Federal Reserve System Celebrating 100 Years of Funny Money

Federal Reserve System

On December 23, 2013, the Federal Reserve System will celebrate 100 years of centralized banking and printing funny money. The creation of the Fed marked the beginning of America’s rampant inflation rate. For the first 125 years of American independence, inflation of any significance did not occur. What $1.00 purchased in 1789 could be had for a very reasonable $1.08 by 1913. Measure that against what it costs today for the same amount of goods; roughly $25.00. This means the current value of today’s dollar is about .04 cents of what it was in 1913.

Ostensibly, the Federal Reserve System was put in place to prevent “bank panic,” stabilize the dollar and resist inflation. Democrat President Woodrow Wilson was convinced that “central planning” by the federal government could replace incremental market forces. He’d been influenced by a work of fiction called Phillip Dru: The Administrator, which glorified intrusive governmental intervention into every aspect of American life. In it, Colonel House – the book’s author and “adviser” to President Wilson – weaves a tale of “enlightened” central planning as a means to achieve “social justice.” So Wilson believed a Federal Reserve System would end poverty and cure all manner of imagined market woes. In a novel, even the most implausible concepts don’t have to be impossible.

It is important to note that the Great Depression did not happen until nearly two decades after the Federal Reserve System came to be. Socialist thinkers and Keynesian economists seem to believe that Capitalism itself was responsible for the market collapse. An interesting position to hold, considering that the 1929 stock market crash happened 15 years into the Fed’s command & control doctrine. The very same policies which were put into practice as a means to eliminate even the possibility of anything like that occurring can be directly linked to the Crash. They are also responsible for the Great Depression lasting 15 years longer that it should have. America should remember that, as the nation celebrates 100 years of the Federal Reserve System pumping trillions in virtually counterfeit funny money, into the economy.

The terms “banknote” and “demand note” describe documents issued and guaranteed by a private bank, delineating its obligation to pay the bearer a “dollar” of gold on demand. The term dollar didn’t start out as a monetary value; it was a physical measurement of weight, like a Troy Ounce or a British Pound. The private banks which issued demand notes could only stay in business if they were able to honor those obligations. The integrity, intelligence and dependability of a bank’s management would determine if a bank was a success or failure. Bank panics could sink a bank which was run improperly, but they had little to no effect on most institutions.

Private banks would also transfer funds and debt instruments between other private banks, across the nation. Which meant they all had a serious need to remain honest and trustworthy, as members of the American private banking industry. Self-regulation works very well in privately held industries, because the people ultimately responsible for the industry’s continued success, work tirelessly to ensure it.

The Federal Reserve System suffers no such obligations. It has no competitors, no industry peers and allows no audits of its inner workings. Instead of private banks acting with enlightened self-interest, America is now saddled with a largely unaccountable, mostly invisible system. It manipulates the supply of money, rates of interest and acceptable practices; it operates on the concept that gurus, soothsayers and “experts” work some form of financial mysticism. The open operation of market forces are no longer allowed to determine the dollar’s value and supply.  Dollar Value

The American dollar is no longer real; it isn’t backed by specific quantities of gold or silver any more. Instead, American dollars are only worth the promises of additional debt; multiples of trillions incurred by faceless bureaucrats and irresponsible politicians. The general public is lead to believe the Federal Reserve System is working in America’s best interests, then encouraged to celebrate it printing funny money out of thin air for the past century.

Editorial by Ben Gaul


ETF Daily News
CATO Institute
American Thinker
St. Louis Fed

5 Responses to "Federal Reserve System Celebrating 100 Years of Funny Money"

  1. Haddon Foster   December 28, 2013 at 5:53 am

    Dear Glen, If you were only as smart as you think you are. — A little German history might benefit your perception. “Smell the coffee, Glen,” printing money REALLY can lead to disaster!

  2. Glenn   December 24, 2013 at 12:58 am

    In reality, the dollar cannot collapse.
    It cannot collapse because more funny money can always be printed.
    But reality is not the same as “perception”.
    And what we are witnessing today is an American public being given the false perception that the dollar is on the brink of collapse.
    This manipulation is being led by powerful people who WANT Americans to panic, riot in the streets, and tear down the entire government.
    Because once Americans destroy this government – they will have the replacement ready to be installed.

    And this article feeds right into that manipulation.

    I am surrounded by short-sighted fools.

    • Ben Gaul   December 28, 2013 at 11:25 am

      By all means Glenn, what better course should we take? Declare everything Shiny and allow the economy to rot from the gangrene of Liberalism?

      What was it someone said about how evil triumphs; good men doing nothing, I believe?

  3. Odell Hobbs   December 23, 2013 at 5:41 pm

    Congrats to the Federal Reserve for 100 years of $uccessfully robbing the American
    People. Most of the people that I have talked to over the years really don’t care that
    it is not federal and there are no reserves. Nothing they can do about – so as long
    as they have a warm bed and a full tummy – what does it matter.
    My own education started in 1992 when I purchased the Eustace Mullins book, “The Secrets of the Federal Reserve”, then in 1994 I bought “The Creature from Jekyll Island” by G. Edward Griffin. They should both be required reading.
    I have known individuals who has ‘tinkered’ (for the lack of a better word) with the
    financial system – and the Powers-That-Be would have none-of-it. They have the Power and it’s Their Way….Or Else!!!
    I can only imagine how wonderful this country would be “IF” 1913 started with Real Money instead of this Funny Money. Good Luck America, you’re gonna need it.

  4. thelastbesthope   December 23, 2013 at 9:16 am

    The dollar is based of the full faith, of friend and foe, at home and abroad, that the government of the United States of America won’t collapse.

    That faith has been shaken.

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