Recently in his February 10, 2010 testimony before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C., the Federal Reserve Chairman Ben Bernanke prepared a report about the current economic policies of the Federal Reserve. The goal was to explain the exit strategy the Reserve has for removing the extremely risky lending habits it has been using to try and provide economic stability for our nation. You can see the entire report at: http://www.federalreserve.gov/newsevents/testimony/bernanke20100210a.htm#fn9.

Of particular interest to me is his statement near the end of his prepared statments in section 9.
“The Federal Reserve believes it is possible that, ultimately, its operating framework will allow the elimination of minimum reserve requirements, which impose costs and distortions on the banking system.”

WHOA! Did you read that? Do you know what they are suggesting? THIS IS THE LAST STRAW THAT WILL CAUSE THE CAMELS BACK TO EXPLODE INTO THE STONEAGE!

If you are not aware, recent history has caused us to move off of the gold standard, spend ourselves into oblivion as a country and now we are talking about removing the requirement for banks to hold funds in reserve.

The current money supply is made by bank a lending to bank b. Then bank b can lend out 90% of the money it has to bank c. Bank c can then lend to bank d who can then lend out 90% and so on and so forth. The 10% held is called the reserve. Actual HARD ASSETS (if you can call fake paper money hard assets) will no longer be required to be held by a bank.

So what does all this craziness mean? Your bank will no longer be required to hold any cash, they can lend out more and continue to make risky loans etc. at an even greater amount than they can today. It also means your money is going to be worth less as it will increase the money supply and INFLATION occurs when there is more money in the money supply.

Welcome to the $10 gallon of gas and the $5 value menu at your local McDonalds. Prices are going up my friends and your savings will take the hit. (Cash in the bank earning 1.45% interest doesnt cut it when inflation is 10%, you just lost 8.55% of your money).

Please contact your local representatives and ask them to support a bill to audit the Federal Reserve and bring to light the criminal activity that would have caused you or I to go to prison. Its not too late if we act.