100 Years Ago Congress, President Gave Away Our Future

One of the most profound problems our country faces is a broken economy and all the related troubles it generates.

Debt, poverty, suffering, loss of liberty all in some way have roots in the long, slow collapse of the economic potential of America.

And much of that can be traced back 100 years ago to the enactment on December 23, 1913, of the Federal Reserve Act.

The Federal Reserve Bank was created to stabilize and strengthen the economy. At least that was the theory.

It has utterly failed in that task.

Prior to the Federal Reserve, prices throughout America’s history were relatively stable. Even when there were periods of inflation, prices eventually resettled back where they were.

In other words, a side of beef or a new hat cost about the same in the late 1800s as it did in the 1600s.

Since the Federal Reserve came into being, however, the dollar has lost 97 percent of its purchasing power. That’s why, for instance, people in the 1950s could have the house with the yard, two cars, steaks and seafood on the weekends, and money to put into the bank on one wage-earner’s salary, whereas today, even two-earner families are struggling.

Ninety-seven percent loss in spending power means things on average cost about 33-34 times today what they did in 1913. Obviously there’s no comparison to some modern products, like an Xbox or laptop computer, but there’s also no denying that the standard of living in this country used to be much higher, even while salaries in many industries haven’t changed that much.

The Federal Reserve causes inflation in various ways, but the chief method is by increasing the money supply.

The first rule of economics is supply and demand. If there’s too much supply of some product floating around, its price or value goes down. The same thing happens to dollars. While we all love raises, when the Federal Reserve starts printing money without tightening up the existing money supply, each dollar in your pocket buys less.

Thanks to electronic financial networks, the Federal Reserve doesn’t even need to print physical dollars or mint coins to increase the money supply. A few taps on a keyboard will do what it used to take an elaborate printing press to accomplish.

Through loans and an encyclopedia of financial arrangements and instruments, the Federal Reserve and its member banks create dollars out of thin air.

Fractional reserve lending is just one trick they use to make fiat dollars. The law allows banks to loan out money that is on deposit while still showing an unchanged balance in savings accounts. For example, if you deposit $100, the bank may loan $90 of your money to someone else, but you still have a recorded balance of $100.

The loan will eventually be paid back with interest, so the bank has created almost $100 from nothing. If at any time during the loan the original depositor wants his money, the bank can just shift funds from some other account.

That’s not the least of the problems with the Fed. While it appears to a casual observer to be a government agency, it’s a private bank, controlled by a board composed of officers from other banks. It’s not subject to audits by Congress or the president, so it operates with no public scrutiny.

And evidence suggests that the various Fed chairmen and officers have not always worked in the interests of the people of the United States, even though it’s our economy we’ve entrusted to them.

Invariably, the Fed chairman is involved with international banking groups, such as the Bank of International Settlements, a clique of central bankers who meet in Switzerland to set international banking policies. With the Fed’s globalist outlook, it’s anybody’s guess exactly how often international concerns take precedence over the needs of Americans, but it’s likely a regular occurrence.

As money buys less, prices rise not just for consumers but for government. That results in budget shortfalls just to provide continuing services, which increases pressure to raise taxes to make up the difference. Rising taxes just expand the problem and help perpetuate an endless cycle.

After 100 years of the Fed driving America into the ground, it’s long past time Americans get smart and take back control over our own future.