Fascinating Arguments

Current mood: fascinated

The Federal Reserve isn't "Federal". The Federal Reserve or "The Fed" as the news always calls them is a private banking institution. Using the term "Federal" or the "Fed" deceives people into believing that the Federal Reserve is a part of the Federal Government.

Sec. of State Knox lied to the American public when he told them that the 16th Amendment (The Income Tax Amendment) was legally ratified by the States when it was not. Because of this fraud the American people have believed there is a tax on their income, when there is not.

"If you examined (The 16th Amendment) carefully, you would find that a sufficient number of states never ratified that amendment." U.S. District Court Judge James C. Fox 2003

Senators were bribed to pass "The Federal Reserve Act" without the required constitutional amendment. They did this during Christmas Vacation while many Senators were home for the holidays. And that's how the unconstitutional Federal Act came into being.

The bankers were very clever. They understood that whoever issued the money controlled the government.

The US government/people gave away one of it's most important powers to Bankers (to issue money). As a result we/US Govt. have to borrow money from them and pay interest to finance our government. In turn the American people were forced to lower their standard of living and pay a graduated income tax to give the bankers more profit.

The Bankers won and the American people lost.


"Give me control of a nation's money supply and I care not who makes it's laws."

Mayor Rothschild Private Banker


"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is now controlled by it's system of credit. We are 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 (Former US President)

9/25/1919


More about the Fed

Current mood: fascinated

The Federal Reserve System (colloquially, "the Fed") has faced various criticisms since its conception in 1913. The system was created as a third attempt at central banking in the United States. The Federal Reserve Act, which began the Fed, was a hotly debated issue in its own right, and passed primarily on party lines—and that was only after considerable political manipulation of Congressmen by Woodrow Wilson.[1]

The earliest debates on central banking in the United States centered on its constitutionality, private ownership, and the degree to which an economy should be centrally planned. Some of the most prominent early critics were Thomas Jefferson, James Madison, and Andrew Jackson, although Madison ultimately recanted. As the effects of central banking, and the Federal Reserve System in particular, became more apparent, new criticisms began to emerge.

Criticisms of the Fed come from a variety of sources, ranging from conspiracy theorists to mainstream economists.


Congressman Louis T. McFadden, Chairman of the House Committee on Banking and Currency from 1920–31, accused the Federal Reserve of deliberately causing the Great Depression. In several speeches made shortly after he lost the chairmanship of the committee, McFadden claimed that the Federal Reserve was run by Wall Street banks and their affiliated European banking houses.[2]

Many Congressmen who have been involved in the House and Senate Banking and Currency Committees have been open critics of the Federal Reserve, including Chairmen Wright Patman, Henry Reuss, and Henry B. Gonzalez.[citation needed] Congressman Ron Paul, the current ranking member of the Monetary Policy Subcommittee, is a staunch opponent of the Federal Reserve System, and routinely introduces bills to abolish the Federal Reserve System,[3] although these have been unsuccessful, garnering neither cosponsors nor hearings.[4] Paul gained more success with the Federal Reserve Transparency Act of 2009. While the bill has yet to move out of committee, it has attracted a number of cosponsors.[5] It has often been said that the Federal Reserve is a creature of Congress and it is the fluctuating opinion of that body that it answers to.[6]



Perhaps the most widely-accepted criticism of the Fed was first proposed by Milton Friedman and Anna Schwartz: The Fed exacerbated the 1929 recession, sparking the Great Depression. After the stock market crashed in 1929, the Fed continued to contract the money supply and refused to save banks that were struggling due to bank runs. This mistake, critics charge, allowed what might have been a relatively mild recession to explode into catastrophe. Friedman and Schwartz believed that the depression was “a tragic testimonial to the importance of monetary forces.”[17]

Before the 1913 establishment of the Federal Reserve, the banking system had dealt with periodic crises (such as in the Panic of 1907) by suspending the convertibility of deposits into currency. The system nearly collapsed in 1907 and there was an extraordinary intervention by an ad-hoc coalition assembled by J. P. Morgan. The bankers demanded in 1910-1913 a central bank to address this structural weakness. Friedman suggests, however, that if a policy similar to 1907 had been followed during the banking panic at the end of 1930, it might have stopped the vicious circle of the forced liquidation of assets at depressed prices, just as suspension of convertibility in 1893 and 1907 had quickly ended the liquidity crises at the time.[18]

Essentially, in the monetarist view, the Great Depression was caused by the fall of the money supply. Friedman and Schwartz note that "[f]rom the cyclical peak in August 1929 to a cyclical trough in March 1933, the stock of money fell by over a third." The result was what Friedman calls the "Great Contraction"—a period of falling income, prices, and employment caused by the choking effects of a restricted money supply. The mechanism suggested by Friedman and Schwartz was that people wanted to hold more money than the Federal Reserve was supplying. People thus hoarded money by consuming less. This, in turn, caused a contraction in employment and production, since prices were not flexible enough to immediately fall. The Fed's failure was in not realizing what was happening and not taking corrective action.[19]



Many have since agreed with Friedman and Schwartz's theory, including current Chairman Ben S. Bernanke, who said in a 2002 speech:

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.