"Most Americans have no real understanding of the operation of the international moneylenders. The bankers want it that way. We recognize in a hazy sort of way that the Rothschilds and the Warburgs of Europe and the houses of J. P. Morgan, Kuhn, Loeb and Company, Schiff, Lehman and Rockefeller possess and control vast wealth. How they acquire this vast financial power and employ it is a mystery to most of us. International bankers make money by extending credit to governments. The greater the debt of the political state, the larger the interest returned to the lenders. The national banks of Europe are actually owned and controlled by private interests... The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and... manipulates the credit of the United States." - Sen. Barry Goldwater (R-AZ.)
Conspiracy theorists, like Barry Goldwater, argue that the “Fed” has never been audited. That is sort of a fact. Although the private accounting company, Price Waterhouse, goes over the “Feds” books every year and shows us how much money is spent on wages, benefits, equipment, and clearing our checks, they are not allowed to look at little things like how much money the “Fed” transfers into and out of our country. Federal law actually excludes several areas from inspections, including (31 USCA §714): “(1) transactions for or with a foreign central bank, government of a foreign country, or non-private international financing organization...” The “Fed” can send money overseas without approval, oversight, or audit by anyone. I figure if the “Fed” wanted to send vast sums of money to its international banker owners; it would do it by wiring it to a foreign bank account, not by cutting a paycheck. So, the “conspiracy” theory that the Federal Reserve is sending billions or even tens of billions of our U.S. tax dollars every year to “international Bankers.” Well, that theory may or may not be true. By law, we literally cannot know. Why do you think would there be a law like that?
Here’s something else to consider, according to Federal law, “No Senator or Representative in Congress shall be a member of the Federal Reserve Board or an officer or a director of a Federal reserve bank.” No member of Congress, no representative of the American people, is to have access to the inner sanctum. What do they fear? U.S. Senators and Representatives form Intelligence Committees charged with overseeing our country’s deepest, darkest secrets and covert missions, but they are forbidden, by law, to know what the “Fed” is doing.
Also, according to12 USC 3019, Federal Reserve banks, including the capital stock and surplus therein, and the Income derived there from shall be exempt from Federal, State, and local taxation, except taxes upon real estate. Why are they not exempt from real estate taxes? Because they are not part of the federal government. The Federal Reserve is the only private corporation that is exempt from federal and state taxes. This independent “Fed” can refuse to create money if it wants. Professor Seymour E. Harris, Harvard economist, wrote in the Washington Post, “We cannot afford, in these days of crisis, the luxury of the Executive going one way and the Fed another. Under President Kennedy, there were threats of restrictive monetary policy; e.g., at one point Mr. Martin would VETO the tax cut by not financing the deficit out of additional money. The Board itself gives too much attention to the wishes of the financial interests. The banks even more so."
In 1935, the U.S. Supreme Court struck down Roosevelt’s National Recovery Administration as unconstitutional. According to the Supreme Court, “The Constitution established a national government with powers deemed to be adequate, as they have proved to be both in war and peace, but these powers of the national government are limited by the constitutional grants. Those who act under these grants are not at liberty to transcend the imposed limits because they believe that more or different power is necessary. Such assertions of extra-constitutional authority were anticipated and precluded by the explicit terms of the Tenth-Amendment. The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” (You may recall that this was exactly Thomas Jefferson’s argument against establishing America’s first central bank.) The National Recovery Administration attempted to put into place the exact same type of self-serving industrial cartel as was created by the Federal Reserve Act. The U. S. Constitution is very clear and it does not empower the federal government to issue un-backed, fiat currency. Somehow, through the “Federal Reserve Act,” Congress has delegated to private bankers a power that the Congress itself does not have. Unfortunately, the question of the legality of the “Fed” has never been brought before the Supreme Court and all these public officials – from the President on down - who have sworn to “defend the Constitution from all enemies foreign and domestic” continue to look the other way.
HR 2755, currently in the House of Representatives, calls for the abolition of the Federal Reserve System. Over 1,500 U. S. cities and organizations have called for the dissolution of the Federal Reserve. Wright Patman, Chairman of the House of Representatives Committee on Banking and Currency for 40 years, introduced legislation to repeal the Federal Reserve Banking Act twenty times. Congressman Henry Gonzales, when he was Chairman of the banking committee, also introduced legislation to repeal the Federal Reserve Banking Act nearly every year. It's always defeated. I have provided you with many quotes from Louis McFadden, Chairman of the House Banking Committee and Charles Lindbergh (Republican Senator from Minnesota.) - Both actually attempted to impeach members of the “Fed!” Do these people, people who have intimate knowledge of the machinations of the Federal Reserve System, know something you and I don’t? It’s no wonder we are in the dark, the same bankers who own the “Fed” control the media and give huge political contributions to sympathetic members of Congress.
You know, given the conspiratorial beginnings of the Federal Reserve, its cartel oligopoly of the U.S. banking industry designed to benefit a few New York Banks, and the appalling statutory and media secrecy it’s no wonder that otherwise normal people are convinced that shenanigans are afoot. Go ahead; call it a conspiracy. It is.
A Note about the Bailout
First, let me just quote part of Section 8 of the actual Bailout Bill that passed Congress: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Interesting. (It’s not called “Section 8” for nothing.) Why would that wording be put into this bill? Well, in article published in the October 24, 2008 New York Times, the newspaper's economic columnist, Joe Nocera, reveals what he calls "the dirty little secret of the banking industry,” that many banks have no intention of using the government bailout money to make new loans. As Nocera explains, the plan to hand over $250 billion in taxpayer money to the biggest banks was never intended to get them to resume lending to businesses and consumers. Its real aim was to bankroll a rapid consolidation of the American banking system by subsidizing a wave of takeovers of smaller financial firms by the most powerful banks. Nocera cites an employee-only conference call held October 17 by a top executive of J P Morgan Chase, a beneficiary of $25 billion in public funds. Nocera explains that he was able to listen surreptitiously to a recording of the proceedings. Asked by one of the participants whether the $25 billion in federal funding will "change our strategic lending policy," the executive replies, "What we do think, it will help us to be a little bit more active on the acquisition side or opportunistic side for some banks who are still struggling." "And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment, and I think we have an opportunity to use that $25 billion in that way, and obviously depending on whether recession turns into depression or what happens in the future, you know, we have that as a backstop." “We would think that loan volume will continue to go down as we continue to tighten credit to fully reflect the high cost of pricing on the loan side.”
Nocera notes: “It is starting to appear as if one of Treasury’s key rationales for the recapitalization program — namely, that it will cause banks to start lending again — is a fig leaf, Treasury’s version of the weapons of mass destruction.” “In fact, Treasury wants banks to acquire each other and is using its power to inject capital to force a new and wrenching round of bank consolidation.” As Mark Landler reported in The New York Times earlier this week, “the government wants not only to stabilize the industry, but also to reshape it... I don’t know about you, but I’m starting to feel as if we’ve been sold a bill of goods.” Bankers have been told that bailout money has been given to banks whether they need it or not so that the public won’t know which banks are in financial need and pull their money out of those institutions. Sure. Like publicly traded banks don’t all issue quarterly financial statements. The weak banks use bailout money to help shore-up their balance sheets and then the strong banks use their money to sweep them up.
So, the Bush administration, using the same flourish and sense of immediacy that accompanied their “War on Terror,” and the Afgan and Iraq wars, once again sends trillions of taxpayer dollars from working class Americans to the richest of the world’s rich. There he goes again, spreading the wealth. You don’t have to be steeped in conspiracy theories to see the pattern here.
Here’s a question for you: Who owns the “Fed?” The last time the shares were audited (That I can find) was as of 11:05 A.M. on July 26, 1983. As of that date and time, 53% of the New York Federal Reserve Bank – which controls the “Fed” and represents about one half of the total assets of the entire system – was owned by 5 banks: Chase, Chemical, Citibank, Manufacturers Hanover, and Morgan. Since that day, Chemical Bank bought Manufacturers Hanover in 1991; Chemical merged with Chase in 1996; and Chase merged with Morgan in 2000. If the shares remained with the holders of record in 1983, your Federal Reserve System is now controlled (as it has been since the beginning) by J.P. Morgan Chase (Rothschild and Rockefeller) and Citibank. Citibank remains in a very weak condition, even after having received two bailout packages totaling $45 billion. It still has a good chance of being taken over – After Citibank has received her last dollar of funding, J.P. Morgan Chase will just use our taxpayer money to limit its competition and monopolize the banking industry.
Speaking of taxpayer money, round two of the current Bailout raises the total expenditures to about $2 trillion. If we just make it $3 trillion, we could give every man, woman, and child in the U.S. $10,000 cash to go out and spend our way out of this looming depression. You know a “spread the wealth” kind of thing. Sure this sounds crazy, but think about it... Who else would know how to spend the bailout money quickly and in exactly the right manner to help the most people? Who else deserves this break but the very people we are counting on to pay the bills? Think of it as a loan to the taxpayers, to be paid back by the taxpayers. This money would go to pay mortgages, buy cars, buy food, and yes, buy liquor and drugs. The point is that the money would be put into circulation very rapidly and ALL the wheels of our economy would be greased simultaneously. Do you actually think that giving all that money to just a few of the largest banks makes more sense?
During the presidential campaign, there was a lot of disparaging talk about Obama’s “spread the wealth” statement. McCain “spinsters” seized upon this “Socialist” talk and milked it for all it was worth. (Apparently, not much.) The fact of the matter is that we are constantly redistributing the wealth of this country. Unfortunately, the money goes the wrong way, from the working taxpayers to the rich. Consider the billions of dollars given to corporations in “no-bid” or sweetheart contracts, “pork barrel” additions to Congressional bills, and corporate tax “loopholes,” subsidies, externalities, and bailouts... all for the benefit of the rich and paid for by the working class. How do the beneficiaries of all this “Corporate Socialism” repay us struggling taxpayers? By sending our jobs to foreign lands, hiring illegal aliens, plundering pension funds, laying-off workers just before they reach retirement age, by merging and eliminating competition, by price-fixing and collusion, by cutting health benefits, by instituting usurious fees and penalties on all of our accounts, by externalizing the costs of pollution and product health risks, and by passing on to consumers everything from the legal costs of avoiding regulations to buying politicians. Corporate Socialism privatizes profits but socializes risk.
What can be done?
Given our present national fiscal predicament, what can be done? The cure is relatively simple and painless. The U.S. Government should buy back the Federal Reserve System for $450 million (As is specified in its “enabling act”), keep everybody employed doing the same job as they do now in the same buildings, using the same equipment, and at the same pay. The only difference would be that they would be working for the U.S. Treasury Department and not a private corporation. Any income generated from the interest on the U.S. Bills, Notes, and Bonds would be recycled back into the treasury – just as the current “Fed” is supposed to do. The difference would be that there would be no secret overseas money transfers. Everything would be open and above board.
Next, eliminate the whole circular process of making Treasury instruments, selling them, paying interest on them, and then buying them back. If the U.S. Government has the ability to print its own money – and it does – what is the purpose of the Treasury Bills, Notes, and Bonds? Nothing. The Federal Reserve Banks demand them in exchange for printing money, but our Government can print its own money without any help from the “Fed.” We don’t need the Federal Reserve or the Treasury instruments. In fact, the Treasury Instruments do nothing constructive, they simply tie-up money that could be used elsewhere. Most government projects funded by the $11 trillion in national debt have long ago come and gone but we taxpayers continue to pay interest to the Federal Reserve Banks on the “debt.” If these “dead” instruments were eliminated, there would be trillions of dollars unencumbered and available for investment in “living” businesses, real estate, and state and local government bonds. What happens to our national debt if we retire the Treasury Bills, Notes, and Bonds? It disappears. When we retire the Treasury instruments, we stop paying interest and we won’t owe anybody anything. The Treasury simply prints money when needed by Congress, just like the Federal Reserve currently does, and everything stays the same. Inflation wouldn’t go away, of course, but it wouldn’t be any worse either. With the “National Debt” gone, we Americans just might get our Ft. Knox gold back that the “Fed” took as collateral. By eliminating Treasury Bonds, Notes, and Bills, taxpayers can save about $500 billion every year on interest payments. Alternatively, we can pay the same in taxes and use that money for better medical care, education, roads, hospitals, etc. Alternatively, if you are of the “Neo-Con” persuasion, we could heed God’s call and invade Iran, Syria, North Korea, etc.
The U.S. economy cannot absorb the return of $11 Trillion without serious disruption and dilution of the dollar (inflation.) The best way to absorb the return of these wayward funds while controlling inflation is to increase the reserve requirements for loans at lending institutions. Currently, banks have a 10% reserve requirement on checking deposits and, essentially, a 0% reserve requirement for savings accounts and CDs. A 10% reserve requirement means that if your bank takes in $100 in a checking account, it can loan out $1,000 to somebody else. Your bank simply “creates” another $900 of “money.” If that sounds bizarre to you, take a minute and think about what a 0% reserve requirement means. Now, how do you feel knowing that there are so few dollars behind your bank loan? Behind our entire economy? Currently, banks create about ten times as much “money” as the Federal Reserve System. Do you think that our economy might be on a little firmer footing if the reserve requirements were slightly higher – a little more meaningful? We can control inflation by balancing this infusion of money into our economy while increasing the reserve requirements of lending institutions. This will not only stimulate our economy at a time when it is sorely needed, but also fortify our banking system (at a time when it is sorely needed.) Balance is the key. If we raise the reserve requirements too little, we risk more inflation... too much, and we will have a deflationary spiral and depression.
Who is currently in charge of monitoring the banks’ reserve requirements? The Federal Reserve. Picture it this way: If the banks were hens, the “Fed” would be the fox. By absorbing the Federal Reserve System functions into the Treasury Department, where they rightfully belong, our banks would be monitored, not by their cohorts and competitors, but by slightly more impartial government officials. Strict, independent monitoring of banking reserve requirements and interest rates would act as a steady hand on the tiller of our economy.
How do you control interest rates? In classic free market dynamics, the market sets the rate. Without “Fed” interference, wouldn’t the market normally take care of the rates automatically? When there is more money chasing fewer loans, interest rates fall, stimulating the economy. When more people want to borrow, interest rates go up, slowing the economy. If the government only pumped in more money to keep up with increases in production, there would be enough money for the economic system, but not so much to cause inflation. Extra money could be pumped into the market if the Treasury felt the need for stimulation outweighed the need for stability – Like now.
To take the place of the Treasury instruments in our money markets, the Treasury can insure high-grade corporate paper and back the principal and interest with the “full faith and credit of the United States.” Of course, the interest rate that the issuing corporation pays investors on these insured notes and bonds would be less than what is paid on their uninsured debt and this difference would be sent to the Treasury by the corporation as payment for the insurance. Of course, the debt instruments of more financially sound companies would have a narrower spread than the lower grade paper. This spread would no doubt fluctuate over time as the corporation became more or less solvent, automatically adjusting the price paid for the insurance to the risk involved.
What? The Government can’t insure private paper? We are doing it right now. The Federal Deposit Insurance Corporation insures your savings account (‘till the end of 2009) up to $250,000. They have $52 Billion insuring $4.3 Trillion in savings. If that is ever used up, the U.S. Government (taxpayers) will step in and cover the rest for the bankers. Indy Mac alone cost $9 billion. And what about the current two trillion dollar banker bailout? Again, that’s the U.S. Government (taxpayers) stepping-in and covering private paper. As long as we taxpayers are insuring private investments, we may as well be paid for it by the people who are profiting from our guarantees – expressed or otherwise.
Whether or not you believe that the “Fed” is set up for the enrichment of the few at the expense of the many... Even if I have not convinced you of anything so far... “The power to determine the quantity of money... is too important, too pervasive, to be exercised by a few people, however public-spirited, if there is any feasible alternative. There is no need for such arbitrary power... Any system which gives so much power and so much discretion to a few men, [so] that mistakes - excusable or not - can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic - this is the key political argument against an independent central bank.” – Milton Friedman, Economist.
There’s one more point you should consider: It’s you. It’s you and me and everybody else. We humans create these institutions, corporations, and governments for our benefit. We, the people of the United States of America, have all the power. If the Federal Reserve System does not function to our liking, we have the absolute power to change or abolish it. We are not on this planet, in this country, at this time, to be anybody’s slave.
I figure we have one last chance to take control of our destiny. With all eyes focused on our economic plight, if there is ever to be a chance for true reform, that time is now. If our current situation is “fixed” by the massive infusion of devalued dollars, America’s attention will quickly return to sports, movie stars, and local crime. If it remains broken, we will face an economic depression. “It's a recession when your neighbor loses his job; it's a depression when you lose yours.” - Harry S. Truman. And, as J.P. Morgan said, “People without homes will not quarrel with their leaders. This is well known among our principle men now engaged in forming an imperialism of capitalism to govern the world. By dividing the people we can get them to expend their energies in fighting over questions of no importance to us except as teachers of the common herd.”
These villains have always relied upon our ignorance and secrecy to advance their plans. Right now, you have two choices... awareness or oblivion: Thomas Jefferson, “If a nation expects to be ignorant and free, it expects what never was and never will be,” or Doris Day, “Que sera, sera. Whatever will be, will be.” Choose.
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