Central banks are now all over the news with inflation now being front and center of economic discussion.
Historically, Americans have been skeptical of these institutions. Founding Father Thomas Jefferson was alleged to have said:
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.”
Nevertheless, political and banking elites have made attempts to impose central banking on the American populace throughout American history.
Various cases stand out:
- The First Bank of the United States became operational on December 12, 1791 with a 20-year charter. The creation of the First Bank was justified on the grounds of bolstering commerce, repaying debt incurred during the American Revolution, revaluing the currency, and beating back inflation.
Indeed, there was opposition by the likes of Thomas Jefferson, who feared that a national bank would establish a financial monopoly that benefits financiers and merchants at the expense of local and state banks.
In 1811, the First Bank eventually expired. Due to the proliferation of state banks and general hostility towards national banks, the First Bank was never re-chartered.
- The Second Bank of the United States was chartered in February 1816. A board of directors oversaw this bank. This board was tightly connected to industry and manufacturing, which angered many populists of that era.
When Andrew Jackson became president, he made it a point to take on the Second Bank. He viewed it as an instrument for well-connected interest groups in urban and industrial northern states.
Nicholas Biddle, the president of the Second Bank, was Jackson’s main enemy. Old Hickory stuck it to Biddle by vetoing a bill to recharter the Second Bank in 1832. The bank was set to be rechartered in 1836.
Jackson doubled down by stripping all federal funds from the Second Bank and redistributing them to various state banks. By 1836, the Second Bank’s federal charter reached its expiration date. Once Jackson left the Oval Office, his dream of ending the Second Bank became a reality.
- The Federal Reserve is by far the longest lasting central bank in American history. In the aftermath of the banking panic of 1907, various prominent financial titans took advantage of the ensuing hysteria to make their case for a new central bank.
Representatives of some of America’s most powerful banks convened at Jekyll off the Georgia coast in November 1910.
There, they drafted their central bank legislation, which went through numerous overhauls and rebrands. Once the finer details were hammered out, these oligarchical interests were able to put forward the Federal Reserve Act.
This bill quickly made its way through Congress and was signed into law on December 23, 1913 by President Woodrow Wilson. In turn, the Federal Reserve System was established.
Since the Federal Reserve was set up in 1913, the dollar’s purchasing power has plummeted by 96%.
Contrary to popular belief, central banking is not a normal feature of the American experience. In fact, one could argue that the Fed’s current existence is as anti-American as it gets.
As long as the Fed exists, America will face significant economic upheavals.
So, it’s best to be economically prepared for the worst.
At the Empowered Investor Inner Circle, I teach people how to be economically anti-fragile in the face of high levels of inflation.
One way I show investors how to thrive during times of economic upheaval is by using inflation induced debt destruction. In doing so, you defeat inflation and build a stout income property investment portfolio.
The way this works is quite simple:
You start by heading to your bank to take out a loan to acquire a property. Ideally, you buy this property in a reliable linear market.
Once you’ve bought the property, you then rent it out to a tenant. In turn, your tenant takes on the carrying cost on the property.
As time goes by, you pay off the debt in depreciated dollars due to inflation. In the meantime, your income property appreciates faster than inflation.
By investing in an income property, you kill two birds with one stone: Inflation reduces your debt burden and your income property’s value outpaces inflation.
This is one of several wealth-building secrets you’ll acquire at The Empowered Investor Inner Circle.
In joining the Empowered Investor Inner Circle, you’ll have access to a vibrant community of experienced investors who know the ins-and-outs of income property investing.
The average real estate investor simply does not have access to the following perks that you’ll receive at the Empowered Investor Inner Circle:
- A list of experienced investors operating in your market.
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- Innovative real estate software that assists you with property management, tracks your cash flow, and potentially saves you thousands of dollars that is usually spent on useless property managers.
Becoming a member of the Empowered Investor Inner Circle will free you from the grasp of the property managers fleecing you, while also providing you the tools to identify reliable deals that generate steady cash flows.
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If you’re ready to take your real estate investment game to the next level, head on over to the Empowered Investor Inner Circle.
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