"Nobel laureate Joseph Stiglitz, a former chief economist at the World Bank, said that if a country had applied for World Bank aid during his tenure, with a financial regulatory system similar to the Federal Reserve's—in which regional Feds are partly governed by the very banks they're supposed to police—it would have raised alarms."
—Stiglitz, Nobel Prize-Winning Economist, Says Federal Reserve System 'Corrupt'

Stiglitz, author of Freefall: America, Free Markets, and the Sinking of the World Economy, has it right. You can't be a watchdog over yourself. This is a huge conflict of interest. The Federal Reserve recommended massive bail outs to the banks whose officers sit on its board of directors. I have no doubt this is just the tip of the iceberg. The real story is likely far more complicated and far deeper.

Our financial system is seriously flawed. It should be no surprise to anyone. After all, we are talking about an institution with the power to create money out of thin air. No man can be given such god-like power and be free of greed and corruption. The system is faulty by design.

Here's a simplified illustration of how the Fed works. Until you understand the nature of the problem, you can't truly appreciate its magnitude.

Let's start from zero: No money in circulation. . . . Read more

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