Posted on November 13, 2015 by Martin Armstrong
QUESTION: the big question: WHY do USA still have the FED (a private company) dictating the USA economy?????????
ANSWER: Very simple. The Fed was originally a private bailout entity to replace JP Morgan and what he did in the Panic of 1907. Stimulation was buying corporate paper, not government. When WWI came, Congress ordered the Fed to buy government paper not corporate. They never returned it to its original design. The Great Depression comes. Congress usurped all branches and established a single national interest rate. They ordered the Fed to support US debt at par during WWII but did remove that in 1951.
The answer is very simple. Congress gets to blame the Fed for inflation because the definition is an increase in money supply so that is the Fed’s job. Meanwhile, Congress relieves itself of any responsibility for inflation and fiscal management. Everyone focuses on the Fed and not the fact that Congress creates the bulk of the money by debt.
It’s a blame game that relieves Congress of any responsibility. They get to hold hearings and interrogate everyone else except themselves. They keep everyone blaming the Fed and that what they can run for office and promise the moon. The Fed is nothing like what it was supposed to be. The elastic money was to allow it to stimulate buying corporate paper that is at least repaid. Once that became government paper, the game was changed. Roosevelt even confiscated the gold from the Fed in 1933 just like all other banks.
So it works. So many people hate the Fed, but they do not look at who really creates the bulk of the money – CONGRESS. It is very naive to think if you shut down the Fed that will solve everything. The problem runs much deeper.
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