Hello friends! Ever hear of the
Federal Reserve Act of 1913? I doubt it, right? Well, let me tell you, it is probably one of the most influential changes to the United States' government
ever made. I suggest you read up on it.
So what did the Federal Reserve Act do?
Why it installed the Federal Reserve as the vehicle for the United States' new monetary policy of course!
What makes up the Federal Reserve and what does the Federal Reserve do?
Well, that's a BIG question Paul, let me break it down for you. The Federal Reserve is consisted of 12
private banks located in major cities around the United States, these private banks control the flow of money into the economic system. In other words, they control value of the dollar. By the Federal Reserve printing more money, the value of the Dollar goes down.
Well is this good or bad? It must have been put in for a good reason!
The short answer is, it's bad. Let me see if I can explain it easily. The Dollar (
Note how it is called a Federal Reserve Note) essentially the government's credit card, and the Federal Reserve is our creditor. So, when the congress or the executive branch needs money, and the treasury can't produce it within the tax coffers, the Federal Reserve prints it. Why is that bad? Well, we haven't had any money for long time now, so we keep printing money, killing the value of the dollar. But what are we continuing to do? Why spend
tons of money of course!
I don't know if you watch/read the News but, there is a lot of talk about banks, such as Fannie Mae, Freddie Mac, and most recently AIG. You recall a little talk about that, yes? Well that's very important! These banks have hit their limit, they are out of money, and have nothing else they can do. They are going out of business! So what does the U.S. government do? Well the government claims that these banks are "too big to fall", so the U.S. simply buys their debt or bails them out via printing a bunch of money it has no backing for, increasing the national debt
, ruining the value of the dollar, and thus the economy.
So, what is making these banks fail?
Bad loans. The banks have been loaning out money that they knew the reciever's of the loan couldn't afford. It puts the bank in debt, the loans are never payed back, and the banks in short are in big trouble. That should make sense, right?
So who's to blame?
The list goes on
forever. Basically everyone, Democrats, Republicans, and largely congress over the last 90 years. This is not a new crisis either. In fact,
the value of the dollar has been dropping ever since the Federal Reserve Act. How come congress and the doesn't do anything?
Because it isn't a pretty thing to talk about, it's all caused by eachother's party and the ramifications of the eventual fall of the monetary system and the economy will all happen after they have completed their terms. Also, these days, talking of humanitarianism gets into office much faster than talking about monetary policy. I shouldn't say "these days" though, that has gone on for a long time too. I'd say it probably started around the
New Deal. Something, by the way, we'll be paying for
forever, Social Security was created in the New Deal and we all know the Social Security coffers are dried up and then some.
Can anything be done?
Probably not, I'm pretty apathetic about it at this point. I basically sit back and enjoy the stupid show. If you want to do something, consider joining meetups surounding this subject, and raising awareness and educating people where possible.
Anyway, just wanted to raise an issue that stems much deeper than socialized medicine and wars.
Have fun all.
Al