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Three Branches of government, clueless yet sly
Seven govern the Board, in their halls of stone
Twelve Banks print fiat, doomed to die
For 'copter'  Bernanke, on his cell phone
In the FOMC, where the budgets lie
One Bank to rule them all, One Bank to mind them,
One Bank to bring them all, and to inflation bind them
In the FOMC, where the budgets lie
The current Fed Chairman, Ben Bernanke, has openly boasted that the Federal Reserve caused the Great Depression . The preceding Fed Chairman Alan Greenspan agreed, and wrote that the Fed should be destroyed . This estimate  by Kotlikoff, posted by the St. Louis Fed on its website, says that the off-budget obligations of the US have created a $65.9 trillion 'fiscal gap.'
Most Americans seem to think these guys are kidding. I doubt it; none of the Fourteen Fedwraiths have been stand-up comics. We ignore their threats and warnings at the cost of our financial well-being. There's nothing stopping the US economy from turning into Argentina.
The Federal Reserve is a 'central bank,' in other words, a check-kiting Ring of Power. It is called the 'Federal Reserve' because in 1912 Senator Aldrich attempted to pass a bill creating a 'central bank.' All Americans knew at the time that central banks caused inflation and deflation; the bill failed.
The next year Aldrich introduced the same bill, but called the new organization the 'Money Mafia' to make it less distasteful. No, not really. He called it the 'Federal Reserve' and confused enough people to pass the Federal Reserve Act on December 23, 1913. This date is sacred to this day, both to evil Templars trying to find the Da Vinci code and to people who are trying to pass bills without too much scrutiny just before the Congressional recess. Thus the US ended up with a Central Bank, just like the Kaiser's Germany and other fashionable countries of the time.
So, nothing unusual here. All 'regulatory agencies' (starting with the ICC, which cartelized the railroads) have always been captured (or more often, created) by the industry they 'regulate.' The Fed is the regulatory agency for banks, and indeed it originated at a meeting between bankers in 1910 at Jekyll Island  (Hyde Island was booked up).
However, the power of the Fed goes beyond that of ordinary cartels and government-granted monopolies. Not just a parasite on one industry, the Fed can magically drain real wealth from the entire economy. Since 1913 it has removed 95% of the value out of the dollar, and thus out of the bank accounts of those foolish enough to use the dollar as a 'store of value.'
The Fed makes the political faction which wields it invulnerable to market forces in the bond market. Anyone who knows Fed policy ahead of time gains the Fed's power to vampire wealth from those who create it. No political candidate or party can stand against the power of Money Itself.
How does the Fed do all this? It 'prints money'; in other words, it counterfeits. It both directly prints money through the FOMC and allows the banks that it 'regulates' to loan out more money than they have in their vaults . . . I mean on their hard drives. If anything goes wrong with this process, the Fed prints money to cover any shortage. Or, if the Fed wants to, it can increase bank reserve requirements and 'un-print' money, as it did in 1929 to cause the Great Depression.
Printing money is not some sort of charitable activity. In addition to simply stealing from those on fixed incomes, inflation damages the entire information flow in the economy. If no one knows exactly what money is worth, they can't calculate profits and losses. The whole parallel-processing computer that we call 'the market economy' starts giving inaccurate answers. For instance, all through the 1920s, the Fed inflated, and businesses thought they were doing better than they were. They overinvested in their existing product lines. Then when the Fed DEFLATED in the Depression, businesses went bankrupt and underinvestment was the rule.
The destruction of information doesn't stop there. Inflation and deflation make it even harder to predict the value of money years in the future. If there is deflation, you can't pay off your debts; if there is inflation, your savings, insurance payouts, bond interest etc. become worth less. Inflations and deflations transfer ownership of real goods around, scrambling property rights (and always in favor of those who know monetary policy in advance).
A Short Chonicle of the Fed:
1913: Hired orcs, started printing unbacked money.
1917-18: Printed money even faster to pay for World War I.
1920-29: Printed some more money.
1929: Surprise! The Fed un-printed money by increasing bank reserve requirements. In 1929 and through the 1930s, as Bernanke says, the Fed hurled the entire US economy into the Great Depression and kept it there for years, unemploying millions. Civilization literally went backwards, with negative economic growth.
1933: the Fed magically stole all the gold from the small-town bank vaults of the entire Shire and moved it into Darkness under Fort Knox (a Darkness so complete that the gold has not been audited  since the 1950s. Indeed, the darkness is so thick that some suspect much of the gold hoard may actually have been sold by Johnson and Nixon to cover up the decline in the dollar). Dragons everywhere died of envy, moving them onto the endangered species list.
1940s: printed money to change ownership of Eastern Europe from Hitler to Stalin.
1950s-70s: printed money (causing negative real returns for bonds during some of this period)
1980: The Fed was granted another malevolent power by the Council Of Idiots . Under the Depository Institutions Monetary Control Act of 1980, the Fed can, and does, simply print tens of billions of dollars to buy the worthless bonds of all the dictatorial regimes on Earth. This is called 'monetizing foreign debt,' because 'Aid to Dependent Dictators ' doesn't sound as professional.
The Fed used to release the figures on this extra-Constitutional aid to Pol Pot, Idi Amin et. al., but then Representative Ron Paul (the token Lawful Good representative from The Woodlands) starting keeping track of it, so they quit. (Quit releasing the figures, not funding the dictators). They recently extended this policy, and now don't even release the domestic M3 money supply numbers. This saves a lot of time, since now no one can even try to predict the real inflation rate.
1980-2006: Today, the Fed detaches the military-entertainment complex from the need to openly pass war taxes through Congress. They simply print as many dollars as they want, reducing the value of all other dollars proportionately. As in Argentina, the purpose of taxes is just to maintain a demand for depreciating dollars, since everyone needs them to send to the IRS .
Taking the Fed to Mount Doom
The Fed performs no productive economic function. All it does is increase the fluctuations in the value of the medium of exchange, thus adding an artificial monetary risk to other economic risks. Thanks to the 'fractional reserve' nature of the Fed, it can't even accurately control its own destructive powers. Even if Galadriel ran the Fed, she could do nothing but evil.
So the only reasonable solution is obvious to students of evil wizardry: send a multicultural task force  to hurl the Fed into an active volcano. Once the Fed is destroyed, monetary life could return to normal. US political strife would be reduced as well, since there would no longer be an all-powerful economic prize for the winning faction. Any government expenditures would have to be bribed for properly in Congress, not just secretly transmitted through money-center banks to overseas dictators.
One difficulty that most so-called 'reformers' have had is that they wanted to wield the Power of the Fed themselves. Of course no Fed-Bearer will voluntarily give its precious Fed to anyone else. But the process of replacing the Fed has already begun.
Most Americans know that the dollar is a terrible store of value, and use it only for the shortest term that they can. Long-term savings are held in the form of stock mutual funds, real estate, and increasingly 'exhange traded funds' like GLD and SLV . . . in other words, gold and silver, just as people have done for thousands of years. There is no barrier to people using any of these real commodities for trade.
Visa, Discover, Paypal, Ikobo , etc. are all perfectly capable of electronically transferring any form of fully-backed private money around. The ancient 'check-clearing' system of the Fed is ridiculous and redundant; why should money travel slower than the speed of light? Separation of Money and State is no harder than separation of Church and State, and no less beneficial.
The Fed is both evil and obsolete. There is no way to use the counterfeiting power of the Fed Chairman for good. We will 'throw him down, and have no one in his place.'