The Federal Reserve's Shady Past

[PoliticalChic]

What was before the Fed?

"Free" Banks: 1837-1863

yes and each one had its own currency. At one point there were 2200 different curriencies in the USA. Imagine how inefficient that would be today? Europe just switched to one currency from 27 and you want to go back to 3-4000 curriencies?

1. The essence of the thread is the shady origins of the Federal Reserve.
Consider why it was done in such a manner.

2. I'm almost certain that you know the reason for the government's desire for one stop-shopping for loan.
The Civil War.
Not particularly to make certain only one currency was available.

you would prefer 3-4000??

I would prefer that you provide a comment on the origin of the Federal Reserve.

As far as I recall it originated in the Panic of 1907. Wall Street and govt decided it was better to have a big central bank system in place to act as the lender of last resort in a panic rather than risk a depression as private bankers and govt frantically organized each time it was necessary to get up the money needed to
liquefy the system.

To this day most economists from all points on the spectrum want to keep the Fed on grounds it is less dangerous than a gold standard. I think both are dangerous and either can be managed successfully with the economic knowledge we now have.

So.....you didn't bother to read the posts......

I see.

 

[EdwardBaiamonte]

yes and each one had its own currency. At one point there were 2200 different curriencies in the USA. Imagine how inefficient that would be today? Europe just switched to one currency from 27 and you want to go back to 3-4000 curriencies?

1. The essence of the thread is the shady origins of the Federal Reserve.
Consider why it was done in such a manner.

2. I'm almost certain that you know the reason for the government's desire for one stop-shopping for loan.
The Civil War.
Not particularly to make certain only one currency was available.

you would prefer 3-4000??

I would prefer that you provide a comment on the origin of the Federal Reserve.

As far as I recall it originated in the Panic of 1907. Wall Street and govt decided it was better to have a big central bank system in place to act as the lender of last resort in a panic rather than risk a depression as private bankers and govt frantically organized each time it was necessary to get up the money needed to
liquefy the system.

To this day most economists from all points on the spectrum want to keep the Fed on grounds it is less dangerous than a gold standard. I think both are dangerous and either can be managed successfully with the economic knowledge we now have.

So.....you didn't bother to read the posts......

I see.

what exactly would I learn if I did read them?

 

[PoliticalChic]

What was before the Fed?

"Free" Banks: 1837-1863

yes and each one had its own currency. At one point there were 2200 different curriencies in the USA. Imagine how inefficient that would be today? Europe just switched to one currency from 27 and you want to go back to 3-4000 curriencies?

1. The essence of the thread is the shady origins of the Federal Reserve.
Consider why it was done in such a manner.

2. I'm almost certain that you know the reason for the government's desire for one stop-shopping for loan.
The Civil War.
Not particularly to make certain only one currency was available.

you would prefer 3-4000??

I would prefer that you provide a comment on the origin of the Federal Reserve.

As far as I recall it originated in the Panic of 1907. Wall Street and govt decided it was better to have a big central bank system in place to act as the lender of last resort in a panic rather than risk a depression as private bankers and govt frantically organized each time it was necessary to get up the money needed to
liquefy the system.

To this day most economists from all points on the spectrum want to keep the Fed on grounds it is less dangerous than a gold standard. I think both are dangerous and either can be managed successfully with the economic knowledge we now have.

1. "...most economists from all points on the spectrum ...."
When Albert Einstein died, he met three New Zealanders in the queue outside the Pearly Gates. To pass the time, he asked what were their IQs. The first replied 190. "Wonderful," exclaimed Einstein. "We can discuss the contribution made by Ernest Rutherford to atomic physics and my theory of general relativity".

The second answered 150. "Good," said Einstein. "I look forward to discussing the role of New Zealand's nuclear-free legislation in the quest for world peace".

The third New Zealander mumbled 50. Einstein paused, and then asked, "So what is your forecast for the budget deficit next year?"
—The Economist, June 13th 1992, p. 71).


2."...keep the Fed on grounds it is less dangerous than a gold standard."

"China Working Quietly To Buy Up Gold"
China Working Quietly To Buy Up Gold - Forbes

You might be well advised to peruse what I'm posting tomorrow.

 

[PoliticalChic]

1. The essence of the thread is the shady origins of the Federal Reserve.
Consider why it was done in such a manner.

2. I'm almost certain that you know the reason for the government's desire for one stop-shopping for loan.
The Civil War.
Not particularly to make certain only one currency was available.

you would prefer 3-4000??

I would prefer that you provide a comment on the origin of the Federal Reserve.

As far as I recall it originated in the Panic of 1907. Wall Street and govt decided it was better to have a big central bank system in place to act as the lender of last resort in a panic rather than risk a depression as private bankers and govt frantically organized each time it was necessary to get up the money needed to
liquefy the system.

To this day most economists from all points on the spectrum want to keep the Fed on grounds it is less dangerous than a gold standard. I think both are dangerous and either can be managed successfully with the economic knowledge we now have.

So.....you didn't bother to read the posts......

I see.

what exactly would I learn if I did read them?

Did you ask the same thing when you began college?

 

[EdwardBaiamonte]

you would prefer 3-4000??

I would prefer that you provide a comment on the origin of the Federal Reserve.

As far as I recall it originated in the Panic of 1907. Wall Street and govt decided it was better to have a big central bank system in place to act as the lender of last resort in a panic rather than risk a depression as private bankers and govt frantically organized each time it was necessary to get up the money needed to
liquefy the system.

To this day most economists from all points on the spectrum want to keep the Fed on grounds it is less dangerous than a gold standard. I think both are dangerous and either can be managed successfully with the economic knowledge we now have.

So.....you didn't bother to read the posts......

I see.

what exactly would I learn if I did read them?

Did you ask the same thing when you began college?

but who cares this is not college? You'd cant say what you want me to learn from your cut and pastes?

 

[EdwardBaiamonte]

yes and each one had its own currency. At one point there were 2200 different curriencies in the USA. Imagine how inefficient that would be today? Europe just switched to one currency from 27 and you want to go back to 3-4000 curriencies?

1. The essence of the thread is the shady origins of the Federal Reserve.
Consider why it was done in such a manner.

2. I'm almost certain that you know the reason for the government's desire for one stop-shopping for loan.
The Civil War.
Not particularly to make certain only one currency was available.

you would prefer 3-4000??

I would prefer that you provide a comment on the origin of the Federal Reserve.

As far as I recall it originated in the Panic of 1907. Wall Street and govt decided it was better to have a big central bank system in place to act as the lender of last resort in a panic rather than risk a depression as private bankers and govt frantically organized each time it was necessary to get up the money needed to
liquefy the system.

To this day most economists from all points on the spectrum want to keep the Fed on grounds it is less dangerous than a gold standard. I think both are dangerous and either can be managed successfully with the economic knowledge we now have.

1. "...most economists from all points on the spectrum ...."
When Albert Einstein died, he met three New Zealanders in the queue outside the Pearly Gates. To pass the time, he asked what were their IQs. The first replied 190. "Wonderful," exclaimed Einstein. "We can discuss the contribution made by Ernest Rutherford to atomic physics and my theory of general relativity".

The second answered 150. "Good," said Einstein. "I look forward to discussing the role of New Zealand's nuclear-free legislation in the quest for world peace".

The third New Zealander mumbled 50. Einstein paused, and then asked, "So what is your forecast for the budget deficit next year?"
—The Economist, June 13th 1992, p. 71).

so then if you don't care about whether economists like the fed or not please tell us who we should consult about it and what it is they would advise.

 

[EdwardBaiamonte]

yes and each one had its own currency. At one point there were 2200 different curriencies in the USA. Imagine how inefficient that would be today? Europe just switched to one currency from 27 and you want to go back to 3-4000 curriencies?

1. The essence of the thread is the shady origins of the Federal Reserve.
Consider why it was done in such a manner.

2. I'm almost certain that you know the reason for the government's desire for one stop-shopping for loan.
The Civil War.
Not particularly to make certain only one currency was available.

you would prefer 3-4000??

I would prefer that you provide a comment on the origin of the Federal Reserve.

As far as I recall it originated in the Panic of 1907. Wall Street and govt decided it was better to have a big central bank system in place to act as the lender of last resort in a panic rather than risk a depression as private bankers and govt frantically organized each time it was necessary to get up the money needed to
liquefy the system.

To this day most economists from all points on the spectrum want to keep the Fed on grounds it is less dangerous than a gold standard. I think both are dangerous and either can be managed successfully with the economic knowledge we now have.

1. "...most economists from all points on the spectrum ...."
When Albert Einstein died, he met three New Zealanders in the queue outside the Pearly Gates. To pass the time, he asked what were their IQs. The first replied 190. "Wonderful," exclaimed Einstein. "We can discuss the contribution made by Ernest Rutherford to atomic physics and my theory of general relativity".

The second answered 150. "Good," said Einstein. "I look forward to discussing the role of New Zealand's nuclear-free legislation in the quest for world peace".

The third New Zealander mumbled 50. Einstein paused, and then asked, "So what is your forecast for the budget deficit next year?"
—The Economist, June 13th 1992, p. 71).


2."...keep the Fed on grounds it is less dangerous than a gold standard."

"China Working Quietly To Buy Up Gold"
China Working Quietly To Buy Up Gold - Forbes

You might be well advised to peruse what I'm posting tomorrow.

and why do we care if China is buying up gold??

 

[PoliticalChic]

How many folks actually know what the Federal Reserve is, or does?

And....how many know how and why is was begun?



1. "The outbreak of the Panic of 1907 occurred following a series of scandalous revelations about the investments of some prominent New York financiers, which triggered widespread runs on trust companies throughout New York City..... The events of the Panic of 1907 that had the most severe consequences for financial markets were the widespread runs on trust companies that began in October....triggered by a failed attempt to corner the shares of United Copper Company, a mining concern, which resulted in significant losses for the speculators involved. " http://isites.harvard.edu/fs/docs/icb.topic1029951.files/Carola Paper.pdf




2. "The following passage, taken from "Chapter One: The Early 1910s: Post-Panic Creature and Party Posturing," outlines the influence of leading bankers, including J.P. Morgan, during the creation of the Federal Reserve - and the lengths to which government officials went to cover it up.

a. "Their plan called for the establishment of a National Reserve Association.
In keeping with the strategy to create a central bank without calling it such, the moniker omitted the word "bank."

b. The men agreed upon a central structure, with fifteen quasi-independent branches whose policies would be coordinated through a central national committee. It would have the power to create one standard currency that would support the country and the big banks in times of emergency, ensuring their stability.

c. The Treasury was in charge of creating coins and paper currency; its Bureau of Engraving and Printing had been producing all currency for the U.S. government, including silver and gold certificates, since 1877. A central bank would add another dimension to the U.S. banking system. (On October 28, 1914, the bureau began printing paper Federal Reserve notes, as instructed by Federal Reserve members.)....

d. The fact that it really was a means to provide an easier money supply to the big banks would not be part of its publicized benefits."
How Big Bankers Kept Secret Their Role in the Fed s Creation - Bank Think Article - American Banker





3. " The Federal Reserve is an independent central bank that derived its power in the aftermath of the Panic of 1907... a failed attempt to corner the copper market. Leery of banks, depositors withdrew savings in droves. The run ignited widespread concern in banking circles and Congress. ... prominent financier J.P. Morgan intervened, using his money (and recruiting help from fellow bankers) to keep banks afloat and prevent the New York Stock Exchange from going under. Many considered Morgan a hero for saving the economy, but the perception changed as the public came to believe Wall Street bankers actually caused the panic.

a. ... Congress created the National Monetary Commission to review bank policies and develop a sound national monetary system. Chairing the Commission was Senator Nelson W. Aldrich, who, closely aligned with bankers, had no intention of leaving them out when crafting the Federal Reserve Act—

b. .... the nation’s top financiers arrived at the exclusive Jekyll Island Club on the Georgia coastline for one purpose: to devise a plan to restructure banking in America.
In“From Farm Boy to Financier,”an article in the February 9, 1935, issue of the Post, author Frank A. Vanderlip—a leading banker and former Assistant Secretary of Treasury for President William McKinley—chronicled the top-secret meeting that helped create the Aldrich Plan, which would frame the Federal Reserve Act.

c. .... Aldrich concocted a scheme to bring together an elite group to help draft reforms. To ensure secrecy, Aldrich invited five key leaders from banking and government—Henry Davison, A. Piatt Andrew, Benjamin Strong, Paul Warburg, and Vanderlip—to the isolated Jekyll Island Club—“without a journalist within 50 miles.”
Jekyll Island and the Secret Behind the Fed The Saturday Evening Post

"In one of the most remarkable Abbott and Costello routines in modern times, the economic wizards at the Fed again raised interest rates on Tuesday. Their crackerjack logic for doing so is to steer America on a course toward recession so they have the tools in hand to end the recession that they themselves created. Can anyone tell us who's on first?

Worse, this Fed move doubles down on its blunderous interest rate rise in September. President Donald Trump turned out to be exactly right: The central bank pullback on money would slow growth and crush the stock market in order to combat nonexistent inflation.

The Fed had already reduced the monetary thrust that it provides to the economy eight times since Dec. 15, 2015, by raising its federal funds interest rate from 0.25 percent to 2.25 percent. Each time, the Fed claimed that it needed to guard our economic airliner from inflationary "overheating" -- as if its job is to prevent too many people from working and to make sure that paychecks aren't rising too quickly."
Fire the Fed

 

[McRocket]

How many folks actually know what the Federal Reserve is, or does?

And....how many know how and why is was begun?



1. "The outbreak of the Panic of 1907 occurred following a series of scandalous revelations about the investments of some prominent New York financiers, which triggered widespread runs on trust companies throughout New York City..... The events of the Panic of 1907 that had the most severe consequences for financial markets were the widespread runs on trust companies that began in October....triggered by a failed attempt to corner the shares of United Copper Company, a mining concern, which resulted in significant losses for the speculators involved. " http://isites.harvard.edu/fs/docs/icb.topic1029951.files/Carola Paper.pdf




2. "The following passage, taken from "Chapter One: The Early 1910s: Post-Panic Creature and Party Posturing," outlines the influence of leading bankers, including J.P. Morgan, during the creation of the Federal Reserve - and the lengths to which government officials went to cover it up.

a. "Their plan called for the establishment of a National Reserve Association.
In keeping with the strategy to create a central bank without calling it such, the moniker omitted the word "bank."

b. The men agreed upon a central structure, with fifteen quasi-independent branches whose policies would be coordinated through a central national committee. It would have the power to create one standard currency that would support the country and the big banks in times of emergency, ensuring their stability.

c. The Treasury was in charge of creating coins and paper currency; its Bureau of Engraving and Printing had been producing all currency for the U.S. government, including silver and gold certificates, since 1877. A central bank would add another dimension to the U.S. banking system. (On October 28, 1914, the bureau began printing paper Federal Reserve notes, as instructed by Federal Reserve members.)....

d. The fact that it really was a means to provide an easier money supply to the big banks would not be part of its publicized benefits."
How Big Bankers Kept Secret Their Role in the Fed s Creation - Bank Think Article - American Banker





3. " The Federal Reserve is an independent central bank that derived its power in the aftermath of the Panic of 1907... a failed attempt to corner the copper market. Leery of banks, depositors withdrew savings in droves. The run ignited widespread concern in banking circles and Congress. ... prominent financier J.P. Morgan intervened, using his money (and recruiting help from fellow bankers) to keep banks afloat and prevent the New York Stock Exchange from going under. Many considered Morgan a hero for saving the economy, but the perception changed as the public came to believe Wall Street bankers actually caused the panic.

a. ... Congress created the National Monetary Commission to review bank policies and develop a sound national monetary system. Chairing the Commission was Senator Nelson W. Aldrich, who, closely aligned with bankers, had no intention of leaving them out when crafting the Federal Reserve Act—

b. .... the nation’s top financiers arrived at the exclusive Jekyll Island Club on the Georgia coastline for one purpose: to devise a plan to restructure banking in America.
In“From Farm Boy to Financier,”an article in the February 9, 1935, issue of the Post, author Frank A. Vanderlip—a leading banker and former Assistant Secretary of Treasury for President William McKinley—chronicled the top-secret meeting that helped create the Aldrich Plan, which would frame the Federal Reserve Act.

c. .... Aldrich concocted a scheme to bring together an elite group to help draft reforms. To ensure secrecy, Aldrich invited five key leaders from banking and government—Henry Davison, A. Piatt Andrew, Benjamin Strong, Paul Warburg, and Vanderlip—to the isolated Jekyll Island Club—“without a journalist within 50 miles.”
Jekyll Island and the Secret Behind the Fed The Saturday Evening Post

Hey...we agree about something - though I suspect your dislike of the Fed coincides with Trump's recent distresses over it's actions.

I have despised the Fed for about a decade and was fully supportive of Ron Paul's Audit The Fed legislation.

H.R.1207 - 111th Congress (2009-2010): Federal Reserve Transparency Act of 2009
Federal Reserve Transparency Act - Wikipedia

 

[PoliticalChic]

How many folks actually know what the Federal Reserve is, or does?

And....how many know how and why is was begun?



1. "The outbreak of the Panic of 1907 occurred following a series of scandalous revelations about the investments of some prominent New York financiers, which triggered widespread runs on trust companies throughout New York City..... The events of the Panic of 1907 that had the most severe consequences for financial markets were the widespread runs on trust companies that began in October....triggered by a failed attempt to corner the shares of United Copper Company, a mining concern, which resulted in significant losses for the speculators involved. " http://isites.harvard.edu/fs/docs/icb.topic1029951.files/Carola Paper.pdf




2. "The following passage, taken from "Chapter One: The Early 1910s: Post-Panic Creature and Party Posturing," outlines the influence of leading bankers, including J.P. Morgan, during the creation of the Federal Reserve - and the lengths to which government officials went to cover it up.

a. "Their plan called for the establishment of a National Reserve Association.
In keeping with the strategy to create a central bank without calling it such, the moniker omitted the word "bank."

b. The men agreed upon a central structure, with fifteen quasi-independent branches whose policies would be coordinated through a central national committee. It would have the power to create one standard currency that would support the country and the big banks in times of emergency, ensuring their stability.

c. The Treasury was in charge of creating coins and paper currency; its Bureau of Engraving and Printing had been producing all currency for the U.S. government, including silver and gold certificates, since 1877. A central bank would add another dimension to the U.S. banking system. (On October 28, 1914, the bureau began printing paper Federal Reserve notes, as instructed by Federal Reserve members.)....

d. The fact that it really was a means to provide an easier money supply to the big banks would not be part of its publicized benefits."
How Big Bankers Kept Secret Their Role in the Fed s Creation - Bank Think Article - American Banker





3. " The Federal Reserve is an independent central bank that derived its power in the aftermath of the Panic of 1907... a failed attempt to corner the copper market. Leery of banks, depositors withdrew savings in droves. The run ignited widespread concern in banking circles and Congress. ... prominent financier J.P. Morgan intervened, using his money (and recruiting help from fellow bankers) to keep banks afloat and prevent the New York Stock Exchange from going under. Many considered Morgan a hero for saving the economy, but the perception changed as the public came to believe Wall Street bankers actually caused the panic.

a. ... Congress created the National Monetary Commission to review bank policies and develop a sound national monetary system. Chairing the Commission was Senator Nelson W. Aldrich, who, closely aligned with bankers, had no intention of leaving them out when crafting the Federal Reserve Act—

b. .... the nation’s top financiers arrived at the exclusive Jekyll Island Club on the Georgia coastline for one purpose: to devise a plan to restructure banking in America.
In“From Farm Boy to Financier,”an article in the February 9, 1935, issue of the Post, author Frank A. Vanderlip—a leading banker and former Assistant Secretary of Treasury for President William McKinley—chronicled the top-secret meeting that helped create the Aldrich Plan, which would frame the Federal Reserve Act.

c. .... Aldrich concocted a scheme to bring together an elite group to help draft reforms. To ensure secrecy, Aldrich invited five key leaders from banking and government—Henry Davison, A. Piatt Andrew, Benjamin Strong, Paul Warburg, and Vanderlip—to the isolated Jekyll Island Club—“without a journalist within 50 miles.”
Jekyll Island and the Secret Behind the Fed The Saturday Evening Post

Hey...we agree about something - though I suspect your dislike of the Fed coincides with Trump's recent distresses over it's actions.

I have despised the Fed for about a decade and was fully supportive of Ron Paul's Audit The Fed legislation.

H.R.1207 - 111th Congress (2009-2010): Federal Reserve Transparency Act of 2009
Federal Reserve Transparency Act - Wikipedia

"Hey...we agree about something -"

OMG!!!


Clearly, I'll have to re-think my position....

 

[EdwardBaiamonte]

Their crackerjack logic for doing so is to steer America on a course toward recession

no!! their reason is to prevent inflation and keep economy from over-heating. Do you understand?

 

[EdwardBaiamonte]

President Donald Trump turned out to be exactly right: The central bank pullback on money would slow growth and crush the stock market in order to combat nonexistent inflation.

inflation is not non-existent it is 2.3% and threatens to go much higher given a bubbled up stock market, too low unemployment, and a decade of 0% interest. Do you understand?

 

[Natural Citizen]

no!! their reason is to prevent inflation and keep economy from over-heating.

Except they're the reason for the inflation.

 

[EdwardBaiamonte]

The Fed had already reduced the monetary thrust that it provides to the economy eight times since Dec. 15, 2015, by raising its federal funds interest rate from 0.25 percent to 2.25 percent.

sure but 2.25% interest is too low by historical standards. It destroys the incentive to save and invest, and distorts the economy in many other ways which ultimately harms the economy. Do you understand?

 

[Natural Citizen]

so what would replace the Fed?

The Free Market.

 

[EdwardBaiamonte]

Each time, the Fed claimed that it needed to guard our economic airliner from inflationary "overheating" -- as if its job is to prevent too many people from working and to make sure that paychecks aren't rising too quickly."
Fire the Fed

its job is to prevent inflation. A monetary history of the USA would suggest that rates should rise now to prevent a massive inflation later which is exactly why they are raising rates. Do you understand?

 

[EdwardBaiamonte]

so what would replace the Fed?

The Free Market.

a free market with 1000's of bank printing their own money would be a disaster and depression.

 

[EdwardBaiamonte]

no!! their reason is to prevent inflation and keep economy from over-heating.

Except they're the reason for the inflation.

they are the reason for the 2.2% inflation we have but that is not a bad thing.

 

[Natural Citizen]

How many folks actually know what the Federal Reserve is, or does?

Why yes. Yes I do.

Here's how it works. The politicians aren't running on the idea of spending less. They instead say ''hey, vote for me because I'll make sure that the government provides you with more free stuff than my opponent say's he will.' Of course, there's no such thing as a free lunch. Nope. So to provide all of that supposed free stuff that they ran on, the politicians vote for the country to spend more than its income. This is called deficit spending. To pay for that deficit spending the Treasury borrows currency by issuing a bond. A bond is an IOU. It's a piece of paper with numbers printed on it that says loan me a trillion dollars today and I promise that over a ten year period I will pay you back that trillion dollars. Plus interest. But...Treasury bonds happen to be our national debt. The Treasury then holds a bond auction. And the world's largest banks show up and compete to buy part of our national debt and make a profit on it by earning interest. As we move through this process, the big banks are there taking a cut every step of the way. This is not by chance, which I'll explain.

Through a shell game called open market operations, the banks get to sell some of those bonds to the Federal Reserve, at a profit. How does the Federal Reserve pay the bonds? I'll tell you how. The Federal Reserve opens its 'checkbook' and writes bad, bogus, counterfeit checks that should bounce because they're drawn on an account that always has nothing in it. They're creating 'currency''. Which is different than ''money''. I'll get to that later. Of course, when you or I write a check, the money has to be in there. Right? To steal a quote from the Boston Federal Reserve's ''Putting it Simply", they say that ''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.” The Federal Reserve then hands those checks to the banks and at this point ''currency'' springs into existence. The banks then take that ''currency'' and buy more bonds at the next Treasury auction. You see?

Now. What is a check? A check is also an IOU. When you write a check, you're making a note that says here's my IOU for cash, all you have to do is go to the bank and pick it up. This particular process is very important to understand, because we're gonna come back to this later to explain how this affects you and I.

So. let's recap that part. The politicians say ''hey, vote for me because I'll make sure that the government provides you with more free stuff than my opponent say's he will.the politicians vote for the country to spend more than its income. Again, this is called deficit spending.'The Treasury issues IOU bonds. The banks then buys those IOU bonds with ''currency.'' The Federal Reserve then writes IOU checks and hands them to the banks in exchange for the Treasury's IOU Bonds. Thus ''currency'' is created. What's really happening here is that the Federal Reserve and the Treasury are just swapping IOUs using the banks as middle men and, presto, ''currency'' magically comes into existence. This process repeats over and over and over and over and over again, enriching the banks and indebting the public by raising the national debt. The end result is that there is a build-up of bond at the Federal Reserve and 'currency' at the Treasury. This process is where all paper ''currency'' comes from. The Federal Reserve and the government incorrectly call it ''base money'' because they don't know the difference between ''money'' and ''currency.'' It's correctly called ''base currency'' because it is not ''money.'' It is ''currency.''

''Money'' has to be a store of value and maintain its purchasing power over long periods of time.' But the base currency that is piling up as a consequence of the process which I've explained is nothing more than a receipt for a claim check on an IOU bond. So it's really nothing but a supply of numbers. So, then the Treasury now deposits the newly created ''currency'' into the various branches of the government and the politicians who were claiming they were going to give you more free stuff than his opponent would says, ''hey thanks for that.'' Then the government does some deficit spending on public works, social programs, and, of course, wars, to include paying weapons manufacturers and contractors, along with the soldiers' pays. The government employees, contractors, and soldiers then deposit their pay in the banks.

Now. When they deposit this ''currency'' into the bank, they're not actually depositing it into an account to be held safely in trust to them. Instead, you're actually loaning the bank your ''currency'' and they can do pretty much whatever they please with it to include gambling in the stock market, and loaning it out at a profit, of course. This is where the process of ''currency'' really gets cranking. This is where fractional reserve lending comes into play. Now, what does that mean? It means precisely what it says. It means that the banks reserve only a fraction of your deposit and they loan the rest out. Though rates vary, I'll use a 10% ratio here to explain the process. If you deposit 100 'dollars' into your account, the bank legally takes 90 'dollars' of it out and loans it out without telling you. The bank must hold 10 'dollars' of your deposit in reserve just in case you want some of it. These reserves are called 'vault cash.' Now, why does your bank account still say that you have 100 'dollars' if they stole 90 of it? It's because the bank left IOUs that it created called 'bank credit' in its place. That's why. To reference the Federal Reserve Bank of New York, they say that "Commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars in accounts on their books in exchange for a borrower's IOU." End quote. These are nothing but numbers that the banks type into their computers. And even though these 'bank credit' IOU numbers are very different from 'base currency' numbers, because they only exist in computers, they are still 'currency.' So now there is 190 dollars in existence. Created out of the 100 dollars deposited. You see?

Of course, the reason people take out loans from the bank is to buy something. So the borrower takes the 90 'dollars' that the bank loaned to him from your account and he pays the seller of the item. Then the seller deposits that money into his account and his bank loans out 90% of that 'currency' and leaves 'bank credits' in its place. So now theres' 271 'dollars' in existence from the original 90. This process repeats and repeats and repeats until it's under a 10% reserve ratio and all backed by 100 'dollars' of 'vault cash." Of course, some rates of deposits are only 3%. Some are 0%. The result is the expansion of the 'currency' supply by the banks. Of course, 'currency' is not 'money.'

So. let's recap that part. When 'currency' is deposited into the banks, the banks get to lend it out and then it gets redeposited and lent out again, over and over and over again creating 'bank credit' all along the way. This is where the vast supply of our 'currency' comes from. In fact around 96% of all 'currency' that is created is created by the banking system.

Now. At first, massive amounts of 'currency' spewing into society might sound like a fun idea. At least until you remember that the prices of every day goods and services act as a sponge on an expanding 'currency' supply. The more 'currency' we have, the more prices will rise. This is where 'inflation' comes from. The true definition of inflation is an expansion of the currency supply. Rising prices are merely the symptom. Our entire 'currency' supply is nothing but a few dollars whipped up in this scam where the Treasury and the Federal Reserve swap glorified IOUs and a bunch of numbers that the banks just type into their computers. That's it. That's our entire currency supply. It's a set of numbers. Some of them printed and most oft hem typed. There is nothing else.

But...we work for some of that 'currency' supply. True wealth is your time. Which we trade away hour by hour, day by day, week by week, year by year, for numbers that somebody printed on pieces of paper and punched into bank computers. We are what gives the 'currency' its value. Here comes the bad part. We work hard so that we can save some of that 'currency' so that we can pay the 'tax' collector in the United States known as the IRS. They then turn it over to the Treasury so that the Treasury can pay the principal plus interest on that bond that the Federal Reserve bought with a check which is drawn on an account that has nothing in it.

Now. Let's recap that part, too, because this is where the system begins to rob the poor, middle class and seniors on a massive scale. Much of our taxes are not used on schools, roads, and public services. They're used to pay interest on bonds that the federal reserve bought with a check which was drawn on an account that has nothing in it. Here, the Federal Reserve is committing fraud. Recall that before the establishment of the Federal Reserve, there was no need for personal income tax. The Federal Reserve was created in 1913 and in that very same year, the constitution was amended to allow income tax via the 16th amendment by an unconstitutionl act of Congress. Do you really think that this was just a coincidence? Ask yourself how much income tax you've paid over your lifetime and realize that much of it has been siphoned away by those who own the system. We'll get to them after we learn the mumbo jumbo of the 'debt ceiling' delusion.

The debt ceiling delusion is based on a paradox. Meaning there was interest due on that bond, and there was interest due on every one of those loans that the banks made. That means that there is interest due on every dollar in existence. Let's ask a question. If you borrow the very first dollar in existence and you promise to pay it back plus another dollar's worth of interest, where do you get the second dollar to pay the interest? The answer is that you have to borrow that dollar into existence and promise to pay it back with interest as well. So, now there are 2 dollars in existence, but you now owe 4. And so on, and so on, and so on, and so on. It keeps happening over and over and over again. The result is that there is never enough 'currency' to pay the debt. There is always more debt in the system than there is 'currency' in existence to pay the debt. Therefore the entire system is impossible. It is finite. It will come to an end one day. Right now the dollar is 98% down from 1913. 98%. What would happen if the government stopped borrowing to do deficit spending? Are the payments on those Treasury bonds going to stop? What would happen if the public stopped borrowing and going deeper into debt? Are your house and car payments going to stop? No. They're not. There is a payment due every month on the principal plus the interest on every dollar in existence and those payments do not stop. If we stop borrowing, then no new 'currency' is created to replace the 'currency' that we used to make those payments. Whether you're making a payment on a loan or paying a tax to make a payment on a Treasury bond, the portion of the payment that goes to pay off the principal extinguishes that portion of the debt. BUT...the debt also extinguishes the 'currency.' When currency and debt meet, they destroy each other. If we just pay off the principal only, all of the loans and Treasury bonds that exist, the entire 'currency' supply vanishes. So, if we don't go deeper into debt every year, the whole thing goes into a deflationary collapse under the weight of those payments.

People always talk about balancing the budget, bringing down the debt, and living within our means. But they don't understand that this is deflationary. It is impossible to do under our current monetary system without collapsing the entire economy. This is why any talk of a debt ceiling is not only ridiculous, it's delusional. The system is designed to require ever-increasing levels of debt just to continue. And that's why politicians will always kick the can down the road and raise the so-called debt ceiling over and over again until the whole system finally collapses under its own weight. In other words, they don't want it to collapse under their watch. The founding fathers of the United States knew the dangers of central banking and they fought to free themselves from this very thing. The Revolutionary War started out as a tax revolt. But now we must pay tax just to have a monetary system. Having just suffered through the hyper-inflation of the continental dollar, which was printed into oblivion to fund the Revolutionary War, they understood the dangers of a debt based monetary system. So to protect future generations from institutional theft and out of control government, they wrote in the constitution that only gold and silver can be 'money' for the simple fact that you can't print it. Personally, I don't care what it is, but we need a competing currency if we're to survive. Our current system is not only unconstitutional, but it robs us of the liberty and prosperity that our forefathers fought and died for. And we're all feeling the effects of ignoring the constitution right now. By forcing more currency into circulation our purchasing power is diluted. Inflation is a slow, insidious stealth tax that is simply the result of this debt based monetary system.

This system empowers those who create the currency and receive it first because they get to spend it into circulation before it has an effect on the economy. They're stealing purchasing power from the poor, middle class, and seniors, and transferring it to the banks and the government every hour of every day of every week of every year. And the people at the top know it. To quote the Federal Reserve itself, ''The decrease in purchasing power incurred by holders of money due to inflation imparts gains to the issuers of money." This is a fraud. It is a pyramid scheme. It is a ponzi scheme. It is a scam. Our entire monetary policy is nothing more than a form of legalized theft.

Of course, the Federal Reserve is not Federal. It has stock holders. There is no federal agency that has stock holders. Now, what is a stock holder? A share of stock represents a share of ownership in a corporation. So, the stock holders are the owners of the corporation. Therefore, the Federal Reserve is a private corporation with owners. For reference, you may check their site. It specifically states that the stock holders receive an annual dividend of not more than 6%. Now, we know that the stock in the Federal Reserve was originally issued to the largest banks in the United States. With mergers and acquisitions through the years, you can't actually trace who owns the stock in the Federal Reserve. That's a very closely guarded secret. The best guess would be that they are those primary dealers. The banks that get to make a profit by selling part of our national debt, those bonds, to the Federal Reserve who buys them with a check that is drawn from an account with nothing in it. Then we pay tax to pay the principal and the interest on those bonds so that the Federal Reserve can pay the banks not more than a 6% dividend. This is purposely complex and very few understand it. And that's okay. It's why people who do understand it take the time to explain it. Our system is Keynesian. And to quote Keynes, himself, ''By this means government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft." Presented correctly, however, anyone can understand the system regardless of the complexity of it.

This system funnels wealth from the working population to the government and the banking sector. It is the cause of the artificial booms and busts of modern economies and it causes great disparity of wealth between the rich and the poor, middle class, and seniors. The working class. We're debt slaves. Recall that bond is the root word of bondage. Whenever a government issues a bond, it is a promise to make us pay tax in the future.

I'll leave you with a great quote from a letter from George Washington, written to James Madison on the topic. He said, and correctly so, ''No generation has the right to contract debts greater than can be paid off during the course of its own existence." By stealing from prosperity from tomorrow so that we can spend it today, we enslave ourselves and future generations.

This system relies in the public being ignorant to its function.

 

[EdwardBaiamonte]

This system relies in the public being ignorant to its function.

its function is to prevent inflation and deflation which is a good thing to prevent.