The Evolved Podcast

Cancel The Fed: A Private Banking Cartel Posing As Government

Subscriber Episode • • Aaron Scott • Season 1 • Episode 18

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Money isn't just the dollar in your wallet—it's a system of control with the Federal Reserve at its center. This episode pulls back the curtain on one of America's most powerful yet least understood institutions.

The Federal Reserve presents itself as a government agency working for economic stability, but beneath this facade lies a quasi-private institution born from the interests of banking elites. Created in 1913 following a secret meeting at Jekyll Island between Senator Nelson Aldrich and executives from the nation's most powerful banks, the Fed was designed to appear public while ensuring private control over monetary policy. Regional Federal Reserve banks are actually owned by member banks that receive guaranteed dividends and elect directors—embedding banking interests directly into national economic decisions.

While claiming to promote maximum employment and price stability, the Fed's policies consistently favor financial institutions and asset holders. Low interest rates fuel asset price inflation benefiting the wealthy, while average citizens struggle with stagnant wages and rising costs for necessities. During crises like 2008 and COVID-19, the Fed moved swiftly to bail out Wall Street while Main Street suffered. Perhaps most damning was its catastrophic failure during the Great Depression, when it tightened credit and allowed the money supply to contract by nearly one-third as unemployment soared to 25%.

Beyond critiquing the current system, we explore alternatives—from mutual credit systems and public banking to local currencies and resource-backed money. These models point toward an economics that honors reciprocity over exploitation, that sees currency not just as money but as a current of life energy flowing through communities. The future doesn't need another central bank; it needs central belonging—a new architecture that mirrors the intelligence of natural systems and distributes rather than concentrates power.

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Speaker 1:

Hello everyone and welcome back to the Evolved Podcast, a space for unfiltered truth, deep reflection and heightened awareness. Here, knowledge isn't just information. It's a tool for transformation. Each episode is designed to challenge illusions, reveal patterns and empower Not to entertain but to awaken.

Speaker 1:

Today, we turn our gaze to one of the most powerful yet misunderstood forces shaping our world Money. Not the dollar in your wallet, but the system behind the system, the architecture of credit control and central banks. At the heart of it all sits the Federal Reserve. Cloaked in the illusion of public service, yet born from private interests, it claims to stabilize markets, control inflation and protect the economy, but who does it really serve and at what cost? We live in a world where those who own the assets benefit most from policies made in backrooms, while the average citizen bears the weight of inflation, debt and diminishing purchasing power. A system that should safeguard the public good has instead been weaponized to entrench inequality, to reward speculation over creation and to make financial survival feel like a privilege rather than a right. This isn't just an economic issue. It's a spiritual one. When value itself is defined by profit, when worth is indexed by what you produce rather than who you are, the sacred is stripped from our lives. We forget that economy comes from the Greek oikonomia, meaning household management. It was never meant to be a battlefield of winners and losers, meaning household management. It was never meant to be a battlefield of winners and losers, but a living system that reflects care, reciprocity and balance. So what happens when we stop asking how to survive inside the system and begin asking how to transform it? In this episode, we'll explore the inherent conflict of interest embedded in the Federal Reserve System structure, how monetary policy quietly shapes everything from opportunity to inequality, and why reclaiming our economic imagination is essential to building a world where everyone's dignity is non-negotiable, because to create a future rooted in truth, beauty and justice, we must stop treating systems as sacred and start treating life that way instead. Let's begin.

Speaker 1:

The formation of the US Federal Reserve in 1913 was a result of intense negotiations among elite bankers, politicians and business leaders who were seeking to stabilize the US financial system, but it was also shaped by their own financial interests. Despite the public perception that the Fed is a government agency, it is in fact, a quasi-private institution with limited democratic oversight and deep ties to the private banking sector that created it. In the late 19th and early 20th centuries, the US suffered from repeated financial panics, notably in 1873, 1893, and 1907, during which banks collapsed, credit evaporated and the public lost trust in the system. The panic of 1907 was especially pivotal. It showed that private financiers like JP Morgan could essentially bail out the US economy single-handedly, highlighting both the fragility of the system and the overwhelming influence of wealthy bankers. In response, a secretive 1910 meeting took place at Jekyll Island, georgia. This meeting involved Senator Nelson Aldrich, executives from JPMorgan Co, kuhn, loban Co and the National City Bank of New York. These men drafted a plan for a central bank that would serve the needs of the banking elite. Under the guise of stabilizing the economy, their goal was to create a lender of last resort for banks, protect bank assets in crises and centralize control of money and credit in the hands of a few.

Speaker 1:

Congress passed the Federal Reserve Act in December 1913. President Woodrow Wilson signed it into law. It created a central banking system with 12 regional Federal Reserve banks overseen by a board of governors in Washington DC. But here's the key the regional banks are not government-owned. They are owned by private member banks in their districts. These banks hold stock in the Federal Reserve banks, receive guaranteed dividends and elect six of the nine directors at each regional bank, while the Board of Governors is appointed by the President and confirmed by the Senate.

Speaker 1:

The actual monetary operations of the Fed, like setting interest rates or conducting asset purchases, are carried out by the Federal Open Market Committee, or FOMC, which includes seven public board members and five private rotating regional bank presidents. This creates a hybrid structure where private banking interests are directly embedded in national monetary policy. There's no direct audit of the Fed's monetary actions and Congress has no control over its decisions regarding interest rate changes, asset buying programs or quantitative easing or currency expansion. The Fed is said to be quote independent to avoid political pressure, but in practice it answers to no electorate, is insulated from congressional budgeting and serves a system where the interests of Wall Street, not Main Street, often dominate. Its decisions can inflate asset prices, dictate credit flows and shift economic tides with little to no input from the public. It ostensibly serves the original architects. Morgan, rockefeller, warburg and their peers designed the Fed to protect the banking class during crisis. That legacy persists to this day. During 2008 and COVID-19, the Fed bailed out large financial firms and supported markets far more swiftly than it aided ordinary citizens. It continues to funnel liquidity into asset markets, disproportionately benefiting those with stocks, real estate and capital.

Speaker 1:

While it operates with the aura of government legitimacy, the Federal Reserve is essentially a private banking cartel with government power. Its formation was driven not by public mandate, but by elite financial interests. It remains unaccountable to voters, it's shielded from transparency and it's in control of the levers of money and credit in the world's largest economy. In this light, the Fed doesn't just manage the economy, it defines who benefits from it. The purpose of the US Federal Reserve, commonly known as the Fed, is to ensure a stable, secure and well-functioning monetary financial system in the United States. It conducts monetary policy In this capacity. The Fed's primary role is to promote maximum employment, stable prices or low predictable inflation and moderate long-term interest rates. These are collectively known as the Fed's dual mandate, set by Congress. It also supervises and regulates banks. It ensures the safety and soundness of the banking system and is supposed to be protecting consumers. It also monitors and addresses systemic risks that could lead to financial crisis. It acts as a lender of last resort during times of liquidity shortages, like the 2008 financial crisis and the COVID-19 market disruptions. It also provides financial services. It serves as the bank for banks and for the US government. It handles payments, distributes currency, clears checks and facilitates electronic transfers.

Speaker 1:

The Fed is the only institution authorized to issue Federal Reserve notes, which is the physical cash used in the United States. Here's how they do it they use low inflation, which equates to asset price growth. For the wealthy. The Fed often keeps interest rates low to stimulate borrowing and economic activity, particularly during recessions. This cheap money flows disproportionately into assets such as stocks, bonds and real estate, which are mostly held by the wealthy in large institutions. What's the result? Well, you get asset inflation, not consumer price inflation, and this becomes the real economic driver and the wealthy benefit the most. Stabilizing CPI inflation helps justify easy monetary policy that inflates asset values and widens the wealth gap. The average citizens are hurt by delayed wage growth. The Fed's focus on inflation can make it reluctant to allow wages to rise too fast, fearing what they call a wage price spiral. But wages typically lag behind both inflation and productivity growth, especially in lower income sectors. This causes real wage to stagnate or decline even as the cost of living rises. This is a conflict. The Fed may act to suppress inflation just as working class Americans begin to see modest wage gains.

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The Fed's bank-centered design protects lenders, not borrowers. The Federal Reserve System was originally created by and for a consortium of private banks 12 regional banks, largely governed by commercial bank representatives. Policies like low interest rates help banks and large borrowers like corporations and hedge funds far more than consumers. Meanwhile, savings accounts, pensions and fixed incomes earn negligible returns under these exact same policies. As a result, the Fed's mandate preserves financial system liquidity and lender profits while eroding small savers' value. In truth, inflation targeting by the Fed can mask structural inequality. The 2% inflation target is applied generically, ignoring how inflation affects different classes unequally. Inflation target is applied generically, ignoring how inflation affects different classes unequally. For the average citizen, inflation in housing, healthcare, education and food far exceeds 2% over time. For asset holders, moderate inflation is tolerable or even beneficial, because it lowers the real cost of debt and boosts capital gains. As a result, the Fed's inflation lens focuses on abstract averages, not the lived reality of economic inequality.

Speaker 1:

Its debt-fueled growth favors financial institutions. A system where low inflation and interest rates are maintained over long periods encourages high levels of borrowing by governments, corporations and households. This expands the financial sector's role in the economy while making average people more debt-dependent. Through credit cards, student loans and mortgages, banks profit massively from the system through interest fees and asset leverage. As a result, what stabilizes the economy for central banks strengthens the grip of debt for the general public. The Federal Reserve's mandate appears neutral Price stability, full employment but in practice it privileges capital over labor, assets over wages and financial institutions over everyday economic sovereignty. Wages and financial institutions over everyday economic sovereignty.

Speaker 1:

The inherent conflict of interest in the existence and structure of the Federal Reserve stems from the hybrid public-private nature of the institution and its dual role as both regulator and participant in the financial system. Here are the core elements of this conflict there is a public mission, yet private ownership. The Federal Reserve has a public mandate, ie stable prices, full employment, etc. But its regional banks are owned by private member banks. These private banks earn dividends from their ownership, which raises questions about whether the Fed can truly be independent of the institutions it oversees. The same banks the Fed regulates are part-owners of the institution, creating the appearance or risk of regulatory capture, ie the regulator being unduly influenced by those it's supposed to supervise. The Fed is meant to serve the broader economy, but its actions, such as quantitative easing or bailouts, often disproportionately benefit large financial institutions and asset holders. Critics argue the Fed's tools tend to inflate asset prices, exacerbating wealth inequality.

Speaker 1:

A central bank that is supposed to serve the public interest may, in practice, serve the financial elite, intentionally or unintentionally, thus undermining trust in its neutrality. The Fed is independent from elected officials to avoid political interference in monetary policy. However, this independence means that an unelected body wields immense power over interest rates, money supply and economic conditions, with little democratic oversight. Who holds the Fed accountable if its decisions harm workers, inflate bubbles or mismanage inflation? Their dual mandate, which is price stability and maximum employment, often requires massive trade-offs. In fighting inflation, for example, the Fed may raise interest rates, which can increase unemployment and hurt borrowers, especially in vulnerable communities. The Federal Reserve is meant to act in the public interest, yet it is structurally tied to the private banking system and wields immense unelected power. This raises concerns of bias, lack of transparency and misaligned incentives, especially when its policies seem to disproportionately benefit financial institutions over ordinary citizens. When assessing the Federal Reserve's efficacy or its ability to perform its mandates, we need look no further than the Great Depression. The Federal Reserve's mismanagement of the Great Depression stands as one of the most glaring illustrations of how the system is inherently flawed and fails to serve its intended purpose, that is, to promote financial stability, full employment and price stability.

Speaker 1:

Between 1929 and 1933, the US economy experienced a catastrophic collapse. Gdp dropped by nearly 30%, unemployment soared to 25%. Thousands of banks failed. Deflation deepened the crisis. Yet the very institution created to prevent such a collapse, the Federal Reserve, stood by or worsened the situation. At a time when banks were collapsing en masse and depositors were panicking, the Fed refused to inject liquidity into the system. According to economist Milton Friedman, this decision alone turned a sharp recession into a full-blown depression. Milton Friedman stated, and I quote the Fed's inaction was not passive negligence.

Speaker 1:

It was an active choice to let the money supply contract. From 1929 to 1933, the US money supply fell by nearly one-third. Instead of increasing reserves or lowering interest rates, the Fed tightened credit, fearing inflation. But inflation was nowhere in sight. The real threat was deflation, which worsened debt burdens, cut wages and collapsed prices.

Speaker 1:

The Fed was more concerned with maintaining gold convertibility than rescuing the domestic economy. It prioritized foreign creditors and international trust over job creation, stability or growth at home. The commitment to an abstract monetary rule outweighed concern for real human suffering. You see, the decentralized structure of the Federal Reserve System, split into 12 regional banks led to confusion, inaction and competing interests. The New York Fed wanted to act aggressively, but other regional banks to confusion and action and competing interests. The New York Fed wanted to act aggressively, but other regional banks resisted. There was no unified leadership to steer the economy out of crisis. So what does this reveal about the Federal Reserve? Well, it reveals a system more loyal to capital than to people, more reactive to elite panic than to public need, and more focused on technical orthodoxy than adaptive wisdom. Rather than fulfilling its mandate to ensure stability, the Federal Reserve deepened the collapse by choosing austerity over expansion, inaction over intervention and ideology over intuition.

Speaker 1:

The Great Depression is not just a failure of policy. It is a symptom of systemic misalignment A system that treats the economy as numbers not lives, a system that listens to markets not communities, a system rooted in control not care. It shows us what happens when we give godlike power to institutions with no spiritual, ecological or democratic accountability. The Great Depression should have been a turning point, a moment to ask what is money for? Who is the economy meant to serve? Instead, the Fed was later given even more power without the necessary restructuring of its purpose, transparency or values. The Federal Reserve's handling of the Great Depression is a case study in how a system built on abstraction and hierarchy can fail utterly in the face of human need. It is not just a flaw in strategy. It's a failure of the soul of our country. If we are to reimagine economics, we must begin by replacing technocratic indifference with conscious design systems that align with life, not simply capital. This conflict is structural, not conspiratorial. Yet the outcomes are the same a system that reinforces inequality under the banner of economic stability. To realign it would require redefining stability not just as low inflation, but as equitable participation in prosperity.

Speaker 1:

Here are several alternatives to the traditional central banking system that are either already in use or being proposed to address the shortcomings of centralized, debt-based monetary systems. There's a mutual credit system, like Sardex in Italy, where local businesses trade with one another using a credit system that doesn't rely on national currency. Balances are created by trust and offset over time. No interest, no banks. This encourages circular, community-based economies. There's public banking systems like the Bank of North Dakota. It's a state-owned bank that serves the public interest rather than private shareholders. Profits are reinvested into the state for education, infrastructure and small businesses. This structure supports local banks instead of competing with them.

Speaker 1:

There are complementary and local currency structures, like the Bristol Pound in the UK or Ithaca Hours. These currencies circulate only within a local community, keep wealth local, often depreciate if not spent, encouraging circulation rather than hoarding. There's also sovereign digital currencies, like in China, nigeria or the Bahamas. These are centralized in nature but represent a shift from private bank-created money to state-issued digital cash. These systems may increase transparency and reduce bank overreach, but still depend on state control, not decentralization. There's also resourced backed and ecological currencies Currencies backed by carbon sequestration, renewable energy or ecosystem restoration. They're proposed as a new way to anchor money in planetary boundaries and natural value. There's also the Islamic banking system, which is a non-interest-based financial model. These systems ban interest and emphasize ethical investment. They promote shared risk and real asset-backed finance. They are already in practice widely in parts of the Middle East, southeast Asia and Africa. Each alternative reflects a different worldview, one that prioritizes community equity, resilience or ecological harmony over control and profit.

Speaker 1:

The Federal Reserve System was built not with an ear to the sacred, but with an eye towards control. Control At its core. The Fed is designed to regulate markets, manage inflation and stabilize the financial system through levers of interest rates, money supply and credit issuance. But nowhere in its architecture does it say what serves life, what honors the soul, what sustains harmony with nature or equity among all beings. It is a system of mathematical abstraction, disconnected from the pulse of the earth and the breath of the human spirit. Its measures of success are GDP growth, consumer confidence, inflation targets. These are fundamentally extractive. They reward acceleration, consumption and competition, not regeneration, sufficiency or reverence. Reverence.

Speaker 1:

This system commodifies time. The Fed's policies rely on interest and artificial pressure placed on time itself. But the sacred moves cyclically, not linearly. Growth for growth's sake is a violation of a natural order which includes rest, decay and renewal. This system values only what can be measured. Love has no metric, belonging has no price tag. The Fed's levers cannot touch the soul of a village where the grief of a forest felled for GDP. It governs a reality that omits the most essential truths. The system also privileges the few over the many. Its very origin, crafted in secrecy by bankers at Jekyll Island in 1910, enshrined a system where those with capital shape the conditions for everyone else. This is not stewardship. This is hierarchy disguised as stability.

Speaker 1:

If we were to align economic life with the rhythms of the cosmos, we would not center control, we would center relationship. We would have local and decentralized exchange systems, mutual credit networks, community currencies and time banks. All mirror the reciprocity found in ecosystems that prioritize trust, service and sufficiency over speculation and hoarding. We would look at regenerative finance capital deployed in service of healing of land, bodies and communities. Profit is not abandoned but subordinated to purpose. The goal is not to extract but to circulate vitality. We would focus on sacred timing and natural limits.

Speaker 1:

A sacred economic system would follow the seasons. There would be time for rest, time for slowness, time for listening. Artificial scarcity and perpetual urgency would be replaced by trust and natural abundance. We would look for currency backed by meaning, instead of debt-based money issued through private banks. We could imagine currencies backed by service, by time, by care. Imagine a currency that grows in value, not when hoarded but when shared. You see, the universe doesn't inflate endlessly. Stars collapse into black holes, galaxies birth new systems. Nature teaches us that everything must be in balance. The Fed knows only expansion or contraction, but the sacred teaches us rhythm, not reaction.

Speaker 1:

The future of economy is not more control, it's deeper coherence. It is remembering that value is not determined by markets but by what sustains life. To build this future, we don't just need better policies. We need a reorientation of the soul, an economy that listens to the earth, that reflects the fractal harmony of creation, that restores the sacred to the center of exchange. We don't need to destroy the old system to begin, we only need to stop bowing to it and start designing economies that sound like love.

Speaker 1:

As we come to the end of this episode, one thing becomes clear we cannot heal a system designed to keep us asleep without first remembering who we are. The Federal Reserve, like many institutions, operates from a paradigm of control, scarcity and separation, where value is extracted, not cultivated, where wealth is concentrated not shared, where the rhythms of life are bent to serve the mechanisms of profit. But sacred economics begins with a different premise, one that honors reciprocity over exploitation, that sees currency not just as money but as a current, as a flow of life, energy, trust and care. If the Federal Reserve listens only to markets and not to people, let alone to the earth, then it is not a system aligned with life. And if the systems that govern us cannot reflect the sacred, then it is up to us to begin imagining, remembering and building the ones that do, not through revolt but through resonance, not through dominance but through coherence. The future doesn't need another central bank, it needs central belonging, a new rhythm that honors every being, a new architecture that mirrors the intelligence of the cosmos. So let this episode be an invitation not just to question the system, but to come back into right relationship with value, with community and with the sacred flow of life itself, because in the end, the revolution won't be centralized. It will be rooted, remembered and lived.

Speaker 1:

As you continue listening to the Evolved Podcast, I'm going to unveil the true nature of the world that exists right under your nose. I'm going to analyze with you, out in the open, the systems at play here and the ways we can grow together and evolve. My aim To provide you with real ways to touch higher levels of awareness through truth and knowledge. Episodes are updated weekly. If you want to change your world for the better and support this evolution of consciousness, please show me by following, sharing this podcast with those you love and leaving a review. If you enjoyed our time today, please donate on BuyMeACoffee, linked in the show notes below. Until next week, let's level up and master your universe. You.