federal reserve

5 myths debunked about the Federal Reserve

Popular myths about the Fed
Popular myths about the Fed © Mesut Dogan/Shutterstock.com

Assassination, foreign control and money printing: the stuff of a motion picture thriller?

Not in this case. They're all the fodder for wild and surprisingly popular myths surrounding the nation's central bank, the Federal Reserve.

It does wield considerable power, evident in the extraordinary measures taken during and after the financial crisis. But it's amazing the things that otherwise reasonable people say about this admittedly complex U.S. government institution.

David Reiss, professor at the Brooklyn Law School, says, "To most of us, the Federal Reserve is a riddle, wrapped in a mystery inside an enigma, to borrow Winston Churchill's phrase."

With the Fed celebrating its centennial, the time is right to tackle some of these myths head-on. There are many myths out there regarding the Fed. Here are just a handful.

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It seems that no government agency is immune from off-the-wall conspiracy theories, and that includes the Federal Reserve.

As the Fed celebrates its centennial, let's take a look back at some less-than plausible conspiracy theories. The first and easiest to debunk is that the Fed prints money. It's true that the Fed does have immense control over the money supply, but it's all done through tools such as manipulating the discount rate and bond buying. The Bureau of Engraving and Printing is responsible for making all of our bills and coins.

One of the more eccentric conspiracies is that the Fed assassinated JFK. This one dates back to an executive order that allegedly gave the treasury the right to issue silver certificates. Debunkers know that the order in fact reduced the amount of silver certificates, replacing them with Federal Reserve notes. Conspiracies about who runs the Fed abound, but a little research reveals that the Nation's central bank lies firmly under the control of the government.

 

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