To return all the rights and profits from the creation of money to the citizens, should the Federal Reserve be abolished?

[Adaeva]

The Federal Reserve was created in 1913 and quickly signed into law by President Woodrow Wilson. Some people believe the Federal Reserve was created by the bankers and for the bankers.

Permit me to issue and control the money of a nation, and I care not who makes its laws! That quote is attributed to Nathan Rothschild, but regardless of who said it, does it describes how the wealthy 0.01% run the two US political parties.

https://fee.org/articles/the-case-against-the-fed/

[abc3643]

I taught you about the Federal Reserve months ago.

It was created for a reason. (*)

Those who fail to learn from history are condemned to repeat it.

Please learn; you owe it to the rest of your species and its descendants.

And, no, the Federal Reserve and the wealthy do not "run" the two political parties.

First off, the wealthy generally are for the GOP because the GOP will cut taxes and, usually, not overspend.

We have two dominant parties in this country because we live in a federation in which state legislatures are dominated by those two parties. So, since it is voters who can thwart the two-party system, the established parties in most states banned something called "Electoral Fusion". That's hard to explain, but electoral fusion lets a candidate run for multiple parties and all the votes across all parties count toward the total for that candidate. In states without electoral fusion, candidates either can't run on multiple parties or their ballots cast for them are independently counted and not "fused" into a total.

Banning electoral fusion should be unconstitutional. But, that lack of electoral fusion is why the two parties are stable and third parties have a rough time getting off the ground.

(*)

https://www.stlouisfed.org/in-plain-english/history-and-purpose-of-the-fed

History and Purpose of the Federal Reserve

Before the Federal Reserve was founded, the nation was plagued with financial crises. At times, these crises led to "panics" in which people raced to their banks to withdraw their deposits. The failure of one bank often had a domino effect, in which customers of other banks rushed to withdraw funds from their own banks even if those banks were not in danger of failing. Banks needed a source of emergency reserves to prevent the panics and resulting runs from driving them out of business.

What led to the creation of the Federal Reserve? A particularly severe panic in 1907 resulted in bank runs that wreaked havoc on the fragile banking system and ultimately led Congress in 1913 to write the Federal Reserve Act. The Federal Reserve System was initially created to address these banking panics. It is now charged with several broader responsibilities, including fostering a sound banking system and a healthy economy.

[Anonymous]

Great article as usual from FEE. I of course agree we were better off before Congress ceded control of the currency to the Federal Reserve. Althou this would not itself change the nature of the business cycle but rather make the dollar more reliable.

As an institution the Federal Reserve has proven itself to be a catastrophic failure instead of controlling inflation they driven it to extremes almost unimaginable before. The Federal Reserve actually make congress look competent.

In the 100+ years before the Federal reserve the U. S. Dollar had doubled in value.
In the 100+ years after the Federal Reserve the U. S. Dollar lost nearly all of its value to the point where the current dollar is probably worth around a penny in 1913.

The Federal reserve like many thing they did during the 'progressive era' is also flatly unconstitutional. Not only is the institution itself unauthorized in the 11 page Federal Constitution. The 'legal tender' bank notes they issue now un-backed by anything and baring not interest are effectively Bills of credit. Something not only the Federal Goverment is not authorized to issue under Article 1 Section 8 Clause 5 but the States too are forbidden to issue under Article 1 Section 10 Clause 1.

Like the Bank chartering in general idea this too was discussed at the Federal Constitutional Convention of 1787 and rejected.
The reason was nobody trusted the Goverment with such abusive financial power indeed this is arguably one of the reasons behind the Constitutional Convention of 1787 in the first place.

[DWornock]

Absolutely, that criminal and private organization should be abolished. They have cost the American public $20 trillion by lending money they legally counterfeited and charging interest; and, by counterfeiting 4 to 5 percent of our GPA each year. Over the last 100 years the dollar has lost an average of 4% per year while gold which is real money has retained its value.

There power is almost absolute. They used their right to counterfeit to buy up control of all mainstream media. With control of the media and their right to counterfeit, they own the state and federal politicians and judges. That gave them control of public schools and most colleges.

[NamerOfStars]

No. Fiat currencies aren't something you can just "switch off". You'd either replace it with nothing, and we go back to the cycle of having the currency explode every twenty years, or you replace it with something, which, statistically, would probably be worse.

[monorprise]

The currency didn't explode every 20 years before the Fed... you clearly are not familiar with 19th century economics.
We had a business cycle, Boom and bust, then just like we still have the same business cycle today.

[NamerOfStars]

@monorprise Yeah, and the panic of 1819 was just a myth. Come ON, man.

[monorprise]

@NamerOfStars That is called a bust in a standard boom bust business cycle, they happen roughly every generation in a modern investment based economy.

The reason for this is very simple people routinely make bad investment. In a highly connected by trade economy those same investments drive booms in economic activity while they are presumed good to support them, and busts when they turn out to be poor choices and people dont get paid.

Fractional reserve lending using the currency simply helps investors to lie about their resources to all of their trade partners using said bank notes driving this cycle to even greater extremes.

Such lending is made possible by fractional reserve banks regardless of their direct control of the currency.

The only thing such Government currency control adds is the ability to tax everyone using said currency for the losses. Which is exactly what the Federal Reserve does in practice.

[monorprise]

@NamerOfStars As you no doubt have no idea how this works without everyone being taxed via long term inflation (real inflation) in a nromal economy. Let me just say that the banks which choose to issue the bad loans and the people who choose to invest in them bare the cost of the bad investments alone.

As appose to today, where everyone who is FORCED to hold the Federal bill of Credit known as the modern U. S. Dollar is forced to routinely pay for people and their banks poor investment choice.