The Federal Reserve's Explicit Goal: Devalue The Dollar 33%

[madfranks]

Two things: first, notice how they propose to devalue the dollar, not by declaration, but by slow inflation. Second, unless you believe your paper assets will outperform this devaluation, buy gold and silver!

Link Here

The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.
An increase in the price level of 2% in any one year is barely noticeable. Under a gold standard, such an increase was uncommon, but not unknown. The difference is that when the dollar was as good as gold, the years of modest inflation would be followed, in time, by declining prices. As a consequence, over longer periods of time, the price level was unchanged. A dollar 20 years hence was still worth a dollar.
But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 (2032) dollars to purchase the same basket of goods 100 (2012) dollars can buy today. What will be called the “dollar” in 2032 will be worth one-third less (100/150) than what we call a dollar today.
The Fed’s zero interest rate policy accentuates the negative consequences of this steady erosion in the dollar’s buying power by imposing a negative return on short-term bonds and bank deposits. In effect, the Fed has announced a course of action that will steal — there is no better word for it — nearly 10 percent of the value of American’s hard earned savings over the next 4 years.

Why target an annual 2 percent decline in the dollar’s value instead of price stability? Here is the Fed’s answer:
“The Federal Open Market Committee (FOMC) judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve’s mandate for price stability and maximum employment. Over time, a higher inflation rate would reduce the public’s ability to make accurate longer-term economic and financial decisions. On the other hand, a lower inflation rate would be associated with an elevated probability of falling into deflation, which means prices and perhaps wages, on average, are falling–a phenomenon associated with very weak economic conditions. Having at least a small level of inflation makes it less likely that the economy will experience harmful deflation if economic conditions weaken. The FOMC implements monetary policy to help maintain an inflation rate of 2 percent over the medium term.”
In other words, a gradual destruction of the dollar’s value is the best the FOMC can do.

More at link...

[Twisted Titan]

But they have already destroyed the purchasing power by 97%

The last 3% can be extended as long as people are willing to deal in the tokens

[gunDriller]

>> After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years.

more like, 333% over the next 20 months.

they're only off by a factor of about 100.

[iOWNme]

WOW.

They just come right out and say it. Right in your face.

"WE ARE STEALING FROM YOU OVER THE NEXT 20 YEARS".


The slow grinding devaluation of everything around us: The Money. The Morals. The Justice. The Virtue. The Honor. The Integrity. All destroyed.

[osoab]

So I guess it is a foregone conclusion that the FED charter will be renewed in 2013?

[horseshoe3]

33% over 20 years is approximately 1.5% annual inflation. Does anyone think it will be that low?

[Hatha Sunahara]

Haven't they been inflating the dollar by 3% every year for the last 50 years or more? Are they slowing down their theft of our value? Is that how they fuel an economic recovery? By stealing less from us?


Hatha

[Glass]

33% over 20 years is approximately 1.5% annual inflation. Does anyone think it will be that low?

I think thats compounding perhaps?

33% per annum for 20 years sounds more like it. /sarc

Seems to be working. Looking at US products such as cars. Prices are now better than just about anyone else in the market by 20% - 25%. We get Dodge and Chrysler down here.

[Ares]

So I guess it is a foregone conclusion that the FED charter will be renewed in 2013?

Common misconception Osoab. There hasn't been a charter since 1927. It's been extended indefinitely.

Sec. 4 ... the said Federal reserve bank shall become a body corporate and as such ... shall have power: ... Second. To have succession for a period of twenty years from its organization unless it is sooner dissolved by an Act of Congress, or unless its franchise becomes forfeited by some violation of law. Federal Reserve Act of 1913 (P.L. 63-43, 38 STAT. 251, 12 USC 221).

However, this 20-year corporate life was changed to perpetual in 1927 by Act of Feb. 25, 1927 (44 Stat. 1234) as follows:

Second. To have succession after February 25, 1927, until dissolved by Act of Congress or until forfeiture of franchise for violation of law.

This is codified in the United States Code, 12 U.S.C. § 341. See

http://www.law.cornell.edu/uscode/ht...1----000-.html

[madfranks]

33% over 20 years is approximately 1.5% annual inflation. Does anyone think it will be that low?

Yeah, I had to think about this, while it's sort of mind blowing that they would come out and admit that this is their policy, it's really no different than how they've been doing it for decades now. According to the inflation calculator at westegg.com, what $100 could buy you in 1990 would require $165 in 2010, which is a 39.3% devaluation over 20 years. And what $100 could buy you in 1970 would cost $337 in 1990, which is a 70.3% devaluation over the previous 20 years! How is this policy any different, other than the fact that they're totally downplaying how much inflation there really will be!