Wednesday, June 07, 2006

The Federal Reserve Act: Read it for yourself...

Don't take my word for it. Don't take G Edward Griffin's word for it... Read the Federal Reserve Act yourself, directly on the Fed's web site.

Here's a brief breakdown of the first few sections:

SECTION 1. Short Title and Definitions

In this section, we see that "Wherever the word '“bankÂ' is used in this Act, the word shall be held to include State bank, banking association, and trust company, except where national banks or Federal reserve banks are specifically referred to." This means that the State is a banking institution, and it means that the State, in conjunction with private banks, run the Fed. This section--in defining "bank" as it does, sets up the Fed as a central banking monopoly and puts the State in the mix as a part of that monopoly.

SECTION 2. —Federal Reserve Districts

This section serves to eliminate any power of the Branch banks and centralize it all in the Federal bank (which, of course, includes the State).

SECTION 2A. —Monetary Policy Objectives

"The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."

The Fed has most definitely failed miserably in their stated objectives. For instance--stable prices... A 1900-dollar is worth less than 3 cents today due to the Fed's inflationary policies. In the last 10 years, our dollar has lost 20% of its purchasing power.

SECTION 3. —Branch Offices

This further centralizes power over the board of governors in the National and State bank and takes it away from branch banks. The Board of Governors of the Federal Bank, which is appointed by the State (a member of the monopoly) is given supreme power over all of the operations of the branch banks. Even the directors of the branch banks can be fired at will. "Directors of branch banks shall hold office during the pleasure of the Board of Governors of the Federal Reserve System."

So let's see... so far we have a central banking cartel that includes the State... We have centralized and supreme power over the entire system in the hands of a few people who more or less appoint themselves, and they have failed in their stated objectives. Keep reading the rest of the act yourself.

If you can get through the lawyer-speak, you will also see that they can create and/or destroy money at will. They must issue a report to Congress but they are not bound to take any direction from Congress whatsoever. They may create 9 times the amount of money that is authorized by the Treasury for the the purchase of government bonds to sell at interest to private sector banks. In "unusual and exigent circumstances," the Federal Reserve bank may create money for any purpose whatsoever.

According to their own definition (this is not word-for-word from their site, but it's implicit in their language): the Federal Reserve System is a central banking cartel that includes several private banks and our own Federal Government.


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