Insight into the Banking System

One man's propaganda is another man's truth --me

Unless people research and learn about topics themselves, then everything they know about the world they would learn from (FOX, CBS, NBC, CNN, etc), and sadly those are very very biased towards a given set of folks. (Go and Google Missing white woman syndrome to see a great example) That being said, the Internet is changing that!

So one of the things that has been the most interesting for me in following Dr. Ron Paul's campaign has been the education piece. I'm now reading about the War on Drugs, Presidential Powers, the "Separation of Church and State" (BTW, contrary to popular belief, those words are not in our Constitution), State vs Federal authority, Council on Foreign Relations, Monetary Policy, etc. Although these items do not seem to be a list of the most riveting subjects, when you learn that they are some of the corner stones of our Governmental policy, then they take on a whole new level of interest.

I am also learning how tough Politics really are. I'm learning that when you state a position, be prepared to have shots fired your way, correctly or incorrectly. This is a new position for me, considering that just two months ago, I kept a very very low profile about politics. But I guess my skin in toughing up.

So on to the topic at hand. Over the past half a year, the media has been talking about the "credit crunch" and the "subprime mortgage" mess. Well for most of us those words just flow over us, myself included. Well, I am now here to share some knowledge about this, and you can thank Ron Paul. One of the first things I heard Ron Paul say was his statements about the "Inflation Tax" [YouTube 30 seconds] [wikipedia]", and how this was directly related to the activities of the Federal Reserve and Central Bank. Federal Reserve? Central Bank? What are these things?

So I started reading. Here is what I learned. First off, the definition of a Central Bank from wikipedia is:

A central bank, reserve bank or monetary authority, is an entity responsible for the monetary policy of its country or of a group of member states. Its primary responsibility is to maintain the stability of the national currency and money supply...

Most all countries have some sort of Central Bank. (see list here)

Our Central Bank is called the Federal Reserve. For better or for worse, the Federal Reserve is highly independent from the Government, although it was the Government that set it up back in 1913.

So rather than try and explain it to you, instead I have found two sets of very good videos on YouTube that explain it in a very straightforward way.

Where does the money come from?
Part 1 - 8.5 min
Part 2 - 8.5 min
Part 3 - 7.5 min

Money, Banking and The Federal Reserve
Part 1 - 22.5 min
Part 2 - 19.5 min

So here is where the propaganda come into play from me :D Take a look back at an earlier post from me about Monetary Policy and Ron Paul's interaction with Ben Bernanke (current Reserve chairman), and ask yourself this question: How many of the other candidates could have that type of conversation with Ben Bernanke? Dr. Paul lists his favorite books as "Human Action: A Treatise on Economics" by Ludwig von Mises and "The Road to Serfdom" by Friedrich A. Hayek. Now there is some light reading.