Pennies and Nickels

Economics has been referred to as a dismal science.  (Actually, I would debate if it should be a science at all; but, then again, that is a discussion for another day.)  Well, our government has just taken economics to a new level of absurdity.  You ask, how?  The U.S. Mint loses more than $100 million a year minting pennies and nickles.  Now, get this!  It cost our government 2.4 cents to make a penny and 11.2 cents to make a nickel.  However, the metal composition of the penny and nickel has not changed in more than thirty years.  So what has happened to cause this?  The value of our money has simply been debased, or destroyed by the body (Federal Reserve System) that is suppose to protect the overall stability of our money.  For instance, the dollar has lost more than 95% of its purchasing power since the creation of the Federal Reserve System in 1913.

Millions of the so-called "baby boomers" are seeing their life savings debased by the actions of the Federal Reserve System.  Each year their money purchases less and less because of the liquidity induced activities of the Federal Reserve System.  Since 2008, the Federal Reserve System has increased "reserve credit to the banking system" in excess of $2 trillion.  This manipulated action by the Federal Reserve System has kept interest rates "artificially low," which is designed to increase profitability of banks and Wall Street firms and promote consumers to take on more debt!  Also, this monetary policy has driven those most vulnerable investors (baby-boomers/retirees) into riskier financial assets such as stocks and junk bonds in an effort to make their retirement dollars last longer.  In other words, a crisis is just waiting to occur.  As a matter of fact, I believe over the next four years an economic crisis as worse, if not worse, as the Depression of the 1930s will loom before our very eyes.  Maybe then, we will all come to understand why economics is referred to as a dismal science.