The Federal Reserve is neither Federal nor a Reserve! It is one of the Greatest Scams of Alltime!

Episode 11: Right From the Horse's Mouth

Here is a quote from Page 2 of Modern Money Mechanics, a publication of the Federal Reserve Bank of Chicago:

"The actual process of money creation takes place in the banks."

Subsequent to that, a quote from Page 8 of Philadelphia's The National Debt, which is also a Federal Reserve Bank publication:

"The Federal Government, with the cooperation of the Federal Reserve, has the inherent power to create money - almost any amount of it. This power makes technical bankruptcy out of the question."

Federal Reserve member banks are protected from any risk of bankruptcy. Just by keeping a 10% reserve rate in the bank's Federal Reserve Account they are allowed to loan more money than they have. For example, a $10,000 "deposit" allows the bank to lend $90,000 which it does not have and still remain protected.

How? The American public protects the banks from bankruptcy by paying higher prices for goods and services should the Fed have to dilute the money supply by printing sufficient money to prevent the bankruptcy of a bank.