The Mandate of the Federal Reserve System

"The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates."  Now, stable is defined as not subject to sudden or extreme change or fluctuation.  With that definition in mind, let's see how the Federal Reserve System has performed since 1913 in regard to its goal of stable prices. 

A dollar in 1913 would be worth only four cents today, or it has lost 96% of its value.  (So much for stable prices!)  In other words, its performance on stable prices has been a complete disaster.  Why the comparison with 1913?  That is the year of the birth of the Federal Reserve System.  Therefore, my recommendation would be to eliminate the Federal Reserve System, which is based on a fiat currency, and replace it with a sound currency system, such as gold. See, the Federal Reserve System can inflate, create, as many dollars as they want without anything backing those dollars.  By the way, that is what we mean by monetary inflation, which must be distinguished from price inflation.  Price inflation is the rise in the prices we pay for goods and services. Price inflation is caused by monetary inflation, which is solely controlled by the Federal Reserve System.  That is why monetary inflation is so insidious, because it may take years before it shows up as price inflation.

Don't expect Congress to make the Federal Reserve System accountable for its utter failure to defend the stability of the dollar.  Why?  Because Congress is as complicit and culpable as the Federal Reserves System.  If it wasn't for the Federal Reserve System providing the trillions of dollars to finance the federal deficits year after year, Congress would not be able to deficit spend.  And, therein lies why Congress is complicit and culpable to the actions of the debasement of the dollar by the Federal Reserve System.