Growing Up in the Church of the Federal Reserve
Bitcoin fixes this
I was raised in a peculiar faith. We all were, really, though most people don't think of it that way. The Church of the Federal Reserve isn't your typical religion – no fancy robes or incense here. But boy, do we have our rituals.
From my earliest days, I was taught to put my absolute faith in these special pieces of paper. "In God We Trust," they read, which is pretty on-brand for a cult if you ask me. The elders told us these papers had value because we all believed they had value. Sound familiar? That's basically what my friend Tommy's mom said about her crystals, but at least her crystals were shiny.
Our high priests wear suits instead of robes. They gather in a temple called the FOMC to perform their sacred ceremonies. Eight times a year, they emerge from their chambers to deliver prophecies about something called "monetary policy." Everyone pretends to understand what this means. Nobody actually does. But we all nod gravely because that's what you do in a cult.
The central doctrine of our faith is that a mystical entity called "The Market" must always go up. When it doesn't, our priests perform elaborate rituals called "quantitative easing" to appease it. This is basically the financial equivalent of sacrificing a goat, except instead of a goat, they sacrifice the purchasing power of our savings. Thanks, guys.
We have our own sacred texts, too. Instead of a Bible or Quran, we have economics textbooks that explain how everything works in theories and models that never quite match reality. It's like reading fantasy fiction, except instead of dragons, you get supply and demand curves. The prophets who write these texts are called "economists," and they're about as accurate as a weather forecaster on mushrooms.
Growing up, I learned our special prayers: "The market will regulate itself," "A rising tide lifts all boats," and my personal favorite, "Trickle-down economics works." We'd recite these with the same unquestioning faith that other kids put into "Now I lay me down to sleep."
Our tithing system is called "inflation." Instead of putting money in a collection plate, we just watch our savings magically shrink year after year. It's really efficient – you don't have to do anything! The priests just wave their magic wands (they call them "interest rates"), and poof! Your money is worth less than it was yesterday. Praise be to the Fed.
We have our own version of transubstantiation, too. Through the miracle of fractional reserve banking, banks can turn one dollar into many dollars. It's like Jesus with the loaves and fishes, except instead of feeding the hungry, we're feeding the credit market and are left with less food on our own tables. And just like biblical miracles, it's best not to ask too many questions about how it actually works.
The faithful are expected to store their wealth in special temples called "banks." These temples are considered too big to fail, which is cult-speak for "we'll bail them out with your money if they gamble it away on risky investments." It's like having a drunk uncle who keeps betting on horse races, but instead of cutting him off, your parents just keep giving him your college fund.
Our priests have their own special language, just like any good cult. They call it "Fed-speak." It's designed to sound important while saying absolutely nothing. When the high priest (sorry, "Federal Reserve Chairman") speaks, everyone analyzes every word like it's ancient scripture. "The economy is showing signs of transitory inflation in response to market dynamics" is basically the equivalent of "The gods are restless tonight."
We have dietary restrictions too. You're supposed to consume as much as possible – it's called "driving consumer spending." Saving too much money is considered a sin. They call it the "paradox of thrift," which is a fancy way of saying "Stop being so responsible, you're making us look bad."
The cult has its own coming-of-age ritual: getting your first credit card. It's like a bar mitzvah, except instead of becoming a man, you become a debt slave. They even give you a special number that follows you around for the rest of your life – your credit score. It's like a righteousness meter that measures how good you are at going into debt and paying it back.
We have our own version of hell, too. It's called "bankruptcy." The sinners who end up there are forced to wear sackcloth (from Target, on clearance) and undergo ritual punishment by collection agencies. But fear not! For a substantial fee, special priests called "bankruptcy attorneys" can help cleanse you of your financial sins.
Our faith has different denominations. There's the Austrian school, which is like the Protestant Reformation of economics – they're always protesting against the mainstream church and talking about going back to the gold standard. Then there's the Keynesian school, which is like the Catholic church – they believe in central authority and think all problems can be solved by spending more money.
We even have our own evangelists. They're called "financial advisors," and they go door to door spreading the good news about compound interest and diversified portfolios. For a small percentage of your wealth (every year, forever), they'll show you the path to salvation. Or at least to a moderately funded retirement.
The holy trinity in our faith is GDP, CPI, and the unemployment rate. We track these numbers with the same fervor that ancient priests studied the movements of the stars. When these numbers don't align properly, our priests perform their ritual dance of "adjusting monetary policy." It's like a rain dance, but with more PowerPoint presentations.
Every four years, we hold a special ceremony where we choose a new high priest (or keep the old one, if they haven't crashed the economy yet). The financial markets hold their breath during this sacred time, because apparently the entire global economy depends on who sits in a fancy chair in Washington D.C. No pressure or anything.
We have our own sacred sites too. Wall Street is like our Jerusalem. The New York Stock Exchange is our Mecca. The Federal Reserve building is our Vatican. And the U.S. Treasury is our Bethlehem, where they give birth to new money whenever the priests decide we need more.
Speaking of money creation, that's probably the cultiest part of the whole thing. Remember when you were in college and you learned that banks can literally create money out of thin air through fractional reserve banking? And you said "Wait, what?" And your professor said "Don't worry about it, that's just how it works"? That's cult indoctrination 101 right there.
The really weird part is how we're all totally cool with this. We wake up every day and go to work to earn these pieces of paper that have value because... well, because everyone agrees they have value. And we're fine with other people creating more of these papers whenever they want, making our papers worth less. Try explaining that to an alien civilization sometime.
But here's the thing about being raised in a cult: it all seems totally normal when you're inside it. Of course we should measure our national success by how many things we buy! Of course it's normal for houses to cost 10 times what people make in a year! Of course we should go into debt to get an education! This is all fine! Everything is fine!
And just like any good cult member, I used to keep my doubts to myself. "What's the alternative?" I used to ask. But now I know.
There I was, an member of the Church of the Federal Reserve. I'd go to work, deposit my money in the bank and watch it slowly evaporate through inflation, as I pretended to understand what Jerome Powell is talking about when he spoke. Because that's what we did in the cult.
And if you think this all sounds crazy, well... you might be right. But you're probably still going to check your 401(k) balance tomorrow, aren't you? Don't worry, I won't tell anyone. We're all in this together, after all.
Welcome to the cult. Please direct your attention to the PowerPoint presentation on compound interest.
And yes, Bitcoin fixes this.