Our Lexicon: Legalized counterfeiting

Let's start with the obvious . . .

Counterfeiting is a crime. It's a form of stealing. It allows the counterfeiter to get something for nothing.

Sadly . . .

U.S. laws allow counterfeiting as long as it's done by the Federal Reserve. The Federal Reserve is a monopoly created by Congress to control what you are allowed to use for money. By law, only the Federal Reserve can create money, and it can create as much money as it wants. There is no legal limit.

What the Federal Reserve does is legalized counterfeiting.

The Federal Reserve creates new units of money (dollars) out of thin air, and then uses this money to buy Treasury Bonds. In general (leaving aside a lot of complications) this puts the Federal State in the position of the counterfeiter . . .

The Federal State gets to benefit from the counterfeiting first, buying up resources before the increased money supply has had time to raise prices.

For example . . .

  • U.S. Federal debt rose from $242 billion in 1946, to $925 billion in 1982, but . . .
  • Because legalized counterfeiting reduced the value of the dollar by increasing the number of dollars in circulation . . .
  • The Federal State has been able to pay its old debts using devalued counterfeit dollars, with the result that . . .
  • The $925 billion owed in 1982 was really worth only $201 billion as measured in 1946 dollars.

Thus . . .

Legalized counterfeiting is theft for the benefit of the Federal State. You are the victim. Legalized counterfeiting destroys your savings and retards economic growth that would have raised your personal income. This is NOT government. It is crime.