1938

With the Federal Reserve having been in control of the United States economy for 25 years under the pretext of promoting monetary stability, it has caused three major economic downturns including the Great Depression. As Nobel Prize winning economist Milton Friedman put it,

"The stock of money, prices and output was decidedly more unstable after the establishment of the Reserve System than before. The most dramatic period of instability in output was, of course, the period between the two wars, which includes the severe (monetary) contractions of 1920-21, 1929-33, and 1937-38. No other 20 year period in American history contains as many as three such severe contractions.

This evidence persuades me that at least a third of the price rise during and just after World War I is attributable to the establishment of the Federal Reserve System ... and that the severity of each of the major contractions - 1920-21, 1929-33, and 1937-38 - is directly attributable to acts of commission and omission by the Reserve authorities ...

Any system which gives so much power and so much discretion to a few men, (so) that mistakes - excusable or not - can have such far reaching effects is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic - this is the key political argument against an independent central bank ... To paraphrase Clemenceau money is much too serious a matter to be left to the central bankers."

Milton Friedman would also state,

"I know of no severe depression, in any country or any time that was not accompanied by a sharp decline in the stock of money, and equally of no sharp decline in the stock of money that was not accompanied by a severe depression."