Part 7/14:
The Fed leverages several tools to influence the economy—most notably, open market operations (buying and selling government securities), setting the discount rate, and adjusting reserve requirements for banks. These controls allow the Fed to inflate or deflate the money supply at will, leading to artificial booms and inevitable busts. By creating excess credit through fractional reserve banking, where banks only hold a fraction of deposits in reserve, the Fed inflates a pyramidal system of money supply that amplifies inflation and redistributes wealth towards government entities, big banks, and connected corporations.