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End the Fed?

  • Thread starter dashman
  • Start date
If you are like me you have probably been doing alot of research here in the last year or two to figure out what the heck is wrong with this country. It seems whether you go left or right they are both mirror images of each other. In that they look the opposite, but yet are the same.

I never really put much thought into where our money comes from. Or who the heck Allen Greenspan was. Not sure who is over the Fed now. I figured it came from some branch of the government like the Treasury. Come to find out that it is not a government entity at all and rather a private bank. Or rather a conglomerate of banks.

I found this article rather interesting. And wheter you are conservative, liberal, independant, or other. This article is worth a reading IMHO.

Not trying to sway any of you. I had just never given much thought about such topics until this past year or so.

http://www.prisonplanet.com/11-reasons-why-the-federal-reserve-is-bad.html
 
I read the article and some of what it says probably isn't so far off but I'm not sure about the article as a whole. I think it plays on fears people have about the fed and makes accusations without much real support for its claims.
 
Agreed. I take great caution when reading stuff from this site and do not subscribe to alot of what they say. I wish they would just stick to the facts and leave conclusions to the reader. Too much conspiracy theory crap. I think the facts should speak for themselves which most times they do.

I think it is absolutely true that we should fear the power of the Fed and begin to gain control back from it. We have no visibility into what they do and yet we keep giving them more and more congressional power (ie: Financial Reform Act) to a private company.
 
once you accept that politicians by their very nature are liars it tends to make more sense......take Obama for example....whether you like his policies or not i think we can all agree that a major thing he campaigned on and promised his voters was more transparency in government.....one of the things he pledged to do was put all legislation on the web for every person to view for 5 days before it was signed......this is something he as president could do with out any approval of congress pretty easy as waiting 5 days for his signature is not considered detrimental to the process at all.....once elected he forgot that promise in a heck of a hurry.....

politicians, especially on the national stage are crooks.....ive seen a few good ones at the local and state level but even they are scarce.....truly where we started heading down the wrong path was when we allowed individuals to make careers out of being politicians......being sent to DC should be considered a temporary public service not something you do till you retire....
 
Time to overthrow the government.
 
I have been interested in this for years. The fact we pay private bankers for the right to have money and have them control that money is obscene. In recent years though the system has gotten even more incredibly complicated. Economic private interest groups have gotten laws passed causing the current economic situtation we are in. Most of the politicians do not understand the intricacies of the system they are changing. The way derivatives (debt, bonds, mortgages, options) are bought and sold is literally a QUADRILLION dollar business. This has dwarfed the ability to be regulated and we end where we are now. It is laughable that many conseratives think we are becoming a socialist nation. Socialism means the govt controls the means of production this is the exact opposite. It is a for lack of a better term a corporatocracy. With so little control the government is powerless to cause any effective change. We instead throw more money at, our tax money bailing out billionaires. The billionaires made fortunes taking risks with their money. They didn't share their profirts, but now that their risks are biting them in the *** we need to bail them out. Whenever I hear someone talk about cell phones for poor people and other pettiness that is a drop in the bucket to what we give to the richest most powerful people in the country. How did the stimus package help you or me? If was meant to help the other 99.999% of americans the money would be loaned with interest and on the condition it creates US jobs. Hell we don't know where most of it went. the stimulus packages added up may wind up costing 2+ trillion dollars and is mostly unaccounted for, yet a few years back I was "randomly" audited on the $1,500 refund I recieved that year. Which they eneded up finding was an accurate return. Rant over.
 
Well said chezilla.

I think we as voters need to put this issue to the forefront as politicians aren't going to. At least not most of them. I am so tired of hearing the policies that divide us and keep us in continual disagreement over the crap that pales in comparision to the fact that we are bleeding money.

It is the monetary policies that we need to focus on. Whether you agree or disagree with social programs, I think we should all agree that we should not have to ask a private company for permission to use our money and then pay them interest. It should not be thier money to begin with. It is ours. Our dollar would go alot further to help people if we did not have to give so much of it back in the form of interest.

I am not a financial expert, but common sense tells me this is asinine.
 
I just wanted to share this from a friend. Probably not entirely relevant, but meh.
Why do I always see "Freedom Isn't Free" stickers often coupled with some kind of anti-tax stickers? Aren't taxes the cost of freedom? Or do they think the only acceptable currency for freedom is the lives of American soldiers?
 
I just wanted to share this from a friend. Probably not entirely relevant, but meh.
Why do I always see "Freedom Isn't Free" stickers often coupled with some kind of anti-tax stickers? Aren't taxes the cost of freedom? Or do they think the only acceptable currency for freedom is the lives of American soldiers?

your making a leap in the thought....the problem is that most are sick of getting hit by taxes decided by ppl in DC that get to vote in their own benefits package and raises.....you ask anyone of those ppl about taxes in general i bet they have no problem paying more taxes for their local school, or to help out their community hospital.....the complaint comes from taxes levied by the bureaucrats, most of these ppl like the fact they get to decide by majority vote on most the local taxes.....the community gets to decide whether they think their school or hospital has been doing the right thing and if they have give them more money...
 
  • #10
Good question. There will always be tax, maybe they don't agree with how much not sure.

I think many people are like me. They know something is not right but nobody on the boob tube or in the media will put a finger on it. We switch back and forth between Republican and Democratic candidates hoping one will just fix the problems. When in fact they both seem to be contributing to it. At least when it comes to financial policy.

Whether you want to ask the Fed to print a little money or alot, what does it matter. Why are we asking the Fed, a private company, to borrow our money. They create it out of thin air and then charge us interest for using it.

We do not elect them and they are not appointed by anyone we elect. They operate with complete freedom to help or hinder us. And it seems all they have been doing since inception is hinder. We have had one Depression and numerous recessions under the Fed. I don't think we have had any prior to that. Reminds me of going to a casino. No matter what we do with our votes. The house has the advantage.

At least that is what it seems like to me. Again not an expert here. Just a person trying to understand more of the problems. I am not one to rely on lying politicians or media that seems to have an agenda (both sides of the spectrum). I only hope more and more people will do the research themselves so we as a country can begin to identify and dismantle what is really taking us to the poor farm.

To me it isn't liberal social programs or conservative tax breaks to the wealthy. It is the fact that some company is stealing our money right from under us.
 
  • #11
Sorry, but that is one of the most sensationalist articles I've ever read. It's bias is evidently clear from the get go. Mind if I break it down a little?

"Theoretically, one day that U.S. government could simply decide to print as many U.S. dollars as it wants and pay off all government debts. But under the current system that is not allowed. "


And with good reason. Ever hear of hyper inflation? Each new dollar in the system means every other dollar is worth less. Or as wikipedia puts it:

The main cause of hyperinflation is a massive and rapid increase in the amount of money that is not supported by a corresponding growth in the output of goods and services.

Examples of countries printing money to pay off debt:

Pre-WWII Germany (Helloooooo Hitler!)
China (before pegging their Yaun off the dollar... which is another topic all together)
Zimbabwe
Yugoslavia


And many more economies we should never emulate.

So, when the U.S. government needs to borrow more money (which happens a lot these days) it goes over to the Federal Reserve and asks them for some more green pieces of paper called Federal Reserve Notes.


And it doesn't really pull this money out of thin air. It's usually comes from the issuing of T-Bills or some other federal security. That's where the term "national debt" comes from. I can't find the numbers right now, but about 75% of the national debt is US owned, with only about a quarter of it being foreign. Essentially, we are borrowing from ourselves and paying ourselves back. This can be extremely beneficial to an economy as long as it's used to help create economic growth. Anyone can buy T-Bills and it can be an extremely safe (although low yielding) investment.

"Getting rich" off government debt is ludicrous. Returns are usually at 1 or 2 percent. People with money and know how to invest don't waste their time with these except for security. Some people even use to think of it as a savings account you could earn interest on... but regulations have changed so that even savings accounts are allowed to pay interest. But thats another matter as well.

4 – The Federal Reserve devalues our currency. Since the Federal Reserve was created in 1913, the U.S. dollar has lost 96 percent of its purchasing power. The truth is that just a two percent inflation rate will wipe out half of your purchasing power within a single generation.

Of course it does. Devaluing our currency can be beneficial in certain contexts. Want American manufactures to be able to compete with other countries? Make it cheaper for other countries to buy American goods by devaluing the dollar. This strategy seems to be working pretty well for China right now.

The Federal Reserve also controls the national money supply. They can pump trillions into the economy or pull trillions out without being accountable to anyone. This can have disastrous consequences. For example, after the U.S. stock market crash of 1929, the Federal Reserve continued to contract the money supply. Many analysts believe that this was one of the key things that precipitated the Great Depression.

The reason this recession didn't turn into a depression like many people "predicted" it would is because our economy is managed by the Fed. The Fed had hardly any power during the Great Depression, and in fact most of its current powers are the result of the Great Depression and an aversion to ever allowing anything like that to happen again.

Sorry if I seemed scatter brained or picked on random points, but I know a bit about finance and economics and when there are articles where the author has little grasp on the real situation it really bother me. Mostly because it opened with the author saying the US could print money to pay off its debt.

If you want to learn a lot more look back through the various banking acts that congress has passed over time. Each one tells a lot about the current state of the economy and why it was passed. You'll also see a pattern of increased regulation (bad times) and de-regulation (good times).
 
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  • #12
Sorry, but that is one of the most sensationalist articles I've ever read. It's bias is evidently clear from the get go. Mind if I break it down a little?

"Theoretically, one day that U.S. government could simply decide to print as many U.S. dollars as it wants and pay off all government debts. But under the current system that is not allowed. "


And with good reason. Ever hear of hyper inflation? Each new dollar in the system means every other dollar is worth less. Or as wikipedia puts it:

The main cause of hyperinflation is a massive and rapid increase in the amount of money that is not supported by a corresponding growth in the output of goods and services.

Examples of countries printing money to pay off debt:

Pre-WWII Germany (Helloooooo Hitler!)
China (before pegging their Yaun off the dollar... which is another topic all together)
Zimbabwe
Yugoslavia

to true.....forget which one you were using a wheel barrel full of paper money to buy a loaf of bread
 
  • #13
I got to the first point, noticed the writer has never heard the word inflation, and stopped reading. That's Econ 101 there.
 
  • #14
SeaQuest: I am not ignoring your post. I haven't fully read it all the way through. You bring up some good points from what I have read. That's why I posted. I know there are alot of bright individuals on this forum and wanted to hear your opinions.

jpappy789,
There is mention of hyper inflation towards the latter part of the article. The fact that that is possible really has no bearing on who should control our money. That can happen no matter who prints it if not managed properly.

Why can’t the U.S. government just print up all the money that it needs?

Well, the way that our Congress spends money that would probably create horrific hyperinflation, but that is the subject for another article.

My question is: Are we better off after the Fed took over? When I look at history I see a gradual decline. Y = Mx + b tells me the slope seemed to change sometime around when the Fed took over.
 
  • #15
Hmmm. Thought this was interesting. The Federal Reserve Bank posted record profits in 2009. Beating it's previous record set during the Great Depression. And this is just what they are telling us, which they don't have to. They don't answer to anyone. We cannot audit them. This is reason enough for me to want to audit them and determine if we should allow them to continue to profit off of thier policies that has caused nothing but massive deficits since thier inception.

http://www.huffingtonpost.com/2010/01/12/federal-reserves-profit-h_n_419835.html
 
  • #16
I'd agree wholeheartedly in having some form of audit for the Fed. Why not have them adhere to SEC reporting guidelines like public companies have to? There's a lot going on there the American people have a right to know.

But as for our massive deficit I'd much rather blame the spend happy congressmen and presidents, lol.

And after reading the article it notes they made the profit from the holding and sale of their securities (T-Bills and the like). The Fed buys T-Bills back in order to increase the money supply. This has a number of effects, one of which is lowering the interest rates. More money in the system means there is more money to loan, which was done to actually get the economy going again and allowing banks to lend money. It was extremely hard for potential home owners and business to get a loan at the height of the recession because nobody was lending.

When the Fed says it's lowering interest rates it injects money into the system by the buying back of their securities until rates reach their target level. And when they want rates to go up they sell their securities to take money out of the system.

This also can have a dramatic effect on the exchange rate of the US Dollar vs. other countries currencies.

So while they are making a decent profit, it's just a byproduct of getting the economy back on track for growth. And the profit went right back into the treasury, probably for congress to piss away in about 10 minutes ;)
 
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  • #17
The Federal Reserve is a private corporation that has nothing to do with anything federal. I can call myself Federal Reserve Indiana Gardener. Aww, c'mon, put me in control of your money, I'm Federal. :-D lol They only look out for themselves. Our country's economy will never recover and remain in good shape under the control of the Federal Reserve, because they don't want it to. They make money off of it the way it is. It's just a constant cycle of building it up and tearing it down so that they can build it up again.


David
 
  • #18
actually that cycle is a normal part of things.....every country goes through it no matter how their monetary system is controlled....what needs to happen is for ppl to accept that and knock the current administration(by this i mean the president AND most definatly congress) upside the head to realize you cant spend your way out of the bottom of the curve.....thats like standing in a bucket and trying to pick yourself up by the handle....it has never, and will never work......what kicked us out of the Great Depression wasnt FDR's spending, it was WWII and the allies buying arms and munitions manufactured in the US....outside dollars came in and kicked us out of it.......
 
  • #19
Just for the record, the current Fed Chairman is Ben Bernanke. He was appointed by Bush II. I don't think anyone (mostly libertarians) who advocate massive reforms to the Fed, DoEd, etc., have seriously considered the possible consequences. That article is about 99% supercharged opinion, sort of like Fox News. Doesn't give me a lot of confidence in any analysis or conclusions they might provide.
 
  • #20
You say that like you think I hold Bush in high regard. For the record, I don't hold Obama in high regard either.

I don't disagree with you. The link I provided is clearly biased. But I am trying to focus on facts here. I realize the article of choice may not be the most factual and is clearly very opinionated. But the facts that are there cannot be discredited.

I don't pretend to have all of the answers either. I am trying to understand what thier purpose is. I have seen the slogan "End the Fed" and am trying to weigh the merits of that.

Here are my opinions based on the facts that I know.

It is a fact that the country went into bankruptcy about 20 years after the Fed took over while under FDR. We have been in bankruptcy ever since borrowing money from the Fed to run the country and paying interest. We are coming up on 100 years of this and there will soon come a time that the interest payments will be greater than what the US gets in taxes. So what happens then? It is clear to me that this model is broken.

To me it seems they cause public debt while reaping massive profits via interest payments. If I am not mistaken, they are the holders of a majority of the US deficit, China is #2. From what I researched, they make the most money in times of dispair from what I can tell. (see second link).

Perhaps not end the Fed, but definately audit it. Does anyone even know who owns it? It is a private company. Who gets the profits? If we are going to have a Fed, I would much rather see it made a public company with shares trading on the stock market and dividends paid. Why did we sign over this massive money maker to a privately held bank? That doesn't have to follow the same SEC guidlines imposed on the rest of the banking world? Are they special? Are they above the law?

Also, they have no competition. Isn't that a monopoly?

These are the questions I am trying to bring to light. Not how biased the writer of the article I published was.

Here is an interesting quote made by someone close to the creation of the Fed...

"Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders."


– The Honorable Louis McFadden, Chairman of the House Banking and Currency Committee in the 1930s
 
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