Outstanding write up from Jason here. Everyone really should know this stuff.

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The Federal Reserve is one of those things that I grew up hearing about every once in a while on the noon business hour on the local news station here in Chicago, and I knew they had something to do with interest rates, but beyond that it never really crossed my mind. I think they talked about it for about 10 minutes in college economics 101, but otherwise we mostly talked about supply and demand, trade, monopolies, etc. I just kind of assumed it was part of the government and never really bothered to look into what it was actually about.
Well, on my honeymoon in Tahiti, I realized that everything was REALLY expensive for Americans, but not so expensive for everyone else. The dollar had lost a lot of value since I'd gone to Europe a few years ago. And then I started hearing Ron Paul talking about the abolishing the Federal Reserve. So I did a little homework. It was enlightening.
Chris Pirillo recently wrote a post "Is It Time to Abolish the Federal Reserve?", where he cites some interesting quotes from financial experts regarding the trouble that the Federal Reserve is causing around the world. If you've never looked into the Federal Reserve on your own, you had better sit down Dorothy, because Kansas is about to go bye-bye. This is quite a rabbit hole:

• It is NOT part of the United States government. It is a privately owned group of 12 banks. The truth is that The President (you would think that this would be done by Congress, but that's another topic) is allowed to appoint members of the Federal Reserve Board, who issue guidelines about how things should be run. But it is not part of the government, it is a privately owned corporation.
• Nobody knows who owns it. Yeah, the kicker to the last part is that we don't get to see who owns it, although I could venture a couple of guesses. Because it is a private corporation, not a public corporation, it doesn't have to abide by SEC rules and therefore does not have to disclose ownership.
• It is constantly stealing your money. Every time the Fed injects money into the economy, by buying bad mortgages, making account "adjustments" at member banks, or buying T-bills, the money in your bank account loses a little value. It's called Inflation, and it only benefits a few select people. The law of diminishing returns says that the farther away you are from the source of new money, the less value you get from it. The Fed and its member banks derive a LOT of value from new money, because it originates with them, but its value diminishes with each successive transaction the money is involved in. By the time it trickles down to you and I, we end up losing value. And make no mistake, it can just create new money *poof*: "The Federal Reserve can also create book-keeping credits in the reserve accounts of its member banks"
• It was created under cloak and dagger. Literally. It's such a normal part of life now that you may not realize it, but the way the Fed was founded, the promises that were made, and the deception involved would make a great spy movie:

  "I was as secretive, indeed I was as furtive as any conspirator. Discovery, we knew, simply must not happen, or else all our time and effort would have been wasted. If it were to be exposed that our particular group had got together and written a banking bill, that bill would have no chance whatever of passage by Congress…I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System"
  Frank Vanderlip - President, National City Bank of New York
  

  Read about the early history of the Federal Reserve for more fascinating details.
• It caused the Great Depression. Shortly after the system was put in place, the Fed reacted to a liquidity crisis by contracting the money supply. Bad move. As a result we got the Great Depression, the New Deal, and the big bad government we know and love today.
• It is illegal according to the Constitution. Article 1, Section 8 states that "Congress shall have the power to create money and regulate the value thereof". Congress no longer has anything to do with the process.

They don't teach you this stuff in school (our great educational system in action). But this is not fringe conspiracy stuff, this is well-documented fact, just look it up on Wikipedia. Better block out a couple hours if you do though, because you'll quickly learn that there's a lot you don't know.
Frankly I don't know how we would get rid of this thing without killing our economy temporarily. I think we'd have to move to a new currency backed by gold, like the dollar was until Nixon took us off the gold standard in the 70's. I'm hoping someone more educated than myself has a more elegant solution to this problem.
Finally, a quote from Thomas Jefferson:

"If the American people ever allowed the banks to control the issuance of their currency, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied."

Wise man.




Originally Published by Jason Kolb