The Federal Reserve System was created on December 23, 1913, when President Woodrow Wilson signed the Federal Reserve Act into law. Today, the Fed has decided to commemorate the event today with all three living Fed chairman delivering remarks. We are sure it will be very exciting but in the interests of 'balance' we offer a few alternative views of the "success" of the venerable monopoly including its cost: since 1913, the dollar has lost nearly 90% of its purchasing power.
The day it all changed...
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"If we evaluate an organization's performance by what it promised when it was created, the Federal Reserve has clearly failed the American people... the revolution of 1913 shifted power from individuals, communities and states to the federal government and its powerful allies in the private sector."
Instead of providing protection, the Fed has robbed the public through the hidden tax of inflation brought about by currency devaluation.
The American people like to think that we have a "democratic system", but there is nothing "democratic" about the Federal Reserve. Unelected, unaccountable central planners from a private central bank run our financial system and manage our economy. There is a reason why financial markets respond with a yawn when Barack Obama says something about the economy, but they swing wildly whenever Federal Reserve Chairman Ben Bernanke opens his mouth.
The Federal Reserve has far more power over the U.S. economy than anyone else does by a huge margin.
the Fed was supposed to extend credit only for “productive” and not for “speculative” purposes." Ironically, less than a year later, the Fed noticed that some loans were being diverted to "securities purchases"
And last but not least...
According to the popular lie, the Federal Reserve was supposed to have been established to smooth out the economic cycle, thus preventing booms, busts, recessions, and depressions.
It hasn’t really worked out that way.
In the 100 years prior to the establishment of the Federal Reserve, there were 18 distinct recessions or depressions:
1815, 1822, 1825, 1828, 1833, 1836, 1839, 1845, 1847, 1853, 1860, 1865, 1869, 1873, 1887, 1890, 1899, and 1902.
Since the establishment of the Federal Reserve, there have been 18 recessions or depressions:
1918, 1920, 1923, 1926, 1929, 1937, 1945, 1949, 1953, 1958, 1960, 1969, 1973, 1980, 1981, 1990, 2001, 2008.
So in other words, the economy experienced just as many recessions with the ‘expert’ management of the Federal Reserve as without it.
And this doesn’t even begin to capture all the absurd panics (the S&L scare), bailouts (Long-Term Capital Management), and ridiculous asset bubbles that they’ve created.
Hardly an impressive enough track record to justify conjuring trillions of dollars out of thin air, and awarding nearly totalitarian control of the money supply and economy to a tiny banking elite… wouldn’t you say?