The Federal Reserve System

William Christensen 2/29/08 (13)
The Federal Reserve System was created in 1913, by an act of congress. It was created to protect the people. By not allowing huge banks to go under, and allowing for the money supply to be manipulated, it helps the economy grow unchecked. It has the power to create money, and the power to remove money from the system. The way it creates money is deceptive, and hard to follow. In his book, The Creature from Jeykll Island, Edward Griffen says,

“First, the Fed takes all the government bonds which the public does not buy and writes a check to Congress in exchange for them. There is no money to back up this check. These fiat dollars are created on the spot for that purpose. By calling those bonds "reserves," the Fed then uses them as the base for creating nine (9) additional dollars for every dollar created for the bonds themselves. The money created for the bonds is spent by the government, whereas the money created on top of those bonds is the source of all the bank loans made to the nation's businesses and individuals. The result of this process is the same as creating money on a printing press, but the illusion is based on an accounting trick rather than a printing trick.”

This is how the Federal Reserve System operates.

Reasons for Abolishing the Federal Reserve System
I believe that the Federal Reserve System should be abolished because of the following four things:

Not federal or reserve
The so called “Federal Reserve System” has the wrong name. In reality, the Federal Reserve System is not federal. The government has no control over it. It is a banking cartel. A cartel is when a group of representatives from competing companies meet. Their goal is to work together so that everyone can make a better profit. The banking cartel wanted to get the government to back them. The way the did it was by creating the Federal Reserve System. They were able to get this through congress by saying that it would protect the people. The Federal Reserve System is not a reserve either. They have almost no money, except for what the government owes them

Made to protect the banks
In reality, the Federal Reserve System was created to protect huge banks from going under. When a large bank is about to bankrupt, they go to the government with a sob story. They say that if the bank fails, the economy, and maybe even the world economy, will go into a recession. Then the government pays all the bank's debts, and the business goes on like normal. All the money they are getting from the government might help the few people who have invested in the bank, but in reality the inflation caused by the creation of money hurts a lot more than it benefits. I believe that if the bank were to fail, the economy might have a recession. However, it would never happen again, because all the other banks would learn their lesson.

Too much power
The Federal Reserve System has the power to put our economy into a boom or a bust. They can send us into a depression. For a private company to have that much power over our economy is not good. This effect is hard to explain in one paragraph. If you want to learn about it, read The Creature From Jekyll Island.

If you want to know more, you should read The Creature from Jekyll Island, by Edward Griffin, and What Ever Happened to Penny Candy? by Richard J. Maybury.