Please Explain The Federal Reserve and the fall of the dollar

"The Case Against the Fed" by Murray Rothbard.

An easy read and a great resource.

Like the car.....I used to joke FIX IT AGAIN TONY!

Devvy Kidd has an excellent book entititled "Why A Bankrupt America", and G. Edward Griffin's "Creature From Jekylle Island" is also accurate. My fellow patriots on this thread also are on the mark with their synopsis.

Welcome to Daily Paul, you'll learn more here in an hour than in an entire semester of the programming they'll feed you in high school.

A pound of gold in 1900 would get you a really nice suit, hat, tie, belt, socks and pair of shoes. A pound of gold today would get you a really nice suit, hat, tie, belt, socks and pair of shoes.

When they instituded the Fed in 1913, and then they severed the last tie to the gold standard in 1971, they allowed the Fed to print as much money as they wanted. So, as long as someone is willing to borrow money, the Fed can print it, and charge interest to the borrower. Technically, since they didn't create the money for the interest, they always have to increase the money supply over time. This is why you have inflation. The dollar now is worth about 0.04 in 1900.

The fed controls the interest rate, which in effect controls the amount of money they print. The lower the rate, the more people borrow, the more money the Fed has to print. The extra dollars without increased productivity causes the value of the dollar to fall. This effects everything the middle class have to buy to survive. Oil pirces have been steady for the last 5 years or more, but the price of gasoline has almost doubled. That's because the U.S. dollar has been devalued by almost 1/2. Everything you buy gets shipped at one point or another. The increase in gas and oil pirces therefore, causes the price of everything to have to increase.

The malivestment caused by the easy credit causes bubbles in the economy like the NASDAQ or internet bubble and the housing bubble. People borrow money they cannot pay back and lenders lend money to people who can't pay it back. Somewhere down the line, the loans get defaulted on, and people lose their homes, their savings, their stock holdings, or whatever. People on fixed incomes get a cost of living increase of 3%, but the price of gas, heating oil, homes, etc. goes up 5 or 10% or more.

In the last year or so, the overall money supply has gone from 10 trillion to over 14 trillion. Everytime someone wants to borrow money, the Fed prints more. The longer they keep rates artificially low, the more money they will have to print. They do this to stave off the recession (depression), but it only ends up making things worse. Like 20 million Americans losing their homes. In a true free market eoonomy with a gold and silver standard, the total money supply is limted. The value is regulated and steady and is not devalued over time. In a free market, rates are determined by the market itself. If rates are low, and too much borrowing occurs, the money supply gets tight, and the banks tighten up their lending standards and raise their rates. (Correctly for the rate that was too low to begin with. Instead of saying, "Oh, we've had the rates low for too long, I don't want to deal with the consequences... let's just keep them low. What kind of since does that make? Fight inflation with inflation? Crazy. But some of the greatest economic minds (supposedly) in our country think this is the course of action to take.)

There are links to some fantastic videos if you click the HOME tab on the top of this page and then scroll all of the way down to videos. Fiat Money and The Money Masters can teach you about everything there is to know about the Fed.

I love Paulie!

If our currency was interest free and backed by Gold and Silver, our currency would Appreciate, not depreciate. Since our currency is not backed anything and can be printed at will, and is loaned to the US government with interest; debt and devaluation is inevitable.

This explains it better (about 3mins into it).
http://www.youtube.com/wa...

Also check out my YouTube Favorites

http://www.youtube.com/pr...

Watch the youtube movie "From Freedom to Fascism" it gives you the breakdown of the system. Basically the ability to create dollars whenever the government needs them gives the government to go on spending sprees, leaving Americans to pay the bill in the form of income tax. We pay income tax to pay the Federal Reserve back the interest it charges America to print and loan us the money. When we attacked Iraq we had to print more money because our government went broke. This money has no asset backing it, it is like if you took a piece of paper wrote $20 on it and handed it out to pay bills. The American dollar is attached to oil. That means you can only buy oil if you have American dollars. This is changing in Iran and possibly Russia soon. That is why we are hell bent on sanctions on Iran, not because of nukes, but because they are selling oil for money other than American dollars, causing our dollar to lose more value. Now that our country is facing new economical problems, it is like we are printing more money with no true sound economy to back them. We are basically handing these people bandaids for cuts that require stitches. They can see the blood seeping through. I hope that makes sense. I am sure someone will answer this question better than I did. There is some really intelligent people on this website. One great thing you could do is spread the message of Ron Paul to all your friends in high school, and hope that they tell their parents to check him out. It is great to see a junior in high school that actually cares about politics, and is smart enough to see Ron Paul as the man for the job. It says a lot about you, you are the hope of the future of this great nation. Learn Ron Paul's platform and think about running for office someday. Keep up the great work!! It is people like you who will be the future of this movement.

is this Concise Guide to Economics:

http://www.conciseguideto...

Look at the Money and Banking section.

The Fed can print money (Federal Reserve Notes) at will.

The vast majority of the time they print money to buy treasuries from the U.S. Government. This allows the government to go into debt at a cheaper interest rate. These are called open market operations.

Also, they can lend money to banks and also regulate the fractional reserve requirements, basically allowing banks to print money to loan out to other people in order to make a return on credit produced out of thin air.

This is a "debt-based" system where every "dollar" created is actually a credit given to some borrower either directly through the Fed or through banks overseen by the Fed.

The system is fraudulent in a number of ways and relies on the blind confidence of the people.

Our entire credit system is basically a ponzi scheme, where the total amount of claims FAR EXCEEDS the actual amount of money in the system.

In theory the Fed could just print infinite money. This is what causes hyperinflation, but if they did such a thing, they would destroy the entire framework of the dollar-based economy so this is one of their biggest fears. This would be if people just lost confidence in the "Federal Reserve Note" (which is not what an actual "Dollar", as defined by the U.S. CONSTITUTION, is).

So they must act within these limits. But limiting credit to protect the dollar can really lead to a massive credit crunch due to the bubbles the system has already caused.

The Federal Reserve System is intellectually and ethically bankrupt. The Congress should abolish the Fed immediately and create a free market money and credit system and let the people decide. The thing is, people gain power via the Fed, so they do everything they can to keep it going.

That's why we must all work together for liberty and righteousness. Ron Paul is currently the best representative of our cause, but it is growing and will continue to grow due to its righteousness.

Hope this helps!

Kemp
www.ponderthis.net

Money as debt

I doubt you will hear any of this in your class, but maybe you could bring it up.

I would also recommend "The Creature From Jekyll Island" by Edward Griffin. Breaks it all down pretty well in layman's terms.