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The Dangers of an All-powerful Federal Reserve

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The editors at Online Accounting Degrees decided to research the topic of:

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.

SOURCES


- http://www.investopedia.com/university/thefed/fed2.asp
- http://www.pollingreport.com/institut.htm
- http://www.youtube.com/watch?feature=player_embedded&v=dZSZwKrI4Ss
- http://www.minneapolisfed.org/community_education/teacher/calc/hist1800.cfm
- http://research.stlouisfed.org/fred2/series/AMBSL/downloaddata?cid=124
- http://www.forbes.com/sites/bobmcteer/2013/03/21/the-fed-has-not-been-printing-boatloads-of-money/
- http://www.lewrockwell.com/2007/04/ron-paul/the-most-dangerous-monopolist/
- http://www.forbes.com/sites/kenrapoza/2013/05/22/no-end-to-the-feds-asset-purchasing-til-2014-maybe/
- http://www.globalresearch.ca/the-us-fiat-dollar-ponzi-scheme-digital-money-used-to-purchase-toxic-assets-from-the-too-big-to-fail-global-banks/5336990
- http://www.bloomberg.com/news/2011-08-21/wall-street-aristocracy-got-1-2-trillion-in-fed-s-secret-loans.html
- http://www.wlf.org/Upload/legalstudies/legalopinionletter/102309Fleschert_LOL.pdf
- http://www.factcheck.org/2008/03/federal-reserve-bank-ownership/
- http://theeconomiccollapseblog.com/archives/11-reasons-why-the-federal-reserve-is-bad
- http://www.jparsons.net/housingbubble/
- http://www.huffingtonpost.com/2013/08/28/federal-reserve-employees-survey_n_3826165.html
- http://theeconomiccollapseblog.com/archives/11-reasons-why-the-federal-reserve-is-bad
- http://thetruthwins.com/archives/ron-paul-and-the-federal-reserve
- http://en.wikipedia.org/wiki/Reserve_requirement
- http://online.wsj.com/article/SB10001424127887323906804579036571835323800.html
- http://www.investopedia.com/university/thefed/fed4.asp
- http://www2.fdic.gov/sdi/main.asp
- http://www.infoplease.com/ipa/A0763206.html
- http://en.wikipedia.org/wiki/Gold_standard
- http://www.federalreserveeducation.org/about-the-fed/history/


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