Federal Reserve Chairman Ben Bernanke told a House committee on February 28 that the administration and federal regulators are closely monitoring financial markets following the biggest one-day decline in stock prices since September 2001, but so far the markets appear to be "working well."

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Federal Reserve Chairman Ben Bernanke delivered testimony on long-term fiscal challenges and the economy to the House Budget Committee on Wednesday, February 28. During his testimony, the Fed chief recommended that Congress act to stem the rising budget deficits that will result from increased federal spending.

The Dow had dropped 416 points the day before — the largest decline since the first day of trading following the 911 attacks — and the nation was understandably nervous about the state of the economy. Bernanke assured the committee members that Tuesday's precipitous stock market plunge had not changed the Fed's view that the U.S. economy was sound. He also said that there did not seem to be any single trigger for the drop, which many observers had attributed to a sharp drop in the Chinese market that had preceded the U.S. market decline.

Bernanke said that federal regulators are closely monitoring financial markets in the wake of the biggest sell-off in stock prices in more than five years but so far the markets appear to be "working well."

While Bernanke's advice to Congress to reduce federal spending was sound, it is unfortunate that he could not have offered that advice as a key member of the legislative or executive branches of government, rather than as the head of the quasi-private central banking system known as the Federal Reserve System. Because, if the financial markets are indeed "working well," as Bernanke said, they are doing so despite the federal regulators and the existence of the Federal Reserve System that Bernanke chairs — not because of them.

All that most individuals know about the Fed is that it sets interest rates and affixes its name and seal to the "Federal Reserve Notes" each of us carries in our wallet. But the impact of the Federal Reserve on our economy — and even our government — is immense.

Congressman Charles Lindbergh, Sr., wrote a book in 1913 explaining his opposition to the creation of the Federal Reserve entitled, Banking and Currency and The Money Trust. He was well qualified to write about the subject. Rhode Island Senator Nelson Aldrich had formulated the "Aldrich Plan," upon which the Federal Reserve System is based, while serving as chairman of the National Monetary Commission created by the 1908 Aldrich-Vreeland Act. A Washington reporter noted that Lindbergh was "the only man I have ever known who had read the entire twenty [actually, 23] volumes of the Aldrich Monetary Commission."

When the Aldrich plan was rejected and the Glass Bill was introduced in Congress in 1913 as another, successful attempt to create the Fed, Congressman Lindbergh said of the bill: "This act establishes the most gigantic trust on earth.... When the President signs this act the invisible government by the Money Power, proven to exist by the Money Trust investigation, will be legalized.... This is the Aldrich Bill in disguise.... The new law will create inflation whenever the trusts want inflation...."

In an economy wherein every word uttering forth from the mouth of the Chairman of the Federal Reserve is seized upon by investors and has repercussions on Wall Street, the ability of the Fed to impact our financial markets obviously indicates too great a concentration of power in too few hands. Mayer Anselm Rothschild (1743-1812), founder of the powerful European banking dynasty that in many ways served as a model for our own Federal Reserve System, once stated: "Give me control of the money, and it does not matter who makes the laws."

To the advice given by Chairman Bernanke to Congress we should add: Abolish the Federal Reserve System and restore soundness to our currency with a gold standard. Such a policy would not only curtail government spending, deficits, and inflation, but would add stability to our financial markets as well.

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