The Danger of the All-Powerful Federal Reserve
The Dangers of an All-Powerful Federal Reserve
The Federal Reserve is the largest player in the world’s largest economy. It’s a behemoth that affects us all.
– “The Federal Reserve is more powerful than Congress.” Ron Paul 
– And it’s on a runaway train
– Things cost 2230% more than at the Fed’s inception.
– While there was a 48% DECREASE in prices in the hundred years before.
Filled with Fiat Money
– Rapid expansion of the monetary base was used to purchase the toxic assets of the financial crisis. This enabled the reserve ratio to remain intact, in case there was a run on the banks. 
– With $1.2 trillion lent to the top 30 banks in the world. 
– A money supply that is too quickly increased risks hyperinflation. A risk to all of us, and particularly the elderly, who are often on fixed incomes.
The Engineer could be drunk
– Ron Paul’s “Audit the Fed” or Federal Reserve Transparency Act has passed resoundingly in the house 327 to 98.
– But has been held up in the Senate for over a year.
Only no one knows
– Using the Freedom of Information Act:
– Bloomberg LP requested information on toxic asset purchases by the FED
– The Federal Reserve Bank of NY responded that it is not “an agency” and thus the request is invalid.
He’s rich enough to do whatever he wants
– The Fed is actually a private bank
– with 12 regional banks in
– Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, San Francisco
– Owned by 38% of the 8000 largest private banks
– Each required to keep 3% of their reserve as stock in the Fed.
– Owned by other large private banks.
How money is created.
– The federal government goes into debt
– –> asks the Fed for a loan to cover this money
– –> Fed trades money for federal bonds
– –> Sells bonds to private investors, banks
– –> Taxpayer money pays off interest on loan
Who makes money? 
– Loan of $30 billion:
– Government: +$30 billion (from above)
– Taxpayers: -$50 billion (to pay off loan with interest over time)
– Investors: +$20 billion (from the interest)
He wrote a book on train wrecks.
Responsibilities of the Fed:
– To Prevent Bubbles, which are high volume of trades where prices vary considerably with intrinsic value.
– By definition: When there is a prolonged mismatch between supply and demand. Too much money is chasing too few shares.
– But he was drunk then too.
– 1.) There is no economic theory on how to identify bubbles before they happen.
– 2.) Quantitative easing causes more bubbles, inflation, and market stability in the long run.
– Hold on… The Fed is subject to cronyism, political pressure, and lobbying. Let’s hope all of our bank accounts don’t start looking like our Nation’s.