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This isn't entirely true.

7 members of the Federal Reserve's Board of Governors are appointed by the President and approved by the Senate. The remaining 5 are the presidents of the regional Federal Reserve Banks. These 12 also make up the Federal Open Market Committee which happens to (essentially) set interest rates in the country.

So, Federal appointees actually do have a controlling vote on the monetary supply in this country... so, while the Federal Reserve Banks are technically private, they are run by Federal appointees (7 members gives the government a controlling majority on the Board of Governors and the Open Market Committee).

The real reality is that our Founders never imagined a fiat currency system. However, a fiat currency system is a necessity in the modern world... like it or not. Going back to a commodity standard (the gold standard) would require the agreement of over 200 nations because one country, on its own, can't just revert to a commodity based currency when the rest of the world operates on a fiat basis - it would completely frick exchange rates in ways that I can't even begin to understand.

I'll add that a return to the gold standard isn't the panacea that a lot of people imagine it to be... Gold backed currency was the cause of a lot of war and colonialism. It was also the foundation of mercantilism (export more than you import and minimize domestic demand for consumer goods in order to amass national wealth)... None of these things would actually be good for Americans in the 21st century despite what Ron Paul (who I like on a lot of issues) says.

You're lost.

Severely lost.

Fiat currency can exist, and should, probably.

The key is where it comes from and how it's brought into existence.

The Treasury has the power to create currency, regulate it's quantity and preserve it's value -- they can do this without creating interest. Lincoln and JFK are the two presidents to do such a thing and we know how that ended.

The central banking system loans money into existence, creating an automatic and perpetual debt spiral.

A dollar is created at interest, but another one has to be created to pay the interest, but that dollar has interest.

It's a ponzi scheme.

Very complex and elaborate, but also very simple.

Private corporations are creating currency and loaning it into existence. This is not how it's supposed to be done.