The Money Compass: Where Your Money Went and How to Get It Back

Chapter 1

Introduction

The Invisible Hand of Confiscation

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.

The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

—Alan Greenspan, “Gold and Economic Freedom,”

The Objectivist (1966)

“Why have I lost my money? And who took it?” That’s the theme of this book. Millions of once rich and well-off Americans have watched their assets disappear in the Great Recession. These Americans are unemployed, and after years of work many have lost their homes, and their once rock-solid retirement plans are in ruins. Was it based on stupid financial decisions? Probably. Was it based on making financial decisions without a high level of financial literacy? Probably. Was it greed? Probably. Was it based on actions over which they had no control? Probably. Many Americans have become poorer, and the rest are worried.

The “Probablies” are not the only answer to these questions. This book looks at specific political and financial events that put Americans into complex situations where they are required to make decisions that they are unskilled to make. On the surface these financial choices appeared simple. Buy a house. Sign a mortgage. Invest in stocks.

Yet signing a mortgage is a complex decision, and the forces and policies behind the financing are hidden. Oh, and we want to note at the beginning ...