US Money Chapter 5 – Our Current System


Our Current System 5.41 The constitution on money (2)

Not all of our founding fathers fully understood the importance of money creation to their vision for America – a nation of, by and for the people, and thus failed to make the money creation power crystal clear in the Co…

Our Current System 5.54 Sunshine is the best disinfectant (4)

Here’s a little sunshine on the Federal Reserve balance sheets. UNITED STATES FEDERAL RESERVE STATEMENT OF CONDITION OF ALL FEDERAL RESERVE BANKS COMBINED63 Notes for United States Federal Reserve Statement of Condit…

Our Current System 5.40 Our current system: how did we get here? (2)

There is something curious in the movements of this modern complicated machine, the funding system; and it is only now that it is beginning to unfold the full extent of its movements. In the first part of its movements …

Our Current System 5.42 The US federal reserve system (2)

The Federal Reserve, the central bank of the United States, provides the nation with a safe, flexible, and stable monetary and financial system. – http://www.federalreserve.gov The Federal Reserve Act makes money cre…

Our Current System 5.43 The fed’s own words (2)

Here is what the Fed says about itself: As the nation’s central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary …

Our Current System 5.44 The fed’s goals (2)

The Purposes and Functions of the Federal Reserve System… The goals of monetary policy are spelled out in the Federal Reserve Act, which specifies that the Board of Governors and the Federal Open Market Committee shoul…

Our Current System 5.45 The duties of our central bank (2)

The Fed’s duties fall into 4 distinguishable areas: Basic banking services; Banking standards & supervision; Money creation; and, Compensating for an unstable system. Basic banking functions Services to financial inst…

Our Current System 5.46 Who creates new money?: a privileged elite of private bankers (2)

The Federal Reserve Act hands the privilege of creating our money supply over to the private banking sector. About 99 percent of the money we use today is created by private bankers or their central bank. Our government …

Our Current System 5.47 How is new money created?: debt-credit creates the money supply (2)

The Federal Reserve Act of 1913 made law a fractional reserve money creation system: private banks create new US money when they exchange their own IOU-future-value notes, called Federal Reserve Notes, for an IOU from ei…

Our Current System 5.48 The tokens: cash and digital (2)

Our money is an IOU-future-value promise from the private bank members of the Federal Reserve System. The Federal Reserve promises come in two basic forms of the token we call a US dollar. A dollar can have a physical fo…

Our Current System 5.49 How much money have the banks created? (2)

Bankers and economists have made counting the money supply a challenge. Money is defined as a tiered construct of increasingly obscure means of issuing debt or credit. M0 is called the monetary base and it is the money t…

Our Current System 5.50 Money supply growth rate: steady devaluation of our dollar (2)

growth According to data provided by the Fed, our money supply increased steadily for the past 100 years. It is created at rates as high as 11 percent in the run up to bubbles and then drops to rates of negative one to n…

Our Current System 5.51 The golden goose: government (2)

The gift that keeps on giving Under our current system, Government is the golden goose for private banks and the financial sector. Wall Street makes money when the Fed system creates new money for government to spend. T…

Our Current System 5.52 Conflating monetary with economic (4)

A system that gives the power to create money to private banks fuses and confuses monetary and financial issues. It’s hard to see clear choices, and when the money system fails, the economy fails along with it. The Fed’…

Our Current System 5.53 A radical departure (4)

A century ago, between 1913 when The Federal Reserve Act was passed and 1929 when the economy came crashing down, banks with the power to create new money could also invest it. This ability to self-deal created a booming …

Our Current System 5.55 Pandora’s box – pushing the boundaries: a new digital currency (4)

Two new currency variations are emerging; they’re both called digital currency, and they’re very different. One will rule us, one will serve us. Nearly all of money today is created and used online. So, most of our money…

About the US Money Chapter 5 – Our Current System category (1)