If you’ve been paying attention, you’ll notice that things don’t seem normal with our economy and depending on how old you are you’ve probably realized things hasn’t been
Perhaps you’ve even noticed how the American standard of living has declined quite substantially over the past few decades and may ask why?
Why does it take more time and effort to acquire the things today that our grandparents could have purchased with just one income?
Why do we have to work two jobs to make ends meet when our grandparents only needed one? Is there a reason why healthcare costs are so expensive?
Why are rents and home prices rising so fast? Most importantly, why does the dollar buy less today than yesterday? There’s one culprit who’s responsible, the Federal Reserve.
Note: the federal government, state, and local governments also have a hand in many of these issues.
What Is the Federal Reserve?
The Federal Reserve Act was signed into law by President Woodrow Wilson on December 23, 1923, and by 1914 the Federal Reserve was operational.
The original sole purpose of the Federal Reserve was to respond to any stresses in the banking system and to create financial stability as a lender of last resort.
In time the Federal Reserve was called upon to become the regulator of monetary and economic policy, which includes being responsible for the unemployment rate.
However, what exactly does the Fed do in regards to monetary policy? Well, they manipulate interest rates or even inflate the money supply to help stimulate economic growth.
They can also raise interest rates to contract the money supply to halt inflation.
In the end, the Federal Reserve is supposed to maintain the value and stability of the U.S. Dollar. However, if you look at the charts below, you can see they’re doing a poor job at preserving the value of our dollar.
Since the inception of the Federal Reserve, the dollar has lost roughly 95% of its original value, and consumer prices have risen drastically.
Do We Need the Central Bank?
Now that we understand just how terrible of a job the FED is doing in regards to our currency, we have to ask should we continue to let the Federal Reserve be in control of monetary policy?
I think the answer is obvious, no.
We should repeal the Federal Reserve Act and shut down all the Federal Reserve banks.
If we do that, who should be in charge of our monetary system? The White House? Congress? Oh please no, none of them should be in charge.
The answer is “We the people.”
The Dollar’s Value Prior To The Fed
Furthermore, before the Federal Reserve central bank system, it was the people and individual banks who were in charge of the monetary policy and guess what? We performed a much better job.
Though there was one caveat, the Dollar was back by gold. Thanks to gold the government(s) spending was limited.
Except for the few wars here and there which slightly devalued our currency, overall we did a good job in managing the U.S. Dollar.
Yes, there were a few central banks thrown in there starting with the First Bank of the United States and the Second Bank of the United States. A period where our currency was a little weak for a time. However, they didn’t last long.
Buying Power of One U.S. Dollar compared to 1774 USD
The truth is the market or individuals; do a much better job managing the nation’s money than the Federal Reserve or any other central bank for that matter.
It’s about time we the people take control of the nation’s capital and not some central authority. Perhaps then we can enjoy the same living standards as our grandparents.