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What is The FED
The founders warned of the affect that a central banking system would have on our domestic and international commerce. Because of a series of financial panics (particularly the Knickerbocker Crisis of 1907 in which the NY stock exchange dipped in it's peak by 50 percent in a single year) the The Federal Reserve Act was passed in 1913.
Ostensibly the FED had three main purposes which have been expanded since it's inception; To maximize employment, keep prices of cost of living stable, and provide loans at a moderate interest rates over long periods of time.
The FED today is comprised of a Board of Governors, various advisory committees, The Federal Open Market Commission (FOMC), twelve Federal Reserve Banks and a consortium of privately owned banks.
The Federal Reserve Commission acts as the government's bank. The U.S. treasury keeps an account with the FED (over which trillions of dollars are transferred) just as an individual would hold a checking account with a private bank. The governments taxes are deposited in this account and its outgoing expenses are paid by it.
Buying Our Money at Interest
The FED further physically produces our Savings bonds, treasury notes (cash). It produces paper currency which it sells to the U.S. government at interest in a system called a repurchasing agreement. This has become particularly unstable in it's affects on the economy since the gold and silver standards were dropped and replaced with the concept of elastic currency. This allows the FED to expand or contract the amount of money in circulation as is warranted by fiscal conditions but it also allows them to dictate the worth of the U.S. dollar.
The First Bank of The United States Charter was established in 1791 but expired as it's charter was not renewed under the presidential tenure of James Madison. The Second Bank of The United States was established in 1816 and later ended with it's charter's expiration under Andrew Jackson. The third, the FED, has been operating since 1913.
The FED is overseen to a degree by the government, and requires members of the Board of Governors to be appointed by the President and confirmed by the Senate. But the FED itself is for the most part internally self-regulated and also self funded through it's private and public transactions and interest accrual with other banks and governments.
Corruption and Criticism
Among those who attended a private retreat in 1910 with the goal of setting up a new central banking system were members of the Rockefeller family and representatives of J.P. Morgan, along with other wealthy family banking interests.
Andrew Jackson said of the Second Federal Banks's constituents, "You are a den of vipers. I intend to wipe you out, and by the Eternal God I will rout you out...If people only understood the rank injustice of the money and banking system, there would be a revolution by morning."
President Garfield made this astute observation; "It must be realized that whoever controls the volume of money in any country is absolutely master of all industry (and) commerce." Charles Lindbergh said, "This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President (Wilson) signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill." while Wilson himself said himself on his egress from office, "I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world — 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."
The founders, particularly Jefferson who had witnessed the corruption of central banking practices in England and recognized the cyclical iniquity of a country buying it's own currency at interest while a largely private enterprise manipulates if's value through calculated responses to it's demand.
He said, "If the America people ever allow private banks to control the issuance of their currencies, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their prosperity until their children will wake up homeless on the continent their fathers conquered."
The Central Banking Cartel which regulates our economy today is known as the FED and it more than any other institution, and also quite deliberately, is responsible for our current economic condition.