Prior to 1913, the people had direct veto power to the spending policies of the Federal Government. Because if the government wanted to borrow money, it had to go to the people for it. There was no central bank. It had to sell bonds. If you didn’t want to go to war, you didn’t buy bonds. If you didn’t want the pork project that the government had in mind, you didn’t buy the bonds. It was a very simple, effective system. A Republican system that gave direct veto power to the people on economic policy. And by extension, a direct veto on all policies foreign and domestic. And it worked very well until 1913. This is how government managed to stay small. The federal reserve is a banking cartel that controls the money supply in the United States. They attemp to do what only the free market can, control the economy. This policies of the Federal Reserve are the chief culprit behind the economic crisis. Its unchecked power to create endless amounts of money out of thin air brought us the boom and bust cycle and causes one financial bubble after another. Since the Fed’s creation in 1913 the dollar has lost more than 96% of its value, and by recklessly inflating the money supply the Fed continues to distort interest rates and intentionally erodes the value of the dollar. Because of continued rising inflation and the Federal Reserve’s suppression of interest rates, investing in traditional safe havens such as savings accounts, mutual funds, and Treasury bonds has become unprofitable.
Thanks to heroic efforts of Congressman Ron Paul, former Congressman Alan Grayson and Congressman Bernie Sanders to audit the Federal Reserve, we now know that the Federal Reserve secretly “lent” 16 trillion dollars’ worth of American money from 2007 to 2010 — much of it to foreign banks at 0% interest and none has been paid back. If given to the american public, this would equal 226,430 per household. This needs to end.
(http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3)
The solution is to allow the free market to set interest rates, NOT the federal reserve. When banks have more money, it is only because people are actually saving. When more people are saving, the banks have more money. When the banks have more money (more supply), they can now lower their interest rates, attracting more borrowers and making more loans. When people are saving less because of a weaker economy, the banks have less money (less supply) and therefore interest rates go up. This is not a bad thing. People should be discouraged from making loans, buying cars and houses and putting things on their credit cards when the economy is weak. This is the beauty of the free market. When the Federal Reserve can no longer just print money at will, we will be forced to only go to war when our national security is threatened, instead of spending over $1 trillion trying to to police the world. We must vote to abolish the federal reserve.
“We have statutorily gone on to a fiat money standard and as a consequence of that, it is inevitable, that the authority that is the producer of the money supply will have inordinate power.”
– Alan Greenspan, Chairman of the Federal Reserve, 1987-2006