---

Central Bank Called the Fed Fails in its Actions and its Communication.

---

The United States managed without a central bank, with certain exceptions, until the twentieth century. The Federal Reserve System was brought in, so it was claimed, to regulate the nation’s financial system, and to prevent economic depressions and bank panics.

Despite its lofty ideals and the Bank Panic of 1907, which was used by supporters to justify the creation of the Federal Reserve, the central bank called the Fed failed to avoid the Great Depression of 1929 or the Wall Street Crash of 1987.

The Founding Fathers of the United States were in the majority against the idea of a central bank, control of which would too easily have been appropriated by a power-hungry minority.

Thomas Jefferson said that the issuing power of the currency of the American people should rest with the American people.

He painted a desolate picture of private banks taking over the issue of currency, inflation, deflation, deprivation of property and homeless children.

The Federal Bank is a government entity, but is however, privately owned.

---

---

Fundamental Flaws in the Fed

The history of central banking in the U.S. contains an interesting anecdote. After the First Bank of the United States ended in 1811, after 19 years of existence, the Second Bank of the United States came into existence in 1816.

Then-President Jackson disapproved and took government funds out of the bank, whereupon the bank’s president contracted the money supply in retaliation and set off a recession.

In the current Federal Bank, the private members aspect still remains. It is an exclusive club where the public still does not know how monetary policy is being set, despite this being an issue which impacts the whole of the U.S. nation.

Eminent economists who have been proven right on numerous occasions criticize the historical functioning of the central bank called the Fed, meaning the Federal Reserve System and its operations.

Milton Friedman’s opinion is that ideally the U.S. should get rid of the Federal Reserve System. He stated that, as a fundamentally flawed system, it is not reasonable to try to improve it, but the only real choice is to replace it.

He even rated getting rid of the Federal Reserve as the most urgent economic problem of the time. Current President of the Federal Bank and noted economist in his own right, Ben Bernanke, agreed that the Federal Reserve System had plunged the U.S. even deeper into the Great Depression.

---

Fed Failure to Communicate or Prevent Inflation

The central bank called the Fed has also demonstrably failed to prevent inflation. Whether the inherent flaw is already in the printing of more money or the lack of willpower to change direction afterwards, the central bank called the Fed is a long-standing culprit.

Despite its shortcomings, the Federal Reserve lacks accountability. It exploits its independence and private membership and gives out only cryptic messages about its strategy, direction and policy.

The end result is that financial organizations end up having to guess or second-guess about Fed policy in the future, and on occasions they get it wrong and the whole market suffers.

Even if central bank called the Fed won’t go away, it is still under pressure from congress people and the media alike to better explain its thoughts and actions.

Recently, both Bloomberg News and Fox Business Network have filed a formal request or lawsuit for detailed information from the Fed.

---

---