow mobiles, vacations, even filet mignon… making all those things, common. Those who save money are able to defend themselves or others, when our Rights are trampled by government bureaucrats and cronies, which impudently makes it harder to trample on people’s Rights. If you wanted to be prince, wouldn’t it be easier to subjugate people who are already dependent, slavish, hedonistic, materialistic and ignorant? They would be far easier to reduce to less equal than, people who are independent, individualistic and able to defend their Rights?
You can’t even make a spurious case, with a straight face, that governments today do not encourage profligacy. Every new government program that comes out is intended to mitigate the negative consequences of debt. Interest rates hammered down, credit cards in the mail, government guaranteed loans, student loans, car loans, heck people even take out loans to go on vacation! Even as governments encourage spending and debt, they discourage saving, skewing the aggregate debt load on society in favor of debt. From waging war on savers to encouraging profligacy government must have an end game. Assuming they know what the are doing, and since they themselves will talk all day long how smart they are, being so educated and such, they must have a plan. Since all governments made up of people tend to become ever more despotic as they age, we can see that the trajectory of our governments has indeed started veering autocratic, and with that in mind the war on savers makes more sense.
Sincerely,
John Pepin
