The Fed's Apology for Causing the Great Depression in the 1930s

Whistleblower issue for July 2006 writes this:

Today, the entire Western financial world holds its breath every time the Fed chairman speaks, so influential are the central bank's decisions on markets, interest rates and the economy in general. Yet the Fed, supposedly created to smooth out business cycles and prevent disruptive economic downswings like the Great Depression, has actually done the opposite.

"From the Great Depression, to the stagflation of the seventies, to the burst of the dotcom bubble" in 2001, charges U.S. Rep. Ron Paul, "every economic downturn suffered by the country over the last 80 years can be traced to Federal Reserve policy."

While many Fed defenders claim it worked valiantly to prevent or minimize the ravages of the Great Depression, in reality the Fed caused the Depression and greatly increased the severity of its effects.

In fact, as July's Whistleblower documents, the Fed's new chairman, Ben Bernanke, admitsthat the Federal Reserve was responsible for the Great Depression. "We did it," Bernanke said, adding, "We're very sorry."

But the Fed's sins go way beyond the Great Depression. "Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy," said Paul, the congressman best known for his steadfast commitment to the U.S. Constitution.

One would hope that the Fed's sins would not be repeated. That depends, of course, upon whether they did it on purpose or not, because the same money motive of the Fed's board of governors in the 1920's and 1930's is probably still a factor in this century. Mr. Bernanke may apologize, but don't expect anyone to give back any of the money stolen by its actions.

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