“Paper money eventually returns to its intrinsic value —- zero.” – Voltaire
“You have to choose between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.” – George Bernard Shaw
The Federal Reserve , is not Federal nor does it have a reserve. It was created under criminal circumstances
“The United States Constitution grants to Congress the authority to coin money and regulate the value of the currency. The Constitution does not give Congress the authority to delegate control over monetary policy to a central bank. Furthermore, the Constitution certainly does not empower the federal government to erode the American standard of living via an inflationary monetary policy.”
“I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.” -Woodrow Wilson, after signing the Federal Reserve into existence
The System derives its authority and public purpose from the Federal Reserve Act passed by Congress in 1913. As an independent institution, the Federal Reserve System has the authority to act on its own without prior approval from Congress or the President.
Controversy about the Federal Reserve Act and the establishment of the Federal Reserve System have existed since prior to its passage, and include whether Congress has the Constitutional power to delegate its power to coin money or issue paper money, whether the Federal Reserve is a private banking cartel established to protect large banks, or whether the Federal Reserves’ mistakes increase the frequency and severity of boom-bust economic cycles such as the Great Depression of the 1930s.
Its purpose was ……Preventing Asset Bubbles BUT it has done nothing but create bubbles since its formation. Its theme tune should be
“I’m forever blowing bubbles”
Many economists speculate that the Fed was responsible, or at least partially responsible, for the United States housing bubble. They claim that in the Fed kept interest rates too low following the 2001 recession. This in turn, some speculators claim, prompted borrowers to be reckless. The housing bubble then lead to the credit crunch. In addition, some economists, such as Nouriel Roubini, have said that the dollar’s status as the reserve currency, “may deteriorate”, while others such as Ron Paul have already announed that the dollar-reserve standard is dead. According to Ron Paul:
We’ve had the dollar reserve standard from ’71 up until last year. That’s collapsed. It’s gone. It’s done. And they have to have a new monetary standard. And they’re planning behind the scenes. We’re not entitled to know anything about it. Under the law, they don’t have to tell us a thing. But believe me, they’re planning. They’re panicky, because they don’t have an easy answer but there are major changes going on. I have argued this case for years
Perhaps the most accepted criticism regards the Fed’s role in the Great Depression. The economists Milton Friedman and Anna Schwartz were the first to propose that the Fed was the primary cause of the depression, and since then, the theory has been adopted by numerous others, including the current Federal Reserve Chairman Ben S. Bernanke. In loose terms, the criticism goes as follows: Even after the stock market crashed in 1929 the Federal Reserve continued to contract the money supply and refused to save struggling banks from failure, even though they were in serious threat because of bank runs, ultimately turning what would have been a relatively mild recession into the catastrophe of the 1930s. A less accepted view among economists is that the Fed kept interest rates too low in the 1920s resulting in the exorbitant stock prices of 1929, which inevitably had to deflate.
This is EXACTLY WHAT IS HAPPENING TODAY
CONSPIRACY, COINCIDENCE OR INCOMPITANCE?
The board of directors of each Federal Reserve Bank District also have regulatory and supervisory responsibilities. For example, a member bank (private bank) is not permitted to give out too many loans to people who cannot pay them back. This is because too many defaults on loans will lead to a bank run.
Whoever knowingly makes any false statement or report, or willfully overvalues any land, property or security, for the purpose of influencing in any way…shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
These aspects of the Federal Reserve System are the parts intended to prevent or minimize speculative asset bubbles which ultimately lead to severe market corrections. The recent bubbles and corrections in energies, grains, equity and debt products and real estate cast doubt on the efficacy of these controls.
SO WHY ARE THE BANKERS NOT FACING $1,000,000 FINES AND 30 YEARS IMPRISONMENT?!?!
It was also supposed to stablise the dollar …….
The Record of the Federal Reserve
Not a day goes by without talk of the Federal Reserve, whether by the organization itself or by its opponents. An incessant cheerleader of his organization,Chairman Ben Bernanke will be the first to tell you that the Federal Reserve is an utmost necessity to the smooth operation of the U.S. financial system.Some would disagree. And while ongoing events can be difficult to objectively examine, hindsight is usually much more prescient.
Let’s set aside what The Fed says for a moment and examine what it actually does.
From 1776 to 1912 (136 years), the value of the dollar, relative to the Consumer Price Index, increased by 11%. A dollar could buy 11% more goods in 1912 than in 1776. Thus, if in 1776, you sat on your savings pile of $1,000,000 for 136 years, it would then be worth $1,110,000 in purchasing power (it will have appreciated in value by 11%). A loaf of bread for Thomas Jefferson cost the same as a loaf of bread for Lincoln 50 years later and again the same for J.P.Morgan 50 years after that.
The United States Federal Reserve System was created in 1913. The stated purpose of the Fed, by the definition taken from its own website, is to “conduct the nation’s monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices.” Note that “stable prices” is another way of saying “stable dollar,” they are two sides of the same coin (couldn’t resist the pun).
After the Fed’s creation, from 1913 to 2008 (95 years), the value of the dollar, relative to the Consumer Price Index, decreased by 95%. A dollar could buy 95% fewer goods in 2008 than in 1913. Thus, if in 1913, you sat on your savings pile of $1,000,000 for 95 years, it would then be worth only $50,000 inpurchasing power (it will have depreciated in value by 95%). One would now need to pay about 20X more than J.P. Morgan for one’s bread. Ask my mother how much the price of milk has increased just in the last ten years alone.
In other words, the value of the dollar remained extremely stable for 150 years, the Fed was created in order to “stabilize the value of the dollar,” and the result has been a 95% devaluation of the dollar in less than 100 years following its creation. Below is a graph of this history, which I’ve marked with the year 1913 so you can see the change. The graph is also marked with the years of decoupling from the gold standard, as no examination of dollar value would be sound without such mention.
While we all take inflation as a “given” – as something that “just happens” in the economy – this belief is utterly incorrect. Inflation, which is the loss of value in your saved dollars, is caused by the Federal Reserve through its management of the money supply. Next time you see Ben Bernanke on the television telling you that they “will take the necessary steps” to help the country, consider their track record so far, and their dismal failure at their stated objective: preserving the value of America’s money.
Yet, American’s aren’t particularly upset about this, and indeed the vast majority have no idea about any of this. I would wager that this is because Americans are educated in Government schools, which barely teach basic accounting, let alone macroeconomic monetary theory. In public school I was forced to memorize the names of every country in Africa, yet there was never a discussion of the nature of money. Half the nations of Africa have been renamed since, but the economic principles which cause such political turmoil remain the same.
The Federal Reserve System is fraudulent. Whatever its stated purpose, its effect is to create a hidden mechanism of deficit spending by politicians, through the insidious invisible taxation of monetary debasement (inflation). With printed money, the Government can buy services for its voters before the effects of inflation are felt. The voters money buys less the following year, as the new money has raised prices, and they are often none the wiser.
Obama is now mandating that the Fed is to have more oversight, more authority and control over the markets of the United States. If we can learn anything from the Fed, it’s that the best way to succeed as a politician is to stretch one’s failure over a long enough period that people won’t remember it.
THE FEDERAL RESERVE HAS BEEN A SPECTACULAR FAILURE!!! FIRE THE THEVIES!
AUDIT AND CLOSE THE FED, CRIMINAL CHARGES SHOULD BE STARTED FOR INSIDER DEALING AND FRAUD AND OVERVALUING ASSETS!!! CONFISCATION OF PROPERTY SHOULD FOLLOW!
What did the public just buy in “Toxic Assets” if it was not overvalued assets?
That’s $1,000,000 dollar fine and 30 years in the clink for starters.
The same goes for THE BANK OF ENGLAND!!