Money Quotes on the "Federal Reserve"
Thomas Jefferson once 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 [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
The so-called “Federal Reserve” is just what Jefferson warned about. It is no more “Federal” than Fed-Ex. It is instead a group of a dozen private companies who have been given a monopoly power by Congress to issue our currency and control the money supply in the United States. When the government wants to borrow money, instead of issuing its own currency, as Jefferson wanted, it instead goes to the Federal Reserve Banks and sells a bond to the banks. So the banks get the bonds from our government, and in exchange the government gets “Federal Reserve Notes” created from thin air.
Since Congress created the Federal Reserve in 1913, the dollar has lost more than ninety five percent of its purchasing power. In 1913 one dollar could buy about six loaves of bread. Now it can even buy one loaf. What happened to the purchasing power of the dollars in your paycheck? The value of your dollars was stolen through inflation. Inflation is the result of too much money being circulated compared to the amount of goods (like loaves of bread) and services in the economy.
The Federal Reserve does not want inflation, in fact it would rather there be none. It even talks a good game about keeping inflation in check. But the bottom line is that the Federal Reserve makes money by charging interest on the money and credit that it creates. The more money it creates then the more interest it collects. So even though it does not want to destroy the value of a dollar, that destruction is the inevitable result of what they do.
They make money creating money and credit. So if the price of that is inflation, then it is a price that they are more than willing to have you pay. The value of your dollars is sucked down with every new dollar they make, so that they take your money without you even noticing they took it. You still have the same pile of dollars you had, but now you notice they don’t buy very much. It’s because they created a huge pile of dollars that they are sitting one, and therefore the value of yours is now much less.
Soon after the Federal Reserve was created in 1913 the easy credit it created caused “The Roaring Twenties”. When that bubble collapsed, it was called “The Great Depression”. The banks got everybody over-extended on credit, then when they withdrew the credit, asset prices collapsed. The banks were then able to buy up huge chunks of the country at bargain prices. Now it looks like they are at it again. The banks are sitting on tons of bailout money, but credit is drying up. American fiscal history since 1913 is the very same boom-bust cycle that Jefferson warned us about.
Inventor Thomas Edison on the Federal Reserve: “It is absurd to say our Country can issue bonds and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the People. If the currency issued by the People were no good, then the bonds would be no good, either.”