Sound as a U.S. Dollar?
Sent: Saturday, September 15, 2018 4:44 PM
Subject: 10 Things That Every American Should Know About The Federal
Reserve
My Comments: When was the last time you heard the
phrase “sound as the U.S. Dollar”? There are a number of websites that
have dollar calculators over time, such as https://www.officialdata.org/1800-dollars-in-1913?amount=100 Play with it a bit and you will see that between 1800 and 1913 the
purchasing value of the dollar actually increased. However, since 1913
when the Federal Reserve was established, the purchasing value of the dollar
steadily decreased by an average of 3.13% a year. Today the dollar is
worth about 2 to 3 cents of what it was worth in 1913 and the situation is
getting worse every year.
According to
Article I, Section 8 of the U.S.
Constitution, the U.S. Congress has been given
the responsibility to “coin Money, regulate the Value thereof, and of foreign
Coin, and fix the Standard of Weights and Measures”. So why is the Federal Reserve doing it?
It is hard to get information about
the Federal Reserve. There are a lot of conspiracy books out there about
the Federal Reserve, such as The Creature from Jekyll Island and many
others.
The article below is the best I
have found thus far, and it also seems to answer a question I have had for some
time about the Federal Reserve. If our money is being steadily devalued,
who is getting the money from the inflation? As many countries inflate
their currency to pay off debt, that certainly is not the case with the United
States. Maybe the answer is in item 1 of the 10 things listed below, where
the member banks are paid dividends of 6% a year. I’d like to know for
sure.
If we are to repair this nation,
the Federal Reserve seems to be one of the items that need to be repaired.
There is no reason that our government should operate its money supply such that
our dollar is devalued more than 3% a year, year after year after year.
That is theft for all those who have money in their pockets, or banks and thrift
institutions. That is not the way it averaged prior to the creation of the
Federal Reserve in 1913.
Michael Snyder
Feb 9, 2012
What
would happen if the Federal Reserve was shut down permanently? That is a
question that CNBC asked
recently, but
unfortunately most Americans don’t really think about the Fed much. Most
Americans are content with believing that the Federal Reserve is just another
stuffy government agency that sets our interest rates and that is watching out
for the best interests of the American people. But that is not the case at
all. The truth is that the Federal Reserve is a private banking cartel
that has been designed to systematically destroy the value of our currency,
drain the wealth of the American public and enslave the federal government to
perpetually expanding debt. During this election year, the economy is the
number one issue that voters are concerned about. But instead of endlessly
blaming both political parties, the truth is that most of the blame should be
placed at the feet of the Federal Reserve. The Federal Reserve has more
power over the performance of the U.S. economy than anyone else does. The
Federal Reserve controls the money supply, the Federal Reserve sets the interest
rates and the Federal Reserve hands out bailouts to the big banks that
absolutely dwarf anything that Congress ever did. If the American people
are ever going to learn what is really going on with our economy, then it is
absolutely imperative that they get educated about the Federal
Reserve.
The
following are 10 things that every American should know about the Federal
Reserve….
#1 The Federal Reserve System Is A Privately Owned
Banking Cartel
The
Federal Reserve is not a government agency.
The
truth is that it is a privately owned central bank. It is owned by the
banks that are members of the Federal Reserve system. We do not know how
much of the system each bank owns, because that has never been disclosed to the
American people.
The
Federal Reserve openly admits that it is privately owned. When it was
defending itself against a Bloomberg request for information under the Freedom
of Information Act, the Federal Reserve stated unequivocally in court that it
was “not an
agency” of the federal
government and therefore not subject to the Freedom of Information
Act.
In
fact, if you want to find out that the Federal Reserve system is owned by the
member banks, all you have to do is go to the Federal Reserve
website….
The twelve regional Federal Reserve Banks, which were
established by Congress as the operating arms of the nation’s central banking
system, are organized much like private corporations–possibly leading to some
confusion about “ownership.” For example, the Reserve Banks issue shares of
stock to member banks. However, owning Reserve Bank stock is quite different
from owning stock in a private company. The Reserve Banks are not operated for
profit, and ownership of a certain amount of stock is, by law, a condition of
membership in the System. The stock may not be sold, traded, or pledged as
security for a loan; dividends are, by law, 6 percent
per year.
Foreign governments and foreign banks do own significant
ownership interests in the member banks that own the Federal Reserve
system. So it would be accurate to say that the Federal Reserve is
partially foreign-owned.
But
until the exact ownership shares of the Federal Reserve are revealed, we will
never know to what extent the Fed is foreign-owned.
#2 The Federal Reserve System Is A Perpetual Debt
Machine
As
long as the Federal Reserve System exists, U.S. government debt will continue to
go up and up and up.
This
runs contrary to the conventional wisdom that Democrats and Republicans would
have us believe, but unfortunately it is true.
The
way our system works, whenever more money is created more debt is created as
well.
For
example, whenever the U.S. government wants to spend more money than it takes in
(which happens constantly), it has to go ask the Federal Reserve for it.
The federal government gives U.S. Treasury bonds to the Federal Reserve, and the
Federal Reserve gives the U.S. government “Federal Reserve Notes” in
return. Usually this is just done electronically.
So
where does the Federal Reserve get the Federal Reserve Notes?
It
just creates them out of thin air.
Wouldn’t you like to be able to create money out of thin
air?
Instead of issuing money directly, the U.S. government
lets the Federal Reserve create it out of thin air and then the U.S. government
borrows it.
Talk
about stupid.
When
this new debt is created, the amount of interest that the U.S. government will
eventually pay on that debt is not also created.
So
where will that money come from?
Well,
eventually the U.S. government will have to go back to the Federal Reserve to
get even more money to finance the ever expanding debt that it has gotten itself
trapped into.
It is
a debt spiral that is designed to go on perpetually.
You
see, the reality is that the money supply is designed to constantly expand under
the Federal Reserve system. That is why we have all become accustomed to
thinking of inflation as “normal”.
So
what does the Federal Reserve do with the U.S. Treasury bonds that it gets from
the U.S. government?
Well,
it sells them off to others. There are lots of people out there that have
made a ton of money by holding U.S. government debt.
In
fiscal 2011, the U.S. government paid out 454 billion
dollars just in interest
on the national debt.
That
is 454 billion dollars that was taken out of our pockets and put into the
pockets of wealthy individuals and foreign governments around the
globe.
The
truth is that our current debt-based monetary system was designed by greedy
bankers that wanted to make enormous profits by using the Federal Reserve as a
tool to create money out of thin air and lend it to the U.S. government at
interest.
And
that plan is working quite well.
Most
Americans today don’t understand how any of this works, but many prominent
Americans in the past did understand it.
For
example, Thomas Edison was once quoted in the New
York Times as saying the
following….
That is to say, under the old way any time we wish to add
to the national wealth we are compelled to add to the national
debt.
Now, that is what Henry Ford wants to prevent. He thinks
it is stupid, and so do I, that for the loan of $30,000,000 of their own money
the people of the United States should be compelled to pay $66,000,000 — that is
what it amounts to, with interest. People who will not turn a shovelful of dirt
nor contribute a pound of material will collect more money from the United
States than will the people who supply the material and do the work. That is the
terrible thing about interest. In all our great bond issues the interest is
always greater than the principal. All of the great public works cost more than
twice the actual cost, on that account. Under the present system of doing
business we simply add 120 to 150 per cent, to the stated
cost.
But here is the point: If our nation can issue a dollar
bond, it can issue a dollar bill. The element that makes the bond good makes the
bill good.
We
should have listened to men like Edison and Ford.
But we
didn’t.
And so
we pay the price.
On
July 1, 1914 (a few months after the Fed was created) the U.S. national debt was
2.9 billion dollars.
Today,
it is more than more than 5000 times larger.
Yes,
the perpetual debt machine is working quite well, and most Americans do not even
realize what is happening.
#3 The Federal Reserve Has Destroyed More Than 96% Of The
Value Of The U.S. Dollar
Did
you know that the U.S. dollar has lost 96.2
percent of its value since
1900? Of course almost all of that decline has happened since the Federal
Reserve was created in 1913.
Because the money supply is designed to expand
constantly, it is guaranteed that all of our dollars will constantly lose
value.
Inflation is a “hidden tax” that continually robs us all
of our wealth. The Federal Reserve always says that it is “committed” to
controlling inflation, but that never seems to work out so well.
And
current Federal Reserve Chairman Ben Bernanke says that it is actually a good
thing to have a little bit of inflation. He plans to try to keep the
inflation rate at about 2 percent in the coming years.
So
what is so bad about 2 percent? That doesn’t sound so bad, does
it?
Well,
just consider the following excerpt from a recent Forbes article….
The Federal Reserve Open Market Committee (FOMC) has made
it official: After its latest two day meeting, it announced its goal to
devalue the dollar by 33% over the next 20 years. The debauch of the
dollar will be even greater if the Fed exceeds its goal of a 2 percent per year
increase in the price level.
#4 The Federal Reserve Can Bail Out Whoever It Wants To
With No Accountability
The
American people got so upset about the bailouts that Congress gave to the Wall
Street banks and to the big automakers, but did you know that the biggest
bailouts of all were given out by the Federal Reserve?
Thanks
to a very limited audit of the Federal Reserve that Congress approved a while
back, we learned that the Fed made trillions of dollars in secret bailout loans to the big Wall Street banks
during the last financial crisis. They even secretly loaned out hundreds
of billions of dollars to foreign banks.
According to the results of the limited Fed audit
mentioned above, a total of $16.1
trillion in secret loans
were made by the Federal Reserve between December 1, 2007 and July 21,
2010.
The
following is a list of loan recipients that was taken directly from page 131of the audit report….
Citigroup – $2.513 trillion
Morgan Stanley – $2.041 trillion
Merrill Lynch – $1.949 trillion
Bank of America – $1.344 trillion
Barclays PLC – $868 billion
Bear Sterns – $853 billion
Goldman Sachs – $814 billion
Royal Bank of Scotland – $541 billion
JP Morgan Chase – $391 billion
Deutsche Bank – $354 billion
UBS – $287 billion
Credit Suisse – $262 billion
Lehman Brothers – $183 billion
Bank of Scotland – $181 billion
BNP Paribas – $175 billion
Wells Fargo – $159 billion
Dexia – $159 billion
Wachovia – $142 billion
Dresdner Bank – $135 billion
Societe Generale – $124 billion
“All Other Borrowers” – $2.639 trillion
Morgan Stanley – $2.041 trillion
Merrill Lynch – $1.949 trillion
Bank of America – $1.344 trillion
Barclays PLC – $868 billion
Bear Sterns – $853 billion
Goldman Sachs – $814 billion
Royal Bank of Scotland – $541 billion
JP Morgan Chase – $391 billion
Deutsche Bank – $354 billion
UBS – $287 billion
Credit Suisse – $262 billion
Lehman Brothers – $183 billion
Bank of Scotland – $181 billion
BNP Paribas – $175 billion
Wells Fargo – $159 billion
Dexia – $159 billion
Wachovia – $142 billion
Dresdner Bank – $135 billion
Societe Generale – $124 billion
“All Other Borrowers” – $2.639 trillion
So why
haven’t we heard more about this?
This
is scandalous.
In
addition, it turns out that the Fed paid enormous sums of money to the big Wall Street banks to help “administer” these
nearly interest-free loans….
Not only did the Federal Reserve give 16.1 trillion
dollars in nearly interest-free loans to the “too big to fail” banks, the Fed
also paid them over 600 million dollars to help run the emergency lending
program. According to the
GAO, the Federal Reserve shelled
out an astounding $659.4 million in “fees” to the very financial institutions which
caused the financial crisis in the first place.
Does
reading that make you angry?
It
should.
#5 The Federal Reserve Is Paying Banks Not To Lend
Money
Did
you know that the Federal Reserve is actually paying banks not to make
loans?
It is
true.
Section 128 of the Emergency Economic Stabilization Act
of 2008 allows the Federal Reserve to pay interest on “excess reserves” that
U.S. banks park at the Fed.
So the
banks can just send their cash to the Fed and watch the money come rolling in
risk-free.
So are
many banks taking advantage of this?
You
tell me. Just check out the chart below. The amount of “excess
reserves” parked at the Fed has gone from nearly nothing to about 1.5
trillion dollarssince 2008….
But
shouldn’t the banks be lending the money to us so that we can start businesses
and buy homes?
You
would think that is how it is supposed to work.
Unfortunately, the Federal Reserve is not working for
us.
The
Federal Reserve is working for the big banks.
Sadly,
most Americans have no idea what is going on.
Another example of this is the government debt carry
trade.
Here
is how it works. The Federal Reserve lends gigantic piles of nearly
interest-free cash to the big Wall Street banks, and in turn those banks use the
money to buy up huge amounts of government debt. Since the return on
government debt is higher, the banks are able to make large profits very easily
and with very little risk.
This
scam was also explained in a recent article in the
Guardian….
Consider this: we pretend that banks are private
businesses that should be allowed to run their own affairs. But they are the
biggest scroungers of public money of our time. Banks are lent vast sums of
money by central banks at near-zero interest. They lend that money to us or back
to the government at higher rates and rake in the difference by the billion.
They don’t even have to make clever investments to make huge
profits.
That
is a pretty good little scam they have got going, wouldn’t you say?
#6 The Federal Reserve Creates Artificial Economic
Bubbles That Are Extremely Damaging
By
allowing a centralized authority such as the Federal Reserve to dictate interest
rates, it creates an environment where financial bubbles can be created very
easily.
Over
the past several decades, we have seen bubble after bubble. Most of these
have been the result of the Federal Reserve keeping interest rates artificially
low. If the free market had been setting interest rates all this time,
things would have never gotten so far out of hand.
For
example, the housing crash would have never been so horrific if the Federal Reserve
had not created such ideal conditions for a housing bubble in the first
place. But we allow the Fed to continue to make the same
mistakes.
Right
now, the Federal Reserve continues to set interest rates much, much lower than
they should be. This is causing a tremendous misallocation of economic
resources, and there will be massive consequences for that down the
line.
#7 The Federal Reserve System Is Dominated By The Big
Wall Street Banks
Even
since it was created, the Federal Reserve system has been dominated by the big
Wall Street banks.
The
following is from a previous
article that I did about
the Fed….
The New York representative is the only permanent member
of the Federal Open Market Committee, while other regional banks rotate in 2 and
3 year intervals. The former head of the New York Fed, Timothy Geithner,
is now U.S. Treasury Secretary. The truth is that the Federal Reserve Bank
of New York has always been the most important of the regional Fed banks by far,
and in turn the Federal Reserve Bank of New York has always been dominated by
Wall Street and the major New York banks.
#8 It Is Not An Accident That We Saw The Personal Income
Tax And The Federal Reserve System Both Come Into Existence In
1913
On
February 3rd, 1913 the 16th Amendment to the U.S. Constitution was
ratified. Later that year, the United States Revenue Act of
1913 imposed a personal
income tax on the American people and we have had one ever since.
Without a personal income tax, it is hard to have a
central bank. It takes a lot of money to finance all of the government
debt that a central banking system creates.
It is
no accident that the 16th Amendment was ratified in 1913 and the Federal Reserve
system was also created in 1913.
They
have a symbiotic relationship and they are designed to work
together.
We
could fill Congress with people that are committed to ending this oppressive
system, but so far we have chosen not to do that.
So our
children and our grandchildren will face a lifetime of debt slavery because of
us.
I am
sure they will be thankful for that.
#9 The Current Federal Reserve Chairman, Ben Bernanke,
Has A Nightmarish Track Record Of Incompetence
The
mainstream media portrays Federal Reserve Chairman Ben Bernanke as a brilliant
economist, but is that really the case?
Let’s
go to the videotape.
The
following is an extended excerpt from an article that I published previously….
———-
In
2005, Bernanke said that we shouldn’t worry because housing
prices had never declined on a nationwide basis before and he said that he
believed that the U.S. would continue to experience close to “full
employment”….
“We’ve never had a decline in house prices on a
nationwide basis. So, what I think what is more likely is that house prices will
slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s
gonna drive the economy too far from its full employment path,
though.”
In
2005, Bernanke also said that he believed that derivatives
were perfectly safe and posed no danger to financial markets….
“With respect to their safety, derivatives, for the most
part, are traded among very sophisticated financial institutions and individuals
who have considerable incentive to understand them and to use them
properly.”
In
2006, Bernanke said that housing prices would probably keep
rising….
“Housing markets are cooling a bit. Our expectation is
that the decline in activity or the slowing in activity will be moderate, that
house prices will probably continue to rise.”
In
2007, Bernanke insisted that there was not a problem with
subprime mortgages….
“At this juncture, however, the impact on the broader
economy and financial markets of the problems in the subprime market seems
likely to be contained. In particular, mortgages to prime borrowers and
fixed-rate mortgages to all classes of borrowers continue to perform well, with
low rates of delinquency.”
In
2008, Bernanke said that a recession was not
coming….
“The Federal Reserve is not currently forecasting a
recession.”
A
few months before Fannie Mae and Freddie Mac collapsed, Bernanke
insisted that they were totally secure….
“The GSEs are adequately capitalized. They are in no
danger of failing.”
For
many more examples that demonstrate the absolutely nightmarish track record of
Federal Reserve Chairman Ben Bernanke, please see the following
articles….
But
after being wrong over and over and over, Barack Obama still nominated Ben
Bernanke for another term as Chairman of the Fed.
———-
#10 The Federal Reserve Has Become Way Too
Powerful
The
Federal Reserve is the most undemocratic institution in America.
The
Federal Reserve has become so powerful that it is now known as “the fourth
branch of government”, but there are less checks and balances on the Fed than
there are on the other three branches.
The
Federal Reserve runs the U.S. economy but it is not accountable to the American
people. We can’t vote those that run the Fed out of office if we do not
like what they do.
Yes,
the president appoints those that run the Fed, but he also knows that if he does
not tread lightly he won’t get the money from the big Wall Street banks that he
needs for his next election.
Thankfully, there are a few members of Congress that are
complaining about how much power the Fed has. For example, Ron Paul once
told MSNBC that he believes that the Federal Reserve is now actually more powerful than Congress…..
“The regulations should be on the Federal Reserve. We
should have transparency of the Federal Reserve. They can create trillions of
dollars to bail out their friends, and we don’t even have any transparency of
this. They’re more powerful than the Congress.”
As
members of Congress such as Ron Paul have started to shed some light on the
activities of the Federal Reserve, that has caused many in the mainstream media
to come to the defense of the Fed.
For
example, a recent CNBC article entitled “If The
Federal Reserve Is Abolished, What Then?” makes it sound like there is absolutely no other
rational alternative to having the Federal Reserve run our economy.
But
this is not what our founders intended.
The
founders did not intend for a private banking cartel to issue our money and set
our interest rates for us.
According to Article I, Section 8 of the U.S.
Constitution, the U.S.
Congress has been given the responsibility to “coin Money, regulate the Value
thereof, and of foreign Coin, and fix the Standard of Weights and
Measures”.
So why
is the Federal Reserve doing it?
But
the CNBC article mentioned above makes it sound like the sky would fall
if control of the currency was handed back over to the American
people.
At one
point, the article asks the following question….
“How would the U.S. economy then function? Something has
to take its place, right?”
No,
the truth is that we don’t need anyone to “manage” our economy.
The
U.S. Treasury could be in charge of issuing our currency and the free market
could set our interest rates.
We
don’t need to have a centrally-planned economy.
We
aren’t China.
And it
goes against everything that our founders believed to be running up so much
government debt.
For
example, Thomas Jefferson once declared that if he could add just one more
amendment to the U.S. Constitution it would be a ban on all government
borrowing….
I wish it were possible to obtain a single amendment to
our Constitution. I would be willing to depend on that alone for the reduction
of the administration of our government to the genuine principles of its
Constitution; I mean an additional article, taking from the federal government
the power of borrowing.
Oh,
how things would have been different if we had only listened to Thomas
Jefferson.
Please
share this article with as many people as you can. These are things that
every American should know about the Federal Reserve, and we need to educate the
American people about the Fed while there is still time.
