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Q&A on the Federal Reserve

January 17, 2014

Q: What does the Federal Reserve do? A: The Fed was created to stem fault lines in the financial system that many argued bred depositor runs, interest rate spikes and market speculation in the late......

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peterpalms

Jan-17-14 3:06 PM

a, and the Federal Reserve System was the mechanism by which it was accomplished. Actions have consequences. The consequences of wealth confiscation by the Federal-Reserve mechanism are now upon us. In the current decade, corporate debt is soaring; personal debt is greater than ever; both business and personal bankruptcies are at an all-time high; banks and savings and loan associations are failing in larger numbers than ever before; interest on the national debt is consuming more than half of our personal income tax; heavy industry largely has been replaced by overseas competitors; we are facing an international trade deficit for the first time in our history; 75% of downtown Los Angeles and other metropolitan areas is owned by foreigners; and the nation is in economic recession

First Reason to Abolish the System. The System has failed in its stated objectives to stabilize the economy 21

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peterpalms

Jan-17-14 3:03 PM

The accepted version of history is that the Federal Reserve was created to stabilize our economy. One of the most widely-used textbooks on this subject says: "It sprang from the panic of 1907, with its alarming epidemic of bank failures: the country was fed up once and for all with the anarchy of unstable private banking." Even the most naive student must sense a grave contradiction between this cherished view and the System's actual performance. Since its inception, it has presided over the crashes of 1921 and 1929; the Great Depression of '29 to '39; recessions in '53, '57, '69, '75, and '81; a stock market "Black Monday" in '87; and a 1000% inflation which has destroyed 90% of the dollar's purchasing power. Let us be more specific on that last point. By 1990, an annual income of $10,000 was required to buy what took only $1,000 in 1914.4 That incredible loss in value was quietly transferred to the federal government in the form of hidden taxation,

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