Why the Fed and the free Market Are Incompatible

Since the before the bank bailouts, I have been studying to understand the myriad of conflicting info. It's complicated. Both government regulation & deregulation have contributed, along with utter irresponsibility of wall street. It seems clear now that the biggest contributor to this whole economic mess is the Fed itself. The private Federal Reserve Bank is the sole determinant of monetary policy and its actions require no approval from Congress. Congress members do not understand the complicated workings of the money system. Therefore, they look to the Fed and it's advice as the best course of action. When a bill is needed, Congress generally does what the Fed wants (though they try to give the appearance of listening to their constituents at home). In addition, the Fed acts on its own to bailout banks for pennies on the dollar, etc. without any discussion with congress.

I am convinced that the Fed is at the heart of the entire economic crisis. Despite being the authors of a brilliant monetary scheme, they no longer know what they are doing. The Fed artificially manages the economy by manipulating interest rates & engages in many other practices aimed at managing the economy. Because of the Fed, there is NO free market in banking. We cannot have both a free market and a Federal Reserve Bank—the two are incompatible. Either the Fed manipulates the market or the people do—otherwise they are at odds with each other. One of them must go. End the Fed or end the free market.

How do we end a system which has been in place since the 1913 passage of the Federal Reserve Act? The US Constitution gives congress the responsibility to create money, which it has delegated to the Fed. We are paying interest on imaginary money created by a wholly private institution whose ownership is a mystery. There is no reason for this. Congress needs to get some balls and retake their constitutionally mandated authority to coin money. The easiest way to do this is to nationalize the Federal Reserve Bank. A national cannot be in debt to itself. If the US nationalizes the Fed, it will owe no debt to the Fed and no interest payments will be required. Such a course of action is not contrary to the "free market". In fact, it returns us to the money system set by our forefathers in the Constitution. By nationalizing the Fed, we could eliminate the practice of artificial economic manipulation by setting a fixed, permanent interest rate on the money it loans.

If you want to truly understand how the Federal Reserve works, read The Creature From Jekyll Island: A Second Look At the Federal Reserve. Or, for a quick overview, read this article from DissidentVoice.org. To unravel the complicated nature of the economic crisis & its future impact, a good place to start is with the book Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse by Thomas E. Woods, Jr. You can get the book or audio book from the library.