Republican presidential nominee Donald Trump blasted the U.S. Federal Reserve and Fed Chair Janet Yellen for being more "political" than his Democratic counterpart Hillary Clinton in Monday night's heated presidential debate.
Is he right? Is the Fed political in any way, shape, or form?
Fed officials, the vast majority of political analysts, and "a wide range of independent observers," according to The New York Times, "roundly rejected" Mr. Trump's "accusation."
But the truth is, the Federal Reserve is absolutely, positively political. It's in its DNA.
I'll prove it to you…
The Fed Began as a Political Tool
This isn't about Donald Trump being right. And it isn't about Hillary Clinton telling reporters on her campaign plane on Sept. 6, 2016, "You should not be commenting on Fed actions when you are either running for president or you are president. Words have consequences. Words move markets. Words can be misinterpreted."
This is just the bare naked truth about the Federal Reserve and how it operates.
Most people, including the majority of politicians in the United States, analysts, and journalists covering politics and the economy, and overseas observers, don't know what the Fed is.
They think as America's central bank it's a branch of the government. It isn't.
An example of the ignorance of even respected news outlets like The New York Times was front and center Tuesday.
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In a Times article titled "Scant Evidence to Support Trump's Attacks on the Fed," author Binyamin Applebaum writes, "The Fed is not independent. It is an arm of the federal government, chartered by Congress to maximize employment and minimize inflation."
The Federal Reserve System is privately owned by shareholders. It is not an "arm" or branch of the U.S. government.
It was conceived in 1910 by a handful of rich and powerful men including Sen. Nelson Aldrich of Rhode Island, well known as an agent of John D. Rockefeller, to whom he was related through a family marriage; J.P. Morgan & Co. partner Henry Davison; Paul M. Warburg, the principal partner at Kuhn Loeb & Co.; an American agent of Europe's richest, most powerful banking family, the Rothschilds; and National City Bank president Frank A. Vanderlip, at a clandestine meeting at the secluded Jekyll Island Club off the tip of South Georgia, partly owned by John Pierpont (J.P.) Morgan.
The senator and bankers designed the private central bank, which took three years to slide through Congress, to have the sole right to create Federal Reserve Notes (U.S. dollars), in other words, they own America's money supply, and to use their money to buy the government's debt whenever it was necessary to support federal operations and to support and backstop the big banks who were the shareholders in the new central bank.
The whole story of how the Fed was created, by who, for what purposes, and how it was greased to be twisted through Congress and institutionalized in law under the Federal Reserve Act of 1913 is one of America's dirtiest secrets. But the truth is out there.
As conceived, the Federal Reserve System is a political tool. It couldn't have come into being if political interests weren't satisfied.
The Fed Is Political – Whether It Acts or Not
About the Author
Shah Gilani is the Event Trading Specialist for Money Map Press. In Zenith Trading Circle Shah reveals the worst companies in the markets - right from his coveted Bankruptcy Almanac - and how readers can trade them over and over again for huge gains.Shah is also the proud founding editor of The Money Zone, where after eight years of development and 11 years of backtesting he has found the edge over stocks, giving his members the opportunity to rake in potential double, triple, or even quadruple-digit profits weekly with just a few quick steps. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.