Awareness / Economics / Politics

The Danger of the All-Powerful Federal Reserve – InfoGraphic

The Danger of the All-Powerful Federal Reserve

The InfoGraphic


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 [3]
– 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. [6][7][8][9]
– With $1.2 trillion lent to the top 30 banks in the world. [10]
– 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.[11]

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.[12]
– 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? [13]

– 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.



One thought on “The Danger of the All-Powerful Federal Reserve – InfoGraphic

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