Ryan Price's Soapbox

In a time where the majority of Americans do not have any idea what the Federal Reserve does, many people would probably answer the question with a resounding “I don’t know”. For those of you who are reading this and do not know what the job of the Federal Reserve is here’s a crash course.

Wikipedia defines them as:

The Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) is the central banking system of the United States. It was created in 1913 by the enactment of the Federal Reserve Act, largely as a response to a series of financial panics or bank runs, particularly a severe panic in 1907.^[1][2][3] Over time, the roles and responsibilities of the Federal Reserve System have expanded and its structure has evolved.^[2][4] Events such as the Great Depression were some of the major factors leading to changes in the system.^[5]Its duties today, according to official Federal Reserve documentation, fall into four general areas:^[6]

1. Conducting the nation’s monetary policy by influencing monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
2. Supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system, and protect the credit rights of consumers
3. Maintaining stability of the financial system and containing systemic risk that may arise in financial markets
4. Providing financial services to depository institutions, the U.S government, and foreign official institutions, including playing a major role in operating the nation’s payments system

Now why would I ever propose such a thing? Because think about it, during the time of its inception in 1913 , the Federal Reserve created the conditions which lead to the Great Depression, the devaluing of our currency by 90%, and every major bubble and burst up to and including the Recession of 2008. Ever since it was created, the US Government has had little to no hand in managing the funds of the United States, a central bank essentially does this and then subsequently collects interest on it for its own use. Now that interest collected could easily be turned into payments to pay off our national debt, and natural rises and falls would be more easy to swallow instead of what you saw in 1980 and 2008. When the Federal Reserve lowers rates, it creates an artificial bubble, this bubble grows but much like the Tech boom and the Housing Market Explosion, they all end the same way….crashing to the ground.

If the system hasn’t accomplished its stated goals, what then has it been able to do? It has been the tool used by the major bankers to gain control over the smaller banks. It has been able to bail out many international banks when their reckless overseas lending policies brought them to the brink of bankruptcy. It has been the financing agency for Congress’ unprecedented deficit spending on the welfare state and war. Many people believe that it has intentionally manipulated the economy in order to influence the results of our presidential elections. Now more than ever you can see this in the most recent recession. Thoughts or comments?

- Ryan Price