A few months ago I set out with the intention of either debunking or validating the arguments against the Federal Reserve System (aka "the Fed").
I've come to the conclusion that the Fed absolutely must be abolished.
Why?
Before I explain, understand: this is an issue that transcends all partisan differences. Whether you're a Democrat, a Republican, a Libertarian, or none of the above, the very nature of the way the Fed operates will undermine your agenda. (unless your agenda is to allow your hard-earned dollars to lose value by the second ... read on)
I'd even go so far as to say that abolishing the Fed should be the primary mission of every U.S. Congressman. Without abolishing the Fed there is absolutely no point in debating philosophical differences in budgetary policy. The operations of the Fed have corrosive effects on our economy that are far more dire than the effects any spending ever could.
How is this so? Great question ...
So, Why End the Fed?
The following statements are probably going to be quite hard for you to believe, but as you'll see in a moment they are verifiably true.
1. The value of your dollar is systematically designed to fall. Inflation is, in fact, a necessary side effect of our current financial system.
If you fully grasp that statement and its natural consequences, that's really all you need to know to justify the abolition of the Fed.
Most Americans I talk to think that inflation is a natural phenomenon. As shown quite well in the video above, it's not. The price of goods and services increases when the value of your currency falls. The value of your currency only falls when you "inflate" the supply of available currency.
To help you understand why this video is so important, try the following thought exercises:
- Imagine a currency without in-built inflation. If you were to put money away for your retirement, you would not have to worry about your nest egg losing value. But because the value of your money is constantly declining, you must then gamble your money in a mostly corrupt financial market to "hedge against inflation." This is equivalent to saying "in order to keep the streets free of crime we must invest more money in criminal enterprise."
- Inflation can be interpreted - quite literally - as a "hidden tax." If more money is printed to pay for the government's out-of-control spending, you end up paying for it. How? Because your dollars are now worth less. That is, you can now buy less with the same dollar. They may as well have taxed you - or simply taken the money from you without your permission. (in effect, they did - the end result is precisely the same - only less honest)
- When the "price" of your home goes up, you may think you're gaining value, but in most cases your not. The inflationary nature of the dollar renders most increases in value illusory.
Again, if inflation were some natural phenomenon, this would simply be one of those difficult facts of life we must accept. Given that it's a man-made phenomenon, and one that benefits a very select few "insiders," we don't have to accept it.
2. Under the Federal Reserve System, money is created out of debt.
The above video may merit another viewing.
It's quite simple, but so different from the way most of us think things work that it may take another viewing for it to really sink in.
3. The only people who profit from this are the owners of the banks in the Federal Reserve System - and they do so without putting at risk any assets and without providing any real value.
When any loan in the United States is paid to a borrower, that money is created out of thin air by one of the member banks of the Federal Reserve System. That money is not backed by anything of tangible value. To help you understand this, imagine you have a friend who wants to borrow money from you. You simply print up a counterfeit bank note and "loan" that money to them. You then begin earning interest on that loan and your friend is legally in debt to you. That would be a pretty good business to be in. That is the business of banking in America.
Yes, bank loans are backed by a 10% "fractional reserve" but that reserve can be leveraged so many times that it renders the reserve requirement almost entirely meaningless.
To drive this point home, consider this: even the loans the banks make can be counted as "reserves" and thus leveraged again - ad infinitum.
And these are the banks we are led to believe require a "bail out."
4. The Federal Reserve System acts without oversight
Congress appoints the Chairman and the Board of Governors, but that is a smoke-and-mirrors power when we have no effective oversight over their actions.
Congress has not once conducted an audit of the Fed. They seem to accept on faith that the Fed is "doing it's job" but on the surface we know this simply isn't true. How? Well, one of their stated missions is to "control inflation." But how is this possible when the very way the Fed operates guarantees inflation?
(Read the last two sentences again and think about what that implies.)
The one power Congress does have over the Fed is the power to abolish it. Texas Rep. Dr. Ron Paul has introduced the Federal Reserve Abolition Act as a bill to congress on five separate occasions. On each occasion it failed to gain the support of the representatives you voted for. If you think this is the fault of "the other party," think again. Both Democrats and Republicans have failed us in this most vital of all missions.
There are a number of other reasons to abolish the Fed (see "Recommended Resources" below), but for the sake of clarity and focus, let's stop here.
What's next? Well, that's up to you ...
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Ideas for Plans of ActionI'm not going to be the central point of focus for organizing a campaign to end The Fed myself (I'm far too engaged with my project at Construct Zero), but what follows could provide the groundwork for potential organizers. Maybe some of the good folks reading this will organize campaigns to make this happen ... Maybe one of those good folks is you.
1. If you want to take immediate action now, I strongly recommend supporting Dr. Ron Paul's efforts. He's the only congressman in the United States with the guts to address it. On these merits alone I believe he deserves our support for his presidential candidacy as well. Whatever else you think about which policies are required to bring peace and prosperity to our nation, almost all of it is rendered moot by the operation of the Fed.
2. The first essential step here is education. The U.S. public is in a state of extremely poor education on even the most basic principles taught in High School Civics. As the level of education in the U.S. increases, we're going to need to remain vigilant - and level-headed. Neither the ad-hominem hysterics of the TV pundits nor the emotional partisan bickering of the card-carrying party members help anything. In fact, our tendency to react to these issues with emotion makes us even more prone to manipulation. Those who want to keep the Fed in place will use that, along with your political leanings, against you in this fight.
3. One idea is to demand that any congressman you vote for support the Federal Reserve Abolition Act. (It has since been replaced by the less aggressive but equally well-intentioned "Federal Reserve Transparency Act." We may have to settle with that for now, but the Abolition Act needs a comeback. It will if enough people are informed. Do we have a choice?)
If they do not bring it to vote within 30 days of taking office (in the form of actually showing up for the vote and voting for the measure), immediately begin a campaign of impeachment for the Congressman in question.
Every time a session of congress is held without passing the Federal Reserve Abolition Act, immediately begin an impeachment campaign for the Congressmen in your district who failed to vote in the affirmative, abstained, voted "present," didn't vote, and/or blocked the vote through obstruction.
Recommended Resources:
Articles and Websites
Abolish the Fed by Dr. Ron Paul
National Debt Clock
(and FAQ about the Clock - must see)
Videos
Documentary on How the Fed Works by the Ludwig von Mises Institute
Crash Course: Chapter 10 - Inflation
(watch the full Crash Course - highly recommended)
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