How the Fed extracts the wealth of the United States

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In a masterful study of the Federal Reserve, Secrets of the Temple , William Greider observed that the average American farmer in 1880 knew more about banking and money than most U.S. college graduates today.

Let me prove that.

Take a bill from your wallet or purse. Read the side with the portrait. It says very clearly at the top, "Federal Reserve Note."

The Federal Reserve is not a part of the federal government. It receives no appropriation from Congress. It is a private corporation and its stock is privately traded. The stockholders are the member banks of the regional Federal Reserve Banks, so its major stockholders are the largest banks and their owners.

Historically these have been the powerful Wall Street and European banking families: think Rothschild, Warburg, Morgan, Rockefeller.

All the bills and coins in circulation today are a tiny fraction of the supply of money in the American economy. All the rest is credit, created on the books of the banks "ex nilo" -- out of nothing.

This money comes into circulation at interest paid to the banks that create it. A central bank like the Federal Reserve creates the money supply of the United States, at interest.

The Bank of England was the first privately owned central bank to control a nation's currency. One of its owners, of the Rothschild family well understood what that meant and said: "Give me control of a nation's money, and I care not who makes the laws."

Big money.

The colony of Pennsylvania escaped the clutches of the Bank of England and its tax on money by printing its own. It was pure genius.

Writing in The Wealth of Nations in 1776, Adam Smith noted: "The government of Pennsylvania, without amassing any treasure [gold or silver] invented a method of lending, not money indeed, but what is equivalent to money. By advancing to private people at interest " paper bills of credit " legal tender in all payments " it raised a moderate revenue which went a considerable distance toward defraying the whole ordinary expense of that frugal and orderly government."

Until the mid 1750s there was broad prosperity in Pennsylvania. On a trip to London, Ben Franklin let the cat out of the bag. He noted the widespread poverty he saw there and explained how by printing their own money and avoiding the need for the notes of the Bank of England to conduct their commerce, the people of Pennsylvania insured their own prosperity.

The private owners of the Bank of England went the 1700s version of ballistic and lobbied King and Parliament (Sound familiar?) to outlaw this colonial "script." The depression that followed was the cause of the American Revolution.

Franklin wrote, "In one year the conditions were so reversed that the era of prosperity ended, and a depression set in, to such an extent that the streets of the Colonies were filled with unemployed."

He concluded, "The Colonies would gladly have borne the little tax on tea and other matters, had it not been the poverty caused by the bad influence of the English bankers on the Parliament [Again, sound familiar?]: which has caused in the Colonies hatred of England, and the Revolutionary War."

The bankers got control. Hamilton fronted for them in the young United States. Jefferson and Jackson fought them. Lincoln fought them. Lincoln was assassinated, the bankers once again had control and the war for control of the nation's supply of money raged on.

After decades of planning and massive PR and propaganda, having bought up the support of Ivy League scholars, journalists and the requisite number of votes in Congress, the Wall Street cartel and their foreign allies pushed creation of the Federal Reserve through Congress and got complete control of the nation's money and credit.

Before you pay your taxes, the money you pay with has already been taxed by the owners of the Federal Reserve, which for over 100 years have diverted trillions of dollars of interest payments on our money from the American people into their own pockets.

That is what "central banks" are designed to do: extract wealth from nations by monopolizing the supply and cost of money and credit.

The debt ceiling, sequestration, austerity and budget deficit are a diversion. The U.S. Congress can slash the debt by taking back control of our money from the Federal Reserve monopoly and returning it to the U.S. Treasury and the American people, as the Constitution (Article I, Section 8) wisely provided.

Authors Website: http://www.publicbankingpa.org

Authors Bio:

Author of the forthcoming novel "Pursuits of Happiness," a director of the Public Banking Institute and chairman of the Pennsylvania Project. Mike is an international transportation and logisics executive with broad experience in U.S. government and politics. Mike has lived in the first world and the third world, traveled widely and done business on five continents.