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By Tony and David Treece

Sometimes reflecting on past definitions of words helps us understand current problems. Webster’s 1957 dictionary defined “inflation” as “an increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices.” Of course, since the Great Recession began, the United States’ Federal Reserve has created at minimum five trillion dollars. Instead of Presidential candidates calling for an audit of the Federal Reserve private bank, they should call for the abolishment of the Federal Reserve. It’s a completely unneeded monster that creates boom and bust cycles. If you have cancer, do you want to replace your cancer with a different ailment? No, you want it eradicated!

John Maynard Keynes, a British socialist and the economist who is responsible for much of America’s economic policy, accurately said in 1920 what currency creation results in when he said, “By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens…The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose.”

Luckily for readers of this publication, you can diagnose the current currency destruction happening right now. No matter how much the government plays with what is reported in inflation metrics (food and gas, for example, have been taken out of the inflation metric) we know as demonstrated in last week’s newsletter that the dollar does not go as far as it once did. Remember, we demonstrated how Tony’s first home has increased in price by 78.1% since 1977.

Henry Hazlitt was a Newsweek columnist and the author of “Economics in One Lesson,” a book we recommend everyone read. In 1946, he said that inflation “tears apart the whole fabric of stable economic relationships. Its inexcusable injustices drive men toward desperate remedies. It plants the seeds of fascism and communism. It leads men to demand totalitarian controls.”

The “desperate remedies” are things like wars to cover unstable economies, and statements like “I have a pen and phone” as President Obama so arrogantly stated. Inflation ultimately leads to despotism. Despotism is “the exercise of absolute power, especially in a cruel and oppressive way.” During Adolf Hitler’s ascension to power, he promised grand things to the German people to win their hearts. While we absolutely love how Donald Trump has been able to befuddle the Republican Party establishment, he has strains of similarities. His promises to “make America great again” and everyone will be a “winner” have a similar feel to what we read about in history. Furthermore, how is Trump to be trusted with his numerous policy reversals? He has fed off America’s undefined anger over the way things are going. Out of problems and chaos arise despotic leaders.

We reason that one of the root causes of our current chaos is our unsound monetary policy and a rogue private opaque central bank that is running America. Without the Federal government funneling money to the Islamic State it would not exist, and how else is the money funneled if not through the Federal Reserve? For this reason, our greatest national security issue is not global warming, as Marxist Bernie Sanders and the media would have you believe. Rather, it is the Federal Reserve.

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