The U.S. stock market ended the past week on a sour note.

The market declined as a result of the Federal Reserve’s announcement that it will continue pumping nearly $100 billion into the economy each month, despite concerns that such actions will actually harm the economy in the long run.

Similar actions by the Fed eventually cause recessions that devastate the American middle class, only to be “fixed” by giving trillions of dollars to the very same banks and businesses whose risky behavior helped create the whole mess in the first place.

It’s a vicious cycle, and it hurts everyone except those responsible.

The vast majority of Americans do not understand how their own country’s banking and monetary system, headed by the Fed, work. Henry Ford once said this was a good thing. “For if they did,” he said, “I believe there would be a revolution before tomorrow morning.”

The very name of the Fed is misleading – there are few things federal about it. The president of the United States nominates the members of its Board of Governors, but any significant government involvement stops there.

The Fed is an independent agency, controlling the supply of money and manipulating the economy without any approval from government.

The Fed alone has the power to create money, which it creates from nothing in unlimited amounts, lends out on interest and profits from.

The 12 banks that make up the Fed are essentially private corporations, in which the likes of Bank of America and Citigroup hold stock and receive payments on their holdings.

These Fed banks are almost always run by former Wall Street banking executives. The current president of the Federal Reserve Bank of New York, the largest of the Fed banks, previously served almost 20 years at Goldman Sachs.

While the Government Accountability Office audits the Fed every year, they are given little to no access. Attempts to address this are consistently shot down in Congress, but former Rep. Ron Paul, R-Texas, and his colleagues from both sides of the aisle were able to make some progress in gaining more access in 2011.

The GAO was able to find that in the few years prior, the Fed had secretly given $16 trillion to major financial institutions, wealthy individuals and central banks throughout the world. They also found several instances where Fed board members used their influence to benefit their own banks and companies, as well as themselves.

To give an idea of just how much $16 trillion is, the entire gross domestic product of the United States is slightly over $15.5 trillion, according to the World Bank.

So why is Congress opposed to more transparency in the Fed, again?

In 2009, the second most powerful Democrat at the time, Sen. Dick Durbin, D-Ill., said of banks: “they frankly own the place.” The same year, Rep. Collin Peterson, D-Minn., said that banks “run the place” because “they give three times more money than the next biggest group.”

The distribution of $16 trillion in secret was one of the biggest scandals in the history of the world, but it went virtually unreported in the media. Why? Because the Fed does not only “run the place” in Washington, D.C., but in virtually every media corporation, every industry and everything the American public sees and hears.

Mayer Amschel Rothschild, a pioneer of central banking in the 18th century, is referred to as “the founding father of international finance” by Forbes magazine. He founded the Rothschild Family banking dynasty, the most successful business family in history.

In 1790, he proclaimed: “Let me issue and control a nation’s money and I care not who write the laws.”

Today, these words are as true as ever.

Nick Smith is a senior broadcast and digital journalism major. His column appears weekly. He can be reached at nxsmith@syr.edu and followed on Twitter at @Nick_X_Smith.

Published on September 23, 2013 at 1:06 am