So it goes with the Fed. As it looks just like a governmental agency, and coordinates public policy that influences us all, we tend to get confused with regard to its behavior as a central bank. And so when we discover that the Fed seems to always act in the interest of banks, we start scratching our proverbial skulls. We want to attribute this beguiling behavior to something other than what it is: either your typical run-of-the-mill political corruption; or, perhaps, a confusion with regard to its public-service role; or maybe annoying evidence of an identity crisis. And so, which is it, we ask? Is the Fed a servant of the public? Or is it a bank? It would certainly help to know.
Ladies and Gentlemen: The Federal Reserve
In case you weren't aware, the Federal Reserve is, in fact, a privately-owned banking cartel. In other words, it is nothing less than a coordinated policy-making body composed of the largest and most powerful banks.
Taking our classification analogy into account, we ask ourselves, what does a bank do? How does it feed itself? What is the natural environment that it thrives in? How does it protect itself from dangers? What are its dangers? What does it want? How does it reproduce? How does it prosper? And because it's a strange bank, a unique species of bank, how does operate differently than other banks?
Let us ask these questions. But let us never overlook the fact that THE FED IS A BANK.
After a closer look we can make the following observations:
In 1910, the founders of the Federal Reserve System, which were a handful of directors from the largest Wall Street banks, understood that, if the public ever found out that the banking bill they were then drafting was really a bank takeover, a banking monopoly upon the currency, the bill would never be passed. At the time, these founders still had to address getting the bill passed, and so they had to find a way to sell it before the public. Therefore, it was decided, the reality of the Fed must be concealed--must be veiled--by its hollow image as a public servant, which it most certainly is not.
Take the name. The original seven founders argued over many proposals as to what to call this new institution. The reason the "Federal Reserve System" was finally chosen was because, as Paul Warburg explained, each of these words convey the exact illusion the banks needed for the bill to be passed, and for the bank to survive.
The word "federal" provided the illusion of the institution being governmental, not private, and therefore acting in the public interest. The word "reserve" offered an image of strength and stability; in other words, the notion that the institution would be capable of providing monetary stability. As the banking bill was supposed to be created as a remedy for runs on currency, or "bank runs," stability was a crucial notion to convey. As we shall see, the notion that the Federal Reserve has "reserves" is a huge deception.
And the word "system" literally provided the final illusion, the closing argument so-to-speak, that of de-centralization; of it not being controlled by a single center of financial power. On the surface, the Federal Reserve System is a de-centralized banking system with 12 regional banks, spread out across the country. Although it's true that these regional banks at firstde facto center of power. Not only were the headquarters of the country's largest financial concerns originally centered around Wall Street. But in subsequent years, as the industry continued to consolidate (consequent to Fed policy), other regional commercial centers became merely different markets for the powerful banks in New York to operate in.
Legal Protection
In the last year, many investigative journalists have filed FOIA requests to force the Fed to disclose where TARP recipients were spending the taxpayer money these banks received. The Fed then proved that, as it is a PRIVATE BANK, and independent of oversight, the Fed was under no obligation to disclose that information, and so it wasn't disclosed.
As another example, even though there are a handful of private shareholders that own stock in Federal Reserve branches (just as in any corporate body), these shareholders are no longer publicly disclosed. When the system was first set up, the disclosed shareholders were listed as banking magnates and their families, the very same individuals that worked in secret to put the Federal Reserve System together. These family names read like a who's-who of early-Twentieth Century industry and finance: Rockefeller, Morgan, Rothschild, Schiff, Warburg, Harriman, Aldrich, Vanderbelt, and Kuhn-Loeb. Originally these families bought Fed shares, which also included legal stipulations that the shares could not be forcefully expropriated under any circumstances.
Today, after the numerous banking industry consolidations since 1913, the public has absolutely no idea who owns Fed shares or how these shares are distributed. Do the same banking families own these shares today? Probably. But whatever the case, the controlling interests of this independent, unregulated, policy-making body operate in complete secrecy. As they do, in fact, exercise public policy, perhaps the public would like to know who these people are.
How the Fed Operates
The Fed has two principle monetary functions: first, as an instrument of money creation or money destruction through "buying" or "selling" of government debt; and, secondly, as the lender-of-last resort to participating commercial banks. Let us first scrutinize its role in creating money through government debt.
Federal Reserve Act of 1913 gave this banking cartel a complete monopoly to "create" the nation's money right out of thin air, out of nothing. Read that again. The Fed "lends" our government money, but only through giving our government money the bank never previously had. And this "lending" of nothing is exercised AT INTEREST to the government, to the taxpayer.
Ladies and Gentlemen: The Federal Reserve
In case you weren't aware, the Federal Reserve is, in fact, a privately-owned banking cartel. In other words, it is nothing less than a coordinated policy-making body composed of the largest and most powerful banks.
Taking our classification analogy into account, we ask ourselves, what does a bank do? How does it feed itself? What is the natural environment that it thrives in? How does it protect itself from dangers? What are its dangers? What does it want? How does it reproduce? How does it prosper? And because it's a strange bank, a unique species of bank, how does operate differently than other banks?
After a closer look we can make the following observations:
- Although a private banking cartel, the Federal Reserve advertises itself as an institution of government.
- This public-relations deception is how the institution protects itself; how it survives.
- This deception is intentional, drawn up by the founders of the system itself.
- What this deception hides is that, not only is the Fed a private banking cartel, it is a private banking cartel that acts independently any governmental oversight. In other words, the Fed is completely independent of the U.S. Government.
- We don't know exactly who really controls the Federal Reserve, although we do know it isn't us.
In 1910, the founders of the Federal Reserve System, which were a handful of directors from the largest Wall Street banks, understood that, if the public ever found out that the banking bill they were then drafting was really a bank takeover, a banking monopoly upon the currency, the bill would never be passed. At the time, these founders still had to address getting the bill passed, and so they had to find a way to sell it before the public. Therefore, it was decided, the reality of the Fed must be concealed--must be veiled--by its hollow image as a public servant, which it most certainly is not.
Take the name. The original seven founders argued over many proposals as to what to call this new institution. The reason the "Federal Reserve System" was finally chosen was because, as Paul Warburg explained, each of these words convey the exact illusion the banks needed for the bill to be passed, and for the bank to survive.
The word "federal" provided the illusion of the institution being governmental, not private, and therefore acting in the public interest. The word "reserve" offered an image of strength and stability; in other words, the notion that the institution would be capable of providing monetary stability. As the banking bill was supposed to be created as a remedy for runs on currency, or "bank runs," stability was a crucial notion to convey. As we shall see, the notion that the Federal Reserve has "reserves" is a huge deception.
And the word "system" literally provided the final illusion, the closing argument so-to-speak, that of de-centralization; of it not being controlled by a single center of financial power. On the surface, the Federal Reserve System is a de-centralized banking system with 12 regional banks, spread out across the country. Although it's true that these regional banks at firstde facto center of power. Not only were the headquarters of the country's largest financial concerns originally centered around Wall Street. But in subsequent years, as the industry continued to consolidate (consequent to Fed policy), other regional commercial centers became merely different markets for the powerful banks in New York to operate in.
Legal Protection
In the last year, many investigative journalists have filed FOIA requests to force the Fed to disclose where TARP recipients were spending the taxpayer money these banks received. The Fed then proved that, as it is a PRIVATE BANK, and independent of oversight, the Fed was under no obligation to disclose that information, and so it wasn't disclosed.
As another example, even though there are a handful of private shareholders that own stock in Federal Reserve branches (just as in any corporate body), these shareholders are no longer publicly disclosed. When the system was first set up, the disclosed shareholders were listed as banking magnates and their families, the very same individuals that worked in secret to put the Federal Reserve System together. These family names read like a who's-who of early-Twentieth Century industry and finance: Rockefeller, Morgan, Rothschild, Schiff, Warburg, Harriman, Aldrich, Vanderbelt, and Kuhn-Loeb. Originally these families bought Fed shares, which also included legal stipulations that the shares could not be forcefully expropriated under any circumstances.
Today, after the numerous banking industry consolidations since 1913, the public has absolutely no idea who owns Fed shares or how these shares are distributed. Do the same banking families own these shares today? Probably. But whatever the case, the controlling interests of this independent, unregulated, policy-making body operate in complete secrecy. As they do, in fact, exercise public policy, perhaps the public would like to know who these people are.
How the Fed Operates
The Fed has two principle monetary functions: first, as an instrument of money creation or money destruction through "buying" or "selling" of government debt; and, secondly, as the lender-of-last resort to participating commercial banks. Let us first scrutinize its role in creating money through government debt.
Federal Reserve Act of 1913 gave this banking cartel a complete monopoly to "create" the nation's money right out of thin air, out of nothing. Read that again. The Fed "lends" our government money, but only through giving our government money the bank never previously had. And this "lending" of nothing is exercised AT INTEREST to the government, to the taxpayer.
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