How does the inflation tax help the fed

[RJB]

I understand the cause of inflation and the harm it does to us and the dollar, but how does it make bankers, investers, and the Federal Reserves more money?
Thanks
RJ

[USPatriot36]

There are several ways. One way is that the people controlling the Fed know ahead of times what the Fed will do. Knowing that, they can easily predict what the markets will do and buy, sell or short accordingly.

Also, there is a long delay between the Fed creates money and the inflation hits the streets. So the people who get the money directly from the Fed benefit at the expense of the poor and middle class. This system is meant to be confusing, like any con-artist would do to prevent the average american from understanding it. As one of the creators of this system said, only 1 out of a thousand can detect it.

http://www.lewrockwell.com/paul/paul334.html

[Thurston Howell III]

When new money is created, debt is created and interest is paid to the fed on that debt.

[Shii]

I understand the cause of inflation and the harm it does to us and the dollar, but how does it make bankers, investers, and the Federal Reserves more money?
Thanks
RJ

The lag between money creation and inflation creates profits for the Fed (which collects the interest) and bankers (who simply make the money!). The lag between between inflation and raised wages creates huge profits for businesses (who can now sell products we made for cheap overseas, while we slowly realize the buck we earn can't buy food anymore).

[OptionsTrader]

http://mises.org:88/Fed

or

http://video.google.com/url?docid=-466210540567002553&esrc=sr1&ev=v&len=2485&q=money%2Bbanking%2Bfederal%2Breserve&srcurl=http%3A%2F%2Fvideo.google.com%2Fvideoplay%3 Fdocid%3D-466210540567002553&vidurl=%2Fvideoplay%3Fdocid%3D-466210540567002553%26q%3Dmoney%2Bbanking%2Bfederal %2Breserve%26total%3D345%26start%3D0%26num%3D10%26 so%3D0%26type%3Dsearch%26plindex%3D0&usg=AL29H20J6aA0kHqKwXyIYwizA1Y16AnFaA

[Sergeant Brother]

Though not entirely related, massive spending that the inflation tax helps make possible does make huge amounts of money for powerful special interests.

[Phenom24]

The way I learned it was thusly: Whenever there is inflation, there is a decrease in buying power.

Well, where does the buying power go? Here it is! The government gets to pay for something with money that didn't exist yesterday. Before the $ has a chance to devalue, they use it.

But then once those dollars trickle down into the economy, you cash your paycheck, etc., there are now an extra $X number of dollars in the pipeline. So then the $ devalues by the # of dollars that came out of nowhere.

The real benefit though, is the bankers!!! (If you know who got the Federal Reserve off the ground - it began as a banking cartel) The bankers collect deposits of this money that didn't exist yesterday - and they can loan up to 900% of that amount to people and collect interest.