The Federal Reserve has gone rogue and perhaps it’s time to shut it down.
On Monday, Fed Chair Jerome Powell released a video looking all the world like a hostage video, but it probably was not.
In it, he accused the Department of Justice of “threatening to indict” him for lying about his $2.5 billion renovation of the Fed headquarters—that’s the cost of two and a half football stadiums.
In reality—according to the prosecutor—she had simply requested clarifications, then resorted to subpoenaing him after Powell stonewalled. Nonetheless, the Fed chair cast the inquiry as “intimidation” over monetary policy and as an attack on the Fed’s alleged independence from voters.
The kicker is the Fed actually should be prosecuted for monetary policy. For 113 years of unconstitutional—therefore illegal—counterfeiting. For 14 recessions, a half-dozen financial crisis—including the 2008 bailouts. And for the deep state the Fed financed during all this time.
The Fed’s Path of Destruction
Originally established in 1913 to protect the dollar—and the economy—the Fed failed spectacularly at both.
The dollar today buys just 3 cents of what it did back in 1913.
We’ve had 14 recessions—one every eight years, like clockwork. Roughly every other recession we get an extra financial crisis complete with a bailout you pay.
The recessions are the Fed’s boom-bust machine, where it prints money hand over fist to spark a tissue-fire boom, making it rain on Wall Street and allowing for the Fed to buy the next election.
Then, when printing money sparks inflation, the Fed slams the brakes, throwing the economy into recession.
These recessions have cost trillions in lost wealth; tens of millions of lives are destroyed through bankruptcy, crushed businesses, layoffs, and lost life savings.
One Lancet study found the 2008 crisis alone caused 5,000 suicides from the economic fallout.
And that’s just one of 14.
The Fed Built the Deep State
Worse, the Fed almost single-handedly funded the deep state.
By printing money that financed everything from FDR’s New Deal to the 1960s’ welfare state to endless wars to COVID-19 lockdowns, the Fed had a hand in it all. None of this could have happened without the Fed’s trillion-dollar blank checks, printed in the basement like any counterfeiter.
The American people paid the cost with double-digit inflation that Powell first dismissed as transitory. He then waited until after his confirmation to start fixing. This required jacking interest rates so hard it wiped out a half dozen banks in 2023 and freezing the American housing market in carbonite so 20-somethings had to live in Mom’s basement instead of starting a family.
So, the Fed has a lot to answer for.
Still, the Fed has a lot of defenders. Because it does something very useful to the elite: it makes credit artificially cheap.
This floods profits to Wall Street. It throws money at rich people and corporations who get cheap loans the rest of us can’t get.
Most important of all, the Fed subsidizes federal borrowing so Washington can effectively bid away—and apparently give to Somalis—everything the American people have built.
What’s Next
If Powell’s convicted, President Donald Trump can replace him before his term ends in May. According to prediction markets, that won’t happen, so he’ll stick around.
More important is what this does to the Fed itself. Fed independence has always been a joke—in reality, they dump cheap money on Democrats while slamming the Reagans and Trumps with rate hikes.
With the Fed now in open revolt, we may get some erosion in the Fed’s ability to manipulate the economy with zero political oversight. Which really means zero voter oversight.
But Trump has now smashed open the Overton window to start having a discussion about why we allow an unconstitutional counterfeiter to destroy our life savings and repeatedly feed our economy—and our lives—through a wood-chipper to amuse and enrich Wall Street.