Source: The American Dream
Have you noticed that very few people in the mainstream media ever directly criticize the Federal Reserve? But why should that be the case? Criticizing top politicians from both major political parties has become a national pastime. Most Americans love to throw mud at either the Republicans or the Democrats. But we are told that the Federal Reserve is “above politics” and that it is absolutely vital that the Fed remain “independent”. The reality is that the Federal Reserve has more control over the performance of the U.S. economy than the president even does, and yet most Americans never spend much time thinking about the Fed at all. It is almost as if someone has instructed us to “ignore the man behind the curtain” and most of us just blindly obey. With the economy in such a mess and with the national debt exploding so dramatically, isn’t it about time that we had a national conversation about the performance of the Federal Reserve? Isn’t it about time that we evaluated whether the Federal Reserve is doing a good job or not?
Today I came across a Bloomberg article that was full of endless praise for the secretive Jekyll Island conference in 1910 that developed the plan for the Federal Reserve system. The following is a very brief excerpt from that article….
Although it may seem shocking to watch the 112th Congress, there was a time when national leaders were swift and decisive in getting things done. In November 1910, in the space of less than two weeks, a group of government and business leaders fashioned a powerful new financial system that has survived a century, two world wars, a Great Depression and many recessions.
But has this “powerful new financial system” really performed well for the American people?
The Federal Reserve system has now been in place for about 100 years. That is certainly long enough to evaluate how well it has performed.
So has the Federal Reserve done a good job?
Well, one of the things that the Federal Reserve is charged with doing is to protect the value of our currency. In other words, they are supposed to keep inflation under control.
In that regard, the Federal Reserve has failed miserably. The U.S. dollar has lost96.2 percent of its value since 1900, and almost 100 percent of that decline has come during the Federal Reserve era.
The other half of the Federal Reserve’s “dual mandate” is to keep unemployment low.
It doesn’t take a genius to figure out that the Fed has failed there too.
In the United States today, there are less jobs than there were a decade ago even though we have added more than 30 million more people to the population since then.
The average duration of unemployment in the U.S. is about 40 weeks, and if you gathered together all of the unemployed people in America in one place, they would constitute the 68th largest country in the world.
So, no, the Federal Reserve is not doing a good job of keeping us all employed.
We are also told that the era before the Federal Reserve was created was a time when great “financial panics” happened on a regular basis and that the Federal Reserve was created to stop them from happening.
So has the Federal Reserve been effective at preventing financial panics?
Well, current Federal Reserve Chairman Ben Bernanke has openly admittedthat the Federal Reserve helped cause the Great Depression of the 1930s.
And there have been 10 separate economic recessions since 1950.
So that is not a really great track record.
In addition, it seems very clear that the foolish low interest rate policies of the Fed fueled the massive housing bubble that plunged the U.S. economy into the greatest economic downturn since the Great Depression when it finally crashed.
Shouldn’t the Federal Reserve receive some criticism for that?
Of course one of the biggest problems with the Federal Reserve is that it is a perpetual debt machine.
If you do now know where our money comes from in the United States, please see this article. The Federal Reserve system was designed to perpetually expand the money supply and to perpetually expand U.S. government debt.
On both counts, it has performed brilliantly.
When the Federal Reserve was created, the U.S. national debt was less than 3 billion dollars.
Today, it is more than 5000 times larger.
What is the appropriate word to use when something is 5000 times worse than it used to be?
When you simply look at performance, the truth is that it is really hard to deny that the Federal Reserve has been a complete and total nightmare for the United States.
But instead of shutting it down, Congress has been giving the Federal Reserve even more power. The Dodd-Frank bill gave the Fed significant new powers and substantial new responsibilities, and the Fed has been exercising those new powers in almost complete secrecy.
The following comes from a recent article in the Wall Street Journal….
While many Americans may not realize it, the Fed has taken on a much larger regulatory role than at any time in history. Since the Dodd-Frank financial overhaul became law in July 2010, the Fed has held 47 separate votes on financial regulations, and scores more are coming. In the process it is reshaping the U.S. financial industry by directing banks on how much capital they must hold, what kind of trading they can engage in and what kind of fees they can charge retailers on debit-card transactions.
The Fed is making these sweeping changes—the most dramatic since the Great Depression—almost completely without public meetings.
Does that sound very “democratic” to you?
Why should the Federal Reserve have more power over the economy than anyone else in America?
Why should the Federal Reserve be “above politics” and “above criticism”?
Unfortunately, central banking is one of the few things that almost every nation on earth can agree on.
Did you know that all 187 nations that belong to the IMF have a central bank?
Sadly, the vast majority of the people out there have no idea that central banking is just a giant money making scam.
Central banks are allowed to create money out of thin air which is then lent to national governments. In turn, the citizens of those nations have to pay higher taxes in order to pay the interest on those debts.
Central banking is a way to systematically take wealth from the citizens of a nation and transfer it into the pockets of those that enjoy getting rich by lending money to governments.
When it comes to taking money out of the pockets of the American people, theFederal Reserve is definitely doing a good job.
Our entire economic system is based on debt, and such a system is inevitably going to fail eventually. We need to shut down the Federal Reserve and quit using debt-based currency.
We need to educate the American people about where money comes from and about why central banking is so destructive.
Please share this article and other articles like it with as many people as you can.
Together, we can make significant difference.
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