Is the Fed Too Big To Fail? by Gary North.

Please read the article above first. I support the movement to end the Fed entirely. A very scary proposition to some. However, if fear of the unknown motivates you, fear of what is known about the Fed should motivate you even more. The Fed was created to provide stability, prevent cyclical boom/bust cycles, and serve as the lender of last resort so credit would always be available, even during an economic crisis. By any conceivable measure, it has failed. Again. Again because it’s been tried before and failed before as well.

Yet we keep going back to the well. We keep buying into the notion that government is doing these things in our best interests. The power brokers that get rich from these schemes are very good at sales. They know exactly which buttons to push to keep us in fear. Fear provides them the cover to enact even more policies that benefit them at our expense.

Particularly in the banking industry, fear works well. When the money supply is in the equation, fear is an excellent motivator. We gladly hand over control of it to the government to protect us. Fear has allowed the Federal Reserve system to be created. The FDIC. The bailouts. Fear of losing our money translates into exactly it just through the back door instead. We’ll gladly give it away if we believe it’s in our best interests. Freedom works the same way. We hand over more and more liberty all the time under the auspices of security.

People are afraid to end the Fed because of the unknown. Will the banking system collapse? Will my money be safe? You have to look at the whole system the way it has been set up to understand it. The Fed is only a piece of the puzzle.

 Our economy has evolved. It used to be simple supply and demand that drove it. Now it is credit and spending. Similar in many ways, yet vastly different in others. Under a supply and demand system, we had a more simplistic way of conducting transactions. Much of it was bartering.  There were multiple forms of currency available. The point was equal value. the move to a credit based economy dependent on consumer spending introduces a middleman. The credit provider. We now buy things today that we used to have to save the money for in advance. The world revolves around credit.

To someone who doesn’t have the money, credit sounds like a great idea. The ability to obtain an item today and pay for it later is not without merit. But there is a huge price to pay, and I’m not talking about just the payments and interest. It has created a huge new world and to play in this world, you must sacrifice. We now have fractional-reserve banking. We now have fiat money, otherwise known as money created out of thin air. We now have creative investment vehicles such as the securities market which has led to the derivatives we hear so much about now.

Everything is built on an artificial base. Creating money without an equal good or service to back it up. Investing on a whim. I won’t classify it as getting something for nothing because that’s not accurate. But it involves sidestepping the normal process somehow. Again, this sounds great but you have to sacrifice something to accomplish it.

If we continue to empower the Fed, we will have more of the same. The Fed is a private organization with shareholders. Not you and I of course. We don’t get to play. It is their fiduciary responsibility to those investors to make policy that will benefit THEM, not US. It doesn’t have to be this way, but that is the way Congress has it set up. Unless we force it to change, it won’t happen by itself. Far too many people making money hand over fist on us even in bad times.

Do yourself a favor. Research, research, research. Educate yourself on the money supply and how the Fed works. There are alternatives to a central bank with such extreme power. You won’t hear about them because it’s not in their best interests. If you want the boom/bust cycles to stop, the Fed must go away. Some people think they can tweak the system and simply rein in the Fed. Not gonna happen. The system demands that the Fed operate exclusively and with impunity. Should they have to become transparent and we get to see the ugly truth, the jig will be up. No, there is no modifying the system to save it. It must be eliminated entirely.

This is where the fear kicks in. This is where you must educate yourself and see that there are viable alternatives to a central bank with so much power. Credit is the way of the world today. Extending credit can be done without the hidden middleman skimming profits off of us. I’ll delve into more specific topics relating to this in future posts. But don’t delay. Study up!