I believed in Santa Claus a little longer than most children do. For some reason, as long as I couldn’t definitely prove that my parents were the ones leaving presents under the Christmas tree, I wasn’t ready to completely reject the possibility that it really was jolly old Saint Nick riding a sleigh pulled by reindeer and magically shrinking himself small enough to slip under the front door or through the key hole and into my house (we didn’t have a chimney).
And my parents were incredibly sneaky. I never once caught them. But when I finally told my dad I didn’t believe in Santa any more, he said, with a sly grin, “Santa doesn’t deliver presents to kids who don’t believe in him,” and I promptly responded, “I believe! I believe!” The matter was settled. I got some awesome Legos that year.
The Federal Reserve, fiat money, and inflationary stimulus policies are no different than the Santa Claus of our childhoods. The only problem is that so many adults still believe in them. Let’s examine just how similar the two really are: Santa magically gives you everything you wished for at no cost to you. Free stuff, created magically out of thin air by elves in the North Pole. Purportedly, so can the Fed. Its magical elves are accountants that create wealth out of thin air at the stroke of a pen.
Santa supposedly keeps a list of naughty and nice children, but no matter how bad you were all year, you still got presents at Christmas. Trust me, as a child I was thoroughly prepared to wake up and find nothing under the tree some years and was shocked to wake up and find that Santa had overlooked some of my recent behavior. The Federal Reserve is the same way– banks that should make the naughty list and get nothing but a nice, orderly bankruptcy still get sweet, low (or no) interest loans from the Fed.
So what’s the real criterion? How do you get presents from Santa or loans from the Fed even though you’ve been bad?
Read the rest of my article at The Silver Underground.
Editor in Chief, THL
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