How did the Federal Reserve system hold up during the Great Depression?
1 Answer
The federal government intervened
Explanation:
The Federal Reserve gives a complete monopole on the issuing of American dollars to unknown private shareholders. It was able to hold up during the thirties because the American government plundered the wealth of American people. For instance, the owning of domestic gold was made illegal in 1933, FDR did so to save Wall Street and the Federal Reserve.
Gold was confiscated and the Gold Standard was suppressed. Therefore the federal reserve could print money out of thin air as much as possible without the fear of having people using gold instead of the devalued money issued by the Federal Reserve.
The possession of domestic gold was not reinstituted until the seventies when Representive Ron Paul pushed for the rescinding of that law.
More details:https://mises.org/library/taking-money-back-0
