According to the Federal Reserve, the credit card increased by 50 percent in 2023, while the consumer loan increased to $ 17.5 trillion. A recent survey of clever real estate found that three out of three have credit card loans and 23 percent of Americans increase their credit card loan every month. The survey also found that 48 percent of Americans (including 59 percent of millennium) use credit cards for necessary expenses.
There are results of our fiat money system with excess on credit cards and increase in consumer debt. Since Richard Nixon separated the final link between dollars and gold in August 1971, the government’s value has fallen by 87 percent on the basis of the government’s understood consumer price index number. This means that even though the nominal wages of Americans have increased, their actual wages have declined as their dollars buy less.
Continuous erosion of dollar value makes it impossible to accumulate meaningful savings for many Americans. Those Americans who can save, can actually lose money by thanking the Federal Reserve inflation that erases the value of savings. This is the reason that the Congress has felt necessary to provide tax incentive to encourage savings for things like retirement, education and health care.
The Congress can help protect Americans from inflation by refusing to buy government loan equipment such as Treasury Securities. However, since it will eliminate the Congress’ ability to meet the huge shortage, thus it will force the welfare-war to bring back the state, it is unlikely that such a law will be passed.
The dependence of so many Americans on credit cards for basic requirements is one of the reasons why many are dissatisfied with the American economy. The large amount of consumer loan is also a reason that the Federal Reserve will not increase interest rates anywhere in the interest rates that they will be in a free market. The problem is complicated by the fact that investors and businesses have become accustomed to zero or zero interest rates. The relatively marginal rate of the Fed has increased in the last few years, as many “experts” have warned that the Fed was about to throw the economy into a slowdown. The Fed, however, has been able to claim recession because Fed has kept the rates relatively low, and because the government figures are manipulated to understand the actual rates of unemployment and inflation.
The Fed cannot reduce the interest rates indefinitely without creating a dollar crisis. This will be due to the rejection of either dollar world reserved currency status. At that time, interest rates touch the sky and are demanding payment to consumers and businesses who are relying on loans to cope with the destruction of Fede dollar.
Due to the confidence of many Americans at all levels of society, the moral crisis will spoil the economic crisis that they have the right to economic security provided by the government at the expense of their fellow citizens. This will increase violence and totalitarian political movements.
The Fiat Money System and the collapse of the Welfare-War War State also offers an opportunity for those of us who understand the truth for the creation of a society based on the principles of freedom. We should continue our efforts to reach an important mass of people with a message of freedom by planning to ensure our families.
Dr. Ron Paul is a former member of the House of Representatives. This article was written and published by Ron Paul Institute for Peace and Prosperity.