DANGER: Humanity is Suffering as a Result of our Flawed Money System
“Give me control over a nation’s currency and I care not who makes its laws.”
- Baron Mayer Amschel Rothschild, European Central Banker
Why would we allow the Federal Reserve to have complete control of our currency, when it has already collapsed the value of the dollar by more than 96%?
The value of your money, interest rates for loans, availability of jobs, and the rate of home foreclosures are all decided by a small group of elite private bankers who run the Federal Reserve. Contrary to common belief, the Federal Reserve – the Central Bank in the U.S. – is not a government agency. It’s privately owned and operated.
The directors and shareholders make important decisions about the economy behind closed doors without government or citizen oversight. What’s the result? A currency that is worth less every day; a rigged and volatile market with extreme highs and lows; home foreclosures; and a privileged class of bankers who make decisions to benefit themselves at the expense of others. Private bankers have a tremendous amount of control not only over the economy, but the government and society as a whole. Here’s how:
Banks create money out of thin air – Most people have to work hard to earn their money, but the Federal Reserve and its member banks can create money whenever they want. Banks simply spend money into existence. When the Federal Reserve buys government securities, for example, it simply credits the seller’s account with money that didn’t exist beforehand. This new money is then loaned and re-deposited at banks until it becomes 10 times the original amount.
This is possible because of what’s referred to as fractional reserve lending – banks in the U.S. are only required to keep 10% of their deposits on reserve. So if you deposit $10 into the bank, they set aside 10%, or $1, and loan out the remaining $9. Over time the initial deposit of $10 becomes $100. This is what banks refer to as the “multiplier effect” and it is the primary way money is created. Under this fractional reserve scheme we inevitably become debt slaves to a ruling class of financial elite.
Banks have a monopoly on currency – The U.S. dollar is protected by legal tender laws* and backed by the government and its military. This ensures that the bankers will be successful and profitable, without having to compete. To learn more about it, see our other Critical Issue article.
The Federal Reserve determines how much your money is worth – Since the Federal Reserve took control, the U.S. dollar has lost more than 96% of its purchasing power. One dollar in 1913 is now worth 4 cents.
This is caused by inflation – something the Fed is very good at creating and something that has serious consequences for everyone. It means today’s hard-earned money will be worth less tomorrow. Some even call it another “tax” on the American people. This is happening because the Federal Reserve is pumping more and more money into the economy without any connection to the amount of goods and services being produced. As a result, the value of the dollar goes down.
The Federal Reserve sets interest rates - The Federal Reserve’s Open Market Committee in New York determines interest rates and the amount of money in circulation without anyone else’s approval. This impacts your access to student loans, car loans, home loans and more.
The Federal Reserve orchestrates booms and busts – In the 2008 economic collapse, the biggest commercial banks came out on top even though they were the ones who created the problem in the first place. This was no accident. Through ownership and control of the Federal Reserve, bankers are able to orchestrate booms and busts and bail themselves out. This has been the case throughout history.
Opportunity: We Can Create Entirely Different Banking Systems that Work for Everyone
The current banking system is clearly failing, so why not come up with entirely new approaches that benefit more than just the bankers? We could set up a truly free market (which has never been done before) with diverse banking systems, competing currencies, and thriving local economies. In a truly free market, corporations such as Citigroup, Goldman Sachs, Chase, Wells Fargo and AIG would become insolvent if they created mortgage and derivative scams. Local banks would be thriving. To learn more about this vision of a free-market, go to the Solutions section.
Here are some possibilities for reform:
Open up the Market to Other Currencies – Our hard-earned money does not have to lose value over time. We can eliminate legal tender laws – that currently give the Federal Reserve a monopoly on money creation – and open up the market to other currencies. This would allow various types of currencies to compete – some fiat-based**, others backed by commodities such as gold or silver – and since there would be no subsidies or bailouts, the best would naturally come out on top.
Many economists currently believe that the only way a currency can maintain its purchasing power is by backing it with a commodity. This may be the case, but there are examples of successful fiat-based currencies as well. Thomas H. Greco, Jr., a leading authority on free-market approaches to monetary systems, makes the case in his book The End of Money and the Future of Civilization, that credit (debt) based money is a legitimate improvement over previous forms of money, and it’s just bankers control of credit that gets in the way.
If we open up the market, we can test these theories and see what works best.
Allow Other Banks to Form – Rather than just one centralized bank, there could be various banking systems. In Stage 1 of reforming current systems, the government could set up its own lending facility and create its own money, rather than give that power to the Federal Reserve. This would save American’s billions of dollars every year because they would no longer have to pay interest on the debt to the Federal Reserve. This would have to coincide with publicly financed elections to make sure government leaders are accountable to the public and making good banking decisions. To learn more about it, check out the Economics solutions section.
What Can I Do?
Speak up - Talk about how money works with others – help de-mystify the basics and explore the alternatives.
Put Your Money in a Local Bank - You can stop funding the problem and start funding the solution all in one move – take your money out of destructive central banks and put it into a local bank or credit union. They can use your deposits to fund locally owned businesses and good sustainable projects. To learn more, click here.
Join the Movement to Audit and End the Federal Reserve - Join the movement to expose the Fed’s destructive practices and create honest alternatives. Sign up for Critical Mass Actions to Audit and End the Federal Reserve
* Legal Tender means that Federal Reserve notes (US Dollars) are considered a valid and legal offer of payment in the U.S. The Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
** Fiat based currencies do not have any intrinsic value. Fiat money can not be exchanged for any physical object – such as gold or silver – and is not backed by anything real other than peoples faith in it.