# Federal Reserve

1. ### Jonny_trigonometry

533
So, what are your thoughts on the Federal Reserve? I'll start the thread with some notable people's opinions on the Fed, and related to the Fed.

“I sincerely believe ... that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.” - Thomas Jefferson

"This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President
[Wilson} signs this bill, the invisible government of the monetary power will be legalized....the worst
legislative crime of the ages is perpetrated by this banking and currency bill." -- Charles A. Lindbergh Sr. 1913

"From now on, depressions will be scientifically created." -- Congressman Charles A. Lindbergh Sr. , 1913

"It is well that the people of the nation do not understand our banking and monetary system, for
if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford

"People who will not turn a shovel full of dirt on the project (Muscle Shoals Dam) nor contribute a pound of material, will collect more money from the United States than will the People who supply all the material and do all the work. This is the terrible thing about interest ...But here is the point: If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an additional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way. It is absurd to say our Country can issue bonds and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the People. If the currency issued by the People were no good, then the bonds would be no good, either. It is a terrible situation when the Government, to insure the National Wealth, must go in debt and submit to ruinous interest charges at the hands of men who control the fictitious value of gold. Interest is the invention of Satan". - THOMAS A. EDISON

“History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.” – James Madison

“The national debt is founding in fraud perpetrated on the United States by the international banking interests. The best solution to national debt and social security is for the United States to stop allowing a corporation to print money and charge us interest to do it. The Federal Reserve should be abolished as a starting place to liberate the United States from false dependencies.” – Andrew Jackson

“My agency in promoting the passage of the National Banking act was the greatest financial mistake in my life. It has built up a monopoly which effects every interest in the country”. – Salmon P. Chase – Lincoln’s Secretary of Treasury

“Before passage of this Act, the New York Bankers could only dominate the reserve of New York. Now, we are able to dominate the bank reserves of the entire country.” – Senator Nelson Aldrich – On the Passage of the establishment of the Federal Reserve Bank

“The Government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the Government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government’s greatest creative opportunity. By the adoption of these principles.. the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.” – Abraham Lincoln

“The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy.” – Abraham Lincoln

“If this mischievous financial policy is which has it’s origins in North America, shall become endurated down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedence in the history of the world. The brains, and wealth of all countries will go to North America. That country must be destroyed or it will destroy ever monarchy on the Globe. “ – Times of London - In response to Lincoln printing “Green Backs”.

"A great industrial nation is controlled by it's system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world--no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men." --President Woodrow Wilson

After previous attempts to push the Federal Reserve Act through Congress, a group of bankers funded and staffed Woodrow Wilson's campaign for President. He had committed to sign this act. In 1913, a Senator, Nelson Aldrich, maternal grandfather to the Rockefellers, pushed the Federal Reserve Act through Congress just before Christmas when much of Congress was on vacation. When elected, Wilson passed the FED. Later, Wilson remorsefully replied, "I have unwittingly ruined my country"

So, it's well established that many people with deeper understanding of money and our country abhor the Federal Reserve banking system, and fractional reserve banking. What Is my opinion? I would say that I'd have to agree with them, Thomas Edison said it best. I disagree with a gold backed money system, because gold is easy to monopolize, I agree with a central banking system, but I disagree that it should be in private hands and thus controlled by private interests (the money changers). If we had a pulbic central bank that utalizes a fiat money system, it would be a dream come true, we'd have greenbacks again!

2. ### Pengwuino

7,118
Why didnt you leave any space for those who support the system?

3. ### Jonny_trigonometry

533
they don't deserve it. To support it is to claim that you have more understanding than all those who I quoted.

Last edited: Nov 20, 2005
4. ### wasteofo2

All of your quotes are from far before, or nearly directly after the Federal Reserve Act was passed. All of these figures are far removed from our present state of being. What centralized monetary institutions were in the 1700's and 1800's, and what figures from those periods thought of them, don't necessarily reflect the reality of what one specific centralized monetary institution has become in the year 2005. What was said about the Federal Reserve before WWI doesn't reflect what it has become in 2005.

If you're building a case against the ideal of centralized monetary institutions, that's one thing, but to take general statements like those of Jefferson, made hundreds of years ago, and apply them to a very specific current institution is really just ridiculous.

You're quoting attacks against a system which is no longer as it was when the attacks were made. It'd be like me saying Mao must be unseated, for he is ruining China, or trying to incite people to topple the British government, because in 1856, it was un-democratic.

Why not bring up some evidence of current malevolence perpetrated by the Federal Reserve, and build a case off of that?

Furthermore, times have changed since Edison, and unless I'm horribly mistaken, we aren't on the gold standard anymore...

Last edited: Nov 20, 2005
5. ### Pengwuino

7,118
So your saying no economist has ever had a positive few on central banks? Or are you saying that people who disagree with you are not worthy of having an opinion?

6. ### wasteofo2

I think what he's saying is that since people like Thomas Jefferson and James Madison didn't like centralized government institutions, and Thomas Edison didn't like the gold standard, that we shouldn't like the Federal Reserve in 2005.

7. ### Pengwuino

7,118
I think its confirmation bias...

8. ### Jonny_trigonometry

533
Do you know that the Federal Reserve is not a government institution?

All those quotes are relevant, because they show the personality of those who run the Federal Reserve, the money changers. Those are the people that instutited the Fed. they tricked Wilson into signing it into law. The only affiliation it has with the governemnt is that it's board of directors are all appointed by the government, but that is eaisly controlled by lobyists which are paid by the money changers if not government officials directly paid off in some way by the money changers.

I also put those quotes up so that you don't have to take my word for it, that the Fed has more power than you may think.

9. ### Jonny_trigonometry

533
no, you're just putting words in my mouth. Are those people who i quoted all economists? Did I say anything against central banks? Read the first post more carefully, I was pointing out that privately owned central banking systems are not good, not simply central banking systems in general.

Just forget my quick reply that "they don't deserve it". It was made out of angst, the way I see it, to argue for it is to argue for something morally wrong in my opinion, like slavery. You'll just have to forgive me on that because it is an opinion based on my morals. Granted we are talking about morals here, so my normative claim would be: "It is good to acknoledge a hard worker by not charging him/her an arbitrarily chosen ammount of interest for using the money you issue him/her. It is better to let him/her (the people, aka government) decide how to issue thier own money. It's not in the interest of the nation to answer to a private power, it ought to be free to decide for itself."

Last edited: Nov 20, 2005
10. ### wasteofo2

With your logic, you could say that the State Department or Judiciary isn't a government institution.

They show what individuals from times far removed from our own thought about the money changers of their day. It doesn't show anything about the current Federal Reserve. The Federal Reserve is of course largely independent of the rest of the government, but if you're going to charge that it's controlled by lobbyists, then presents evidence, not steryotypes about money changers from the 1800's.
I'd prefer to take someone's word who is presently alive and knows how the Federal Reserve is currently behaving. Though I'm well aware how immensely powerful the Federal Reserve is. The whole Federal Government is crazy powerful, and it's no secret that the Chairman of the Fed is the second most powerful man in Washington.

11. ### wasteofo2

If you want to have a discussion like that, say it in your first post, define the parameters and your terms, and maybe people will actually know what you're talking about.

12. ### Pengwuino

7,118
You are the one who said people who disagree with you don't deserve an opinion. You even admitted that you said it. I don't see how that is putting words into anyones mouth.

But let's think about this for a second. I'll ignore your comment about it being akin to slavery as that is very disrespectful to those who faught slavery or were slaves themselves. Imagine a private bank that was not allowed to make interest on their loans. How does the bank stay in business? How does it pay its employees? What is your standing on the idea that customers can recieve interest on their bank accounts in a bank? If you want to do away with banks all together, how do economies move forward? How does the common man ever afford to buy a house if he has to pay in full up front? How bout a car even? You can't say monthly payments because that again is a form of banking...

13. ### Jonny_trigonometry

533
geez, I didn't think speaking out against the Fed would be this diffacult on this website. I haven't got anyone else's opinion about it, I guess I'm the only one that disagrees with the way the fed works then huh?

Money changers haven't changed. Thier description is timeless, thier mentality is focused on making money, they don't care about doing the right thing. The right think to them is the business venture which renders the most profit.

I don't feel that I have to explain why I said what I said in previous posts, just say it then, you think the Fed is doing the right thing. What is your opinion? Attacking me means that you either have looked past the whole idea of this thread, or you agree that a privately run central bank is good.

14. ### wasteofo2

The reason people are "attacking" you is becuase you just started a rather nonsensical thread making unfounded attacks against an institution you appear to know very little about beyond simple prejudices.

If you feel you don't need to defend your positions, why did you even bother sharing them? If you're satisfied with your simple prejudices against central banks, then why come to a forum (where discussion is inherent), and not just be happy with your own ideas?

15. ### Jonny_trigonometry

533
You don't understand that I'm not trying to do away with the banking system. You show your lack of understanding of where money comes from. 90% of the money in the country is fake, ie. it doesn't exist. This is because of fractional reserve banking. Imagine you're a banker way back in the day, and you let people store thier gold in your safe, after a while you realize that people don't ask for it back that often, and they trade thier recipts that you issue them which say that they have so and so ammount in your safe. You then decide to use this to your advantage, and let people borrow money from you at an interest (even though you personally don't have any extra money to lend, since its all the property of the people who trust you with it). Have you not committed a crime? You have just used someone elses money to make money. What if everyone wanted to take thier money back, you wouldn't be able to pay every one back, because you lent out more than you have. On top of that you're charging people interest on that money that doesn't even exist. Well this is the status quo of the way the Fed does business. It lends money that it doesn't have out to banks around the nation and charges them interest. Those banks then (by law) are allowed to lend out up to 90% of it, so if everyone wanted thier money back, they wouldn't be able to pay it back, hence, they create money out of nothing, and charge us an ammount of interest on it (to thier liking).

All money comes from bonds issued by the government to the Fed, which then charges the governemnt interest on the money it issues to banks. This is an unnecessary step when the government can issue money directly to the banks. Thats what greenbacks were, and if Lincoln didn't mandate that money system, it's likely that the north wouldn't have won the war. And My referance to slavery is more eaisly understood now, we are (so to speak) slaves of the private interests of the Fed.

16. ### Jonny_trigonometry

533
Tell me where my understanding of the Fed is incorrect. Do you feel you don't need to defend your positions? If you're satisfied with your simple prejedice against my opinion, then why spend your time attacking me rather than just be happy with your own ideas? If you're in the know about how our money system works, then go ahead and show me why I'm wrong.

Again, I'm not attacking central banking systems, just privately owned ones.

I dont' think you really know what I'm talking about, and there is no need for us to argue, I retract my second post because it struck a nerve. I should've explained things step by step until i made that comment. This is touchy subject and I shoul've started talking about it incrementally rather than all at once. there is so much to get your mind around with this topic that it can't all be explained in specific way. The Fed is just a consequence of money changers in thier effort to own as much as possible, maybe I should've started a thread about money changers and thier evolution through history to the present. on thier way they have made many advances, the Fed is one of them but it wasn't the first of its kind, the Bank of England was the first privately owned central banking system. Notice the common way of naming these institutions, which make the citizens think that they have something to do with the government. Then there is the world bank, and the IMF... lets just talk about the Fed, and how it works then, if anyone wants to anymore.

Last edited: Nov 20, 2005
17. ### Pengwuino

7,118
I'm not sure you understand what you are saying. When you put money (or in your analogy, gold) into a bank, you do so with the understanding that your money will be used to fund loans and investments. In return, you recieve interest on your money (or gold). This also has nothing to do with lending money out (not sure why you tried to make such a connection). When you lend someone $100,000, you physically give them$100,000. That is \$100,000 out of hte banks hands. Now if this money doesn't exist, i'm sure mortgage lending companies around the world would have noticed by now. You also seem to misunderstand the borrowing ratio the Fed uses. When a bank wants to borrow money, it must have 10% of that money on hand. I believe it's like what we know as a down payment although I'm not really sure if thats the best analogy...

The money is there, bank's can't just magically create it... it's just not where layman would think it is.

18. ### wasteofo2

First of all, every quote you used to critique the Fed is horribly outdated; everyone of your sources is dead, and know nothing about how the Fed operates.

You said the Fed isn't part of the Government, but showed no evidence. Again, it's like saying the State Department isn't part of the Government.

You said that the Fed is controlled by lobbyists, but showed no evidence.

I do not. However, I didn't really state any of them, besides that you shouldn't attack a modern institution with quotes from people who died before it was even created.

I don't have a prejudice against your opinon. I'm not an ardent Fed supporter. I haven't put in very much time into thinking about whether or not the Fed is as good as an alternative must be. All I'm saying is that you presented a very shoddy case arguing your point that really wasn't even a case of any sorts. You're just adding in all sorts of things as this is progressing, people are pulling your ideas out of you like dentists pulling teeth, when you should've presented your ideas in a cohesive manner at the beginning so we could have a decent discussion.
You didn't say this till quite a bit into the thread. Please explain how privately owned central banking systems are any differently than publicly owned central banking systems.

Furthermore, please explain how it is "a crime" for bankers to lend out people's money? That is the entire principal of a bank. If you want to literally keep your exact money, you buy a safe. Putting it in a bank says that it's alright for the bank to lend it out, and that you get an interest rate on your deposited money. Yes, it's true that if everyone wanted all their money back they couldn't get it in cash, but this is true of any system of banks, publicly or privately owned. Simply because there isn't enough physical cash to cover all the money in the banking system, doesn't mean it doesn't exist. It's just all invested in many various things.

Last edited: Nov 20, 2005
19. ### Jonny_trigonometry

533
That 10% figure you pointed out is called the reserve ratio, it doen't have anything to do with the ammount of money in the bank's safe, but rather the ammount of money in balances. So since those balances can't be paid off with the money in their safe, they are borrowing money that they can't "physically" claim.

You can't say that mortgage companies know that the money is real simply because they use it, after all, if they have numbers in their account, it must be real right? It comes down to the fact that money is simply what is accepted by people using it. When a bank doesn't have enough money in the safe to pay out all the accounts it holds, it doesn't have any money to lend. Yet it does lend money, and charges interest.

Now change your thinking for the local bank you do business with to the Federal reserve. They are the last say in where money comes from, so in thier perspective, they physically don't have the money that they lend out with interest to the government.

Last edited: Nov 20, 2005
20. ### wasteofo2

Money exists outside of the dollar bill. Money exists in equity, money exists in shares of stock, money exists wherever there is value. There is no intrinsic "money" quality within a green piece of paper, our government just arbitrarily deems them to have value, and because of the backing of our government, people value them. Banks do not hold all their equity in the form of paper money, because they need to invest money to earn money, and investment of money is necessary to be able to pay an interest to those who have deposited their money with you. If banks held everyone's money on site, then there couldn't be any interest paid to those who deposit their money in the bank, and there would be no point at all to a bank.

I had honestly thought this issue was burried after FDR dealt with the banking crisis...