How Cryptocurrency Can Abolish the Fed (Part 1: What is the Federal Reserve System?)

Central Banking Murders People

The Federal Reserve Bank commands immense power over people’s lives. The extent to which it exercises this control is incalculable, and if people understood how it worked and the consequences of its activities, they would strive to abolish it immediately. However, this is not the first time someone has articulated the dangers of centralized control over money. Economists, philosophers, anarchists and others have already exposed the nature of America’s cartelized bank system, and they have warned every one of its perils.

So what exactly does the Fed do that makes it so bad?

The central bank mints fiat currency, controls interest rates, and decides economic policies for a whole geographic region. The Fed does more than this, but these are its fundamental obligations. Anarcho-capitalist Chase Rachels expressed the underlying intentions of these powers in his book A Spontaneous Order: the Capitalist Case for a Stateless Society:

“The central bank’s true purposes are to finance government operations, cartelize the banking system, and win over support from the financial elite by allowing them access to newly created money before the rest of society, thus concentrating ever more wealth into the hands of a select privileged few at the artificial expense of the many.”

Since the high priests of The Federal Reserve possess these powers, they have the ability to destroy economies and populations through mass starvation and death. They can do this because they can arbitrarily inflate the currency supply and alter interest rates. This devalues the money while simultaneously inflating prices, which obliterates market signals and confuses investors. The end result is an endless cycle of bubbles that eventually burst and lead to worthless money and a broken economy, such as what happened in 2007. Imagine what happens if this currency manipulation gets worse? Thus, there is an urgent need to abolish the system.

Nature of the Beast

There is a significant hurdle people need to overcome before addressing this issue, though. Few agree on how to abolish it, because they do not understand its nature. They do not know whether it is public or private, whether it is controlled by government bureaucrats or capitalists. They continuously wrestle with the idea of what it is and where it comes from, and most conclude that it is a private entity ran by greedy capitalists, which is inaccurate. So they erroneously advocate “abolishing” free markets instead.

Here is some background.

The Fed was first conceived on a small Island called Jekyll, and both banksters and politicians were instrumental in birthing it. It was an early incarnation of typical incestuous relationships established between politicians and banksters. It is thus an iteration of corporatism—which is an effect of government.

Author of The Creature from Jekyll Island, G. Edward Griffin, in a talk about government and banksters, nearly grasps it. He said,

“We come to the conclusion when we analyze the nature of the Federal Reserve System how it operates, read the Federal Reserve Act, place it against the context of the historical background and we come smack to the realization that the Federal Reserve System although it parades around looking as though it’s a government operation of some kind, is merely a cartel of banks right under our noses and it is protected by law.”

Do not make the mistake of wholeheartedly agreeing with Mr. Griffin. He was part correct. Yes, the collaboration between bankers and government cartelized the banks, but this occurred because of government and law. Without authority to establish the legal precedent for The Fed’s existence, there would be no central bank. And as this system has matured, bankers and politicians have become one and the same. Politicians are now bankers. Furthermore, their control hinges on the ability to manipulate the Fed to benefit the State. This is why its chairman and leaders are selected by Congress, and any oversight is conducted by government.

The Federal Reserve’s official page offers further insight into its ownership:

“The Federal Reserve System fulfills its public mission as an independent entity within government. It is not “owned” by anyone and is not a private, profit-making institution.”

There are a couple key components that demonstrate that the Fed is government-centric. The quote states that it is an “independent entity within government.” And most importantly, it is not for profit, which means it is not a capitalistically based company.

An Alliance Based on Truth and Technology

This is important information because it contributes to how people will choose to fight it. With the knowledge that capitalism and privatization are not the problems, people can gather the appropriate intellectual and technological resources to act appropriately.

Before this knowledge, most people elected to campaign against the “rich” by attempting to incite Marxist style revolutions and overthrow the wealthy and business owners. As history has shown, all forms of socialism have failed. If Marxists can stop thinking in terms of revolution and coup de tats, they can wield a technological development to destroy the system without lifting a firearm. This solution eliminates the problem at its foundation. It puts money back into the hands of the individual, and away from the elite. This weapon is called cryptocurrency…but socialists have to understand it’s not privatization or capitalism that have caused malevolent entities like the Fed to crop up. It is government. And government alone. 

(To be Continued)

Image Sources:


A Spontaneous Order: The Capitalist Case for a Stateless Society by Chase Rachels

The Creature from Jekyll Island by G. Edward Griffin

End the Fed by Ron Paul

Sterlin Lujan is a journalist, editor, speaker, anarchist, and essayist. He has been involved with cryptocurrency and Bitcoin since 2012. Sterlin is especially interested in the intersection of psychology and cryptography. He has written on behavioral economics in regards to innovative technology, and was one of the first to write about the emerging field of cryptopsychology on