The Trump-Musk assassination troops going through the federal bureaucracy will eventually arrive at an oddball entity called the Federal Reserve. It is and isn’t many things, which if confusion is your sport, is part of its charm.
It is an “inflation fighter” whose main purpose is creating inflation. On rare occasions a Fed member or even the Chairman will state in plain language what the Federal Reserve does—“print money”—but most people seem to forget it as soon as the words leave his mouth.
Certain others, who don’t forget it, profit from the scam and trust in the public’s indifference to protect them. So far their trust has been well-placed. With few exceptions, people don’t connect printing money with counterfeiting.
It is a central bank with the appearance of decentralization to suggest it is somehow consonant with founding American values. Contrary to those values, its home in Washington, DC—the Eccles Building—is huge and imposing, suggesting that something great and important is going on inside that’s really none of our business.
It’s operating arm, the Federal Open Market Committee (FOMC), alone determines “monetary policy,” yet the most influential member of the FOMC is appointed by the President.
It exists to stabilize the dollar, which is currently worth about three percent of its value when the Fed first came on the scene in 1914.
It exists to prevent the kind of crises that haunted the economy before its inception, yet those kinds of crises have been more numerous and some far worse in the period after that, up to the present day.
Its product—the Federal Reserve note—is legal tender, which includes the requirement that all creditors must accept the notes in the payment of debts, unless altered by contract. In other words, the Fed has a monopoly of the paper we’re forced to use for money.
As a cartel, the Fed serves as a protector of the banking practice of fractional reserve lending, wherein a single deposit, when loaned, acts as a multiplier of deposits, thereby increasing the money supply, running up prices, and depreciating the value of the dollar. A depreciated dollar favors debtors such as the federal government, encouraging it to borrow more. Fractional reserve banking is a form of embezzlement.
An Englishman who dropped out of school at age 12 to help his father make corset stays from whale bones, who wrote a foundational pamphlet that became a catalyst for American independence, later in life wrote a scathing commentary on paper money:
Money, when considered as the fruit of many years’ industry, as the reward of labor, sweat and toil, as the widow’s dowry and children’s portion, and as the means of procuring the necessaries and alleviating the afflictions of life, and making old age a scene of rest, has something in it sacred that is not to be sported with, or trusted to the airy bubble of paper currency.
He explained how legal tender laws were a method for establishing iniquity by law:
If anything had, or could have, a value equal to gold and silver, [it] would require no tender law; and if it had not that value it ought not to have such a law; and, therefore, all tender laws are tyrannical and unjust, and calculated to support fraud and oppression.
Wise to its vulnerabilities, the Fed has purchased academic protection by putting the mainstream economics profession on its payroll.
Since its inception it has been instrumental in getting Americans killed and maimed in overseas wars, where taxes alone would have proved insufficient and intolerable. Those overseas wars have had blowback on American soil, resulting in vast government expenditures, unrelenting propaganda, and lost freedom.
With its inflation tax on unwary dollar holders, the Fed has turned government from a protective agency into one resembling the war-mongering, all-controlling monster from the pages of 1984.
The Fed has addicted the federal government into debt financing to such an extent that it threatens their beloved mantra “national security” if not abated.
Before the Federal Reserve, in the late 19th century, the country experienced the most prosperous economy in its history. During that period, the country was on a gold standard. My suggestion: Repeal the Federal Reserve Act of 1913, and repeal all legal tender laws.
Regarding “monetary policy,” economist Milton Friedman offered this insight:
If a domestic money consists of a commodity, a pure gold standard or cowrie bead standard, the principles of monetary policy are very simple. There aren’t any. The commodity money takes care of itself. (emphasis added)
