Epoch Times - Most Americans Don’t Understand the Fed. Here’s Why It Matters | Jeffrey Tucker
Aired: 2025-09-08
Duration: 03:26


=== Federal vs Central (03:24) ===

[00:00:01]  The word Federal Reserve is by itself funny because it doesn't say central bank.
[00:00:07]  Americans hated the idea of a central bank because that was more like Germany and Bismarck or whatever.
[00:00:11]  They didn't want that.
[00:00:13]  But central bank is not an American institution, so they called it something completely different.
[00:00:17]  It's actually kind of genius.
[00:00:18]  They called it first the word federal.
[00:00:20]  Federal meaning decentralized, you know, consistent with the Tenth Amendment.
[00:00:24]  So to accomplish that federal piece, the new central bank had branches, you know, had Minneapolis Fed, Atlanta Fed, a Dallas Fed, Chicago Fed, San Francisco Fed.
[00:00:39]  So there's many Federal Reserve banks around the country for no apparent reason, really, except to create the illusion of decentralization.
[00:00:48]  Okay, so there was that.
[00:00:51]  The second part, this word reserve, is funny when you think about it because it implies that they have something.
[00:01:00]  They're in the possession.
[00:01:02]  We have the reserves.
[00:01:04]  Just in case we need them, we have the reserves.
[00:01:07]  In the end, despite its name, despite the intentions of the founders, it was a central bank.
[00:01:15]  It was a progressivist experiment and the application of expertise and science to the sound management of the monetary system of the country.
[00:01:29]  But what's interesting is that, of course, of course, and anybody would have predicted this.
[00:01:34]  I mean, Thomas Jefferson certainly would have, Thomas Paine, this whole generation would have predicted.
[00:01:38]  If you get anything like a central bank, a national bank, a central bank, it will be abused.
[00:01:43]  It will be abused to meet, but it doesn't matter the intentions, whatever.
[00:01:46]  It'll be abused.
[00:01:47]  So what presented itself soon after the Fed was founded?
[00:01:51]  The war in Europe.
[00:01:52]  The Great War.
[00:01:55]  It was a mess, a terrible mess.
[00:01:57]  And the Americans wanted nothing to do with it.
[00:02:00]  But at some point, so what kept America out of wars for the most part was, well, we just didn't want to afford it.
[00:02:06]  We didn't have the money.
[00:02:07]  You know, solve your own problems.
[00:02:09]  We're over here on the other side of the world.
[00:02:10]  We can mind our own business over here.
[00:02:13]  We don't have the money.
[00:02:14]  Well, now with the Fed, you have the money.
[00:02:17]  You've got a printing press.
[00:02:18]  You've got this weird power of this one institution to buy and hold government-created debt with money that didn't previously exist.
[00:02:32]  A check.
[00:02:34]  The nation had a credit card with an infinite balance on it, an infinitely high limit.
[00:02:42]  What could go wrong?
[00:02:43]  What could go wrong, right?
[00:02:46]  That actually, you know, and again, I think the founders of the Fed didn't really imagine this.
[00:02:50]  They thought, well, we're all, look at us.
[00:02:52]  We're responsible guys.
[00:02:54]  You know, we know what's what.
[00:02:55]  We would never do something like that.
[00:02:56]  Well, they lost control of it right away.
[00:02:58]  And so the Fed was probably the reason why the U.S. entered the Great War.
[00:03:04]  Lots of people argue for a constitutional amendment to balance the budget.
[00:03:07]  A lot of people want the Congress to cut spending and so on and so on.
[00:03:10]  But until you unplug the Fed's capacity to just print money and cover up for all the profligacy of Congress, we're never going to get there.
[00:03:19]  We need sound money, or we're never going to get anything remotely like a balanced budget.
[00:03:24]  It's the Fed that makes it all possible.