"The first thing that must be understood is that the Federal Reserve Corporation is not a government agency, as most people think. It is a private corporation controlled by the bankers, and therefore it is operated for the financial gain of the bankers over the people, rather than for the good of the people.
When our Founding Fathers wrote the Constitution of the United States back in the 1700's, they specifically stated in Article 1 of this Constitution:
Congress shall have the Power to Coin Money and Regulate the Value Thereof.
It was the wish of the Founding Fathers that the power to create and control the money be in the hands of the Federal Congress, and not in the hands of private bankers who could charge enormous amounts of interest, and who could actually then control the country by controlling the money. They understood the tricks of the bankers, for what did Mayer Anselm Rothschild, the great European banker, once say: “Permit me to issue and control the money of a nation, and I care not who makes its laws...” It was their belief that all citizens should share in the profits of its creation, not just private bankers, and therefore the national Government must be the only creator of money.
So what happened? For many years after the Constitution was signed, the money in the country was handled both legally and illegally, the bankers having devised all kinds of tricks to try to take control of the nation's money.
But the final blow came in 1913, on December 23rd when the Congress passed the Federal Reserve Act, which officially took the power to create the money to run the United States away from the Congress, and gave it over to private bankers, who called themselves the Federal Reserve Corporation. But note: they are private bankers.

The passage of this Federal Reserve Act authorized the establishment of a Federal Reserve Corporation, with a Board of Directors (The Federal Reserve Board) to run it. And the United States was divided into 12 Federal Reserve Districts.

This new law completely removed from the Congress the right to create money or to have any control over its creation, and gave this function over to the Federal Reserve Corporation. The Fed printed “Federal Reserve Notes”, which are still accepted today as money among the citizens of the country.

But we have to understand that these Federal Reserve Notes, used as money in this country, cannot be considered as being constitutional money. Why, you ask? Because the Congress went against the Constitution of the United states when it passed this Federal Reserve Act, for it specifically states that Congress, and only Congress, shall have the power to coin and regulate the money of the country.

Some might ask: “What does it matter if Congress or private bankers create the money? It is accepted by the people just the same as a medium of exchange with which to perform business transactions.”

Yes, the Federal Reserve Notes are accepted as a medium of exchange by the people of the United States. But this is a debt-money, because interest is charged on every dollar that is created, but the interest is not created! Let me give an example to illustrate this point.

Let us say that the Federal Government needs $1,000,000,000 ($1 billion) more, after it collects the taxes, to continue financing its projects. Since it does not have the money, and Congress has given away its authority to create it, the Government must go to the Federal Reserve, which is now in charge of creating the money for the country. But the Federal Reserve does not just give its money away! The bankers are willing to deliver $1 billion in money or credit to the Federal Government only in exchange for the Government’s agreement to pay it back – with interest! The Congress then authorizes the Treasury Department to print $1 billion in U.S. bonds, which are then delivered to the Federal Reserve Bankers.

The Federal Reserve then pays the cost of printing the $1 billion (about $1,000), and makes the exchange. The Government then used the money to pay its obligations.

Now, what are the results of this transaction! The $1 billion in Government bills is paid, but the Government has now indebted the people to the bankers for $1 billion, on which the people must pay interest! And, of course, the interest is not created!

And, to top it all, on this $1 billion that the Federal Reserve received in bonds from this transaction, it is legally allowed to create another $15 billion in new credit to lend to states, municipalities, businesses, and individuals. Added to the original $1 billion, they could have $16 billion of created credit out in loans paying them interest; with their only cost being the $1,000 they spent for printing the original $1 billion lent to the Government. Is it diabolical? You bet it is!

“Creating” money
We should probably clarify the term “create”. When we use this term, we refer to the process used to bring money into existence. The bankers create money out of nothing, simply by writing numbers in their ledger books, and then giving loans to the American people with this money, allowing them to write checks on the numbers written in their accounts, and then requiring payment with interest. Money is nothing but numbers, be it numbers in a ledger book, on checks, or on dollar bills. Using this process, most banks are legally allowed to lend out up to 50 times of what they have on deposit, creating the money out of nothing and then charging interest on it. You have to admit that it is quite a racket!

And the Federal Reserve prints the paper money we use in circulation, the Federal Reserve Notes, by having numbers printed on pieces of paper of little value, since a few cents will print a $1 bill or a $10,000 bill (at the same cost). Money is very cheap to make, and whoever has the legal right to create the money in a nation can make a tremendous profit'' (All above from an article by Melvin Sickler)

Interest

The below story about the cowboys is from a book “The Two Hundred Year Debate” by former Washington State Senator Jack Metcalf

Four cowboys came into town and wanted to play some cards. They didn’t have any cards so they went into the Federal Reserve Saloon and asked to borrow a deck of cards. They were told they could use the cards but they would have to put up some collateral to borrow the cards, in this case their saddles. The hitch is that each of the four must bring back 14 cards at the end of the evening – a mathematical impossibility (there are only 52 cards in all, or 13 to each cowboy). In the end, one player ends up with only 10 cards and loses his saddle… that is the problem with the fed. It creates money to make loans but doesn’t create the money to pay the interest. Some one has to lose.

JOHN F. KENNEDY vs. THE FEDERAL RESERVE (…The FED basically works like this: The Government granted its power to create money to the FED banks. They create money, then loan it back to the Government charging interest. The government levies income taxes to pay the interest on the debt. On this point, it’s interesting to note that the Federal Reserve Act and the sixteenth amendment, which gave congress the power to collect income taxes, were both passed in 1913. The incredible power of the FED over the economy in universally admitted. Some people, especially in the banking and academic communities, even support it. On the other hand, there are those, such as President John Fitzgerald Kennedy, that have spoken out against it…)

Payment on a Federal income tax 1040 form doesn’t support government. It does three things.

1. It pays the interest on the debt. The U.S. government borrows all the so-called money from the Fed. Who gets this interest? Not the U.S. government.
2. It creates the illusion that it funds government.
3. It slows up inflation. Money is taken out of circulation by this tax. Inflation is caused by too much money being created.

(So what we have is a central bank issuing worthless paper “money” that controls our economy, our lives and our future. This private banking cartel was unconstitutionally granted this power by a devious, scheming groups of senators back in 1913. In essence what they did was place the American people into indentured servitude by forcing The People to pay usury on worthless flat currency (paper money created out of nothing), not to fund the government, but to enrich the bankers and fund wars in which America should never be involved. This system exists not to fund the government, but to allow the U.S. Congress carte blanche power to continue funding unconstitutional agencies and programs by providing them with a bottomless source of worthless ink and computer zeros.)An excerpt from Devvy kidd http://www.devvy.com/notax.html

Here is how it works: The first step happens when the government needs to borrow more money than the public is willing to lend at the interest rate offered. At that point, the government turns to its partner, The Federal Reserve System, and goes through the motions of borrowing the shortfall. I say, “goes through the motions” because the Fed has no money to loan. The government, however, gives it permission to create the money it needs out of thin air, a move that, if done by anyone else, would send them to prison for counterfeiting. The Fed can do it, however, because the government authorized it to do so when it passed the Federal Reserve Act. So the Fed creates whatever amount of money is needed and then gives it to the government, calling it a loan. In truth, the government essentially printed its own money but, instead of using printing presses, it used the banking system, which entered numbers into an accounting ledger and called it checkbook money. The end result is the same except that the public doesn’t understand it, a great advantage to the politicians, and the banks earn interest on so-called loans of money it never had, a great advantage to the banks.

That’s just the starting point. When the government spends the money it receives from the Fed, it goes to individuals and corporations that immediately deposit it into their private banking accounts. This is where the action really becomes interesting. The banks (under the protection of the Federal Reserve Act) are allowed to create out of thin air up to ten times the amount of those deposits and then go through the appearance of lending it to their customers. Once again, I use the phrase “go through the appearance” to emphasize that most of the money they loan does not exist until borrowers request it. At that point, the money is created out of thin air and advanced to the borrower – at interest, or course. Think about that! banks collect interest on nothing. When the loans are paid back, the money disappears back into the vaults, inkwells, or computer chips from which it came