From the founding of our nation until today the way we print money and regulate the economy has drastically change. I've always believed that those who do not learn their history are bound to repeat their mistakes. Therefore, I invite you to learn a little more about where our money comes from, and what it's really worth.
From The Constitution quoted from law.cornell.edu./
Article 1.Section 8. The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;
To borrow money on the credit of the United States;
To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;
To establish a uniform rule of naturalization, and uniform laws on the subject of bankruptcies throughout the United States;
To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;
To provide for the punishment of counterfeiting the securities and current coin of the United States;
To establish post offices and post roads;
To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries;
To constitute tribunals inferior to the Supreme Court;
To define and punish piracies and felonies committed on the high seas, and offenses against the law of nations;
To declare war, grant letters of marque and reprisal, and make rules concerning captures on land and water;
To raise and support armies, but no appropriation of money to that use shall be for a longer term than two years;
To provide and maintain a navy;
To make rules for the government and regulation of the land and naval forces;
To provide for calling forth the militia to execute the laws of the union, suppress insurrections and repel invasions;
To provide for organizing, arming, and disciplining, the militia, and for governing such part of them as may be employed in the service of the United States, reserving to the states respectively, the appointment of the officers, and the authority of training the militia according to the discipline prescribed by Congress;
This serves as a sad reminder of the jobs our democratically elected Congress have managed to shirk over the decades. Where did we begin, though, before the current system we use was in place.
From About.com
Early American Banking: 1791-1863
Banking in the America of 1863 was far from easy or dependable. The First Bank (1791-1811) and Second Bank (1816-1836) of the United States were the only official representatives of the U.S. Treasury – the only sources that issued and backed official U.S. money. All other banks were operated under state charter, or by private parties.
The National Banks: 1863-1913
In 1863, Congress passed the first National Bank Act providing for a supervised system of "National Banks." The Act setup operational standards for the banks, established minimum amounts of capital to be held by the banks, and defined how the banks were to make and administer loans. In addition, the Act imposed a 10 percent tax on state banknotes, thus effectively eliminating non-federal currency from circulation.
The Federal Reserve System: 1913 to Date
Functions of the Federal Reserve System
By 1913, America’s economic growth both at home and abroad required a more flexible, yet better controlled and safer banking system. The Federal Reserve Act of 1913 established the Federal Reserve System as the central banking authority of the United States.
That’s exactly how our money system operates today. For every dollar you deposit in a bank, the bank lends out about ten dollars. Money is created by banks – out of thin air! All money comes into existence by way of a bank loan. Less than 5% of it is ever converted to notes and coins. Most of it is never anything but a balance on a computer at the bank.
A hundred questions come to your mind. Right? They are all answered in my book. "How to Profit from the Coming Great Depression." by Graham Dyer
Why do I say the system has sewn within it the seeds of its own destruction? It has a use-by date. That is why we have an economic depression at least once each century. It is not a question of if the system implodes. Only when it implodes.
From searchwarp.com
Do the research. Go on federalreserve.gov. I can not find anything that states that the Federal Reserve is a government agency, only that it is authorized by the government. This is a huge difference.
If you look at any of the smaller Central State Banks, many of them clearly state that they are independent, but not Government agencies.
Which makes the Federal Reserve a private system, and any of the banks that operate under the Federal Reserve System are private and profit driven banks.
The term "monetary policy" refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence the availability and cost of money and credit to help promote national economic goals. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy.
The Federal Reserve controls the three tools of monetary policy--open market operations, the discount rate, and reserve requirements. The Board of Governors of the Federal Reserve System is responsible for the discount rate and reserve requirements, and the Federal Open Market Committee is responsible for open market operations. Using the three tools, the Federal Reserve influences the demand for, and supply of, balances that depository institutions hold at Federal Reserve Banks and in this way alters the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.
Changes in the federal funds rate trigger a chain of events that affect other short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit, and, ultimately, a range of economic variables, including employment, output, and prices of goods and services. federalreserve.gov
Which monetary policy does the Federal Reserve go by to make money?
How is the money created?
Money is created in two ways: First, money creation comes from borrowing it and spending it. (Money is literally borrowed and spent into existence.) Second, it can simply be printed up "out of thin air" by a central bank. The U.S. economy and other modern economies have central banks and fiat currencies. Central banks have two major powers. They can 1) "peg" the nominal level of short-term interest rates, and 2) purchase assets such as government debt, with newly printed money. When the central bank pegs short-term interest rates at a low level, it greatly encourages corporate and individual borrowing and spending.
For the past decade, most money has been created through private sector borrowing and spending. However, the day is fast approaching when the private sector's new borrowing will not create enough new money to keep servicing the already massive level of old debt. Central banks will need to step up their efforts to "print money out of thin air". Central bank printing of new money is accomplished by purchasing government debt or other assets.
Clearly, there has been substantial money growth since 2000. Moreover, neither the crash of the NASDAQ stock market, or the last recession, has slowed down money growth. The fact that the Fed cut interest rates 13 times since 2000 - reducing them to a 46 year low - has a lot to do with the massive amount of borrowing that has taken place
gold-eagle.com
There are two ways money is created. One is when we spend/borrow it. The term is velocity. This is what they mean when they talk about getting the economy moving. If we spend every dollar we get as soon as we get it the economy looks like it is going somewhere, when, in fact it is more like a washing machine that keeps on spinning but doesn't go anywhere, just as long as it keeps spinning we can call it progress. The other way is through monetary policy, which is the whole reason we even need a Central Bank in the first place. They make our money and then sell it at a even principle to the Department of Treasury. The Department of Treasury buys the principle and agrees to pay an interest rate determined by the Fed. This places the Department of Treasury in debt, which can only be paid by borrowing more money from the Fed, which creates more debt, etc, etc, ad nauseum
One fact that is often overlooked is that our money is not backed by gold, but is legal tender, and thus has value only because the Government of the United States of America recognizes that it does. It was the Legal Tender Act of 1862 that allowed this to be so.
Today it means that the only difference between this . . .
and this . . .
Is that Uncle Sam says so.
The Federal Reserve is in control of the nation's monetary policy, and there is more and more money each year, yet our nation's need for credit continues to grow. If the Federal Reserve is responsible for the stewardship of our nation's economy and monetary policy since 1913 and these are the results that we get . . . .
Q. Why doesn't the Federal Reserve do something to fix the economy itself without asking for public or Government assistance?
A. It can not, not without the risk of causing inflation or deflation. That is why the Federal Reserve will not create more money out of thin air than it already does. This does not change the fact that they already do.
Q. If money can be made out of thin air, can't the Federal Reserve make consumer debt disappear by paying off those debts that inhibit the lower 80% of income earners from climbing out of debt based poverty? And, if the Federal Reserve can not fix the problems of modern economics why do we need it anyway?
A. (Dial tone) . . . . .
Let's fix this ourselves!
Crooked private banks are the main cause of the problems our nation faces today, from the unequal 2+2=3 economy, to lobbying(bribing) elected officials, and everything else in between.
Please sign the
Abolish The Federal Reserve Bank Petition
And please visit
Bail Out The People . org
to find out how to protest against our Government's bailout of Big Business instead of directly helping the citizens they are elected to represent.
Thanks!