The Federal Reserve is as federal as Federal Express. The Federal Reserve was created in 1913 and uses its power to increase the money supply and control interest rates. When money is created out of thin air, this lowers the purchasing power of our money and that is called inflation. A $1 bill in 1913 is now worth $0.05 in 2009. Is it any wonder why most families must have two incomes to make ends meet? Our current monetary scheme steals wealth from the people. Inflation robs the wealth of Americans as we attempt to save for our future. It is easy to understand that if your current savings account rate is 0.1% and inflation is 3%, your savings is being devalued 2.9% per year. In order to stay ahead of inflation and create wealth, an individual must put their money in risky investments to try and get a higher return than the current rate of inflation.
The only entities who benefit from this scheme are those that get the money first and can spend it in today’s dollars before it trickles out and dilutes the money supply. The two entities that have access to this newly printed money and benefit from inflation are the Federal Government and the banking industry. The second function of the Federal Reserve to control interest rates contribute to the boom/bust cycles we have seen in the past. By allowing interest rates to be artificially low the Federal Reserve provides the incentives for investors and businesses to make bad and risky decisions that do not make long term sense. The housing crisis is a direct result of interest rates being artificially kept low for too long.
Currently HR 1207, The Federal Reserve Transparency Act, has 317 cosponsors in the House and 31 cosponsors in the Senate. The American people need to have a better understanding on what is going on behind closed doors at the Federal Reserve. Too much is dependent on it.
Dr. Taylor supports HR 1207 and any other legislation that put sunlight on the working of our monetary system. He will also work to insure that a sound money supply is available to the people.