Back in the 2012 election season a friend of mine got upset when I said I didn’t think Ron Paul was so bad. He looked at me like I was insane and said, “Ron Paul is crazy! He wants to end the Fed!” That was it, end of discussion. He couldn’t tell me why that made Ron Paul crazy, or why we need a central bank. After all, there is no reason to discuss central banking. Just merely saying, “End the Fed” makes you wrong, no evidence needed. Either you’re a Republican or Democrat and you’re in favor of it, or you’re crazy. I’m pretty sure my friend still has no idea what the Fed is or what it does.
Last week I read this article in the local paper about Richard Piccinini Jr. caught in a churning scam. Those of us in the insurance industry know all about churning, but for those who do not it basically means the adviser recommends his clients move their money from one annuity to another (or some other product) each year so the agent makes a new commission on the sale. This is clearly in the agent’s best interest, not the client’s since the client pays some pretty big surrender charges by canceling their existing annuity early. In this case, Piccinini Jr. cost his clients over $200k.
What does this have to do with The Fed? Well, this isn’t the big “gotcha moment” that will convince everyone to get rid of the central bank, but it is a symptom of the system. See, not everyone should be investing their money in insurance companies or the stock market, or really any investment for that matter…and that’s coming from a guy who sells insurance. Clearly these women did not understand what was happening with their money and for some reason they trusted this adviser. Instead of locking their money in an annuity, why can’t they just save it for retirement? Because of The Federal Reserve’s inflationary policy!
While your dollars are sitting in your wallet they are losing value. It doesn’t make sense to hold onto them, so some people end up trusting a guy like Richard Piccinini Jr. to protect their purchasing power. Who do you think really gets rich from inflationary policy? If you guessed Wall Street, congratulations! How many of us learned about a duck hunt on Jekyll Island in school? My guess is you’re probably thinking about Mr. Hyde…Do you think maybe J.P. Morgan and other big time bankers had anything to do with creating the Federal Reserve Bank?