The Federal Reserve Is
All About Stupidity
By Charley Reese
© 2001 The Orlando Sentinel

In the late 1960s, you could buy four or five heavy bags of groceries at a supermarket for about $17. Today, you can carry $17 worth groceries in a plastic sack hooked around your little finger. Ever wondered why the change?
It's simple. Our currency has been devalued. When a nation's currency is devalued, businesses and professions can raise prices and fees to compensate for the loss of value. It's the working men and women who get the shaft.
America's money and credit system is deliberately confusing. The people who designed it were logically afraid that if people understood it, they would never put up with it.
Let's start with the money in your pocket.
You will notice that it is a Federal Reserve Note. It is redeemable in nothing. It is backed up by nothing. Its exchange value, or purchasing power, is determined by the volume in circulation in comparison with the goods and services available at any given time. What makes the scam possible are those 11 little words tucked away in small type.
"This note is legal tender for all debts, public and private."
Without a legal-tender law, people could defend themselves against devaluation by simply switching to gold or silver or even to a more-stable foreign currency, such as the Swiss franc. In the early days of the Republic, there were many different kinds of money in use.
The next step in figuring all this out is to realize that the Federal Reserve System is a privately owned central bank. It was made confusing deliberately. There are 12 regional Federal Reserve Banks, each one private and owned by the commercial banks. As in George Orwell's Animal Farm, all the Federal Reserve Banks are equal, but the New York Federal Reserve Bank is more equal than the others are. It handles the government bonds, and its president has a permanent seat on the Federal Reserve Board. This board, whose members are appointed by the president, is a quasi-governmental organization. More quasi than governmental, I assure you.
So here is how your money is devalued. When Congress wants to spend $50 billion more than it collects in taxes, it goes to the Federal Reserve. The government gives the Federal Reserve $50 billion in government bonds, and the Federal Reserve adds $50 billion to the government's checking account.
Seems reasonable. But there is a catch. Where does the Federal Reserve get the $50 billion to put into the government's checking account?
It creates it out of nothing, with a keystroke. The bonds and the interest due on them are paid for with taxes, which is to say the sweat and labor of the American people.
In the meantime, to stay with our example, $50 billion in new money has been put into the system. In addition to that, the Federal Reserve can manipulate the economy. To put more money into the system, always in the form of debt at interest, it lowers interest rates; to take money out of the system, it raises interest rates.
But always the Federal Reserve acts in the interests of banks -- not in the interests of the people or the country.
Ignorant reporters have recently elevated the current Federal Reserve chairman, Alan Greenspan, to folk-hero status. Nothing is more absurd.
Still, as another American hero said, "Stupid is as stupid does."



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