by B L Dehler

Created on: September 12, 2010

“Permit me to issue and control the money of the nation and I care not who makes its laws.” — Mayer Amsched Rothschild

In case you haven't heard of them, the Rothschilds were one of the most powerful, richest family dynasties in the history of the world. They owned banks across Europe and were named not only among the richest of the world, but also the most influential. What Mayer has to say about controlling money is very revealing.

Contrary to what many believe, the Federal Reserve is not a branch of the United States government. It is a privately owned bank (the owners of which are still secret) that is given permission by the United States Congress to print Federal Reserve Notes, also known as dollars.

A note is a financial term for a debt obligation: when you purchased your house and/or your car, for instance, you signed a “promissory note” promising to pay back the money you borrow. In the very same way, the Federal Reserve prints what we call dollars but are in actuality small debt agreements for the United States government.

It is essential to realize this in order to realize that when the Federal Reserve prints more money, they are really printing IOU notes for the U.S. Government to be repaid by future tax obligations. Long story short: they control the printing of money.

Printing money is only one part of the monetary policy that the Federal Reserve has power over. They also have the power to set interest rates. Most people see interest rates as just how much they have to pay for a home mortgage or car loan. This is true, and an interest rate fluctuation of just 0.5% could mean the difference of $65/month on a $200,000 home loan. That doesn't sound like much until you consider that after 30 years, this equates to paying an additional $23,000 over the life of the loan.

This is part of the problem in America today: interest rates were kept too low and too many people got too far into debt because borrowing money was too cheap when times were good. Not to mention the issues with the adjustable loans they took rather than the traditional fixed rate mortgages. And as we learned, this rippled through the entire economy and then rippled across the world.

I'm not trying to imply that all the issues in America are the blame of the Federal Reserve. Certainly it isn't all their fault. But to say ridiculously low interest rates weren't a large factor is just putting your head in the sand. The biggest problem is, sound fiscal policy

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