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The Federal Reserve Building in Washington, D.C.

The Federal Reserve

It has been said many times that all you need to know about the Federal Reserve is the following:

It's not federal, and it's not a reserve.

Although the above statement is true, this devastatingly-unAmerican system will not go away until a large portion of the American people learn the truth regarding how it robs us of our life and property. Only then will we become motivated enough to bring about its end democratically.

The Federal Reserve System was established on December 23, 1913 by the Federal Reserve Act. This act was passed by congress:

To provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.

What this legislation has really done, however, is a complex issue that affects every American. One certainty that can be discerned from a thorough analysis of the Federal Reserve is that this system is not in the American citizen's best interest or the interest of any other free people with which we interact.

Basics of "the Fed"

The Federal Reserve Act, also know as the Act of December 23, 1913, established a central banking authority that is overseen by the Board of Governors of the Federal Reserve System. This Board, more commonly referred to as simple the Federal Reserve Board, specifically controls the operations of the central bank, the 12 Federal Reserve Banks, thousands of member banks across the country, and several monetary and consumer advisory committees. This is clearly a bank with far-reaching control and unquantifiable monetary power, a power that is arguably vested solely to the government itself. The Constitution states,

"The Congress shall have Power To... coin Money [and] regulate the Value thereof."

Our congress, however, has forfeited this crucial duty. Supreme Court decisions (references coming soon) seem to suggest that Congress cannot delegate its powers to other entities, but the Fed itself has not been subject to consequences of such rulings. The Unconstitutionality of the Fed remains controversial even though it seems to be a fairly straightforward issue.

The Fed is Privately Owned

Those not familiar with the Fed will assume that it is, in some way, part of the government, but the Fed is, in fact, a privately owned banking collective. The agreements between the United States and the Federal Reserve involve two corporations and do not outline a relationship between our Constitutional Republic and a federal agency. The only realistic relations that our government has with the Fed is the Executive's power to appoint members to the Federal Reserve Board and the oversight functions of the congress. Private ownership of the Fed creates a clear conflict of interests. The ability to coin the currency of the United States, set our monetary policy, and control the value of that currency through inflation and deflation should not reside with a bank that is not under the control of the people.

For those who realize the full implications of the Federal Reserve's private ownership, it is natural to doubt the accuracy of such an accusation. Though private ownership has been widely acknowledged, incontrovertible proof is offered here in the form of a 1982 Supreme Court ruling. This information also offers further insight into how the Fed operates and is essential reading for anybody concerned with the Fed and the economic future of our country.

Fiat Money

Originally, US paper currency was backed by gold or silver. The practice of backing currency ensured the stability of that currency as well as the economy. The Federal Reserve, as a fractional reserve banking system, can increase the money supply as they see fit. This gives the Fed, a privately owned corporation, complete control over inflation.

Alternatives

We use Federal Reserve Notes as our currency as part of the Fed's fractional reserve banking system, but there are much more attractive alternatives. In the original colonies for instance, money was issued in the form of "Colonial Scrip" and proved quite successful. It was issued by the government itself, and not a private bank that might attach debt or interest. Also, the amount issued was based on how much was required by trade and industry. Benjamin Franklin, when asked about the cause of strong economies of the colonies, replied,

"That is simple. In the Colonies, we issue our own paper money. It is called 'Colonial Scrip.' We issue it in proper proportion to make the goods and pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one."

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