Credit Card Lawsuits And
The Federal Reserve

Since Credit Card Lawsuits are the theme of this Website, we have tried to keep most of the information we provide specific to this subject.

While we have definite opinions on these subjects, we will try to keep our opinions at a minimum. We hope that you will continue to search these subjects and form your own opinions about these topics.

"What Is The FED?"

Is the Federal Reserve a government agency or privately owned? Many people like to use the saying the Federal Reserve is no more Federal than Federal Express.

The Federal reserve system (The Fed) is the Central Banking System of The United States. The Fed claims to be a Quasi-Public entity...A Government entity with private components.

We believe this is untrue...In our opinion there is no question the Fed is privately owned and operated, the courts agree and have ruled on this very claim.

The United States Court of Appeals, Ninth Circuit. ruled in Lewis v. United States, 680 F.2d 1239 (1982)..."Federal reserve banks are not federal instrumentalities for purposes of a Federal Tort Claims Act, but are independent, privately owned and locally controlled corporations...federal reserve banks, though heavily regulated, are locally controlled by their member banks, banks are listed neither as "wholly owned" government corporations nor as "mixed ownership" corporations; federal reserve banks receive no appropriated funds from Congress and the banks are empowered to sue and be sued in their own names."

The ruling clearly states "...(Federal Reserve Banks) are independent, privately owned and locally controlled corporations..."

The employees of the Federal Reserve are not civil employees and receive no government benefits...Further, Federal Reserve Banks are never listed as Government Agencies under any listing.

So in what way is the Fed a Government Agency?...While the Fed is heavily regulated this does not meet the criteria for its claim of being quasi-public. The Fed is clearly privately run and owned.

"...So Who Runs The Fed?"

The Board of Governors is allegedly the governing body of the Federal Reserve, however the Federal Open Market Committee is much more powerful...More on that in a moment.

The Board of Governors is made up of seven members all appointed by the President of the United States and confirmed by the Senate for terms of 14 years. The Board of Governors oversees the 12 District Reserve Banks, the US Banking system, and Monetary Policy in general.

The Board is required to make an annual report of operations to the Speaker of the U.S. House of Representatives. However, the Board of Governors receives no funding from Congress and the members operate independently.

The true power of the Fed, lies with the Federal Open Market Committee or FOMC. It is the principal tool of US national monetary policy, and is in charge of the nations daily open market operations (the buying and selling of government securities).

The FOMC is made up of 12 voting members, seven are from the Board of Governors, and five of the twelve Federal Reserve Bank Presidents, each serving on a rotating basis. However all of the Federal Reserve Bank Presidents are required to attend FOMC meetings.

Again the FOMC, operates outside of any oversight from Congress, and is in control of the daily operations of the Fed, directly controlling the economy of America. In October 2008 the Fed made loans of over $2 Trillion, to undisclosed sources, and refuses to disclose the details of these transactions.

This is an example of how powerful the FOMC is. The FOMC has complete control over the nations money supply and economy without any input from Congress or the American People.

The members of the FOMC and Board of Governors are among the most powerful people in the world, and these members assume their positions of power without any input from the voting public.

Why The FOMC Is So Important

The importance of the FOMC, and its affects on the economy cannot be understated.

The Fed has 3 policy tools at its disposal to control the economy and money supply.

First, the reserve ratio requirement, sets the minimum reserves each bank must hold in customer deposits and notes against the amount it can directly loan.

Next we have the discount rate, if member banks need to increase their reserves they may borrow from the Federal Reserve.

The interest the Fed charges on the borrowings is called the Discount Rate. This is one way the Fed can increase the money supply by creating money.

When a member Bank borrows from the Fed, the Fed simply writes a check drawn on itself. When the member bank deposits the check, it constitutes a new deposit credit.

Since no one has lost a deposit, the total deposits are increased, and new money has been brought into existence by expansion of credit.

This is very important so we will repeat it...New money has been brought into existence...This is the primary reason for inflation and the Banking problems today.

Finally, and the most important is Open Market Operations. This is the most widely used tool by the Fed, and yet another way the Fed can create money.

In open-market operations the Federal Reserve buys or sells U.S. government securities, usually T-bills, in the secondary market.

If the Fed buys Securities the money supply is increased, if the Fed sells their Securities the money supply is reduced.

However, when the Federal Reserve buys securities, it creates the funds with which it buys Securities. It pays with a check drawn on itself, and when a commercial bank submits this check for payment, the bank gets reserves that did not previously exist.

In other words the Fed is buying Securities without any money, only its ability to create credit!

Why Was The Federal
Reserve System Created?

The Fed was brought into existence by the passing of the Federal Reserve act of 1913. Its purpose was to stabilize the economy and provide a safer monetary system.

Lets look at the American economy since 1913, to see how effective the Fed has been in providing a more stable monetary system.

In 1919-1921 the Stock market lost 46%, just over 5 years from the start of the Fed and problems start. The crash of 1929, started the worst Depression in the history of the United States.

The Depression lasted from 1929-1939, and from 1929 through 1932 the market lost 89%.

Most historians believe the Fed was the contributing factor in causing the Depression, by raising rates they constricted the money supply and created the very problem they were meant to prevent.

The emergence of World War II no doubt had an impact, in resurrecting the American economy. However, by 1945 the war ended and by 1953 America was once again in recession. Recession hit again in 1957-1958, 1969, 1973-1975, 1981-1982.

Black Monday October 19, 1987 the Dow dropped 508 pts, up until that point, it was the single largest one day drop in American history.

America was once again in recession in 1990 and 2001. The Nasdaq had a crash starting in 2000 through 2002 and lost a total of 82%. Which brings us to the end of 2007 through ?, and the events of 2008 are to numerous to mention.

Is this stability?...The Fed has shown it has little if any ability to provide Americans a steady monetary policy...We believe it is time to revoke its Charter...We can and should, repeat history and take back the issuing control of OUR MONEY!!

So What Have We Learned?

The Fed is a Private Corporation operating outside the control of Congress and the American people. The members of the Board of Governors and FOMC are among the most powerful people in the world, and are put into this position without any input from the voting public.

These facts are undeniable.

The fate of our monetary system is in the hands of Private Bankers...These Bankers have assumed their power WITHOUT...Let us repeat, WITHOUT any input from the American Public...Now who do you think is more powerful the members of the FOMC or The President of the United States of America?

We believe the issuing power of the currency, should be restored to the people, just as our founding fathers had intended. Remember this country was founded on Protestors...Tax Protestors to be exact.

We know the contents of this page are a little off subject. We do believe, it is essential for Consumers to understand their debt and how it is created.