Monday, October 26, 2009

The Federal Reserve System

The central bank of the United States is so ingrained in our society that most people don't even question its existence. However, few realize the Federal Reserve is as much a part of the government as Federal Express. The rest of this article will be dedicated to how the Fed came into existence, why no one talks about it (in mainstream media), and what people are actually doing to get rid of this ridiculous system.

On a dark and stormy night...
Okay, it wasn't dark or stormy, but Woodrow Wilson's election sure was ominous. Wilson should go down as the worst President in the history of our country. Yes, seriously. He literally signed a pact with the banking industry stating he would create the Fed if he was elected in turn for massive campaign donations. JP Morgan, who happened to be alive at the time, and own major newspapers in NYC (think Huffington Post AND Drudge Report), decided he would create a false financial crisis in order to consolidate the banking power in the US. He published fake reports in the papers he owned and numerous bank runs ensued. The public demanded a solution to this crisis, and the banking industry already had their pre-planned answer in the Federal Reserve; a private, for-profit system of economic slavery.

The Federal Reserve operates like this: they print ( or simply type in any amount of dollars, as the Treasury technically prints money) and loan it to the US government. They loan the country's own money to the country itself. So basically, the Fed makes up money and then gives it to the US with the expectation that the government will give more of that money back to the Fed, as any loaner would expect of any payee. The only problem is that the total money supply has to come from the Fed directly, meaning the government needs to continuously borrow more money from the Fed in order to pay the Fed back (or from countries like China). This borrow to pay system has led to the 97% devaluation of the dollar since the inception of the Federal Reserve system.

The dollar has become so devalued that the Federal Reserve doesn't even publish M3 anymore. M3 is the total supply of US currency (dollars) in circulation. Add that to the fact that the Fed doesn't allow itself to be audited, and you have a recipe for an absurd centralization of wealth that has nothing to with politics or the true state of the economy. And it gets worse. The Fed has the power to regulate interest rates, meaning how much money (in interest) it costs banks to borrow from the Fed.

You see, banks themselves profit off of this system because of a term called "fractional reserve." This means that if a bank borrows ten million dollars from the Fed, it only has to keep a fraction of that ten million ( one million to be exact) and is allowed to loan that money remaining out to consumers. On the surface, this sounds like a great idea, but don't judge a book by its cover. Because once you open it, the veil is lifted, and the true practices are revealed. The banks don't keep the 10% they are supposed to as the reserve, but instead (through a process of loaning out the money to other banks and spreading the wealth as thin as possible with their branches and subsidiaries) use that entire loan of (hypothetical) ten million dollars as their whole ten percent fractional reserve. Meaning that some bank just got a loan for ten million and turned it into one hundred million dollars, simply by loaning it out to other banks.

In all, we have one central bank literally making money up out of thin air, and then loaning it to banks which, in turn, create ninety percent more money out of thin air. This isn't even including the interest payed on all of these loans! That interest on the money the Fed loans to the government is called your income tax. Our taxes pay nothing more than the interest on the loans created out of thin air simply because our country doesn't own its own currency. How absurd is that?

An atheist spin...
Your head may be spinning, but don't fret. Texas Congressman Ron Paul (R), has introduced HR 1207 "Audit the Fed" Bill into Congress and it is actually receiving major support. Call your representative and find out if he or she supports it. The atheist take on this has been well laid out in this article but simply not called as that. This system of fiat currency is literally a way to enslave the population to serve the banking industry for no purpose. Whatever tax bracket you fall in, that percent of your work year goes directly into the pockets of bankers.

Now, the only way for the government and the Fed to keep this system going is by printing more money every year. That is called inflation; inflation devalues the currency and widens the gap between rich and poor. Buying power goes down every year. There are a few solutions to this problem but the atheist view has one.

The government needs to take control of its currency back from the banking industry. There needn't be a system backed by gold or silver, just simply a constant supply of money. No more, no less, every year. If the supply of money in the market is steady, prices will be steady, and the buying power of consumers will actually go up. This may seem a difficult, if not impossible, task of righting our monetary system, but if the government can easily take control of failing banks and other companies, then hopefully the entire banking system isn't completely out of reach. Thanks and remember to question everything, even the suggestion that you should question everything.

The Political Atheist

No comments:

Post a Comment