The Corner

Papering Over the 100th Anniversary of the Federal Reserve

Exactly a century ago, President Woodrow Wilson signed the law creating the Federal Reserve System.

As Bette Davis might say, “It’s been a bumpy ride.”

Ben Gaul, a blogger over at Liberty Voice, provides a valuable summary.

The creation of the Fed marked the beginning of America’s rampant inflation rate. For the first 125 years of American independence, inflation of any significance did not occur. What $1.00 purchased in 1789 could be had for a very reasonable $1.08 by 1913. Measure that against what it cost today for the same amount of goods; roughly $25.00. This means the current value of today’s dollar is about .04 cents of what it was in 1913.

Ostensibly, the Federal Reserve System was put in place to prevent “bank panic,” stabilize the dollar and resist inflation. Democrat President Woodrow Wilson was convinced that “central planning” by the federal government could replace incremental market forces. . . .

It is important to note that the Great Depression did not happen until nearly two decades after the Federal Reserve System came to be. Socialist thinkers and Keynesian economists seem to believe that Capitalism itself was responsible for the market collapse. An interesting position to hold, considering that the 1929 stock market crash happened 15 years into the Fed’s command & control doctrine. The very same policies which were put into practice as a means to eliminate even the possibility of anything like that occurring can be directly linked to the Crash. They are also responsible for the Great Depression lasting 15 years longer that it should have. America should remember that, as the nation celebrates 100 years of the Federal Reserve System pumping trillions in virtually counterfeit funny money, into the economy.

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