“Fiscal Cliff” Everyone is Talking About

The term “Fiscal Cliff” is widely attributed to current Federal Reserve Chairman Ben Bernanke. Now everyone seems to be saying it. Fiscal Cliff. Fiscal Cliff. I began hearing it regularly on cable news and CNBC this past month or so. I did not know to whom coining this term was attributed. I suspected Ben Bernanke. And I was right. I suspected it was Bernanke because it is this type of distraction from the truth that central bankers and bankers alike use to misdirect blame away from themselves.

A fiscal problem is different from a monetary problem. A fiscal matter is about budgets. Namely, Congress’ U.S. national budget. A fiscal problem is when one is not balancing their income with their expenditures. Every household and business in America understands fiscal matters. A budget. Being fiscally responsible means spending only as much money as you earn, or as your budget allows.

A monetary problem is completely different than a fiscal problem. A monetary problem is one in which there is a lack of confidence in a nation’s printed money.

A nation’s bank(aka central bank) is to blame for monetary problems. This is especially so where the printed money is NOT backed by something of real tangible value such as gold and silver. This type of money, the one that is not backed by gold or silver, is called fiat currency. The U.S. dollar today is a fiat currency. It wasn’t always so. The U.S. dollar today is no longer backed by gold or silver. It’s not backed by gold in Fort Knox(if there is any). It’s not backed by gold bars held by the Federal Reserve in New York. The only thing backing the U.S. dollar is a promise to everyone that the U.S. government can extract tax payer dollars from tax payers if and when the dollar’s value comes into question.

So, a monetary problem is one in which the value of each and every U.S. dollar printed comes into question. What’s the value of the dollar? How much can you buy with it? Over the short term, the value of the dollar fluctuates. Over the long term, the value of the dollar has gone down down down down. Remember when a loaf of bread was 25 cents? Yeah, that kind of down.

The value(aka buying power) of the dollar decreases as the supply of printed fiat dollars circulating increases. You can’t just run the printing press, cranking out fresh new $100 bills day and night. Which is what America’s central bank, the Federal Reserve, has been doing full throttle since March 2009. All that printed money will soon be in circulation and decrease the value of every dollar we might still have in savings. That’s inflation. Inflation is one type of monetary problem. Monetary problems are scary. The culprit? Central banks, i.e. the Federal Reserve. Although our corrupt and ignorant elected congressmen and women are often accomplices to the crime.

It is true our nation has a fiscal problem. Congress is spending way more money than it is taking in taxes. The U.S. budget is not balanced. To this point, Ben Bernanke is correct. However, his term “Fiscal Crisis” is only 10% correct. The term Fiscal Crisis is just the kind of term central bankers would coin to distract the public from themselves, the central bankers.

The greater problems we face as a nation is the Monetary Cliff—whereby the value of saved and earned dollars are diluted to the point of worthless.

What about the Debt Cliff—whereby governments, corporations, businesses, families, and individuals have spent more money than they can ever pay back?

What about the Financial Cliff—whereby banks don’t even trust lending money to other banks for fear they’ll never get their money back? If a bank won’t lend money to another bank, do you think they’ll lend you money for a car, house, or new business?

What about the Stock Market Cliff?

The Bond Market Cliff?

The Crude Oil Supply Cliff?

The point is, our Federal Reserve Chairman Ben Bernanke coined the phrase Fiscal Cliff. A term carefully crafted to distract the public from the bigger problems facing our nation—namely the ones THEY created—the Monetary Cliff.

Facebooktwittergoogle_plusredditpinterestlinkedinmailby feather

Leave a Reply