Does it feel to you like living in America has become like living in a sinking ship? Well, metaphorically we are except in our case the Federal Reserve is the iceberg to our Titanic, if that makes sense. Just in case you don’t know, the Federal Reserve is not a government bank – it’s a private bank. The problem with the Reserve (a.k.a. the Central Bank or The Fed) is that they’re controlling our government. Doesn’t that sound corrupt – a private bank controlling our government. Sounds hard to believe, right? It was for me when I first heard about it too.
This is how it works. The Fed prints money out of thin air and then lends the money to smaller banks, our government or other institutions. After this is done they expect the lendees to pay them back plus interest. Also keep in mind that the Federal Reserve is never really audited so we don’t accurately know how much they are owed or owe in taxes.
Other Americans in power before us chose to dismantle the Central Bank for various reasons such as Andrew Jackson in 1833. Unfortunately the bank didn’t stay away too long. In 1913 the bank was reestablished due of a great amount of propaganda stating that having a Central Bank was safer for the economy. At least during this time the Federal Reserve still issued currency that was exchangeable by gold but it wasn’t long before they started using gold to their advantage.
According to many sources, the Great Depression was caused in part due to the Federal Reserve increasing interest rates on loans to smaller banks. Because of this action, the economy dried up. In those days the Fed could not just print money without gold backing like they do today (Quantitative easing.) In order to get the economy moving again, money had to be circulating but the Fed did not have gold to back up more printed money. President Franklin Delano Roosevelt’s created an executive order in 1933 which outlawed the private ownership of gold in the United States which was clearly unconstitutional. He felt that people were hoarding their gold and he needed that to basically bailout the privately-controlled Federal Reserve Bank and get money circulating again. So American people had to turn in their gold in essence to bail out the Fed who created the whole mess in the first place by increasing interest rates. President Roosevelt made it so that Americans who did not want to turn in their gold could face hefty fines or 10 years in jail. Neither was too appealing so citizens had no choice and gave up their gold for only about $20 to the ounce.
Richard Nixon’s tenure as President was when we saw the Federal Reserve at their finest. This was a very pivotal point for the American dollar. During this time we were involved with The Vietnam War. (I’d like to add that we entered into this war under false pretenses as declassified information now available to the public tells us that The Gulf of Tonkin incident never happened.) The government expenditures to fund this war proved to be very costly which led to the end of the gold standard. President Nixon abolished the gold standard on August 15, 1971. That meant that during that time, our money had nothing to protect us from inflation which ran rampant at that time. After this war, our country spent about one trillion dollars.
Ever since 1971 our nation’s debt has been growing more and more due to the fact that our currency is merely a legal tender. I’d like to add that debt is really not a new thing to this country. The only time this country came close to balancing the budget was 1835 during Andrew Jackson’s term. That was the lowest debt amount this country has seen since our first fiscal year in 1791. The problem today is that the debt is so high and our GDP is so low that it is hard to imagine this country flourishing in say 20 years from now.
I think the best thing we as American citizens can do is to keep educating ourselves regarding the Federal Reserve and demand transparency as to their operations so we Americans can have a say in our futures. In addition we should learn from our and other countries’ mistakes, stand up and voice the desire to make positive changes and support candidates who want to reduce debt in a sensible manner so that hopefully we can patch up this sinking ship.