Dear Crabby, What is The Federal Reserve?

Dear Crabby,
I see the words “Federal Reserve Note” written on the top of all of our bills in the United States. There are other words too, like “legal tender” and “United States Treasurer” as well as pictures of former presidents and a strange pyramid with an eye looking at me. Is this all from our government, or some independent organization?
Sincerely, Shomee DaMoney
Dear Shomee DaMoney,
I have never claimed to be a smart man. I pay attention, I do my job, and occasionally I whine about things – that’s my life.  I did however become intrigued with the whole concept of The Federal Reserve and our money a few years ago.  I thought, how is it that we can all work hard for our money and mind our own business and these people in Chicago or New York can get on the air DearCrabbyand say “Interest rates are climbing” or “The economy is about to slow down” and these words effect everything?  Suddenly I only have half of what I thought I had in my retirement fund. Suddenly my children cannot get a loan for their dream house. Out of the blue, Mrs. Crabby finds out that our line of credit was closed down without anyone telling us.  It’s crazy, yet no one talks about it; we all just accept it. Well, I decided to dig around a bit on these “Fed” guys to find out who they were.  I assumed they were part of Congress, or a division of the government, like the IRS or the CIA.  But they are not!  It turns out that in 1910, a pretty well-known guy named J.P. Morgan decided to have a little duck hunting party that changed the world forever.  That’s right, “The Jekyll Island duck hunt” was called into action and J.P. Morgan chose a couple buddies to form what is now The Federal Reserve. Today this private group, that has board members appointed by our President, is responsible for all the green stuff in your wallet as well as the value of your retirement, the value of your house, the value of our entire country! The government loosely monitors what they are doing and requires them to return any profits, less 6% for their troubles.  Well, that 6% amounts to about three billion dollars a year that they keep! So what do they actually do?  I have no idea.  As I stated before, I am not that smart, but I do own a calculator and I can see that this private organization has a pretty good gig going if you ask me. There is actually a pretty good book called “The Creature from Jekyll Island” that clears up much of what I was saying. As far as the eye on the pyramid, I believe it was originally a symbol of God watching over us, with a Latin phrase that means “He approves.”  Although I am not sure that is the official stand of the Fed or the government today. So good luck in your quest for answers.  I suggest you read a few different books and ask more questions like you have been. In the meantime, keep your chin up, work hard, and pay attention – it has worked for me.
Sincerely, Dear Crabby
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