Q: Where does a Dollar come from?
A: The Federal Reserve System, enacted by law in 1913
Q: What is the Federal Reserve System?
A: It is commonly called a central bank, which is defined as a national bank that issues currency for the government.
Q: Is the Federal Reserve the national bank of the United States?
A: No, it is not federal at all. It is a private institution, and is not subject to audits.
Q: Does the Federal Reserve hold any reserves?
A: No. Reserves are a supply of a commodity that are held in banks, such as gold and silver, that acts as backing for, and secures the value of the money supply. The Dollar lost its tie to a commodity in 1971, when the Gold Standard was repealed, officially establishing a pure fiat currency. Fiat currency can be printed without limit, and has no intrinsic value, so it must declared “legal tender” by the government so that the public is forced by law to accept it as money. (See inflation at 1971 in graph below) 1
Q: What happened to the American peoples’ gold?
A: In 1933, Executive Order 6102 made it a criminal offense for U.S. citizens to own or trade gold, and were forced by law to hand over their gold coin, gold bullion, and gold certificates to the federal government in exchange for Federal Reserve Notes, paper backed only by debt. Silver coins and silver certificates were taken out of circulation in 1964, due to hoarding, and inflation decreasing their face value in relation to their silver content.
Q: What is inflation?
A: The expansion of the money supply.
Q: Why does the money supply expand?
A: The Federal Reserve inflates the money supply by exponentially lending Federal Reserve Notes to the United States with interest, to finance its expanding government, perpetual wars, and “nation building” in foreign nations.
Q: Who pays for the interest on these loans (Federal Reserve Notes)?
A: You. By 2006, gross interest payments on the national debt were running $406 billion per year. In 2010, interest payments on the debt was consuming 44% of personal income taxes. 2
Q: How high is the national debt?
A: 202 trillion with all liabilities included (2010) 3
Q: How does inflation affect the economy?
A: Inflation raises prices, and lowers the value (purchasing power) of each Dollar already in the money supply. It is an indirect confiscation of wealth that is taken from the American peoples’ wages that they are earning, and savings that they have earned. This is the essence of a “central bank” - it is a counterfeit banking practice that creates wealth for a private entity, by creating debt for the public.
Q: How much purchasing power (value), has the Dollar lost since the inception of the Federal Reserve in 1913?
A: 96.14% 4
Q: What was the Dollar, before the Federal Reserve?
A: For 120 years, the United States grew and prospered with sound money. Under the Coinage Act of 1792, the Dollar had value equal to a fixed weight in silver (371.25 grains), commonly known as a Silver Dollar. Promissory notes (paper money) could be redeemed in these commodities of intrinsic value, from banks that held gold and silver reserves. 5
Thomas Jefferson, James Madison, Andrew Jackson and other presidents notoriously opposed and recognized the dangers of inflation, even from a national bank. These men knew that limitless printable “money” was an incentive for war, and that it always plunges the nation into crippling debt.
Q: What does the United States Constitution say about money?
A: Article 1, Section 8: “Congress shall have Power To coin Money, regulate the Value thereof, and fix the Standard of Weights and Measures.”
Article 1, Section 10: “No State shall emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts.”