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Business/Finance See other Business/Finance Articles Title: Time to End America's Century of Central Bank Mismanagement Time to End America's Century of Central Bank Mismanagement By Richard Ebeling Tuesday, December 17, 2013 Please Enable Images to See this One hundred years ago this month, on December 23, 1913, the Congress passed the Federal Reserve Act, establishing a national central-banking system in the United States. The governing board of the Federal Reserve was organized on August 12, 1914, and the Federal Reserve banks opened for operation on November 16, 1914. On the surface, the preamble to the Act, which summarized the purpose of the new government-created institution, seemed fairly innocuous: "An Act to provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes." The Powers of the Federal Reserve But what this meant was the start of the monopolization of monetary matters in the hands of a single politically appointed authority within the boundaries of the United States. Those innocuously sounding functions listed in the Act's preamble, however, gave the Federal Reserve the power to: (a) Control the quantity of money and credit supplied in the United States. (b) Influence the value, or purchasing power, of the monetary unit that is used by the citizenry of the country in all their transactions. (c) Indirectly manipulate the rates of interest at which borrowers and lenders transfer savings for investment and other purposes, including the funding of government budget deficits. A Century of Central Bank Mismanagement The 100-year record of the Federal Reserve has been a roller coaster of inflations and recessions, including the disaster of the Great Depression of the 1930s, the "excessive exuberance" of the late 1990s that resulted in the "Dot.Com" bubble that burst in the early 2000s, and the recent boom-bust cycle of the last decade from which the U.S. economy is still slowly recovering. The crucial and fundamental problem with the power and authority of the Federal Reserve is that it represents monetary central planning. In a world that has, for the most part, turned its back on the theoretical error and practical disaster of believing that governments have the wisdom and ability to centrally plan the economic affairs of a society, central banking remains one of the major remaining forms of socialism practiced around the globe. Government control and planning of the monetary system has resulted in extensive political power over virtually every aspect of our economic life. In 1942 Gustav Stolper, a German free-market economist then in exile in America from war-torn Europe, published a book titled "This Age of Fables." He pointed out: "Hardly ever do the advocates of free capitalism realize how utterly their ideal was frustrated at the moment the state assumed control of the monetary system . . . A 'free' capitalism with government responsibility for money and credit has lost its innocence. From that point on it is no longer a matter of principle but one of expediency how far one wishes or permits government interference to go. Money control is the supreme and most comprehensive of all governmental controls short of expropriation." Poster Comment: END THE FED! Post Comment Private Reply Ignore Thread
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