In Part I, I talked about how the Fed creates money and why it doesn't make sense for banks, bank employees and/or their private owners to benefit personally from the interest received on funds that banks are able to create out of nothing, which they then lend to bank customers (which in some cases is the government). The bankers were given authority to create those funds out of nothing in order to control the supply of money for the sole benefit of The People. Bankers, when they make loans, (to the extent they are creating and lending newly created money) are acting as agents of The People. The People are the true and sovereign owner of those funds and so it is The People, (i.e., the government), that should be the recipient of those interest payments.
Of course banks ought to be adequately compensated for the legitimate services they do provide. That would include interest and fees for lending out capital that banks own by virtue of accumulated earnings or investor contributions, fees for processing loan applications, and fees for evaluating and controlling the amount of money the economy needs to prosper in an optimum and sustainable manner. But banks shouldn't be compensated for services they don't provide, which is to say, they shouldn't gain or be compensated with the interest they receive on funds that were lent by creating that money out of nothing, nor should they be allowed to profit from inside information that might become available to them in the course of managing the money supply; nor should the power that has been entrusted to them ever be used to benefit the bank or bank employees or owners or to influence the legitimate operation of other government functions.
The Fed was entrusted to perform a sacred duty for which they have a fiduciary1 responsibility to perform: to manage the money supply for the benefit of the economy, which is to say, The People, or society as a whole. That duty precludes them from profiting over and above a legitimate remuneration for carrying out its essential duties. If they betray the trust implied by that fiduciary duty, they ought to be removed and/or prosecuted for fraud or breach of trust as the case may be.
Apparently, a good case can be made that some banks, bankers, and bank owners have breached that trust for a long, long time. That means those illegitimate beneficiaries ought to be liable for the fraud and damage they have caused in the process of accumulating their illegitimate power and wealth. They surely ought not to be rewarded for all the poverty, death, and destruction that their infidelity has caused. In fact, they should be prosecuted to the fullest extent of the law for any fraud and/or other criminal acts they have perpetrated.
Of course the arrangement by which the Fed operates, which is to say the legislation that authorizes the Federal Reserve System, might in and of itself be flawed, and it appears that it is. In fact, how the system was supposed to work was not spelled out clearly from its inception. Nevertheless, the Chairman of the Fed and it's governors took an oath in which they pledged allegiance to the Constitution before they took on their duties and I maintain that that oath, properly interpreted, says exactly what I have just said but in different words.
No one should be in the business of banking, either at the Fed or at any of its member banks, who doesn't understand what it means to be a fiduciary or is unworthy of the honor of being trusted with fiduciary responsibilities.
Our elected government officials are also fiduciaries. Unfortunately, we cannot trust the government we now have to redesign the Federal Reserve System or to prosecute any crimes that banks and bankers have committed over the years. The government we now have has refused to prosecute the crimes and misdemeanors of prior administration officials, such as war crimes and other illegal or unconstitutional acts, and, in fact, has engaged in similar acts themselves. How can they be trusted to prosecute the illegal acts of others when they have in the past, and continue in the present, to engage in similar crimes themselves? In fact, with respect to the Fed, our government has already rewarded banks and bankers with billions or trillions of dollars when we all know they instead should have been prosecuted for fraud and other crimes.
When a fiduciary fails to uphold the honor of their office, that person ought to be removed from office. And who has the duty to remove such a person from office? Answer: The person or persons who put them in office; the person or persons who have legitimate power to hire or fire that person. And that would be us.
When a fiduciary duty is imposed, equity requires a stricter standard of behavior than the comparable tortuous duty of care at common law. It is said the fiduciary has a duty not to be in a situation where personal interests and fiduciary duty conflict, a duty not to be in a situation where his fiduciary duty conflicts with another fiduciary duty, and a duty not to profit from his fiduciary position without express knowledge and consent. A fiduciary cannot have a conflict of interest. It has been said that fiduciaries must conduct themselves "at a level higher than that trodden by the crowd" and that "[t]he distinguishing or overriding duty of a fiduciary is the obligation of undivided loyalty."