Common Sense Living

The Federal Reserve System – A “Legal” Crime of Treason

The central bank of the United States is known as “The Federal Reserve”. It was established by an act of Congress in 1913 (The Federal Reserve Act of 1913), and President Woodrow Wilson signed it into law in December that same year. Our nation’s central bank began operations the following year in 1914.

While an act of Congress provided authority to the Federal Reserve to create and manage our nation’s currency, it is also true that the “Federal” Reserve is NOT a federal institution! It is in fact privately owned, with private shareholders, who are comprised of a cartel of commercial banks who collectively refer to themselves as the Federal Reserve system.

This banking system has done more to destroy opportunities for middle and lower class Americans, as well as other countries who have relied on Federal Reserve note “dollars” to back their own currencies, than any institution in history! This has been particularly true since President Richard Nixon untied their hands by removing us from the last remaining elements of the gold standard on August 15, 1971.

President Woodrow Wilson left office in 1921, and questions remain today as to if he even read the Federal Reserve Act of 1913 prior to signing it into law, or if he simply trusted the bank-sponsored “experts” who drafted the legislation. It is widely known that he regretted the “system of credit” he helped establish.


The Federal Reserve system is a system of credit/currency creation that enslaves borrowers with debt that can NEVER ever be paid back! Those borrowers may be the Federal government, state & local governments, corporations, or individuals.

Once an entity borrows money from a bank, it becomes nearly impossible for them to ever free themselves from the debt. The financial matrix is a magical world of money that seems normal, but is really a trap to enslave nations.

You have to borrow money to get ahead. If you don’t borrow, you cannot save fast enough to keep up with the rising prices. The system forces the society’s members into debt just to maintain a normal standard of living.

This situation is more evident with houses, which on average increase in price by about 5% annually. Therefore, a $300,000 home increases by about $15,000 in price the first year, and a little more each year thereafter. If a saver wants to ultimately pay cash, and the saver is keeping just $15,000 each year, they only keep up with the price increase! They have to save MORE than $15,000 a year. The alternative is to save for a down payment, and borrow the remainder.

Prior to the creation of the Federal Reserve system, one could save for a house for 50 years, and the price of the home would have remained relatively unchanged!


We operate today in a “debt money” system. The creation of every dollar today happens as a result of someone going into debt and borrowing money.

Base money is first created by the federal government going into debt. No money is created unless the federal government spends more than they take in through taxes! If the federal government were to ever “pay off the debt”, all money in circulation would simply disappear. If any politician promises to pay off the national debt, they are either ignorant about how the system works, or they are lying! It is NOT POSSIBLE to pay off the national debt because of how base money is created.

When the federal government issues a bond (goes into debt), the buyer of that debt is ultimately the Federal Reserve (aka, The “Fed”). The Fed prints money FROM NOTHING to pay for the bond. The federal government will then owe the principle AND the interest on that bond/loan over time.


Suppose I am the central bank, and I am the only place that is allowed to create money…..from nothing (i.e. I print paper or create digital bank entries from thin air). Since I am a bank, I also don’t just spend that money. Instead, I LEND that money to you. Also, it is completely illegal for anybody but me to create money, or legal tender.

Now let’s suppose you have 10 friends (the society) and you collectively want to borrow money. You issue a $1000 bond at say 6% annual interest. At the end of 1 year, you and your friends in society will owe me (the central bank) a total of $1060……the original $1000, plus $60 interest.

Now suppose I say, “pay off the national debt”. Even if you gather all existing money in circulation, it only totals $1000!!! You can give me the $1000 – as the supply of money evaporates, but you can never give me the $60 interest because I didn’t print that for you!

Oh, that’s okay. I’ll just make the $60 an IOU, and this is what comprises the national debt.

Eventually, after years, the interest on the debt, which compounds exponentially, is growing much faster than the base money being created. The government therefore has to go into debt at a faster and faster rate, which causes more and more money to be in circulation. And the resulting money being created is inflationary.

Here is a chart showing inflation throughout the 250 year history of the United States. Note that inflation became permanent beginning in 1914 when the Federal Reserve system was formed, and it became completely unleashed when President Nixon removed the gold standard (which previously tied the Fed’s hands) in 1971.×395.jpg

Inflation is theft! Working class wages have not kept up with this inflation in the past 40 years. The working class (lower and middle income) are forced to pay an ever increasing percentage of their incomes to the “owners” of society’s assets. This creates a society where the rich get richer, and the poor get poorer.

Everybody feels this happening. They know something has changed. They know that the governments, corporations, and individuals are going into debt like never before. But like Neo in the movie “The Matrix”, it is not always clear when you are in the Matrix itself. You have to view it from the outside!


The Federal Reserve system is a system of FRAUD! It is stealing from the American people, and crimes against a nation’s people are known as “treason”. Unfortunately, this crime is legal.

Going back to my example, the central bank can print money from nothing (i.e. monopoly money) and lend it for full value. If you fail to pay the interest, they can legally take your property (or real value). Why should you have to pay real interest/value on monopoly money?

At a bare minimum, I think the US Treasury should be allowed to print from nothing their own monopoly money to pay the fraudulent interest on the Federal Reserve’s monopoly money they printed from nothing and lent to us collectively!

While the system is fraudulent, it is unfortunately legal. And even more unfortunately, it will have a VERY BAD ending as every fraud committed throughout history similarly ends.

This Federal Reserve fraud ends with an ever increasing inflation, as the dollar becomes worthless due to the unlimited creation of credit & currency.

The only effective way to save money, and have it mean something later is to NOT hold dollars (as they depreciate in value), and instead hold your net worth in real assets like gold or silver coin. Then when the dollar collapses, vote to move back to a pure gold standard. Nations throughout history have always reverted to gold, the only real money there is!

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