Subscribe to Money Morning get daily headlines subscribe now! Money Morning Private Briefing today's private briefing Access Your Profit Alerts

5 Things the Federal Reserve Hopes You'll Never Find Out

Most Americans assume the U.S. Federal Reserve is a powerful government institution that seeks only to safeguard the dollar, boost the economy and drive employment higher.

That's what the Fed wants you to think.

The illusion of the Fed as a stabilizing, positive government entity has more or less existed since its creation under dubious circumstances in 1913.

"It not only avoided the word bank, it cleverly implied federal, or government, control over the establishment of a pool of reserves that would backstop the new banking 'system,'" said Money Morning Capital Wave Strategist Shah Gilani.

Congress has played along the whole time, first by approving the legislation that created this beast and later by endowing the Fed with its "dual mandate" to combat both inflation and unemployment.

The real reasons the Fed was created, and many of the things it does to this day, would shock many Americans.

"If the American people truly understood how the Federal Reserve System works and what it has done to us, they would be screaming for it to be abolished immediately," Michael Snyder writes on his website, The Economic Collapse.

Five Shocking Facts About the Federal Reserve

    1. It's Not Really Part of the Government

    Few people realize that the Federal Reserve didn't even exist until about 100 years ago. It was cooked up by the top Wall Street bankers of the time in a secret meeting on an island in Georgia (A book about it is actually titled "The Creature of Jekyll Island.")

    The bankers wanted a central bank partnered with the government to serve as a backstop for their institutions, which then were prone to panics and bank runs.

    The 12 regional banks that make up the Federal Reserve are not owned by the U.S. Treasury, but by the nation's private banks. According to, "about 38% of the nation's more than 8,000 banks are members of the [Federal Reserve] System, and thus own the Fed banks."

    2. The Federal Reserve's Primary Purpose is to Serve the Banks

    While the stated purpose of the Federal Reserve is its congressional "dual mandate," in practice serving the needs of the big banks still comes first.

    "Central banks – of which the Federal Reserve is, by far, the world's largest and most powerful – serve banks first and foremost," Gilani said. "Secondly, they serve their host governments.  They are the ultimate tool of the rich and powerful."

Join the conversation. Click here to jump to comments…

  1. Derek | May 9, 2013

    Mr. Zeiler, why do you say they hope you'll never find out? What proof do you have to warrant such as sensationalistic headline? What are your motives for slanting the article to the negative? Why would the historical existence of the Federal Reserve SHOCK Americans? Do you feel Americans are just dumb and uneducated and simply have no time to analyze issues and banking structures in an unbiased and rational way? Shame on you for this flypaper piece designed to manipulate people who only read headlines and draw inferences based on their internal bigotries. YOU are the problem with modern media. Rather than put out a piece educating people, you load your work up with juicy words like mandate, shock and abolish. Honestly, your playing to undiscriminating bourgeoisie.

    • Rolo | May 16, 2013

      Derek you are a tool. A tool of the US Govt or just a plain tool. Wake up and push back. Maybe you are a banker that sucks on the teat of the Fed and loves the fact that the citizens of this country have been swindled by our politicians in concert with the banks for every major bailout since the 1800's. Read "The Creature From Jekyll Island" by G Edward Griffin. Read Tom Schauf. Read Matt Taibbi. Vote the thieves out and hold them accountable. The bankers and the politicians deserve jail time for the crimes they have committed. Let's not forget the insurance companies…

      • teacher | May 22, 2013

        You can add medical doctors and hospitals to the list

        • Ken Danagger | September 11, 2013

          teacher – medical doctors are victims of the criminals, just like the rest of us. Hospitals probably are also – at least the smaller ones.
          You have to understand that the corruption exists where-ever an institution has enough political clout to buy favors from the gov't mafia. That's exactly what we have today…
          Our economy is no longer based upon honest competition, with the smartest and most productive being rewarded and inspiring everyone else to do better.
          The game today is to lobby lawmakers for "protection" in the shark infested waters they create for everyone else. The three groups of people who make this evil machine work are: Bankers, Politicians, and Lawyers.

          Political "Pull" is much more important today than productivity. Big corporations have been seduced into paying off the gov't thugs to crush their smaller competition who are unable to pay the "protection money. The motive for increased efficiency and innovation has been destroyed – which is why costs for domestic goods and services is skyrocketing. Cheap foreign imports are the only thing that is keeping inflation from exploding out of control. If not for the USD being the world reserve currency – foreign imports wouldn't be so cheap either, and our economy would collapse. The bankers and many politicans understand this – which is why we are continually getting involved in more and more wars. It's about trying to maintain control over foreign governments so that they don't abandon the petro-dollar.

          • Marine 0352 Matthew Van Dalen | January 9, 2014

            Ken Danagger, I applaud your commentary, it could not have been said any better by anyone! 'Semper Fidelis' Always Faithful, always.

            Derek. You are an idiot, plain and simple. Propaganda at best your words communist. Have a crappy life stupid.

    • Chaz | May 23, 2013

      It would be helpful to know a little about your background and why you appear to blindly support what the Fed has been doing since their inception. I recently became interested because as a 55 year old who has worked my entire life I'm concerned that my financial future (retirement) is being dictated by people whose motives are entirely selfish.

      I agree that we shouldn't believe everything we see in a headline – we should question it, do the research and come to our own conclusion. I agree with Rolo – it's time you started to do the research yourself.

    • jackie cox | November 11, 2013

      The 3 presidents who tried to end the ongoing thefts by the federal reserve system who printup momney out of thin air calling tit a loan to the american taxpayer while getting whatever % interest they so desire—were; LINCOLN, GARFIELD, AND KENNEDY, each one was mysteriously murdered for their efforts to do the right thing for america, who have elevated the world class mafias 250 or so dynasties into virtual nobility as they are in the final stages in creating a one world power, (THE RESURRECTION OF NOBILITY) where their cartel of oligopolies create a world of slaves, hirelings and servants to operate their governments and cartel of oligoploies who supply the world with whatever the Pseudo gang of first born rabbis decide what we can and cannot have, as the world draws closer to a time of change they are unable to adapt to, as time changes all things and the truths they destroy or hide are the truths we need to see us through time—but these people are self chosen to rule the 4 corners of our square, flat earth, the center of our universe which the moon, planets, sun and tiny stars circle each day.

      The only different from them and us is that we used to have respect for one another, an element missing in their belief system—if we had lived each others lives we would be little different from them.

      They must change or perish, as the youth of our world have become aware of them once again, and as they mature into adulthood, will terminate anyone who would see them as servants, hirelings, slaves, a world without hope, instead on one our owlrs instrumentation if used would result in an ongoing modernization of every aspect of life, elevating our magnitudes of literacy while increasing our qualities of life, ushering in new materials technologies we need if we are to survive time.

      Time changes all things, Only Truth survives time

      • Sunny | April 16, 2016

        I agree with everything you've stated including the fact that we are not on a blue marble spinning 1000 mph. We were born into slavery and live in a matrix of lies. I didn't see any of it until I fully accepted Yehushua as my Savior. Shalom.

    • jackie cox | November 11, 2013

      my comments of truth go unprinted in this site which I shall now depart and wish you the end time will bring to you.

    • lisa | May 17, 2014

      Whoa!!! ^^^ calm your farm!!! exactly the opposite of what you have just accused this man of is TRUE!!! I have independently researched this topic and have been PAID to do so and in what he says he is very correct but funnily enough also everything you say if you take the opposite is true! this man and many others who spread this knowledge should be praised!!! If this information has made just one more person think or wondered what the Federal (which isn't "federal") Reserve System does how it works, who started it and how it serves (doesn't serve!!!) Their interests than Awesome!!! Can't help but notice you have such a strong opinion 'for' the reserve system… care to share with us with?

    • Zhakari Meilin | July 15, 2015

      Derek, that comment makes so little sense, a dog could poop in someone's ear and they'd be more informed. Internet trolls run rampant nowadays, but for God's sake if you're going to use words that make it sound like you know what you're talking about, you're doing the same thing as putting whipped cream in a public toilet bowl. People like Derek are the worst thing that's happened to this country, and supporting them is only something that should be done by someone who likes to swim in their own dept. My apologies to everyone EXCEPT derek for my choice words, but what other ones can be suitable for the situation we're in.

  2. Neila moore | May 9, 2013

    Nothing surprises me as we have been fooled a lot by government issues.Yes we are the dumb people because we blindly accept and let them destroy America. We just do not know what to do,,,they are too big and powerful and we are helpless to stop all the coverups . Corruption is rampant..Only the rich can survive ,middle class are done for.

  3. Jason | May 9, 2013

    It's not that they don't want you to "find out", but more that they just don't want you to research or even think a little about it more than a person normally would. Calling it the federal reserve kind of reminds me of when a fast food restaurant calls their fish sandwich and "Icelandic Fish Sandwich". They don't say "Icelandic Cod", but when you hear that you probably think it without them having to lie about it.

    It's ok that the government owns us and runs our lives, but if everyone knew that a privately owned company had as much or more control than the government does, there would be outrage.

    • Stephane | August 24, 2013


      It's NOT OK that the government owns us. We need to stop accepting being treated like cows in the government barns that get milked all their life. Getting to chill in the pasture a few hours a day in the pasture is no substitute for real freedom.

  4. Truth | May 9, 2013

    Derek they do not teach any of this in the schooling system, you learn nothing about the debt system and how dangerous debt is. There is your proof good bye.

  5. Salvatore Governale | May 9, 2013

    Well, why am i not surprised? i knew this shananigans were going on for many, many years….But once again, No one listens to a crazy man….Wait, its going to get very my well worst. Sooner then you think. "Mother should i trust in the government or the feds?" i think not.

  6. Max | May 9, 2013


  7. Salvatore Governale | May 9, 2013

    thats it, lets all work for China… Oh wait a min, i think we are doing that already.

  8. Salvatore Governale | May 9, 2013

    the thing about all this Fed talk,,,,,, absolutely nothing will be done. Someone please throw us all under the bus…

  9. Loong Yew Luen | May 10, 2013

    As a typical working class or tin man in the wizard of oz, How can I gain monetary profit in the stock market? What tools or measures that we can use to trade or invest the hard-earned money?

    • matt | June 2, 2013

      Loong Luen,

      You need three things to succeed in the market:

      1- earn money (which you are obviously doing via your job)

      2- save as much as you can (without compromising your needs too much)

      3 – invest wisely.

      Now the above is a well know approach to wealth building, so I'm not saying anything new.

      However, to succeed in part 2 of the strategy i.e. invest wisely, you do need to educate yourself in the ways of the stockmarket.

      My thoughts are that the old approach of buying and holding are no longer valid. You need to trade but you have to know what stocks to buy, when to buy them and when to sell them.

      To give you a bit of assistance, concentrate on the Indexes first. The stock market is divided into indexes e.g. the XFJ (which has been doing really well up until now), the XDJ, the XHJ etc.

      Look up their charts to see when they are giving good signs of starting to move up. Then look at the individual stocks that are part of that index to ascertain if they're giving good 'Buy' signals.

      Concentrate on good stocks only and for this you'll have to look at the financials or fundamentals side of things but, as a rule, stay away from speccies.

      My thoughts are that the next sectors, or indexes to do well in the second half of the year might be the Energy XEJ and the Resources XJR.

      The market is likely to pick up until early July and then correct for a couple months or so. This might be a good time to enter the better stocks in the Indexes giving good signals.

      If you need to 'educate' yourself, you could do worse than joining the ATA (Aust Technical Analists Association). Please note that this is not a plug. I'm not even a member, as I'm seriously considering moving overseas to live. If I decide to stay here I will join them as I do think they have very good educational resources.

      Take care and the best of luck.


  10. grunta | May 10, 2013

    to derek who made comment at top of page: do your homework mate cause you are the typical
    american that doesnt get it, you are the problem and uneducated to such a degree that you see
    the american flag before anything else. the feds r killing the ecomony at the expense of the american public while stealing and thieving and rigging every game in town! they are bankers
    making billions of dollars while leading the public into bankruptcy, just wait till you wake up next year and find your bank account empty cause you got cyprussed! and if you dont know what i
    mean you dont know anything, im from the land downunder and our prime minister is out of control, she had a press conference the other day and politely asked aussies to pay and extra
    1percent medicare levy to back some scheme she implimented and cant pay for cause she dont know how to run the country. now most people would say well that was nice she asked us if we could pay the extra, but reality is she really meant i #ucked up and you guys are gunna

    • Lars | October 21, 2013

      What the FED has done with their ZIRP is equivalent to a 90+% tax on savings interest (mainly older and retired folks) with the proceeds shoveled directly into the coffers of the big banks. If Congress even tried to enact such a tax to benefit the big banks, the voters would be up in arms, but the FED can do it in the blink of a eye and practically no one notices. With the interests of big banks and big media overlapping to a large degree, no surprise that big media doesn't mention it to the sheeple.

  11. Andy Schuck | May 10, 2013

    Derek, you need to wake up and smell the coffee. In the not to distant future our US dollar will crumble (yes, even more than it has already) and you will be taking wheelbarrows full of dollars to buy milk and bread….see Weimar Germany in the 20's because that is what hyperinflation is all about. The alternative is that your current dollars will be REPLACED with new, ummm, let's call them PATRIOT DOLLARS and maybe you get one new dollar for 100 or 1000 old dollars. Or maybe you can get a few of those ONE TRILLION dollar coins that Treasury would like to mint. HAHA

  12. david hooge | May 10, 2013

    It is a shame that all our currently elected politions are leading the country down this path just to benifit themselves in the short run. Both parties are guilty. Shame! Shame!

  13. H. Craig Bradley | May 15, 2013


    As an individual American, you have very little recourse on this matter, as you are required by legal tender laws to pay all debts in U.S. Dollars. Most credit card companies and most utilties won't accept foreign currencies for payment of bills or debts. So, you must be paid in dollars and you must spend exclusively dollars because the FED has a monopoly.

    Since the decision to even have a FED was made by your grandparents generation in 1913, you are simply stuck with their old choice. You have no power to challenge the status quo. If you try, you will just be marginalized as a "cook" or "nutcase". The Republicans shunned former Congressman Ron Paul of Texas for this very reason. He had little political power in his storied political career.

  14. Anonymous | June 4, 2013

    The Federal Reserve as already stated is a private banking cartel which does not issue money to the government but rather lends money to the government and charges interest on this which we then intern pay back by the government raising taxes. To think that you have any say through the representatives that you feel you voted in is assanine. The truth is that whether you vote Democratic or Republican it makes no difference because at the end of the day both candidates are owned by the banks and large corporations that run America and they will do their bidding. Think about it did anyone get asked if we would like to go to war and spend trillions of dollars to further increase our federal debt to the Fed Reserve, did you vote for this? Did any of you get to vote to lose the right to freedom of speech or unlawful search and seizure under the Patriot Act? In my opinion there is no terrorism it is a ploy to use fear to control the citizens and prevent them from looking at the fact that since Woodrow Wilson signed in the document giving control of our currency to the Federal Reserve we have constantly lost our rights as the great nation that was founded by our four fathers. There is still a way that every American can take control of this and change it and that is the simple fact that the ultimate power does not fall into the hands of big businesses and banks but rather the consumer. If you feel that a business is too powerful and has influence over your government or is not acting in a way that is beneficial to humanity then don't buy their products instead focus on buying goods from companies that are helping our planet. This in turn puts the pressure on these companies to change and intern stimulates the economy in a positive way.

  15. Liam Hamilton | June 12, 2013

    Thank you Money Morning for exposing the atrocious and vile lies that are destroying America and American's hard earned money.

  16. Will | July 6, 2013

    There are many who have responded with absolutely correct thoughts. OUR Congress have lead us down this path and are continuing and the time for the Train Wreck can not be far away. I hope that the Train Wreck does not look as we have seen lately in other countries I fear that is what we will see soon. We need a Leader that has the ability to assemble us to work together during and after the massive Train Wreck happens. The Look will be as if it IS the End of America, Only Together We Will Continue To Stand.

  17. Hasan Howlader | July 18, 2013

    best .

  18. tomt | September 29, 2013

    I admire the Money Morning team for publishing this article.

    "Those who give up their freedom for security, will end up with neither freedom nor security."
    Ben Franklin

    If the people allow banks to control of the currency, their children's children will wake up homeless and penny-less. (not his exact words, but close)
    Thomas Jefferson

  19. Tony Bowne | November 11, 2013

    Just wanted to say thanks for printing this, I am aware o what is going on but very rarely have I seen it in print, could I just add that two Presidents printed debt free money Lincoln and Kennedy.

  20. G13Man | April 28, 2014

    , wow , a bunch of educated people here , [ except 4 the 1st , Derek ] .
    , If the communist kill the lawyers[ check] , teachers [ liberals , non-constitutionalists ] [ check ] ,present politicians [ check] , who should capitalist / constitutionalists do ? [ add bankers [check ]
    , of course the politicians could change the laws , [ has the fed paid taxes] . We could print a coin and pay them .. Have we charged them rent on our printing presses ? or our USA symbol ? whats the back dues ?
    viva the republic . oops hear the drones and see some black SUV's pulling up. Why do they have a bank id on them ?

  21. Marina | May 28, 2014

    5 Things the Federal Reserve Hopes You'll Never Find Out… err… except that most intelligent people already know !! I live in Australia and the Federal Reserve is a laughing stock even here. The greatest con since religion, actually.

Leave a Reply

Your email address will not be published. Required fields are marked *

Some HTML is OK