What is it?
If you're like I was, you probably thought, whenever you heard about the "Federal" Reserve, that it was owned and operated by the "Federal" Government. But here's the thing, you and I were both wrong. There is nothing "federal" about the "Federal" Reserve. It is a private company! Also, there are no "reserves" in it either! So, with all this said, what the heck is it??
The History of the Federal Reserve
It all started less than a decade into the 20th century. Some of the wealthiest men in the world got together and started planning the biggest heist ever to take place in the history of America. These men were so wealthy, that together, they accumulated 25% of the entire world's wealth! And that was BEFORE they started the Fed. Some of these men were Cecil Rhodes, J.P. Morgan, John D. Rockefeller, etc... At an estate owned by Mr. Morgan on Jekyll Island, they started writing what was finally called the "Federal Reserve Act". Although that is what the final name was, that is not what it started as. They tried many titles, but found that adding the word "federal" added some sense of comfort to the ignorant. This act basically gave them complete power over this Nation's monetary system. It was a complete monopoly. Again, if you're like me, you're probably thinking, "well there's no way this could get passed, it's extremely unconstitutional!" Well, I wish you were right, but you're wrong. It got passed. A president by the name of Woodrow Wilson signed it and passed it (along with a corrupt and ignorant house and congress). This gave them more power than we can ever imagine. They had been given virtually complete control of the country.
So, what does the Federal Reserve do?
The Federal Reserve has total control of our currency. That means they control "inflation" (the amount of money that is in circulation) and the "interest rate" (the added amount of money on top of a loan). This means that they have the power to put money into circulation and to take money out of circulation. So lets say the government wants to take out $100 (I'm keeping it low for simplicity). The Fed will LOAN them the $100 with full expectancy of it being payed back (cause its a loan) and on top will charge an extra $25 interest. So, immediately, the country is in debt. Now, the country is ready to pay back the loan, so in order to do this, they take out another loan, just enough to pay back the original (not even including the interest). But by doing this they have only created more debt. So, there really is no way to truly be out of debt, because the only way you can get money to pay off the debt, is by taking money out of the same place you owe money to, and then consequently only creating even more debt while trying to pay the original debt off. It is a never ending situation resulting in debt every time. And now that we are off the gold-standard, we can print money even when we do not have it, giving appearance of wealth, when truthfully all we are doing is causing the value of our currency to go down and creating even MORE debt! Are you starting to get the picture?
Consequences
Many many years ago back when we were on the gold-standard, your dollar was actually worth something. On it, you could read "redeemable by gold" which meant that somewhere, probably Fort Knox, there was a piece of gold that your dollar was representing. So the value of the dollar was based on real gold. Now, we are no longer on a gold-standard, which means your dollar represents nothing. Now bills say "this note is legal tender" meaning its backed by nothing, it is simply a piece of paper. So, the value of the dollar is dependent upon inflation. So, the value goes up when you take money out of circulation and the value goes down when we print more money. Sadly, we have over time, accumulated a substantially large debt, and it continues to rise every day. And the government's answer to that, is to print more money! So, this gives the market a temporary lift, but ultimately devalues our currency, only creating more debt. At this point we have printed way too much money and the dollar's value continues to drop rapidly, and it is only going to get worse. Eventually it will get bad enough that the dollar will crash (because we are not on a standard, we have no accountability, meaning our currency can and will crash). Meaning it will go from little value to no value. Leaving you with nothing but worthless paper. Meaning someone with a hundred million dollars is no richer than the guy with 5 dollars. It will be WORTHLESS. This may be hard for some of you to even comprehend, but sadly, its true. This day is coming and it is coming soon.
To expand on your point our money being worthless, I think it woud be helpful to show the two reasons for how it could become worthless. First it is possible, that your money could become so inflated that it would be worthless, in the international market. Now although this could happen it would still retain its value, although greatly diminished, here in the U.S. The more serious problem lies in the fact that other countries, primarily China, could stop buying our treasury bonds. A U.S treasury is simply an I.O.U that the U.S gives to other countries in order to borrow money. As soon as these other countries stop trusting that we will pay them back, they will stop accepting our bonds and our money will have no value. Since the dollar isn't backed by anything it relies on the trust of the market, so it can fall at anytime
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