US Treasury Takes On The Federal Reserve!

While President Trump continues to question the competency of our Federal Reserve Chairman Jay Powell, Treasury Secretary Scott Bessent this week called for a long overdue review of the Federal Reserve System. Has the Federal Reserve (a private corporation not part of the federal government) been effective in accomplishing its mission? Why are they spending $2.5 billion on a lavish building renovation that should cost 1/10th that amount? And have they prevented inflation and the financial crises they were commissioned to prevent?

Treasury Secretary Bessent calls for a review of 'the entire' Federal Reserve

Other than a few universities, there is probably no organization with more PhD's working for it than the Federal Reserve. This is our nation's central bank, and one would think this organization, with all its data and academic prowess, could predict some simple things like inflation. They have failed their mission in every way possible!

They missed seeing the tech bubble. They missed seeing the real estate crisis. They missed seeing the 2008 financial crisis. They missed seeing the inflation caused by all their own money printing during the Covid debacle, incorrectly predicting inflation would be "transitory".

Clearly, they are NOT accomplishing their goals, and yet annually they siphon many billions of dollars from the American economy, handing those funds to useless bankers living high in the Hamptons.

While the Federal Reserve system is all we have known during our lifetime, there is a better system, a system that doesn't create a $37 trillion debt impossible to ever pay off. In fact, President Lincoln and his Treasury Secretary, Salmon P. Chase, figured it out during the Civil War.

All money we use today, all Federal Reserve notes, physical or digital, are created from thin air by the Federal Reserve system and LENT into circulation. So we all pay continual interest on "money" they create from thin air. In other words, we pay real interest on their fake money. The current interest rate is about 4.4%.

Why do we borrow money created from thin air by the banks, paying interest on that fake money, when the U.S. Treasury can just as easily print fake money from thin air and spend it into circulation interest free?

This is exactly what President Lincoln did to fund the Civil War...and may have been the motive for his assassination! In 1963, President Kennedy did the same thing six months prior to his assassination.

Instead of borrowing fake money created from thin air by the banks, Lincoln (and Kennedy) had the Treasury print up fake money costing the taxpayers no interest. These were called "greenbacks", otherwise known as United States Notes, which look like Federal Reserve notes except they say "United States Note" at the top. They are printed by the U.S. Treasury, not the privately owned Federal Reserve banks.

Better yet, why not have the U.S. Treasury print up their own fake money to pay the interest on the fake money created and lent to us by the banks? Why do we have to pay real interest on their fake/counterfeit money? Why not pay fake interest on the central bank's fake money?

Of course the root of all this Federal Reserve system evil is "fake" money where we all pretend it's real. The ability of any organization (the central bank, the government, or anyone!) to create money from thin air should have been illegal....and our U.S. Constitution intended that!

But the U.S. Constitution had some flawed wording in Article 1, Section 10. It correctly dictated that only gold and silver coin can be used as tender in the payment of debts (i.e. when transacting). But it prefaced that by the term "No State shall issue...", when states were the main entities creating the money supply. Later, the courts ruled that the federal government is not a state, thereby allowing the federal government to create fake money. The Constitution should have read, "No Entity or organization shall issue.....".

Fake money in our economic system, the cause of all monetary inflation and our massive national debt, is created in two ways: 1) directly printing money from thin air, and 2) Fractional Reserve banking. Both practices should be illegal. They are tantamount to counterfeiting, regardless of whether the banks do it, or the federal government.

Gold is not printed from thin air. Bitcoin is not created from thin air. Both forms of sound money require an investment and cost to create a unit of the money, and this fact gives these assets intrinsic value, unlike the dollar that costs nothing to create. However, fractional reserve banking can create tradeable securities based on these assets over and above the quantity of money in circulation, and that process also creates fake money. Fractional reserve banking should also be illegal.

Only when we return to a system where the creation of all money takes investment, and where that money is fully collateralized (100% reserve ratios) at any bank, then we will have a sound money system.

A sound money system restores integrity to the financial system, and prevents all inflation allowing the average person to save, invest, and acquire things that make their life enjoyable and predictable.

Because of the Federal Reserve and the corrupt bankers running it, America has come a long way from its honest sound money roots. It is the fraud known as the Federal Reserve System (Fraudulent Reserve System?) that is bankrupting America to the tune of $37 Trillion in debt. Debt that cost the bankers nothing to create!

The Federal Reserve is not the fix for the crises we see every few years, it is the cause of the crises we see! Our Treasury Secretary is more than justified in calling for a review of this corrupt institution.

And we should not underestimate the political influence the Federal Reserve commands. Our central bank, because they can intentionally cause recessions or depressions, is more powerful than the government causing politicians to be blamed for the economy. Unless the Fed is checked, unless there is oversight and corrective actions taken, this institution is effectively the shadow government in the United States. The sooner it is reviewed and fixed (and potentially eliminated), the faster our lives improve.