More About The Federal Reserve
I believe banking institutions having the issuing power of money are more dangerous to liberty than standing armies.
— Thomas Jefferson
Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and through its Board of Governors manipulates the credit of the United States.
— Sen. Barry Goldwater in With No Apologies (1979)
About the Fed
The Federal Reserve (The Fed), which is not federal and the reserves are debatable, is a cartel of private banks that prints Federal Reserve Notes (that is your money, look at any bill, they are not backed by any commodity of intrinsic value) for banks to loan and collect interest on. Every dollar in existence is backed by debt and the Fed is essentially collecting interest on the money in your pocket; someone owes it to somebank. If there were no debt, there, all the money would be erased from existence. The banks, through the Fed, create new money when they make loans. When money is added to the economy, the rest of the currency is worth less due to supply and demand. This causes people on fixed incomes and many other means of pay to have money that is worth less. This hurts them. Why would we ever let anyone do this? Well, the Federal Reserve can buy treasury securities with hot checks (see quote below) to finance the things (wars, bailouts, debt payments, etc.) that politicians don’t want to tax people for, enabling them to be re-elected. The Fed also artificially adjusts interest rates, bails out and makes loans to banks, and has even sent billions to foreign banks and governments. The Fed has been the main force behind the economic crises of the past hundred years and has undermined prosperity and the free market.
So, if these notes aren’t backed by any commodity of intrinsic value, then what makes them worth anything? Why will the store take my money? Well, maybe this will answer your question.
This note is legal tender for all debts, public and private
If the bills did not say that on them, nobody would use them. Many governments in history have made money without proper support in precious metals and many of these currencies have failed. People know through numerous historical examples that governments printing money is bad, but now there is financial sleight-of-hand and a central bank that makes the money for the government. When governments and banks make more bills, everything raises in price: inflation happens. In some historical cases, there would be price-fixing laws that set the price of goods or services so the prices would stop raising. This would cause people to stop offering the goods or services because they didn’t want the useless bills, go to jail for demanding something more than the bills, or just accept terrible economic hardships.
When you or I write a check there must be sufficient funds in our account to cover the check, but when the Federal Reserve writes a check there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it is creating money.
— Federal Reserve Bank of Boston, Putting It Simply (1984)
Article 1 Section 10 of the Constitution says Congress should have the power:
To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
A private bank does not have this power and ‘To coin money’ referred to coins of precious metal.
Article 1 Section 10 says no state should:
make any Thing but gold and silver Coin a Tender in Payment of Debts;
A Short History of the Fed
The Federal Reserve System was created behind closed doors in the Jekyll Island Club off the coast of Georgia in 1910 by representatives from the world’s largest banks including J.P Morgan & Co., Kuhn, Loeb & Co., J.P. Morgan’s First National Bank of New York, and Rockefeller’s National City Bank of New York with Senator Nelson Aldrich, the father-in-law of John D. Rockefeller Jr. Together, these men represented about one-forth of the world’s wealth at that time. The fact that this meeting even took place was kept secret for years.
The Federal Reserve System is not the first national bank which is why it is called a ‘reserve’ though the only thing in the ‘reserve’ is debt (and a meager $11 billion in gold stock) (The U.S. Treasury owes the Fed $1.65 trillion and the Fed has $851 billion in mortgage backed securities). Two national banks preceded the Federal Reserve. Neither were renewed when their charters expired. Congress refused to renew the first. The expiration of the second involved a political power struggle with Andrew Jackson and an intentional financial crisis instigated by the bank to put pressure on Jackson.
The Federal Reserve was created as a means of financial reform and ‘lender of last resort‘ following the Panic of 1907. The Panic of 1907 was caused by inflation and bad banking practices stimulated by Treasury Secretary Leslie Shaw who told banks they no longer needed cash reserves to back deposits in 1902. This made them able to irresponsibly lend out all of their depositors’ money. Shaw resigned in 1907. There were a number of financial crises in the years following the National Banking System introduced in the 1860’s that concentrated a monopoly of power in ‘national banks’. Upton Sinclair’s The Money Changers (1908) is a novel about J.P. Morgan causing the crash and later being glorified for the rescue of Wall Street.
Since the foundation of the Federal Reserve, the large banks of Wall Street have been well aware of their ‘lender of last resort’. Banks tend to make large amounts of loans far exceeding their reserves and collect wild amounts of interest while hiding or selling off their liabilities in financial instruments such as CDO’s (collateralized debt obligations) that turn into toxic assets. Then, when crisis happens, there is no choice but to bail them out. We would be naïve to think these crises are accidental. The bailout shifts their inevitable losses to the taxpayer.
The Secrecy of the Fed
Not only was the Fed created behind closed doors, but it also operates behind closed doors. The Fed’s operations, policy-making committees, and minutes are secret and the regional presidents are chosen by commercial banks of the regions. In the 1990’s, the Chairman of the House Banking Committee Henry B. Gonzales made proposals that would make Fed be more open to public scrutiny. President Clinton rejected the proposals saying they would “run the risk of undermining market confidence in the Fed”. Wouldn’t a statement like that ruin market confidence as well?
In the past two decades, the Fed has slowly made attempts to become more transparent. The Fed has undergone audits, but not on it’s most crucial operations. There is now a bill to audit the Fed called The Federal Reserve Transparency Act of 2011, H.R. 459, S. 202. Currently, it is referred to Senate Committee on Banking, Housing, and Urban Affairs.
Whereas: Congress, the Federal Reserve, and the U.S. Treasury have put the American taxpayer on the hook for over $16 trillion in bailouts and loans; and
Whereas: The Federal Reserve continues to refuse to fully disclose the details of its emergency lending; and
Whereas: Allowing the Fed to operate our nation’s monetary system in almost complete secrecy leads to abuse, inflation, and a lower quality of life for every American; and
Whereas: HR 459 and S 202, the Federal Reserve Transparency Act, would require a complete audit of the Fed for the first time in its history and would provide answers to the American people about how our money is being spent;
Therefore: It’s time to hold the Federal Reserve accountable to Congress and the American People. I urge you to do everything in your power to pass the Audit the Fed bill!
The Effects of the Fed
The Fed controls interest rates as well as printing money. Some think this can have good effects on the economy because it gets people to spend, but as one learns the ideas of libertarianism, one will see that any manipulation of the free market has a down-side. This kind gentleman will explain.
The Fed, by unconstitutionally creating new money, enabling Wall Street, and writing hot checks for treasury bonds, is in effect robbing every citizen in the country and leading it into greater debt. The Fed ruled during many economic crises and has led to devalued currency and a national debt of over $15.75 trillion. We need no audit to see that the Fed’s actions are unethical. The crimes of the Federal Reserve are already public knowledge. What we do about it is the question.
I demand immediate passage of the following:
· H.R. 2768 (Cancellation of Treasury Debt to Federal Reserve)
· H.R. 1496 (Federal Reserve Transparency Act)
· H.R. 1095 (Freedom to Bank Act)
· H.R. 1094 (Federal Reserve Board Abolition Act)
· H.R. 459 (Federal Reserve Transparency)
Edit: H.R. 459 has passed, now we are counting on S. 202, shown below. Call Kay Bailey Hutchinson and John Cornyn if you live in Texas. It is easy and it is their job to hear you out.
· S 202 (Senate Federal Reserve Transparency Act)
· H.R. 1098 (Free Competition in Currency Act) - This is the most important bill, but it will not pass.
· Immediate resignation of Federal Reserve Chairman Ben Bernanke
· A timely & specific end date, set by Congress to end the Federal Reserve
Learn more below about the way The Federal Reserve operates and how it has enabled Wall Street to bring the U.S into financial ruin; this is a fascinating subject.
“The American Dream”, a cartoon by The Provocateur Network: theamericandreamfilm.com
www.auditthefed.com - auditing probably wouldn’t stop the Fed
The Case Against the Fed by Murray Rothbard. Free to read on that link.
The Creature From Jekyll Island: A Second Look at the Federal Reserve by G. Edward Griffin
End the Fed by Ron Paul
“Divide and Rule | End the Fed” - by Infinitor, me.
www.federalreserve.gov - hear it in their own words
www.mises.org - The Ludwig von Mises Institue - learn about Austrian Economics, the alternative to Keynsian Economics employed by the Fed
“Occupy the Federal Reserve” - a printable pamphlet version of this article for Occupy by Infinitor, me.
www.strike-the-root.com - a reasonable website
Paul Krugman is a puppet.