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What’s the big deal about the Federal Reserve?

The Federal Reserve, informally know as the “Fed,” is the U.S.’s central baking system. Woodrow Wilson created the Fed in 1913 as a measure to help balance and buttress the American monetary system. It was opposed by many legislators of the time, and has since been the target of conspiracy theorists who believe that it purposefully causes recessions and triggers inflation to ultimately keep Americans in fiscal slavery. Fortunately, these are just myths—the Fed is not a private organization, like most people think, and is actually ran by a Board of Governors appointed by the President.

The shareholder banks that make up the Fed actually have no voting power in any of its decisions—bureaucrats appointed by the government make those decisions. So contrary to what many people think, the Fed doesn’t own the government, and the video below discusses just why that’s the case by highlighting what’s really up with the Federal Reserve.

This is a useful video. However, if you have your hands on the money supply and are also private bankers, there are many ways to profit from that and to manipulate things as well. It is naive, especially in the current climate of regulatory capture and crime in high places, to think otherwise.

  • DJ

    It’s also worth noting that inflation is a useful tool for governments that are in debt. This isn’t conspiracy theory, I learned it in macroeconomics class. Let’s say you owe $10 trillion. You create five times as many dollars, which are now worth a fifth of they used to be, and it’s like only having to pay $2 trillion of the old dollars. Such a deal for them – not so good for us.

    If you think that’s crazy, consider that during the period 2000-2011, U.S. Real GDP (as measured in 2003 dollars) has risen 19%, while the money supply, as measured by M-2, has risen 108%. That’s more than five times more money growth than GDP growth.

    If you look at the GDP figures released by the Fed, which aren’t adjusted for inflation, it shouldn’t be much of a surprise that according to them GDP has risen 54% rather than 19%. Wahoo!

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