
Yes, the Alpha and Omega of almost everything that threatens the future of capitalist prosperity and constitutional liberty in America is the Federal Reserve. And its untoward impact goes back decades and decades, taking the form of multiple phases and transmutations as it made its way over the last 110 years to its current malefic incarnation.
To be sure, it didn’t start that way upon its legislative enactment on Christmas Eve 1913. The original statute as crafted by the great Congressman (and later Senator) Carter Glass actually omitted—and deliberately so —the two core features of today’s rogue central bank, which features underlie all our present-day troubles. To wit, there was no provision for the nation’s new central bank to own, borrow or collateralize the public debt. There was also no mandate or mechanism for it to be in the macroeconomic management business, nor was it contemplated that the 12 new Federal Reserve Banks, spread among the regions of the United States, would play any role at all in the stock and bond markets and that only one of these 12 banks— the New York Fed—would ever get within 100 miles of Wall Street.
Most importantly, rather than function as the dominant, centralized influencer and price-setter in the banking and financial markets, as per today’s Fed, the new Federal Reserve system was designed to be a decentralized price-taker and last resort liquidity provider to Member banks within each of its 12 regions. That is to say, the gold coin standard was the basis for anchoring the value of hand-to-hand currency and commercial bank deposit money, and the free market was the forum for pricing money claims, debt, equity and other financial assets…