September, 2009

The Federal Reserve System - Enemy of the American People!

Common Understanding by the American People About the Federal Reserve System (the FED)

Very few Americans have even a limited knowledge of the FED. In most cases, Americans think of the FED as a branch or agency of the United States Government which is involved in setting interest rates, fighting inflation and keeping the economy moving along with as few hiccups as possible.

The face of the FED in recent years (since February, 2006) has been Dr. Ben Bernanke who was recently re-nominated by President Obama to serve a second four year term as Chairman of the FED.

Prior to Dr. Bernanke, the face of the FED as its Chairman from 1987 until February, 2006 was Dr. Alan Greenspan whose often unintelligible speeches and writings left business people, politicians and people from all walks of life scratching their heads.

What Is the FED and What Is Its Purpose?

The FED, in simple terms, is the central banking system of the United States. According to the FED, its principal duties fall into the following four categories:

1. "Conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates;
   
   
2. Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers;
   
   
3. Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets;
   
   
4. Providing financial services to depository institutions, the U.S. Government, and foreign official institutions, including playing a major role in operating the nation's payments system."
   
   

Again, according to the FED, and as presented in Wikipedia, the Federal Reserve System (the FED) consists of five different parts. The parts are the following:

1. "The presidentially appointed Board of Governors of the Federal Reserve System, a governmental agency in Washington, D.C.;
   
   
2. The Federal Open Market Committee (FOMC), which oversees Open Market Operations, the principal tool of national monetary policy;
   
   
3. Twelve regional privately-owned Federal Reserve Banks located in major cities throughout the nation, which divide the nation into 12 districts, acting as fiscal agents for the U.S. Treasury, each with its own nine-member board of directors. These 12 banks are located in Boston, MA; New York, NY., Philadelphia, PA; Cleveland, OH; Richmond, VA; Atlanta, GA; Chicago, IL; St. Louis, MO; Minneapolis, MN; Kansas City, MO; Dallas, TX; San Francisco, CA;
   
   
4. Numerous other private U.S. member banks, which subscribe to required amounts of non-transferable stock in their regional Federal Reserve Banks;
   
   
5. Various advisory councils."
   
   

How Did the FED Come Into Being and Who Was Responsible for Its Establishment?

In November, 1910, 7 men, who represented approximately 25% of the total wealth of the entire world at that time, met SECRETLY on Jekyll Island, Georgia to lay the groundwork for a central bank for the United States. These 7 men were as follows:

1. Paul Warburg - a partner of Kuhn, Loeb and Company (an investment bank) and a representative of the Rothschild banking empire in England and France. Warburg was the major force in preparing the FED plan and is often referred to as the "father of the system;"
   
   
2. Nelson Aldrich - a U. S. Senator and the father-in-law of John D. Rockefeller, Jr.;
   
   
3. Abraham Piatt Andrew - Assistant Secretary of the U. S. Treasury;
   
   
4. Benjamin Strong - head of J.P. Morgan's Bankers Trust Company;
   
   
5. Henry Davison - senior partner of J.P. Morgan Company;
   
   
6. Frank Vanderlip - president of the most powerful bank of that time, National City Bank of New York and a representative of William Rockefeller;
   
   
7. Charles Norton - president of J.P. Morgan's First National Bank of New York.
   
   

As a result of the efforts of these 7 men representing 25% of the world's wealth, the Federal Reserve Act was passed on December 23, 1913 by the United States Congress although its passage "stunk to high heaven" for the following reasons:

1. most members of Congress had gone home for the holidays so clearly there was inadequate debate on an issue of such monumental importance to the country;
   
   
2. those members of Congress who did vote had little or no understanding what they were voting for;
   
   
3. the House of Representatives passed the Federal Reserve Act but it was having difficulty getting out of the Senate. Unfortunately, the Senate had not formally adjourned so they were technically still in session. There were only 3 members of the Senate still present so the Federal Reserve Act was passed on a unanimous consent voice vote.
   
   

The Federal Reserve Act was signed into law by President Woodrow Wilson who later remarked:

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world, no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men."

Why Did These Wealthy Men Want to Establish the FED as the Central Bank of the United States?

The stated reason for the establishment of the FED was to protect the public from the ravages of bank panics (the most recent one having been in 1907) which often led to economic instability in the United States.

In reality, the real reasons were that the large banks wanted the FED as a central bank in order to:

1. halt competition from smaller banks;
   
   
2. obtain a franchise to create money out of "thin air" for the purpose of lending;
   
   
3. obtain control of the reserves of all banks so that they could cover up the problems of poorly performing banks;
   
   
4. convince the United States tax payers to pick up any losses suffered by the system;
   
   
5. convince the United States Congress that their major goal in life was to protect the United States public.
   
   

Who Really Owns the FED?

First and foremost, all Americans should understand the following:

1. the FED is NOT a branch or an agency of the United States Government;
   
   
2. none of the stock of the FED is owned by the United States Government;
   
   
3. 100% of the stock of the FED is owned by powerful private banks, many of them foreign private banks.
   
   

The actual owners of the FED are a closely guarded secret. The following list represents a "guesstimated" list of the original owners:

1. Rothschild Banks of London and Berlin
   
   
2. Lazard Brothers Bank of Paris
   
   
3. Israel Moses Sieff Banks of Italy
   
   
4. Warburg Bank of Hamburg, Germany and Amsterdam
   
   
5. Kuhn Loeb Bank of New York (merged with Lehman Brothers in 1977)
   
   
6. Lehman Brothers Bank of New York (acquired by American Express in 1984; filed for bankruptcy September, 2008)
   
   
7. Goldman Sachs Bank of New York
   
   
8. Chase Manhattan Bank of New York (Controlled by Rockefellers - merged with Chemical Bank in 1996, merged with JP Morgan and Company in 2000 to form JP Morgan Chase)
   
   

History of Central Banking in the United States

Although the FED has been in business for 96 years (since 1913) as the central bank of the United States, it is actually the fourth central bank in our country's history. A brief summary of the other three central banks is as follows:

1. Bank of North America
   This bank was chartered by the Continental Congress in 1781. It was modeled after the Bank of England, issued paper promissory notes that served as a national currency, and focused on creating money to lend to the federal government. This first central bank was riddled with FRAUD and its charter was allowed to expire in 1783 (lasted only two years).
   
   
2. First Bank of the United States
   This bank was created by Congress in 1791. Private investors in the bank included some of the nation's wealthiest and most influential citizens, as well as the Rothschilds from Europe (sound familiar?). Once again FRAUD abounded and the bank's charter was defeated by one vote in both the Senate and House of Representatives in 1811 (lasted twenty years).
   
   
3. Second Bank of the United States
   This bank, the third central bank of the United States, was chartered in 1816 and was a carbon copy of the First Bank of the United States with one minor exception - Congress extracted a BRIBE of $1.5 million from private investors for issuing the bank charter (some things never change, do they?). As usual, this bank was also rife with FRAUD and when the bank's charter expired in 1836 (lasted twenty years), it was not renewed.
   
   

Apparently the one common theme running through the first three central banks of the United States was FRAUD! Why should the fourth central bank (the FED) be any different!

FED Operations - A Profitable Racket

When the United States Government needs money, it just doesn't issue notes (dollars backed by the full faith and credit of the United States) straight out of the United States Treasury. Instead it issues United States Treasury Bonds which are purchased by the FED. The FED pays for these bonds by creating money "out of thin air" or, said another way, by making a simple bookkeeping entry. The following scenario ensues:

1. the United States Treasury holds the money created "out of thin air" by the FED;
   
   
2. the FED holds the United States Treasury bonds;
   
   
3. the United States Treasury pays interest to the FED on the same bonds that it issued.
   
   

The incredible results are that the FED, owned by private banks (including some foreign private banks):

• controls the money supply of the United States
  
  
• keeps the United States in a perpetual state of debt
  
  
• earns interest on the ever increasing debt levels of the United States.
  
  

Each of us should be so fortunate as to have a profitable racket like this!

Track Record of the FED Prior to the 2008 Financial Crisis (1913 - March, 2008)

In the section of this Commentary entitled "What Is The FED and What is Its Purpose?" you will recall that the FED says it has four principal duties:

1. Conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates;
   
   
2. supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers;
   
   
3. maintaining the stability of the financial system and containing systemic risk that may arise in financial markets;
   
   
4. providing financial services to depository institutions, the U. S. Government, and foreign official institutions, including playing a major role in operating the nation's payments system.
   
   

How did the FED do against the above objectives? The FED has the following track record for the period 1913 - March, 2008:

1. the goods and services which you could buy in 1913 for $1.00 now cost nearly $21.00. Said another way, the purchasing power of a 1913 dollar is now about $.05 or a loss of 95%. Obviously, the FED's relentless pursuit of inflationary policies has resulted in the 1913 dollar having lost almost its entire value. I guess the FED didn't do so well with respect to price stability;
   
   
2. recessions, as documented by the National Bureau of Economic Research occurred in 1918-1919, 1920-1921, 1923-1924, 1926-1927, 1929-1933, 1937-1938, 1945, 1948-1949, 1953-1954, 1957-1958, 1960-1961, 1969-1970, 1973-1975, 1980 1981-1982, 1990-1991, 2001, December 2007 - until who knows when since there is no end in sight.
   
   

I can't imagine that the absence of the FED would have made things much worse than this dismal record!

Track Record of the FED Since March, 2008

Now, let's take a look at some of the more recent FED shenanigans which should make every American furious. Here's a brief list:

1. March, 2008 - the FED advanced the funds for JP Morgan Chase (a bank) to buy Bear Stearns (an investment bank) for pennies on the dollar. Do you think that there might be a conflict of interest in having Jamie Dimon, CEO of JP Morgan Chase and a member of the Board of Directors of the New York FED, participate in the secret weekend negotiations?;
   
   
2. September, 2008 - in a totally unprecedented action, the FED purchased an 80% interest in the world's largest insurance company, AIG, by providing AIG with an $85 billion loan;
   
   
3. May, 2009 - the Chairman of the New York FED, Stephen Friedman, resigned after questions were raised about purchases of stock in his former firm, Goldman Sachs;
   
   
4. September, 2008 until today, September 2009 - the FED has spent or committed trillions of dollars relating to the financial meltdown of which at least $500 billion went to foreign banks.
   
   

Recent Events

1. HR 1207 is a bill sponsored by Representative Ron Paul of Texas and it now has 289 co-sponsors. The purpose of the bill is to audit the FED, which has NEVER been legitimately audited in its 96 year history. Can you believe that?
   
   
2. August 24, 2009 - Manhattan Chief U. S. District Judge Loretta Preska ruled that the FED must identify the financial institutions that benefited from its emergency loans. This decision was in response to a Freedom of Information lawsuit filed in November, 2008 by Bloomberg LP, the New York based company which is majority owned by New York Mayor Michael Bloomberg. The FED has until September 30, 2009 to appeal Judge Preska's decision.
   
   

Closing Thoughts

The "bought and paid for press" in the United States is spending very little time discussing HR 1207 and/or the Bloomberg lawsuit. Why? Because they don't want the American people to realize that it has been the actions of the FED which have inflated the dollar away to almost nothing, created a massive debt which we can never repay and enriched a small select group of business people and politicians (including some foreign entities) at the expense of the rest of us. It is time to demand that the politicians in this country force the FED to come clean about what it has done with our money. Nothing less than our survival as a nation is at stake. Don't believe me? Well, just look at the two quotes below from the Rothschilds, one of the FED owners.

"Let me issue and control a nation's money and I care not who writes the laws."