In Review: Meltdown by Thomas Woods

Historian and senior fellow at the Ludwig von Mises Institute, Thomas Woods paints a vivid picture of the origins of fiat money in America. Tracing currency back to the Roosevelt administration, where in 1933 gold was outlawed as currency. This signaled the end of commodity backed money in America, and gave unprecedented clandestine power to the Federal Reserve, that to this day monopolizes our money supply under the tutelage of the federal government.

 

The Federal Reserve is a government created, government run, monopoly that arbitrarily sets interest rates below market standards, and floods the economy with fiat currency that’s tangible value is par with voodoo. Thomas Woods in his current book Meltdown assigns the blame for the fiscal recession, and impending depression, at the feet of the Federal Reserve. He demonstrates how a culpable federal government manipulates economic policy and currency to create a variety of monopolies, paying off constituencies while simultaneously impoverishing Americans and destroying capitalism in an insatiable lust for power and wealth.

 

Woods provides ample historic evidence, demonstrating how every boom-bust cycle in American history was caused and perpetrated by the Federal Reserve. He demonstrates how myopic economic ideologues from both political camps enable fiscal disasters with the blessing of our government.

 

Geed, power, government sponsored enterprises, monopolies, hyperinflation, and flight to real values; these are all inherent afflictions of a kleptocracy that controls our money for its own rapacious spending. Self serving politicians cling to an immoral Keynesian economic fantasy, favoring unsustainable boom time spending to avert the inevitable bust cycle. (See pragmatism). This only prolongs the bust cycle, denying the markets the opportunity for natural adjustment, thus aggravating the inevitable, often painful, market corrections that cannot be denied.

 

By continuously propping up failing industries the government attempts to choose winners and losers, (Chrysler, GM, Bear Stearns, AIG, City Bank, all comes to mind). Government fiscal policy creates moral hazard. For example, guaranteeing bank deposits with FDIC insurance —tax payer money — then encouraging banks to make high risk loans, uncollateralized loans, creates an atmosphere where government bail out is not only inevitable, but normal operating procedure. This misallocation of resources, robs the best and the brightest industries of capital and services that fuel our economy in the private sector.

 

Woods explains how fiat currency is manipulated by government to gain and maintain control over banks, industries, and investment firms. He dispels the prevalent: too big to fail myth and demonstrates how failure of these institutions will reallocate capital and resources into existing productive industries allowing them to thrive and grow our economy back to stability.

 

Woods takes an assertive stance, offering viable alternatives to the economic lunacy of throwing good money after bad, in an effort to spend our way out of recession, a recession caused by the same economic theory government now hails as the cure. He postulates the resurgence of commodity based currency so the Federal Reserve can’t print, spend, and inflate, beyond the means of a fixed commodity.

 

This book is a fascinating read, it strikes a fast pace with invaluable information on every page. Woods has masterfully taken a complex subject making it entertaining and educational for the laymen. This is a must read for all Americans concerned about our future, and economic survival.

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