It essentially emasculated the constitutionally ordained U.S. Department of the Treasury and created a quasi-department that was not quite a government entity, run by private bankers, and fooling the general public to believe it provided a solid authoritative anchor for Public Economic Policies.
In my view, "the FED" should be abolished. Before its creation: America had gold and silver coin, which I favor most; indeed it had paper-currency but it was "backed" by those commodities.
We have learned with this Great Recession that the "full faith and credit of the United States" touted as credibility for Federal Reserve Notes are literally dubious IOU's.
If the current National Debt is so high we cannot repay with this flimsy monopoly-money, I cringe at the prospects for the next economic downturn. Fancy terms like "quantitative easing" are just a scheme masking a system jiggered to help the privileged-class at the expense of the lower and middle-classes.
The FED essentially deepened the Great Depression of the 1930s and many people foolishly still believe in that dubious institution which is, in its mission-statement and in fact, accountable to no one except itself. The FED attempts to look respectable by having a "Board of Governors" and a "Chairman" (Ben Bernanke ) who will soon be replaced.
Yet, it is a conglomerate of several regional Federal Reserve Banks, with private bankers. It is touted as the Central Bank of The United States and the "lender of last resort". Yet, I have checked several sources which say that its reserve requirements are only between 0% and 10%.
If any hometown bank had openly-disclosed "reserves" that low, we would have citizens of our nation do a massive "run of banks" not seen since the 1930s. Except, nowadays, people are too addicted to "plastic" credit-cards or debit-cards. I have nothing against such cards, if used prudently; but this plays into the Federal Reserve System making our money seem 'artificial'.
Warren Buffett once complained about gold that money and manpower is used to dig it out of the ground, money is used to protect it, and he erroneously believes it generates nothing.
Buffett is dead wrong. Gold and silver engenders a tangible form of collateral. Gold and silver engenders solid public faith and confidence in sound money. If so much of our modern elastic money, sometimes called fiat-money or paper money is printed without a backing or foundation: it can become worthless overnight. Decades ago, Germany experienced hyper-inflation.
There were jokes that it took a wheelbarrow full of German paper money notes to buy a loaf of bread. That was no laughing matter for the masses of people who endured such misery. The FED's lack of accountability is disconcerting. I agree with former Texas Congressman, Ron Paul that 'The FED' should be abolished now.