Congress shall coin and print money?

Question

So...the federal reserve is not legal?



http://www.congresslink.org/print_basics_histmats_constitution_art1.htm
http://www.middleeast.org/comments/1/5672.shtml
http://en.wikipedia.org/wiki/Executive_Order_11110

amish rebel- bt that does not make sense. we borrow money from the federal reserve. How can we get out of debt by borrowing more money?

Answer 1

You touch a number of subjects with just a little text. Let's review.


- Re: Congress shall coin and print money?

Yes. The constution grants such power to congress. however, congress has never set up a printing press and had congressmen man it. Exercise of this authority has always come from laws allowing another party issuance of money per congressional authority.


- Re: So...the federal reserve is not legal?

The Federal Reserve is indeed legal per the Federal Reserve act of 1913. Section 20 of the act specifically authorizes the Fed to redistribute "national-bank currency.


- re: The executive order 11110

The implications are way overblown by conspiracy sites. The historical record does not back up the assertion that this would somehow lead shut down the Federal Reserve. Silver certificates and coins are exchanged along side Federal Reserve notes for decades. The U.S. got off the Gold and Silver standard decades earlier because (among other reasons) the money supply could not grow per the demands of the economy. It is a ludicrous leap of logic.


- re: we borrow money from the federal reserve.

Well, yes, but did you know

* ... the U.S. Treasury will not borrow directly from the Federal Reserve and the Federal Reserve will not not borrow directly from the Treasury. It would have the appearance of the government just printing money to pay for expenses. The Treasury sells all T-bills at auction at which the Federal Reserve does not participate..

* ... All T-Bills purchased by the Fed are from the open market.

* ... out of the $8.7 Trillion in national debt, only $851B (less than a tenth) is owned by the Federal Reserve.

* ... the Federal Reserve returns about 98% of the interest earned on T-Bills it owns to the Treasury making it a virtually interest- free loan (not a bad deal for the tax payer)

* ... that most of the debt that the Fed owns will never have to be repaid because it is needed for collateral for all currency in circulation

* ... All other T_bills holders keep their interest.

Answer 2

I don't know if this will answer your question, but I do believe that George Washington assigned Alexander Hamilton to the task of raising money for the new country. Part of Hamilton's plan was the Federal Reserve, which Congress approved. Hamilton had a three part plan, which included, paying off all foreign and domestic debt, the creation of the federal reserve, and something to do with the market system. The Congress went with the first two parts of the plan, but not the third.

Answer 3

Nope, but ask the "man on the street" what The Fed is and they will tell you it is a part of the government. Few americans realize that our money is controlled by foreign bankers.