The Federal Reserve: A Bankster's Wet Dream

"Who controls the issuance of money, controls the government." Nathan Meyer Rothschild
I'm writing this for a friend who asked about how the Fed works and why they've been allowed to get away with what they have. So, I thought I'd kill two birds with one stone.

For anyone unaware, the Federal Reserve (Fed) is not a part of the government, it is a private central bank. Central banks have been dominating banking in Europe for centuries but when Alexander Hamilton attempted to introduce the concept here it was met with resistance- primarily from Thomas Jefferson. Hamilton was able to found the First national Bank of the United States which lasted until Jefferson did away with it a while later.

Similarly, the Second National Bank was defeated by Andrew Jackson but that was , unfortunately, not the end of central banking. Abraham Lincoln, despite his protestations to the contrary, was in favor of a central bank and theories that his opposition was what caused his assassination are false. Lincoln was assassinated because he murdered 675,000 of his countrymen in the name of freedom. The reason that Jefferson and Jackson were opposed a central bank was because they opposed fractional reserve banking.

Jumping ahead to 1910, a group of banksters including Sen. Nelson Aldrich met incognito at J.P. Morgan's estate on Jekyll Island to hatch a plan to implement a central bank in America, once and for all. Taking advantage of an economic downturn Sen. Aldrich put before Congress a plan for a central bank which would have been called The Aldrich Act. Knowing him to be a shill for the Morgan/ Warburg banking cartel, Congress defeated it soundly. To show how much attention Congress pays to prospective legislation, the very same bill was renamed The Federal Reserve Act and it passed by a landslide.

What is wrong with central banking? Central banking is based on fractional reserve banking. Fractional reserve banking requires only a fraction of deposits be held in reserve, when lending money. In other words, if the bank is only required to have 10% on hand, it can lend out $9.00 on every $10.00 it takes in. If there is a run on the bank, the depositors lose their money because the banks have lent it out. In 1929 when there was a bank run, the banks tried to call in loans to meet the depositors demands, but the borrowers didn't have it and the banking system collapsed. (This is an oversimplification, but fundamentally what happened...there was speculation on Wall St involving selling stock on credit, etc.)

Another problem is that after the Coinage Act of 1792, with the exception of the Civil War, the country has been on the Gold Standard. This was/is anathema to the banksters. To fully control the country and the economy, they needed to get us off the gold standard. This way they could issue fiat currency (money backed by faith alone, instead of gold). Naturally, with fiat currency, the Fed can control the value because it isn't tied to anything stable. According to the Coinage Act, the issuance of currency is the responsibility of Congress. After the Federal Reserve Act of 1913, it became the responsibility of the Fed...Congress voluntarily gave up it's most critical role in the American economy. After we got off the gold standard, the Fed (a private bank) had a monopoly on monetary policy and the national economy.

Originally, the dollar was to be worth 1/20 oz. of gold. That changed in the 1930's (1933 I believe) to 1/35 oz. In other words, an ounce of gold was worth $35.00. By 1973 the Fed had messed around with interest rates and printing money (inflation) and gold was around $125.00. European banks began turning in their American currency for gold and for every ounce that went out...we lost $90.00. So, President Nixon took us off the gold standard- temporarily! This was the break the Fed was looking for. By 1976, gold was at $350.00 oz.

This is important to understand. Prices are tied to supply and demand. For anyone not aware: when supply is up...demand goes down and so does prices. Conversely, when supply goes down...demand goes up and so does price. The supply of gold remained fairly stable (because Nixon stopped it from being depleted). Why did the price go up? Inflation...it was done artificially by increasing the money supply (the amount of paper money in circulation). What this means in the real world is, the more money in circulation, the less it's worth...the less actual buying power it has. That's basically why things cost so much more now than they used to. Here's something to think about: when gold was $350.00 oz. the supply was fairly unchanged so, the buying power of the dollar (remember 1/35 oz or $35.00 oz) is $.10 or 10 cents. Right now gold is around $1300 (last time I checked) so in terms of buying power, it's worth about 2 cents (actually 1.8). For every dollar you spend, you receive 1.8 cents worth of merchandise.

About 4 or 5 decades ago a single income family was able to afford a home, a car, some savings and probably a college fund for the kids. We're not talking about some wealthy CEO, just a guy working at a factory, or a mid-level office job. His wife could stay home with the kids, or work part time if she wanted...it wasn't necessary. Look at our economy now. Both parents have to work just to stay afloat. You can thank the Fed and the banksters that they represent. Most homes work from Jan 1 until May (the end)just to pay taxes.

I'm done...please bear in mind I wrote this for someone with no background in finance or economics. I meant it to be a simplified explanation, so don't judge it too harshly.