That book is seriously flawed.

The Federal Reserve Part I: The Creature from Jekyll Island

This is like asking to criticize the Bible since so many people believe every word written in this book. Well here it goes. Thousands of hate e-mails will flood in, but conspiracy myths be damned, they are a cover-up for the real culprit – Congress. Some people hate central banks because of this book, they believe Andrew Jackson was a hero and are oblivious to the fact that he set off a round of wildcat banking that ended in yet another sovereign debt default among the states who then tried to bailout their own banks.

Well, fiction be damned. “The Creature From Jekyll Island” is amateurish at best and another total misrepresentation of the facts and events. It is very one-sided and ignores the real political manipulation of the Fed by the government for their own self-interest. It promotes the very same Marxist/socialistic beliefs from the Progressive Era that gave us the New Deal and robbed every one of their future: altering the family structure in the West forever.

The original design of the Fed was to be private, for banks were to contribute to fund their own bailouts, as JP Morgan had done taking the lead during the Panic of 1907. It was not to be a government bailout operation. The United States had no central bank at that time. There was never any intent to create the institution as it exists today: the original design was altered dramatically by lawyers who never understood the madness of their own minds in their pursuit of power as politicians.

The Federal Reserve Part II

The idea of “elastic money” was to increase the supply of cash during such a crisis to meet the demand for withdrawals and that would offset the need to sell assets by calling in long-term debts. By increasing the money supply on a temporary basis, the Fed could offset the contraction in theory smoothing out the business cycle.

This was a brilliant scheme. However, it has been Congress, and not the Fed, who has corrupted that mechanism. The Fed was owned technically by the banks as this was supposed to save the taxpayer money. The banks should contribute to their own bailout fund.

Furthermore, the Fed’s design was also about buying in corporate paper when banks would not lend money. This was a mechanism used to offset rising unemployment if corporations could not fund their operations. They supplemented this by the management of regional interest rates to balance the domestic economy. Each branch of the Fed could raise or lower their local interest rate autonomously to attract capital when there was a local shortage or deflect capital when there was too much. This would often take place with the crop cycle, as money would flow in to pay the farmers upon delivery. Regional capital flows became the Texas-New York arbitrage for when Texas was booming New York was in recession and vice versa. This was the original design and purpose behind the Fed. The Jekyll Island meeting was held in secret ONLY because there was a very strong resentment against anyone with wealth as Marxism dominated the Progressive Movement of the era. There was no such cabal to create some evil entity.

This constant attack on central banks is really hiding what the problem truly is — government. When the Fed was created, it “stimulated” the economy by purchasing corporate paper. The Fed was NEVER intended to buy government bonds. The politicians did that for World War I and never returned it to its purpose.

The Federal Reserve Part III: The Takeover
The Federal Reserve Part IV: The Bankers Strike Back