The Federal Reserve Bank is NOT a federal agency, it DOES NOT keep reserves, and most of all IT IS NOT A BANK!! The 'Fed' controls and supplies American currency. Money is created out of nothing, and backed by nothing, and is a product of debt (I guess you could say that is backed only by the willingness of the American people to repay their debts. If ever everyone repayed their debts at the same time, the economy would collapse, as there would be no currency). Created by and accounting entry, and LOANED into existence. Money = debt. Every dollar you ever get is someone else's debt that must be paid back with interest, and every dollar is worth less when you spend it than it was when you got it. It is OWNED by the share holders of the Fed's member banks. Inflation IS a 'hidden tax' caused by the expansion of the money supply (more money is loaned into existence making each unit worth less). What is the Fed good for really? Among other things, a Great Depression, and two world wars. Although the Fed, as it is known today, was not yet created when WWI was the game in town, the mechanism was in place by the end of 1913 with the passing of the Federal Reserve Act.
If money is created out of nothing and loaned into existence, where does the money to pay the interest come from? If I created a form of currency, and called it the "Buck", and agreed to lend you 10 Bucks, which must be repayed with interest at a rate of say 10%, where would the money to cover the interest come from? As of this moment, there are only 10 Bucks in play, but you have to pay me 11. Where does that Buck come from? It doesn't exist yet. You guessed it! Another loan, or another economy. Which of course puts more Bucks into the system, causing each Buck to be worth less, as there are more of them now to buy the same amount of stuff. America was built by slavery, has it truly gotten past that very black stain? Or is it just more subtle?
If I am not mistaken, the War of Independence was fought to rid America of this very form of control by the British. Infact previous attempts to form a central bank in America had started wars. A short time before his assassination, President Kennedy vowed (and nearly pulled it off) to put the power to print money back in the hands of the American government (executive order 11110) (a Google search of executive order 11110 here), and back it with silver. I am not saying that this alone inspired is assassination, although it definitely was a factor. But his execution is a topic for a different post. Until then watch this for more info.
