Federal Reserve is the root of our banking problems

By Greg Hildreth

People generally trust the government and the Federal Reserve to run our monetary system. I submit that this trust is misplaced and that the Federal Reserve System is not compatible with a free society.

Private banking corporations own the Federal Reserve.

These corporations enjoy a government-granted monopoly on the creation of our money. These banks earn interest by lending the money they create.

Our currency, the Federal Reserve Note (commonly called the dollar), is a fiat currency and, as such, is not backed by gold, silver, or any other commodity.

The Federal Reserve System was legalized in 1913 with the passage of the Federal Reserve Act.

The act was sold to the public as a way to “break the grip of the money trust” but the details of the system and its functions were drafted and agreed upon by the financial elites of the day. History has shown the system to benefit the financial elite and the Federal Government at the expense of the middle class and the poor.

In 1933, under President Franklin Delano Roosevelt, gold was confiscated from the American public and a law passed forbidding citizens from owning gold bullion (Executive Order 6102 and the Gold Reserve Act of 1934).

Confiscated gold was redeemed at $20 an ounce. Afterword gold was “revalued” at $35 an ounce. This event makes clear that the Federal Government was not being honest with the American public about the value of the metal or, more importantly, the value of the Federal Reserve Note.

It can be argued that the Federal Reserve’s reckless expansion of credit (the Roaring Twenties) was the root cause of the Great Depression.

Instead of admitting the system’s insolvency the government bailed the system out at the expense of the liberty and treasure of the American Public. Sound familiar?

Today’s Federal Reserve Note is worth about 5 cents compared to the dollar that the Federal Reserve inherited in 1913. Gold is now selling around $1,000 an ounce. The actual value of the precious metal is not changing so much as the value of Federal Reserve Notes is depreciating.

The Federal Reserve prints money, not wealth. Newly created money gains its purchasing power by devaluing the existing stock of money. This is why prices go up.

The purchasing power that is lost from the existing money stock is transferred to the financial elites, the government, and, by extension, the politically connected. This process is immoral and causes untold harm to our economy and political process.

The Federal Reserve is protected by law from being audited in such important areas as: “transactions conducted on behalf of or with foreign central banks, foreign governments, and non-private international financing organizations … and open market operations …” and the list goes on.

Why aren’t we allowed to know? Who does the system really protect?

The history of central banking is quite dramatic and thought provoking. I encourage concerned citizens to investigate and scrutinize. As a nation we have great challenges on the horizon and there must be a vigorous intellectual debate on behalf of liberty and a free society.

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.” — Thomas Jefferson.