I Believe it’s Time to Consider Who Benefits from the Federal Reserve System

[Time for change]

As I write the title to this post I imagine some corporate “journalist” reading it and a tape starting to play in his or her mind, saying “Uh oh, conspiracy theorist alert!”

The term “conspiracy theorist” is what the gatekeepers of the status quo use to connect in people’s minds those who are skeptical of so-called “conventional wisdom” with “left wing lunatics”. Here is the formula that everyone must be made to understand:

Skepticism of conventional wisdom = conspiracy theorist = left wing lunatic.

I wouldn’t ordinarily consider the term “conspiracy theorist” to be offensive, if it wasn’t uttered with such contempt and used to imply that I am a lunatic. By the plain English meaning of the phrase, all it refers to is someone who thinks seriously about conspiracies. Anyone who doesn’t recognize that the history of the world is filled with conspiracies of major importance hasn’t read much history. Any American who doesn’t recognize that U.S. history is filled with conspiracies of major importance simply isn’t paying much attention.

Consider just our overthrow of the governments of sovereign nations, for example. Beginning in 1893, we overthrew, helped to overthrow, or went to war against the legitimate governments of dozens of sovereign nations, including Hawaii (1893), Cuba (1898), Puerto Rico (1898), the Philippines (1899-1902), Nicaragua (1909), Honduras (1912), Iran (1953), Guatemala (1954), Indonesia (1965), Vietnam (1961-73), Chile (1973), Panama (1989), and Iraq (2003-???). And William Blum writes in “A Concise History of US Global Interventions, 1945 to the Present”, about United States intervention in 11 different Latin American countries during the Cold War.

I note the above as an introduction to this discussion of the Federal Reserve because I want to explain why I am skeptical of “conventional wisdom”. Each of the above noted events were either secret at the time they were carried out, or they were justified with lies. Though they are now so well documented by historians that they cannot be refuted, anyone who would have tried to discuss them at the time they were carried out would have been castigated for lack of patriotism and branded a “conspiracy theorist”.

My point then is that people who are skeptical of “conventional wisdom” are generally not lunatics – they are usually simply independent minded people who have been around long enough and who have paid enough attention to know that “conventional wisdom” should not be automatically accepted as reality.


What is the purpose of the Federal Reserve?

I’m not an economist, I don’t know much about economics, and I’ve generally found reading on the subject to be dry, boring and very difficult to understand. Nevertheless I recently started reading “The Creature from Jekyll Island – A Second Look at the Federal Reserve”, by Edward Griffin, because it was highly recommended to me by a fellow DUer, Larry Ogg.

Griffin describes the Federal Reserve as a cartel of private banks – meaning a group of banks joined together in order to maximize profits by reducing competition through the creation of a monopoly. In the case of the Federal Reserve, that particular cartel was legalized in 1913 with the enactment of the Federal Reserve Act of 1913. Of course the U.S. public wouldn’t consciously enable the creation of a legalized cartel. So the real purpose of the Federal Reserve System had to be disguised with a purported purpose. Griffin explains the concept like this:

To cover the fact that a central bank is merely a cartel which has been legalized, its proponents had to lay down a thick smoke screen of technical jargon focusing always on how it would supposedly benefit commerce, the public, and the nation; how it would lower interest rates, provide funding for needed industrial projects, and prevent panics in the economy. There was not the slightest glimmer that, underneath it all, was a master plan which was designed from top to bottom to serve private interests at the expense of the public.

The origins of the Federal Reserve System

Griffin describes the idea for the Federal Reserve System as originating in a highly secret meeting of seven of the wealthiest men in the world, taking place at Jekyll Island, off the coast of Georgia in 1910. The seven men included one of our nation’s most powerful U.S. Senators, Nelson Aldrich, and six bankers. He uses several sources to document the highly secret nature of the meeting, including an article written by one of its participants, Frank Vanderlip, 22 years after the passage of the Federal Reserve Act:

I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System… We were told to leave our last names behind us… We were instructed to come one at a time… where Senator Aldrich’s private rail car would be in readiness…

It was the names of all printed together that would have made our mysterious journey significant in Washington, in Wall Street, even in London. Discovery, we knew, simply must not happen, or else all our time and effort would be wasted. If it were to be exposed publicly that our particular group had got together and written a banking bill, that bill would have no chance whatever of passage in Congress.

A brief summary of how the System works

Griffin goes into great detail as to how the system works, and I’ll skip the great majority of that. This is how he summarizes the plan that emerged from the Jekyll Island meeting:

What emerged was a cartel agreement with five objectives: 1) stop the growing competition from the nation’s newer banks; 2) obtain a franchise to create money out of nothing for the purpose of lending; 3) get control of the reserves of all banks so that the more reckless ones would not be exposed to currency drains and bank runs; 4) get the taxpayer to pick up the cartel’s inevitable losses; 5) and convince Congress that the purpose was to protect the public.

Griffin explains objective # 4 in a chapter titled “The Name of the Game is Bailout”:

A primary objective of that cartel was to involve the federal government as an agent for shifting the inevitable losses from the owners of those banks to the taxpayers. That of course is one of the more controversial assertions made in this book. Yet, there is little room for any other interpretation when one confronts the massive evidence of history since the System was created.

He provides numerous examples of how this has worked. One of the most striking examples was the failure of Continental Illinois, our nation’s 7th largest bank, when it failed in 1982. Griffin describes how its irresponsible policies led to huge profits even as the stage was being set for a massive failure. He describes the details of the failure, and then:

This was the golden moment… Without government intervention, Continental would have collapsed, its stockholders would have been wiped out, depositors would have been badly damaged, and the financial world would have learned that banks not only have to talk about prudent management, they actually have to adopt it. Future banking practices would have been severely altered, and the long-term economic benefit to the nation would have been enormous. But with government intervention, the discipline of a free market is suspended, and the cost of failure or fraud is passed to the taxpayers… Banks can operate recklessly and fraudulently with the knowledge that their political partners in government will come to their rescue when they get in trouble…

The final bailout package was a whopper. Basically, the government took over Continental Illinois and assumed all of its losses ($4.5 billion).

Doesn’t this sound eerily familiar to the recent Federal Reserve actions with regard to Bear Sterns?

Even as the Bush administration insists it won't risk public funds in a bailout, American taxpayers may already be liable for billions of dollars stemming from Federal Reserve and Treasury efforts to quell a financial crisis.

History suggests the Fed may not recover some of the almost $30 billion investment in illiquid mortgage securities it received from Bear Stearns Cos., said Joe Mason, a Drexel University professor who has written on banking crises….

The record of the Federal Reserve System

If the Federal Reserve System really does serve the purpose of stabilizing our economy then one should be able to point to evidence of that. At least that’s what a “conspiracy theorist”… I mean a skeptic would say.

Griffin summarizes the record of the Federal Reserve System in stabilizing our economy:

Since its inception, it has presided over the crashes of 1921 and 1929; the Great Depression of ’29 to ‘39; recessions in ’53, ’57, ’69, ’75, and ’81; a stock market “Black Monday” in ’87 (Is it just a coincidence that all those depressions and recessions began during Republican presidencies?); and a 1000% inflation….

The consequences of wealth confiscation by the Federal-Reserve mechanism are now upon us. In the current decade (the book was copyrighted in 1994), corporate debt is soaring; personal debt is greater than ever; both business and personal bankruptcies are at an all-time high; banks and savings and loan associations are failing in larger numbers than ever before; interest on the national debt is consuming half of our tax dollars…

Griffin concludes from this:

That is the scorecard 80 years after Federal Reserve was created supposedly to stabilize our economy! There can be no argument that the System has failed in its stated objectives… There has been more than ample opportunity to work out mere procedural flaws. It is not unreasonable to conclude, therefore, that the System has failed, not because it needs a new set of rules or more intelligent directors, but because it is incapable of achieving its stated objectives…. That leads to the question: why is the System incapable of achieving its stated objectives? The painful answer is: those were never its true objectives… It becomes obvious that the System is merely a cartel with a government façade… When there is a conflict between the public interest and the private needs of the cartel – a conflict that arises almost daily – the public will be sacrificed. That is the nature of the beast. It is foolish to expect a cartel to act in any other way….

This view is not encouraged by Establishment institutions and publishers. It has become their apparent mission to convince the American people that the system in not intrinsically flawed.

William Greider, in “Secrets of the Temple”, reaches a similar conclusion:

At the time, the conventional wisdom… was that a government institution would finally harness the “money trust,” disarm its powers, and establish broad democratic control over money and credit… The results were nearly the opposite. The money reforms enacted in 1913, in fact, helped to preserve the status quo… Once the Fed was in operation, the steady diffusion of financial power halted. Wall Street maintained its dominant position – and even enhanced it.

My assessment

As I said above, I’m not an economist, so I am certainly less qualified to evaluate Griffin’s arguments than a lot of other people.

What about the record of Federal Reserve System failures that Griffin speaks of? Well, I presume that those who defend the Federal Reserve System would say that our economic history would have been worse without the System, and that it was worse before the System was initiated in 1913. I have no way of evaluating that. So I can’t prove to myself that Griffin is right. But as for those who would claim that we would be worse off without the Federal Reserve Act, I would expect them to be able to offer some proof of that, or at least some strong evidence in favor of that statement. In the absence of such evidence why should we have a system that requires our federal government to bail out wealthy banks when they get into trouble?

When large wealthy banks are on the verge of failure, they generally lobby the federal government to bail them out by claiming that if they fail our economy will suffer grave damage, there will be millions of unemployed, etc. etc. etc. Does it seem reasonable that banks would make such claims if they weren’t true? …. Ok, forget I said that.

The main reason I’m inclined to believe that Griffin’s account is right on the money for the most part, other than the fact that his book is extremely well written and meticulously documented with relatively easy to understand examples, is this: The idea that our government giving billions of dollars to super wealthy corporations because of their failures somehow serves to stabilize our economy is…. well…. It sounds so similar to Reagan’s theory of “trickle down economics” or John McCain’s economic stimulus plan of cutting the corporate tax rate from 35% to 25%, claiming that such a tax cut is “essential to U.S. competitiveness”, “will expand the U.S. economy, creating jobs and opportunities for prosperity”, and “lead to higher wages”. To believe that kind of stuff is almost in the same category as believing the Republican assertion that taxing inheritances even beyond $2 million is necessary to prevent ordinary families from going bankrupt.

To believe that we as a nation have to protect the wealthy from their failures in order to enjoy a stable economy just seems to me like the epitome of foolishness. How much extreme income inequality, joblessness and poverty does our nation have to experience before we wake up and realize what’s going on?

[gateley]

1. The same people who created it --

The wealthy captains of industry.

[Baby Snooks]

62. Wealthy but not very good captains...

I believe that two of the original 11 "shareholders" in the Federal Reserve Bank in the beginning were Rothschild banks and the Rothschilds owned a majority interest in the others. Most of the robber barons in fact were backed by Rothschilds. Including the Rockefellers and JP Morgan. The robber barons basically just got greedy. And a little uppity. And perhaps a little too envious.

The problem is that their "heirs apparent" haven't a clue as to what they are doing. The Rotschilds did. And do. The world economy until the "neo-cons" decided they knew better than the Rothschilds was basically controlled by the Rothschilds. Everything backed by something. Gold and silver and even diamonds. Credit is not collateral. Something we haven't learned in this country. Which is why our economy is collapsing.

Our only hope is that Congress says "NO" to this latest attempt by the oligarchists to replace democracy with oligarchy and that the Rothschilds start buying up the banks that are collapsing and they are collapsing as indicated by the $1 trillion plus the Federal Reserve has pumped into the banking and investment banking system in the past six months alone. All of it backed by the taxpayer. Better it be backed by the Rothschilds. They may be a "corporation" which on the surface seems to be oligarchist-friendly but beneath the surface they are still a family that knows what it's doing and is democracy-friendly simply because capitalism, particularly venture capitalism, cannot survive in any other form of government. Mayer Rothschild believed in controlling the currency of a country. And every country he and his sons controlled either was a democracy or became a democracy. Some believe as a result of wars the Rothschilds financed. Nations cannot survive unless there is a viable economy. And we no longer have a viable economy. The ships that Mayer Rothschild sent off to sea are still sea-worthy. Probably the only ones that are. Mainly because the family selects its captains very carefully. To maintain their personal economy which they cannot do without maintaining the world economy.

The ship we are on with these captains is headed for the rocks. Load up what you can in a backpack and put on your life preserver.

[Leopolds Ghost]

103. You speak of the Dutch Economic System enunciated by people such as Amy Chua

In her book on the rise and fall of hyperpowers.

The Rothschild wealth is based on Spanish bullion which got transferred,
in a series of ingenious economic maneuvers backed by the invention (out
of whole cloth) of institutions such as the stock market, the Bourse, and
parliamentary bourgeois representation, to Holland and thence to Britain,
which Holland essentially purchased in 1699, and thence to New Amsterdam.

The Rothschilds, like the Chinese royal family, were merely in the right
place at the right time. When you hear talk of the "Anglo-Protestant
work ethic" and "Judeo-Christian values" in reference to American style
capitalism, the poster is actually harking back to a liberal republican
(in the old sense) "progressive" ideology invented in Holland during the
Catholic Inquisition, when Jews and Protestants (my ancestors) were being
burned at the stake and all the safe money in Europe
(and the Mediterranean) fled to Holland.

Unfortunately, the system was completely corrupt from the word go,
designed to replace one sort of rule with another.

[hvn_nbr_2]

88. Since about 1960, the Fed has acted as an arm of the Republican Party.

Not just the wealthy and corporations, but blatantly to help the Republican party.

Check this guy's analysis:
"The Fed, Interest Rates, and Presidential Elections"
http://home.comcast.net/~david_brubaker/FedIntRateChart.v3.htm

His summary:

During every four-year presidential term, there is a period of 24 months when the Federal Reserve Board's actions on interest rates will have the most impact on the state of the economy during the next presidential election.

During the periods when their actions will most affect the state of the economy during the next presidential election season, the Fed's actions are diametrically opposite depending on the party currently in the White House; but at other times their interest rate actions are similar regardless of the party currently in power.

During that sensitive period of time in every presidential term since 1960, the Fed has acted to stimulate the economy if the incumbent is a Republican and to slow the economy if the incumbent is a Democrat. Through recession and boom, inflation and stability, deficits and surpluses, there is not a single exception to that partisan pattern.

My conclusions: The Federal Reserve acts as a de facto agent of the Republican presidential campaign committee. All of Alan Greenspan's obscure statistics that no one else ever heard of are just a smoke screen to camouflage the Fed's blatantly partisan activity. The Fed seems to have deliberately induced a recession specifically to benefit the Republican presidential candidate in the 2000 election.

The analysis is a little hard to follow all the way through, but it's worth a look.

Based on this guy's analysis, I predicted several years ago that during the period May 2006 through May 2008, the Fed would overall lower interest rates, regardless of economic circumstances. Even before the Republican policies came home to roost so definitively of late, they were already following through on their standard pattern.

[JDPriestly]

94. It is very important for DUers to check the link if hvn_nbr_2

It gives some amazing statistics. I have intuitively understood the economic data provided at that link for a long time now.

http://home.comcast.net/~david_brubaker/FedIntRateChart.v3.htm

The Carter economic fiasco was engineered by the Federal Reserve and the oil companies who are more in cahoots with the oil producing nations than Americans realize.

Clinton managed to avert economic disaster simply because he had such a hopeful, optimistic, ebullient nature that the American people felt happy. The Fed and Greenspan did everything it could to bring Clinton down.

The first thing that the next American president has to do is to appoint a Democrat to head the Federal Reserve. And if that is not possible, the American president needs to get Congress to change the structure of the Federal Reserve or replace it with an institution that answers to the America people even if only indirectly. The Federal Reserve's manipulation of our political system is unacceptable.

[hvn_nbr_2]

95. Thanks, JDP.

The statistics are indeed amazing. Unfortunately, most people don't "do" statistics. For anyone out there who doesn't do statistics, it only takes a quick glance at the charts in that link to see that the Fed behaves in completely opposite ways depending on whether the sitting president is a Democrat or a Republican. Just scroll down to the color-coded table with blue and red.

[EVDebs]

2. The Creature From The Black Lagoon ! LOL !

[jody]

3. You are going to be attacked because the topic will inevitably bring up the controversial

report "Federal Reserve Directors: A Study of Corporate and Banking Influence", House of Representatives, 94th Congress, 2nd Session, August 1976.

[mother earth]

18. Why should we give more power to any private entity? Why is

there no oversight on promoting such a disaster? This is an obvious power grab. I think I woke up in a different country...where are the democratic leaders? This is so blatant.

(Sorry, Jody, I was replying to the OT.)

[Chemical Bill]

69. Who are you speaking for? Who will attack?

Why don't you explain what the report says, and quote it? What is this controversy of which you speak?

Bill

[jody]

92. Google the report I cited and learn about one view of who owns the Fed.

"Federal Reserve Directors: A Study of Corporate and Banking Influence"

[unkachuck]

4. have truer words....

....ever been spoken?

"To believe that we as a nation have to protect the wealthy from their failures in order to enjoy a stable economy just seems to me like the epitome of foolishness."

....sounds like extortion to me....a most excellent post! Thank you.

[Time for change]

43. Thank you -- Yeah, it just sounds like the old "trickle down" stuff to me

[truedelphi]

5. Wouldn't anybody rather believe a conspiracy theory that is true than

Be deluded by propaganda that is a Total Lie??

[Echo In Light]

32. Not if their daily round of life is predicated upon that lie

Pulls the proverbial rug right out from under them, and their belief systems tumble. Hence it's far more comforting to zealously condemn and condescend to those who question favored norms and traditions, favoring the safety in numbers of long established groupthink/business as usual.

[JohnyCanuck]

6. Watch the video Money as Debt

Available from www.moneyasdebt.net , and you can also watch it on line here:

http://video.google.com/videoplay?docid=5352106773770802849

Money created as interest-bearing bank credit is a magic trick, a fraud - now 3 centuries old; one that very few people have seen through despite, or rather because of, its utter simplicity.

It is my intention to make this mysterious debt-money system comprehensible to everyone. It is also my intention to foster sufficient understanding of the problems with this money system that citizens will be motivated to join the monetary reform movement and/or create local alternatives to the global monetary system - a system in which most of the productive people of the world are collectively chained to an ever-increasing and perpetually unpayable debt.

This is a system designed for elite control of the people by those who have given themselves the privilege of creating money. It is also, I believe, a system that is designed for catastrophe. As the movie explains, there can be no sustainable civilization without a sustainable money supply.

Paul Grignon, Producer of Money As Debt.
http://paulgrignon.netfirms.com/MoneyasDebt/ProducersComments.html

[Ichingcarpenter]

7. Thank you........

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3246872&mesg_id=3246902

[Time for change]

39. Wow, that's quite a synopsis of some of the main problems with the system!

Thank you. You must be an economist.

[nichomachus]

48. There's no need to name-call

Calling someone an economist -- them's fighting words.

[BeHereNow]

8. K&R- Interested to see how many replies this thread gets...

Rah-rah American Idol politics, while we ignore what matters.
BHN

[Ichingcarpenter]

9. Only those that are Comfortably Numb

Otherwise the truth would be too shocking.

[Ichingcarpenter]

10. kick nominated n/t

[HCE SuiGeneris]

11. Recommended.

[AzDar]

12. K & R...

:kick:

[Ichingcarpenter]

13. K & R.

[Hubert Flottz]

14. Paul Moritz Warburg (August 10, 1868 - January 24, 1932)

http://www.israel-times.com/finance/2005/08/paul-moritz-warburg-founder-of-the-federal-reserve-banking-system-997/

Jekyll Island

http://www.orwelltoday.com/jekyllislandbook.shtml

[UpInArms]

15. it's the GOP mantra - privatize the profits and socialize the risks

and to hell with the citizens of the country

[Karenina]

20. Thomas Jefferson quote

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."

[UpInArms]

26. that's a great quote

and together Lincoln's quote on the corporations - you know these guys had a clue about what was truly wrong with corporations and government being too cozy

I see in the near future a crisis approaching that unnerves me and cause me to tremble for safety of my country; corporations have been enthroned, an era of corruption in High Places will follow, and the Money Power of the country will endeavor to prolong its reign by working upon the prejudices of the People, until the wealth is aggregated in a few hands, and the Republic destroyed.

ABRAHAM LINCOLN, letter to Col. William F. Elkins, Nov. 21, 1864

[54anickel]

22. UIA, did you catch this one? - Bush Seeks Financial Regulation Overhaul

Granted, something needs to be done but Bush, Federal Reserve???....makes me very leery. This is the Orwellian administration that brought us things like the "Job Creation Act" and what-not....all those things with the people-friendly names that were nothing but corporate give-ways.

Sounds like a re-do of Raygun's Working Group.

http://ap.google.com/article/ALeqM5gCnpr-Wm63Nj5seBLZNmzDjWHImgD8VMUUKG0

WASHINGTON (AP) — The Bush administration is proposing a sweeping overhaul of the way the government regulates the nation's financial services industry from banks and securities firms to mortgage brokers and insurance companies.

The plan would give major new powers to the Federal Reserve, according to a 22-page executive summary obtained by The Associated Press.

The Fed would be given broad authority to oversee financial market stability. That would include new powers to examine the books of any institution deemed to represent a potential threat to the proper functioning of the overall financial system.

snip>

The recommendations are the product of a yearlong review that was begun in an effort to modernize the government's regulatory structure so that the country's financial services industries could better compete in a fast-changing global economy.

snip>

Under Paulson's approach, the long-term goal would be to designate the Fed as market stability regulator and to have a financial regulator who would focus on financial institutions that operate with government guarantees such as providing deposit insurance.

The administration plan, which was first reported by The New York Times on its Web site Friday night, also proposes a business conduct regulator who would be in charge of overseeing consumer protection issues.

The initial reaction from the securities industry was also positive.

"Treasury has delivered a thoughtful and sweeping plan which should provoke intense discussion, debate and potential legislative changes," said Tim Ryan, president of the Securities Industry and Financial Markets Association.

"Our present regulatory framework was born of Depression-era events and is not well suited for today's environment where billions of dollars race across the globe with the click of a mouse," Ryan said in a statement.

more...

[UpInArms]

25. i saw it on this thread

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3247645&mesg_id=3247645

and had a similar response to yours

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3247645&mesg_id=3247677

[54anickel]

38. Figured you'd be all over this one. Thanks for the thread link. I hadn't dug

around DU much yet when I posted my reply to you. :hangover:

Gotta just love these Friday dumps!

Maybe we can start a pool in SMW for the catchy, Orwellian name Bushco will come up with....

Where are all the "Free-Market" media pundits this morning? I'd just like to hear their justification of this latest stabilization stunt. :eyes:

[UpInArms]

40. I do believe that we are being "mocked"

Mortgage Origination Commission (MOC)

I wonder if it's like Poppy's "RATT" - that the RTC had as a subdivision?

[54anickel]

42. Oh jeebus! Meanwhile, I'm sure it's just pure coincidence that such "unprecedented"

measures have tended to transpire under a watchful Bush eye. Let's face it, Poppy actually got to call the shots for at least 3 terms - St Ronnie was simply the puppet resident for 2, then there was his own. I believe he and some cronies stowed away in the Greenspin baggage during Clinton's time, working in the background...now Idiot-Son-of-an-Asshole's residency and it appears the BFEE has been hard at work for almost 30 freakin' years. :hurts:

Oh yeah!!! Bend over America, this won't hurt a bit!

[Grinchie]

66. That's right, let the most unpopular, lame-duck president in history fix the Fed...

What a great idea!

[BrklynLiberal]

54. Accurate and concise synopsis of their philosophy

[Twist_U_Up]

16. “Uh oh, conspiracy theorist alert!”

Welcome to my world........

How long are Americans going to hang on to the idea that we are being told the truth about anything?

"The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State."
- Goebbels

Rec

[Elspeth]

17. Hmmm

...

[mother earth]

19. K & R! This is what is taking place while people who would

otherwise be objecting to this waste precious time with in-fighting over a primary for an election that just might be pre-empted if this crap goes forward.

[robcon]

21. Federal Reserve: one of the most important reforms of the Progressive Era.

It removed, as far as possible, the regulation of the money supply/interest rates from politicians. The checks and balances (14 year terms) meant that one political party would usually not dominate the Fed, and that short-term political gain is unlikely to sway the Federal Reserve governors or Regional Banks.

The main reforms were to set reserve requirements (cash and equivalents on hand) for nationally-chartered banks, to buy and sell short term notes to regulate the money supply (Open Market Committee), set up a discount rate for banks to use for overnight funds and to stabilize the currency.

The Fed, of course, turned the panic of 1929 into the depression (along with the Smoot-Hawley Tariffs) by reducing the money supply just when credit became scarce. It was Keynes' 1936 analysis of the macroeconomy that saved the Fed from future foolishness like that. The business cycle has been much milder now that the economic underpinnings of the interplay of interest rates, money supply, government spending and taxation are better understood.

[Time for change]

33. So, are you suggesting that it's better to have the money supply/interest rates controlled by

wealthy bankers than by elected government officials? And how does it help U.S. citizens in the long run to have them spend billions of dollars to bail out wealthy banks that failed because of incompentency or fraud?

[BadgerLaw2010]

45. Elected officials are competent in matters of finance and honest?

News to me.

Having ignorant people regulate very complex matters is inviting disaster. Paulson and Bernanke at least understand what they are dealing with.

[Time for change]

50. Sure, they understand what they're dealing with

But whose interests are they serving?

[BadgerLaw2010]

57. Everyone, as collapse of the credit markets or banking system is to no one's benefit.

The only difference is to what degree people will be hurt. Based on the Great Depression, the people who take it in the shorts the most are the poor and the middle class. Most "rich" people, presumably who this hatred is directed at, have full equity in their homes and are highly diversified. They don't tend to owe money they can't pay. They get hurt when their assests lose value, but they still survive in fairly good shape.

In order to really destroy them, you are already to the point of total anarchy and well beyond where most ordinary people are ruined and starving to death. Including most of the morons here who root for financial collapse.

This isn't a simulation, so I would rather not find out what Bear blowing up without a net would have resulted in. It certainly scared a lot of people with more knowledge of the situation than I have, and from what I do know, I'll defer to their judgment that it was unacceptable.

But hey, all those Bear employees got "bailed out" with stock that was most of their retirement savings now worth 6% of what it was last year, along with at least half of them losing their jobs in a contracting market. :eyes:

[Leopolds Ghost]

107. So an overhaul of a banking system intended to benefit only the ruling class is to no ones benefit?

The bankers aren't even the top tier in this system. They are merely the money managers, the high priests of a system designed to churn out more of everything -- more cheap labor, more skyscrapers, more greenbacks, more landfill waste -- in order to mask an ever-increasing sinecure for a small cadre of globe-trotting super-rich who are more powerful than any king or emperor. And the politicians are reduced to mere functionaries when threatened with such power -- witness Lula Da Silva's reaction after he was elected.

[JDPriestly]

97. Clearly they do not. If the Bush administration understood

economics, we would not be in the mess we are in. The Secretary of the Treasury who understood things, Paul O'Neill, got resigned under a cloud. Read the book, The Price of Loyalty, and you will see that the Bush administration made sure that his cabinet members towed his wing of the Republican Party's line or were out. The article on the Federal Reserve at http://home.comcast.net/~david_brubaker/FedIntRateChart.v3.htm demonstrates how extremely political and partisan our current Federal Reserve Board is. Read that before you argue that the Federal Reserve is not partisan.


For more on Paul O'Neill, read this:

http://en.wikipedia.org/wiki/Paul_O'Neill_(cabinet_member)

O'Neill was appointed Secretary of the Treasury by George W. Bush. O'Neill was a somewhat outspoken member of the administration, often saying things to the press that went against the administration's party line, and doing unusual things like taking a tour of Africa with singer Bono.

A report commissioned in 2002 by O'Neill, while he was Treasury Secretary, suggested the United States faced future federal budget deficits of more than US$ 500 billion. The report also suggested that sharp tax increases, massive spending cuts, or both would be unavoidable if the United States were to meet benefit promises to its future generations. The study estimated that closing the budget gap would require the equivalent of an immediate and permanent 66 percent across-the-board income tax increase. The Bush administration left the findings out of the 2004 annual budget report published in February 2003.

O'Neill's private feuds with Bush's tax cut policies as well as his push to investigate al-Qaeda funding coming from the United Arab Emirates led to his resignation in 2002 and replacement with John W. Snow.

[Leopolds Ghost]

109. "as well as O'Niell's push to investigate al-Qaeda funding coming from the UAE" led to his firing

:scary:

[defendandprotect]

99. They are competent in identifying democratic economic decisions vs greed, vs monopoly . . .

and in making those decisions, let's hope the public would be watching ---

In the case of the FED we have a basically CLOSED system.

[defendandprotect]

100. For instance: an open debate, perhaps, about having FED or Treasury print our money . . .

on which the FED prints and collects interest?

Think that the Congress and the public could figure out which would be better for our nation?

[Leopolds Ghost]

110. Keeping in Mind that the FED is a series of private banks that turn a private profit on interest

For a few uber-wealthy families since the 1910's.

And bought out the nation's gold reserves under Nixon -- the ORIGIN of that GOD-DAMNED DEBT was an IOU issued by the Fed to NIXON in return
for the nation's gold supply -- causing the dollar to "float" on
interest collected by the world-wide super-rich. There is almost
no gold left in Fort Knox anymore.

How many people know the Fed is a private, for-profit institution
that collects money on every dollar issued to the public, and only its
top functionary directors are appointed politically? There are no
Treasury notes anymore... only Federal Reserve Notes issued by an elite
group of PRIVATE banks controlled by Private families in NY, Paris,
London, Hong Kong, Dubai.

[defendandprotect]

111. Not enough . . . !! That's the point . . .

Recall that Nixon took us off the gold standard ---
and also knocked out the Bretton Woods Agreement ---

Everything that happened post-JFK coup was intended to destroy democracy and our economy.

[Leopolds Ghost]

106. You're defending known Bush cronies like "helicopter" Bernanke?

[Hippo_Tron]

108. It is controlled by a board appointed by the President and confirmed by the Senate

And yes that is a hell of a lot better than having politicians doing it for the same reason that we don't elect judges.

[ThomWV]

52. Thank you for that voice of sensibility in a howling universe

Who benefits from the Fed? We do, every one of us, that's who.

[Leopolds Ghost]

105. So it's "progressive" to have the only legal tender issued by a short list for-profit private banks?

And it's a good thing to remove control of the money supply
"as far as possible" from its constitutionally-mandated
branch of government (Congress)?

Interesting how so-called "progressives" think these days.

[KharmaTrain]

23. The World Bank Is Far More Regressive

Almost all those revolutions cited above were also pushed for by the World Bank...an organization that has imposed many draconian policies on third world countries that have maintained the old "plantation" system in Africa (exploiting natural resources and cheap labor), regressive "Friedman" principals in Latin America and has controlled the ebb and flow of the economic and political "status quo" for nearly a century. Paul Wolfowitz wasn't put in charge of the Federal Reserve, he was put into the World Bank...that alone should say something.

Right now the Federal Reserve is one of the few refuges for small investors and pension funds...T-Bills, while low-yielding, are saving the retirements of many elderly (some who are now having to support their middle-aged kids again) and, while I detest the bail-outs, is helping moderate the bite this recession/depression is having. While letting the bottom fall out would hasten the much needed economic reform in this country and flush out the bad, it would destroy too many lives in the process. The Fed has "softened" this downhill slide.

[Time for change]

31. Isn't there a way to maintain financial stability in our country

without massive giveaways to the wealthy? I don't see how taxpayers paying billions of dollars to prop up failing banks is helpful to our economy. And doesn't that add to the massive income inequality in our country? And it's not only the money that the taxpayers have to pay for these bailouts. By so doing, we encourage banking fraud and incompetence.

Doesn't what you said about the World Bank apply just as much to the IMF?

[KharmaTrain]

37. A Delicate Balance...

The Federal Reserve was set up by FDR as a gatekeeper to prevent runs on banks and to "ebb and flow" the spikes of the economy. Yes, those who "played the ponies", "deregulated" and otherwise created the messes our economy is in deserve to go under with no government assistance, but letting them go without having some kind of cushion takes a lot of others down with them who were victims. If the business itself isn't destroyed, then the image is...as as we saw with Arthur Andersen, that is enough to put a poorly run company under. The market will sort this out, it's just how fast and how far. And, yes, the market is good as well as bad.

Some of these bailouts are going toward propping up the collapse of retirement funds and other "securities" that sit in millions of IRAs, pensions and other small investment funds...not the money of the rich but the middle class...and this is where the "soft landing" is most needed. While the Fed can't, nor shouldn't stop the inevitable credit collapse, it can step in where needed to help buffer the impact. It's a tough act as what appears to be a bail-out to a bunch of billionaires really impacts the smaller guys more.

The IMF and the World Bank are pretty much one and the same. Both are multi-national entities that are dominated by large corporations and political interests that profit from getting the most for the least and they don't care how this affects the cultures and poverty of "under developed" nations.

Cheers...

[Time for change]

51. Would it be possible for a government to protect the depositors, etc.

without bailing out wealthy banks that failed becuase of incompetence or fraud?

[BadgerLaw2010]

58. You think Bear got bailed out? Bear got obliterated.

94% loss in value of stock that was owned by employees and most of the employees losing their jobs.

As far as protecting depositors, it is waaaaaay cheaper to prevent bank failure than try to make FDIC payments on between a qurter-billion and a trillion+ in deposits PER BANK.

[Time for change]

63. "The Gentleman's Bailout"

From an editorial in The Nation
http://www.truthout.org/issues_06/032108LA.shtml

If Washington tries to do something for "losers" who are ordinary citizens, financial titans complain about violating free-market principles. When the titans themselves are going down, they rush to their patrons at the central bank and demand extraordinary relief. Government must save the big money, we are told, for the overall good of the economy. Thus, the financial system's reckless losses - approaching $1 trillion but probably far more - are being "socialized," dumped on the public, the very people victimized by its snares and falsified valuations.

This nation is on the brink of a historic catastrophe. It requires emergency responses… Yet the rescue party is composed of the same people who co-wrote this disaster. They are, first, the financiers who indulged their own appetites for extreme wealth and enlarged a financial system of esoteric fakery that inflated prices and profits. Second, the close collaborators were the Federal Reserve and other authorities who blessed this dangerous concoction and declined to enforce prudential standards….

The authorities, meanwhile, are trying to "save the system" by propping up failure…. Nobody can put a price tag on all of the central bank's rescue promises - many hundreds of billions if the deterioration continues…

In a nutshell, here's what the Fed did after tortured negotiations with Wall Street players: it first bailed out Bear Stearns with a loan that failed to reverse the collapse of the firm's stock price and assets. Then it gave JPMorgan Chase a loan guarantee of $30 billion to protect it against losses as it took over Bear Stearns. Most significant, the Fed promised open-ended loans on easy terms to some twenty other major investment houses to protect them against the same threat. Nobody can put a price tag on all of the central bank's rescue promises - many hundreds of billions if the deterioration continues - but the main point is, the Fed has agreed to take the rotten financial paper, such as home mortgage securities, off the hands of these troubled firms.

What did the Fed demand in return? Not much, it seems, but nobody knows. These private deals were made among gentlemen of high finance; no need to bother the public with complicated details….

[BrklynLiberal]

55. by FDR?

http://en.wikipedia.org/wiki/Federal_Reserve_System

The Federal Reserve System (also the Federal Reserve; informally The Fed) is the central banking system of the United States. Created in 1913 by the enactment of the Federal Reserve Act, it is a quasi-public (part private, part government) banking system<1> composed of (1) the presidentially-appointed Board of Governors of the Federal Reserve System in Washington, D.C.; (2) the Federal Open Market Committee; (3) 12 regional Banks; and (5) various advisory councils. Currently, Ben Bernanke serves as the Chairman of the Board of Governors of the Federal Reserve System.

[JDPriestly]

98. It isn't enough to stop the crisis from worsening at a faster

rate than absolutely necessary. We need to secure our system so that the kinds of excesses that led to this crisis do not happen again. I don't know how old you are, but I have seen this kind of scam a few too many times to think that it is just a natural cycle of the markets that evens itself out. A series of such crises have occurred in my lifetime. (I'm 64, almost 65.) The scenario is always the same.

The article cited above on the Federal Reserve suggests that the Federal Reserve's policies are responsible for a number of the crises. The problem is that the Federal Reserve and the CEOs and big-time investors in the major banks are just too cozy with each other to allow oversight.

It would be a great idea to have an independent entity controlling the money supply. But the Federal Reserve is not truly independent. That entity also needs to be much transparent in its workings. The Federal Reserve is not transparent at all. And that entity needs to answer for its day-to-day activities to both the executive and Congress much more than it has in the past.

If you think the Federal Reserve is nonpartisan and independent, please look at the charts and numbers on the manipulation of the economy during crucial periods prior to presidential elections. You will see an unmistakable correlation between low interest rates during the crucial period before elections when the president is a Republican and high interest rates during the equivalent periods when the president is a Democrat. That partisanship on the part of the Federal Reserve is unacceptable in a democracy. The Federal Reserve must be reformed or done away with altogether. It is an arm of the Republican Party and nothing more. And it remained an arm of the Republican Party through the few recent Democratic presidencies. That is scandalous.

[NorthCarolina]

24. Kennedy signed Executive Order 11110 which returned

the US Government power to issue currency without going through the Federal Reserve. EO 11110 is still valid today having never been rescinded by subsequent administrations, and his issuing this EO is likely to be the real impetus behind Kennedy's assassination.

[JohnyCanuck]

27. John F. Kennedy vs The Federal Reserve

John F. Kennedy
vs
The Federal Reserve

On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed with the authority to basically strip the Federal Reserve Bank of its power to loan money to the United States Federal Government at interest. With the stroke of a pen, President Kennedy declared that the privately owned Federal Reserve Bank would soon be out of business. The Christian Law Fellowship has exhaustively researched this matter through the Federal Register and Library of Congress. We can now safely conclude that this Executive Order has never been repealed, amended, or superceded by any subsequent Executive Order. In simple terms, it is still valid.

When President John Fitzgerald Kennedy - the author of Profiles in Courage -signed this Order, it returned to the federal government, specifically the Treasury Department, the Constitutional power to create and issue currency -money - without going through the privately owned Federal Reserve Bank. President Kennedy's Executive Order 11110 gave the Treasury Department the explicit authority: "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This means that for every ounce of silver in the U.S. Treasury's vault, the government could introduce new money into circulation based on the silver bullion physically held there. As a result, more than $4 billion in United States Notes were brought into circulation in $2 and $5 denominations. $10 and $20 United States Notes were never circulated but were being printed by the Treasury Department when Kennedy was assassinated. It appears obvious that President Kennedy knew the Federal Reserve Notes being used as the purported legal currency were contrary to the Constitution of the United States of America.

SNIP

Kennedy knew that if the silver-backed United States Notes were widely circulated, they would have eliminated the demand for Federal Reserve Notes. This is a very simple matter of economics. The USN was backed by silver and the FRN was not backed by anything of intrinsic value. Executive Order 11110 should have prevented the national debt from reaching its current level (virtually all of the nearly $9 trillion in federal debt has been created since 1963) if LBJ or any subsequent President were to enforce it. It would have almost immediately given the U.S. Government the ability to repay its debt without going to the private Federal Reserve Banks and being charged interest to create new "money". Executive Order 11110 gave the U.S.A. the ability to, once again, create its own money backed by silver and realm value worth something.

http://www.john-f-kennedy.net/thefederalreserve.htm

[defendandprotect]

101. Until fairly recent, I believe there were still some of these Treasury issued bills around???

[havocmom]

104. Never knew that. Thanks for posting that info

Most enlightening.

[Hippo_Tron]

115. No, it really wasn't...

http://mcadams.posc.mu.edu/weberman/jfk.htm

[Norrin Radd]

28. kr

[Echo In Light]

29. The "Conspiracy theory" term is used to discredit/dissuade objective, institutional analysis

[dixiegrrrrl]

30. The Federal Reserve law l was passed in a sneaky manner, too

according to "The Money Masters" ( google it for the fascinating video)
the bill was passed in the empty Senate over Christmas vacation by a couple of cronies, everyone else was gone.
There were numerous at creating a central bank USA that failed previously.
Same idea succeeded in Europe, by the same gang of weathy crooks.
Lincoln opposed the "Central Bank", issued greenbacks, which worked quite well, and was assassinated for his trouble, goes the theory.
Ron Paul has been 100% right on this all along.
However, our schools are teaching to the lowest common standard,
( No Child Left Behind, eh?) thus turning out nice little consumers who just don't need to pay attention to compound sentences, so very few people will strain their brain to figure out we are cogs in a well oiled money machine.

Very well written summary, Time for change. Mucho kudos.

:applause: :applause:

[Echo In Light]

34. ...

:hi:

[JohnyCanuck]

36. Here is a link to watch The Money Masters on line.

http://www.heyokamagazine.com/HEYOKA.12.%20MoneyMasters.htm

It is somewhat long, around 3 hrs, but it contains a lot of interesting history.

[Time for change]

82. Very interesting -- Griffin didn't go into the actual passage of the bill -- unless

I didn't get to that part yet.

Thank you.

[beezlebum]

35. k/r- i read this just after having read

this on my local news site:
Bush Wants to Overhaul Financial System
Fed would get new powers to stabilize economy

WASHINGTON -- The Bush administration will propose major new powers for the Federal Reserve.

They were included in a proposal to overhaul regulation of the nation's financial industry.

A 22-page executive summary obtained by The Associated Press would designate the Fed as the primary regulator of market stability. That would greatly expand the central bank's ability to examine all segments of the financial services industry to detect possible threats to the system.

The proposal is to be formally unveiled Monday in a speech by Treasury Secretary Henry Paulson.

It also proposes consolidating the current scheme of bank regulation, eliminating the distinction between banks and thrift institutions.

Past efforts to change how regulation is handled have met with fierce resistance.

http://www.wdsu.com/money/15739834/detail.html

forgive me if this has already been noted or is completely irrelevant- i've got flu and am quite delirious.

[Time for change]

71. I think it's VERY relevant

Bush's # 1 priority for his presidency has been to dismantle government except to use it as a means to empower his wealthy cronies to make billions. This seems to me like a perfect example of that.

[Grateful for Hope]

41. This very important thread

deserves a kick and R.

To believe that we as a nation have to protect the wealthy from their failures in order to enjoy a stable economy just seems to me like the epitome of foolishness. How much extreme income inequality, joblessness and poverty does our nation have to experience before we wake up and realize what’s going on?

As one who is having a very hard time finding a job after being laid off, I couldn't agree more.

[Time for change]

70. Thank you

And good luck to you in your job search.

[Time for change]

44. "The Gentleman's Bailout"

Recent editorial in The Nation

http://www.truthout.org/issues_06/032108LA.shtml

If Washington tries to do something for "losers" who are ordinary citizens, financial titans complain about violating free-market principles. When the titans themselves are going down, they rush to their patrons at the central bank and demand extraordinary relief. Government must save the big money, we are told, for the overall good of the economy. Thus, the financial system's reckless losses - approaching $1 trillion but probably far more - are being "socialized," dumped on the public, the very people victimized by its snares and falsified valuations.

This nation is on the brink of a historic catastrophe. It requires emergency responses… Yet the rescue party is composed of the same people who co-wrote this disaster. They are, first, the financiers who indulged their own appetites for extreme wealth and enlarged a financial system of esoteric fakery that inflated prices and profits. Second, the close collaborators were the Federal Reserve and other authorities who blessed this dangerous concoction and declined to enforce prudential standards….

The authorities, meanwhile, are trying to "save the system" by propping up failure…. Nobody can put a price tag on all of the central bank's rescue promises - many hundreds of billions if the deterioration continues…

What did the Fed demand in return? Not much, it seems, but nobody knows. These private deals were made among gentlemen of high finance; no need to bother the public with complicated details….

[file83]

46. Thanks for posting this! Many people think the "Federal" Reserve is pure government, but it isn't.

It's mostly a front for a private banking cartel. They have all the smoke and mirrors to give the illusion of government control:

• The name "Federal" (about as government as "Federal" Express)
  
• President appointed Board of Governors (President is told who to appoint, just for show)
  
• 12 Regional "Federal" Reserve banks (really just fronts that hold PRIVATE banks' funds)
  
• "Federal" Open Market Committee (7 of the Fed Board, 5 of Fed Res. Banks, again, controlled privately)
  
• etc., etc., etc...
  

We always complain about Corporate America, rightfully so, but guess who controls Corporate America? The Central Banks of the Federal Reserve System.

And these are the people in charge of our US Treasury!! Private interests.

The Congressional Oversight of the Fed is about as functional as Congressional Oversight for this Iraq War: non-existent.

[Sam Ervin jret]

47. You mean we don't really live in a FREE MARKET system? But they said so? I'm with JFK dump the

whole lot. And find something that works for the people and protects their savings and watches the money changers.(They haven't changed since the time of antiquity and will always need to be regulated)

[nichomachus]

49. If I were going to start a conspiracy . .

The first thing I would do is convince people that anyone who mentioned "conspiracy" was crazy. After that, it's a piece of cake.


For an excellent -- although long -- movie on war, the economy, and religion, check out:

http://zeitgeistmovie.com/

[wildbilln864]

86. yes that is an excellent movie...

and I highly recommend it to everyone.
:hi:

[Mrspeeker]

53. yeah the Capitalist conspiracy

I believe it 110%

[BrklynLiberal]

56. K & R. An excellent post. Thanks for so much information!!!

I love my tinfoil hat....wear it most of the time.

[Time for change]

83. Thank you -- Anyone who doesn't wear a tinfoil hat after 8 years of Bush and Cheney is living in a

bubble. :tinfoilhat:

[whistle]

59. Excellent post, you know that fascists are now running things so it has

...gone beyond simple failures, foolishness and errors of judgment. These bastards are certifiably insane and must be taken out of the mainstream of political and financial power and institutionalized in prisons or asylums!

[JFN1]

60. Outstanding

If you are interested, you might check out "For Us, The Living" by Robert Heinlein. It documents a capitalist system first championed by Upton Sinclair, during his failed bid for Congress back in the early 1900's. Very interesting stuff...

[Time for change]

81. Thank you - I put it on my book list

[IamyourTVandIownyou]

61. Stabilizing = Fixed Markets

I thought we had Free Markets in a capitalistic society.

[superkia]

64. From what I understand, doesnt every penny of our income tax...

go directly to those same bankers to pay towards the interest from what our government spends/wastes. None of it goes to anything that benefits us in this country like most would believe about our income tax.

[Time for change]

73. I can't answer that question, but the Illinois Continental bailout may she some light on it

Griffin explains that by 1986 our government had put more than $9 million into the effort to bailout Illinois Continental. He continues:

While explaining this fleecing of the taxpayer to the Senate Banking Committee, Fed Chairman Paul Volcker said: "The operation is the most basic function of the Federal Reserve. It was why it was founded." With those words, he has confirmed one of the more controversial assertions of this book...

Small banks pay proportionately far more for their insurance and have far less chance of a Continental style bailout....

Griffin explains that during the same time that Continental was being bailed out:

43 smaller banks failed without an FDIC bailout... The impact of this inequity upon the banking system is enormous. It sends a message to bankers and depositors alike that small banks, if they get into trouble, will be allowed to fold, whereas large banks are safe regardless of how poorly or fraudulently they are managed... Nothing could be better calculated to drive the small independent banks out of business or to force them to sell out to the giants. And that, in fact, is exactly what has been happening

[wildbilln864]

87. I think you're correct!

IIRC that's exactly what Ronald Reagan's Grace Commission found and reported. Every cent goes to the interest on the national debt. Into private banker's pockets. :grr:

[Hippo_Tron]

113. No, it doesn't, that's a myth started by libertarians who don't want to pay taxes

But far too much of it does go to the military industrial complex.

[roamer65]

65. From a Series 1950 $20 Federal Reserve promissory note...

"This note is legal tender for all debts, public and private, and is redeemable in LAWFUL money at the United States Treasury, or at any Federal Reserve Bank."

So are Federal Reverve notes illegal? The statement on the note really does prompt that question.

The statement on the note pretty much tells the truth, in my opinion. Federal Reserve notes are pretty much debt instruments, not money. They're simply IOU's, nothing more, nothing less.

[Larry Ogg]

67. Excellent post Dr. Dale; this might be one of those (core) issues were not supposed to talk about.

I also want to thank you for mentioning me in your OP, I’ve gotta say that that made my day. But a more important thing is that you are sharing your perspective, I’m sure this will help more people become aware of things that should not have been forgotten, let alone tolerated…

It’s no secret that our country and the world is in a lot of trouble, but as I often say; symptoms of problems are more often discussed, while the real problems, the causes at the core, usually gets little attention or are ignored all together because of political complexity designed to confuse, which I believe, is also intentional. Nevertheless, I believe the Federal Reserve is definitely at the core of the big picture, and many other problems, it is also attached at the hip too the world bank and the social deviants (aka psychopaths) that control it all, of which such power is abused and used too terrorize the world into submitting too forces that have plagued humanity for time immemorial, i.e. the scourge of psychopaths.

I am not an expert either, but then who can be an expert in a system feigned upon the premise of greed, total fraud and mass murder? A system that seems ostensible productive - yet by design - its true intent is revealed when it preserves, protects and promotes the most venal, corrupt and cancerous leaches society can produce. Sure it sounds like a theory regarding some grand conspiracy, but fortunately, in order for crimes of such magnitude to be carried out, criminals have to divulge their plans to their fellow conspirators; and when that happens the truth leaks out, and it’s not hard to imagine that crooks might know better than anyone; you can’t trust another crook. But that’s not a problem when you have the power to print the money needed to corrupt a system that might stop you. And crooks know money is power, and that power is used to keep the truth out of the conscience of the masses, it is used to buy the politicians within the political system, who in turn will sell them the electoral system, the media, cultural influences such as religious and educational systems and eventually the countries way of life, and all the products of our labor will be owned by the few who control the value given to worthless paper, that we should give them even more power. Can we say, the corruption grows and grows like a snowball headed for hell…

Anyhow it’s like I said, criminals have to divulge their plans to their fellow conspirators; and when that happens the truth leaks out. In addition, a lot of good and decent people have also left us messages and quotes that we should take notice. So with that I will close with some interesting quotes from both sides of the big picture, hope you enjoy them…
Larry

K&R


I have unwittingly ruined my country. President Wilson, upon passage of the Federal Reserve Act, 1913

A few who can understand the system (check money and credits) will either be so interested in it's profits, or so dependent on its favors, that there will be no opposition from that class, while on the other hand, the great body of the people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear it's burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests. Rothschild, London

It is well enough that the people of this nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford

We fix the price of gold and silver to make them valuable or not. J. P. Morgan, in a letter to his son

The Illuminati bankers rule the world through debt, which is money they create out of nothing. They need world government to ensure no country defaults or tries to overthrow them. As long as private bankers, instead of governments, create money the human race is doomed. These bankers and their allies have bought everything and everyone. Henry Makow

It (the Great Depression) was not accidental, it was a carefully contrived occurrence. The international Bankers sought to bring about a condition of despair here so that they might emerge as rulers of us all. Louis McFadden

The Federal Reserve caused the Great Depression by contracting the amount of currency in circulation by one third from 1929 to 1933. Milton Friedman

History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling the money and its issuance. President James Madison

If the people were to ever find out what we have done, we would be chased down the streets and lynched. George H. W. Bush told a White House reporter.

The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity. Abraham Lincoln

We have been communized in that: production in relation to consumption must be ruthlessly regulated or . . . the fraud upon the public, perpetuated by bank credit, will be revealed. American's Bulletin

. . . Debts must be collected mortgages foreclosed as rapidly as possible. When through the process of law the common people lose their homes, they will become more docile and more easily governed through the strong arm of government applied by a central power of wealth under leading financiers. . . . It is thus by discreet action we can secure for ourselves that which has been so well planned and so successfully accomplished. 1924 U.S. Banker's Association Magazine

The financial system has been turned over to the Federal Reserve Board. That board administers a finance system by authority of a purely profiteering group. That system is private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money. This (Federal Reserve) Act establishes the most gigantic trust on Earth. When the president signs this bill, the invisible governments by the monetary power will be legalized. The people may not know it immediately but the day of reckoning is only a few years removed, the worst legislatives crime of the ages perpetrated by this banking bill. Charles A. Lindbergh, Representative, MN

Every effort has been made by the Federal Reserve Board to conceal its powers, but the truth is . . . the Fed (Federal Reserve System) has usurped the government. It controls everything here (congress) and it controls all our foreign relations. It makes and breaks governments at will. Louis McFadden, ex-Chairman of the House Committee on Banking and Currency

The actual process of money creation takes place primarily in banks . . . bankers discovered that they could make loans merely by giving their promise to pay, or bank notes, to borrowers. In this way banks began to create money. Transaction deposits are the modern counterpart of bank notes. It was a small step from printing notes to making book entries crediting deposits of borrowers, which the borrowers in turn could 'spend' by writing checks, thereby 'printing' their own money. Modern Money Mechanics, Federal Reserve Bank of Chicago.


Very soon every American will be required to register their biological property in a national system designed to keep track of the people and that will operate under the ancient system of pledging. By such methodology, we can compel people to submit to our agenda, which will affect our security as a charge back for our fiat paper currency.

Every American will be forced to register or suffer being able to work and earn a living. They will be our chattels (property) and we will hold the security interest over them forever, by operation of the law merchant under the scheme of secured transactions. Americans, by unknowingly or unwittingly delivering the bills of lading (Birth Certificate) to us will be rendered bankrupt and insolvent, secured by their pledges.
They will be stripped of their rights and given a commercial value designed to make us a profit and they will be none the wiser, for not one man in a million could ever figure our plans and, if by accident one or two should figure it out, we have in our arsenal plausible deniability. After all, this is the only logical way to fund government, by floating liens and debts to the registrants in the form of benefits and privileges.

This will inevitably reap us huge profit beyond our wildest expectations and leave every American a contributor to this fraud, which we will call 'Social Insurance'. Without realizing it, every American will unknowingly be our servant, however begrudgingly. The people will become helpless and without any hope for their redemption and we will employ the high office (presidency) of our dummy corporation (USA) to foment this plot against America. Colonel Edward Mandel House


The great mass of people . . . will more easily fall victim to a big lie than to a small one. What luck for rulers that men do not think. Adolf Hitler

[Time for change]

80. Thank you for pointing me towards this book Larry

I've never read a book that dealt with economic issues that made the issues so understandable, was so easy to read, was so interesting and enjoyable to read, and so informative. This subject is so very complex -- it is quite an acheivement for Griffin.

[Larry Ogg]

93. I’m glade you liked the book

Your critique also seems to have hit a home run, and might I say, that’s a good thing, because I feel the Federal Reserve is a core issue. And I know there are a lot of important issues such as health care and rebuilding the countries infill-structure etc., but as you begin to see and learn the truth about the federal reserve, and other things; how it works seems less important than who it works for, at some point you can’t help but realize, why we the tax paying citizens aren’t getting squat out of our tax dollars. It’s like people want some kind of tangible return on their investment, but they don’t want to take the time to look and see that the treasury has been fleeced to the bone of wealth, and filled with nine trillion IOU’s. But at least their free to not bother themselves with why, and they can just go down to the public beach and watch the big shiny yachts with gold rigging cruse by as the occupants on board give those gawking peons on the beach the one finger salute, in honor of their hard work of course.

Dennis Kucinich made a comment in one of the first debates too the affect, that not much progress was going to happen as long as we have this fractional reserve debt based money system, I guess that alone would be enough to make him unelectable. In other words, no support from the money system; it might even be safe to say that money system created money out of thin air and spent it on making him unelectable. Ok, I know that’s reaching a little far, but then, your OP also mentioned conspiracy theories, so I just thought I would be a little imaginative towards a system ware anything is possible... And like Einstein said, “You can’t discover what you can’t imagine”.

Anyhow I recieved your PM and will be in touch if not today then tomorrow.
Larry

[Name removed]

68. Deleted message

Message removed by moderator. Click here to review the message board rules.

[bluesmail]

72. Fantastic Thread K&R

I can just see Poppy waiting through the Clinton years, pulling the strings, waiting because he learned from 'experience' you need to be patient.

[DemReadingDU]

74. I like your last paragraph

Basically, The Federal Reserve is to protect the wealth of the super-rich, to keep them from going bankrupt. It's all about preserving the money in their big pockets.

[santamargarita]

75. It's Scorched Earth Time for these Fascist Pigs!

They're going to do all of the damage they can until this UN-ELECTED Crime Family is finally out of OUR White House!

[nichomachus]

76. There is only one solution

There is only one solution for these fascists and that is the hangman's noose.

When Prescott Bush and his corporate buddies tried to overthrow FDR and install a fascist government in 1934, they weren't tried and hung as the traitors they were. FDR needed corporate support for the New Deal. This allowed the fascists to go underground and build their base. They did that. The battle for the country was renewed with the Mid-'60s Massacre of progressives (JFK-RFK-MLK) which sent a notice to anyone else who would try to screw with the fascist takeover.

I have actually come to think that Nixon's takedown was part of the plot. Nixon was too liberal for the fascists and wasn't one of them -- Nixon was for oil independence, relations with China, the EPA -- none of which suited the fascist agenda. We like to think it was the Democrats who brought him down. While they participated, it couldn't have happened if a spook (deep throat) hadn't fed information to another spook (Robert Woodward).

Once Nixon was gone and the cipher Ford was put in his place, the fascists began to flood into the government structure -- Cheney, Rumsfeld, Bush, and the rest. They never really left.

Clinton was an interruption, which was why he had to be hounded day and night, to keep him from interrupting the agenda. The 1964 Gingrich Putsch helped. Then, Dubya was installed by the fascists on the Supreme Court and we entered the end game, which is where we are now.

I have a feeling this next election may not play out the way we think it might. By that, I mean we may see something that may make an "October Surprise" seem like child's play. I fear that we may end up with the fascists more completely in control than they are now.

[Thickasabrick]

78. But couldn't this also be the beginning of the end? Before the

internet, few people paid as close attention to the "details". I think this has been one of the biggest threats to the fascists - information.

I'd like to think it could go either way...preferably our way.

[nichomachus]

79. Are you forgetting

Are you forgetting the dry run they did a few weeks ago with five "accidental" cable cuts that shut down the Internet for all of the Middle East -- except for Israel -- as well as parts of Asia? That was a dry run. They can shut down the Internet tomorrow -- or simply order the major ISPs to shut it down "for national security." The big firms have already been given immunity if they cooperate with the fascists.

[southerncrone]

77. ""Secrets of the Federal Reserve" by Eustace Mullins is another book

I've been told is very good. Published in 1991, it is difficult to find at a reasonable price. Have wanted to read both it & "Creature from Jekyll Island" for quite some time, but not enough "spare" time.(sigh) They are both on my "to-do" list.


http://www.amazon.com/Secrets-Federal-Reserve-Eustace-M...

Notice it is only available in used format from Amazon partner-sellers. Quite pricy, too. I suspect the "powerful" have bought up as many copies a possible to keep the info from getting out to Joe America. Read the customer reviews.

[B Calm]

84. Predatory Capitalism

Predatory Capitalism. . . . Say it loud and often. . .

[wildbilln864]

85. Great freakin thread! Thank you. nt

:hi:

[brindis_desala]

89. I believe you are conflating two separate issues

The current crisis is indeed largely of the Feds (Greenspan's) own making but it is not an indictment of the institution itself. Like it or not we really do have a global banking system of which the almighty Federal Reserve is just one, albeit, major part. (Think Switzerland is you want to hunt down the real mafia).
You real beef is with Republican administrations who loot the Treasury because they do not think debt matters. Why? well that question you've answered correctly because debt makes their masters richer. In fact one of the reasons we still have two parties is precisely because the Republicans are willing to devalue the dollar to the point of criminal recklessness. Even Dick Cheney "deficits don't matter", knows better than investing in Treasury notes. He drains the working stiffs for the oil empire and then lets Halliburton skip to Dubai. But Pax Americana must endure! Cue the Democrats to right the store.

Bankers (at least the ones in grown-up countries CAN be quite sensible. Take the following excerpt: (note casually that the date is pre 9-11)

From a speech by David Clementi, Deputy Governor
At a Bank of England Conference, 23 May 2001

Banks and Systemic Risk


"there is no point in enhancing disclosures if the market has no incentive to apply the information because creditors believe that banks will not be allowed to fail. So our goal of improving and harnessing market discipline has to go hand in hand with continued rolling back of state guarantees,

[crankychatter]

90. Fed = private company exempt from oversite w/unconstitutional authority

... to print money by fiat, with NO reserve
then extract usury from the public treasure

yeah, it's time a few progressives woke up..
interest on fake money is a fake debt

if you think lobbyists wield too much influence... imagine how much power these fat cats have.

they're salivating over the Amero

won't that be grand?

[Hippo_Tron]

114. No, the federal reserve is controlled by the board of governors

Which are nominated by the President and confirmed by the Senate.

[NotGivingUp]

91. k&r!...damn....just k'd...too late to r

[Postman]

96. The book is from the John Birch Society....

and advocates going back to money backed by gold.

Although it has a good history of "money", it is a rightwing attack on policies that helped this country emerge out of the Republican Great Depression.

If there is a problem with the Federal Reserve, it is that it has served the interests of the wealthy elite for too long as witnessed by the Ayn Rand loving Alan Greenspan.

[defendandprotect]

102. Bookmarked --- and read most of it--!! Thank you . . . this has been a long time

percolating up --

I read Wm. Greider's book when it came out --- just looked it up --- 1989 --- !!!!

Eye opening---!!!

This is certainly a question that the corporate-press doesn't want to touch ---

but "economic democracy" is a question and challenge which should be put to the

candidates. Followed up with questions about the FED --

and we should continue to try to educate DUers about it and move the info along --

[Floyd53]

112. I love this article

Everyone needs to read this article, it's so informative. I did read “The Creature from Jekyll Island – A Second Look at the Federal Reserve”, but it took a lot of time and effort just getting the book so I could read it. Don't expect the local library to have a copy. The Phoenix Public library doesn't keep it on the shelf but did barrow it from another library out of state so I could read it. I was told by somebody that this book is so radical that libraries wont carry it, especially those in the red states and Arizona is very red.

Bottom line this country needs an over haul. Every aspect of it is screwed up and falling a part. Freedom, Democracy, Justice, good fair honest business and employment, health care, education, you name it, all of it is scraping bottom and falling a part.

The good thing about the Bush administration is that most of us now know beyond a shadow of a doubt that our Constitution and Bill of Rights are mostly just and allusion or smoke screen - palliative.

Government has long lost perspective, a true understanding of the relative importance of things; a sense of proportion. It's no longer "We the People", it's We the Corporations, we the military and we the 2% who have all the money power. The rest of us are just slaves to the system. Paying taxes and buying insurance.