Sunday, November 06, 2005

The Federal Reserve

Many others have covered this subject, but with Alan Greenspan about to retire as chairman of the Federal Reserve it's worth covering it again.

If you read this post, your first thought will be that I have spun an incredible, incoherent tale, based upon fantasy, to test your gullibility. When you realize that I am being completely serious and mean every word, you will think me insane. If you check out what I claim, you'll realize that the legislators who created the Federal Reserve were crooks of the highest order and that the Federal Reserve is the biggest scam you've ever heard of.

The full name of the Federal Reserve is "The Federal Reserve Bank," but it's more usually referred to as "The Federal Reserve" or just "The Fed." Two words in the full names are out-and-out lies.

The Federal Reserve Bank is not a branch of Federal Government. It is not under the control of Federal Government. A President can replace only a handful of the governors of the twelve constuent banks that make up the Fed during his two terms, so cannot hope to exert influence upon the Fed that way.

The Federal Reserve Bank has no reserves.

However, the Federal Reserve Bank is a bank. A consortium of twelve privately-owned banks.


Aside: A brief history of money.

Trade was originally done by barter: exchanging an object you had for an object you wanted more. But there were problems with that. You might not be able to find somebody who had what you wanted and who wanted what you had. Even if you did, the values of the two objects might be vastly different ("I'd like that knife. Do you have change for a pig?") So money was invented. Originally, money consisted of coins of precious metals that had an intrinsic value. Gold, silver and copper were the usual metals. All had intrinsic value in their own right (gold and silver for jewellery, copper for pipes, tools, alloys).

Storing your coins at home was a problem: they could be stolen. So banks were invented. You could store your coins in a secure bank and they'd record how much of your money they had and let you withdraw it on request (keeping track of how much you'd withdrawn, obviously). But you had to carry the coins you needed on a day-to-day basis around with you, and they were heavy. So banks came up with the idea of "banknotes." Technically, they are one of the many items collectively known as "promisory notes." IOUs are also promisory notes.

The difference between a banknote and an IOU was the fact that the bank honoured the banknote. A bank would only give you a banknote if you gave the bank one of your intrinsically-valuable coins. All banknotes promised that if you surrendered the note to the bank it would give you an equivalent amount in coin. The British one-pound banknote (no longer issued, ironically replaced by a coin, though one of an alloy with little intrinsic value) used to say "I promise to pay the bearer on demand the sum of one pound" and bore the signature of the governor of the Bank of England.

British banknotes still carry that promise (though for different numbers of pounds, depending upon the denomination of the note). The banknotes of most other countries carry a similar promise. Originally, a one-pound note could be redeemed for one (British) pound of sterling silver (sterling meant a specific purity). This is why the full name of British currency is "the pound sterling." But there's no way you can exchange a five-pound note for five pounds of sterling silver (which, because of inflation, would cost a very great deal more). All you can do is exchange banknotes for other banknotes or for coins made of an alloy with little intrinsic value (if you melted them down and sold the alloy you'd end up out of pocket).

Back in the days when you could still theoretically exchange your note at the bank for gold, banks had a reserve of gold equal in value to the number of notes they issued. They were not allowed to issue more notes than they had gold to redeem, so that if everyone suddenly decided they wanted their gold instead of notes they would all be satisfied. The promise on the note was valid.

Years pass and banks persuade their respective governments to allow "fractional reserves." To issue more notes than they could redeem with their reserves of precious metal. Their reasoning was that not everyone would want their gold at the same time. In fact, hardly anyone asked for their gold. So the governments allowed it. Issuing more notes ("increasing the money supply") is one of the major causes of inflation. But the banks and governments were happy. Until the great crash in the US, when suddenly everyone wanted their gold (a "bankrush") and the banks had no possible way of redeeming more than a fraction of their notes.


Back to the story. The Fed has no reserves because some time after "fractional reserves" came into play, the US stopped backing currency with even fractional amounts of gold. It went off the "gold standard." US currency is now what is technically "fiat currency". Worthless bits of paper that can only be exchanged for other worthless bits of paper or for worthless coins. The economy works only as long as we all believe in the fairy tale and collectively agree that we will work an hour for a certain number of bits of worthless paper and that we can buy things like food for a different number of bits of worthless paper. When everyone stops believing the fairy tale you get hyperinflation (as in pre-WWII Germany) where you need a wheelbarrow to transport enough 1-million-deutschmark notes to pay for a loaf of bread.

But that's not the crazy part of the story. The governor of the Fed is the person who decides how much money will be in circulation and what the interest rate will be. The President can certainly ask the Fed to put more money into circulation, but the governor has to approve that request. The US Government is not in control of the US dollar, the Fed is, even though it is the US Treasury (which is a branch of Federal Government) which runs the printing presses that churn out dollar bills. The US Treasury is not permitted to print notes except as necessary to replace worn notes that are withdrawn from circulation and destroyed (by the US Treasury in a big furnace) unless they receive explicit authorization from the Fed. In fact, US dollar bills do not say that the US Government promises to redeem them but that the Federal Reserve Bank promises to do so. The Treasury may print the notes, but that's only because the Fed sub-contracts the work. Those notes are backed and honoured by the Fed.

And even that's not the crazy part of the story. Let's suppose Dick Cheney decides he would like an additional $1 billion in circulation. So he sends his pet monkey, Dubya, to go cap-in-hand to the Fed to make Cheney's case. After a long interview with the governor of the Fed (during which Dubya has to make many phone calls to his boss to ask for help), the governor of the Fed is persuaded that he will allow Dubya to put another $1 billion into circulation. Does the governor of the Fed go down to his vaults and return with a big pile of dollar bills? Nope, because the Fed doesn't have any reserves. What he does is authorize the US Treasury to print up those additional bills and put them into circulation.

That wasn't the crazy part of the story either, although you might have thought so. Here's the crazy part. The part you won't be able to believe because it seems so insane. You won't be able to believe the system really works that way. But it does. As Dubya turns to leave, the governor of the Fed reminds him that the Fed is a private bank and that it has just let Dubya have billion dollars. A billion dollars that the Fed, and the Fed alone, can redeem. In fact, that billion is not a gift from the Fed to the US Government but a loan.

Now you think I'm mad, but it has to be a loan. You can't go into a bank and expect them to simply give you money because that bank has to redeem that money somehow. You have to ask for a loan, and frequently you have to back the value of that loan with collateral (usually of greater value) that the bank can take away from you if you do not repay the loan. And you have to pay interest upon that loan.

Just think that over. Every US banknote in circulation has been borrowed from the Fed by the US Government. Every US banknote in circulation must eventually be paid back to the Fed (which would mean no money in circulation). As long as US banknotes are in circulation, the Fed is charging interest upon them. Suppose that, one day, the US Government said that enough was enough and decided to pay all the notes back to the Fed and issue its own notes. The Fed would then say "pay back the interest too." Which is absolutely impossible, because the US now has no banknotes with which to do so. So the US Government says to the Fed that they're printing their own notes and will pay back the interest with those. To which the Fed responds that it won't accept those notes, only its own notes.

At this point you've concluded either that the Fed is the biggest scam in the history of the US or that I am insane. At this point you should think about the "national debt." You've probably heard of it. You may even know that it only ever gets bigger. But you probably don't know why it exists in the first place. The national debt is all the money the US Government owes to the Fed: the amount of currency in circulation plus all the accumulated interest.

The Fed wasn't the first bank to operate this way. Other countries have long since had what are known as "central banks" running the same scam. One of the first was the Bank of England. They sold this crazy scheme to an inbred, somewhat insane, monarch (similar to Dubya) on the basis that although there would be an ever-increasing national debt, inflation would decrease the value of the notes and everything would balance. Most of us know that banks are like people who will lend you an umbrella, but only if it's not raining. However, this inbred monarch fell for the scheme, and so did others.

Perhaps you've guessed this already, but the same family started all these central banks, from the Bank of England to the US Federal Reserve Bank. Usually, there is a long, twisted, trail of ownership. The twelve constituent banks of the Fed are owned by other banks, which are owned by a small number of families, acting as cut-outs for this one family. At the top of the pyramid is the Rothschilds. At the second level of the pyramid are twelve families such as the Morgans, Lazards, and Rockefellers. See this for the very twisted trail of ownership, which finally culminates in the Rothschilds.

For those who want more detail, see this (a book-length read, and perhaps too much to take in at once.

Actually, the Fed was not the first attempt by the Rothschilds to create a central bank in the US. Although the predecessor central banks failed or had their charters revoked, they kept on trying. And here is the curious thing. Any president who tried to shut down those banks, or have the US issue its own currency, or return to the gold standard, was the subject of an assassination attempt (almost all of them successful):


  • 1832, Andrew Jackson vetoes renewing the charter of the "Bank of the United States." There were at least two attempts upon his life after that.

  • Lincoln needed finance for the Civil War but the central bank wanted to charge ridiculous rates of interest. Lincoln decided the US Government would issue its own curency (known as the "greenback" because the back of the note was printed in green). He was shot at a play and the greenback died shortly after.

  • James Garfield ran on a return to the gold standard and a promise to fight the international bankers. Assassinated.

  • William McKinley wanted a return to the gold standard and to get rid of the central banks. Assassinated.

  • June 14th, 1963. John F. Kennedy signs executive order 11110 authorizing the US Treasury to issue US Government notes up to the value of the bullion reserves held by the Treasury, bypassing the Fed completely. Six months later JFK left his brains on the back seat of a car in Dallas. Lyndon Johnson (his successor) rescinded executive order 11110.

  • One person since, although not a president, tried to investigate the Federal Reserve Scam. Robert F. Kennedy, too, was assassinated.


The message is clear. You don't fuck with the Rothschilds and their central bank scam.

If you research my claims (as you should), you're likely to unearth these nuggets:


  • The Rotshchilds (either directly or through their subordinate families) have fomented every major war in the past few hundred years. They, and their subordinate families, have benefited by speculating on the outcome of the war, and by selling arms and materiel to both sides.

  • The Rockefellers and some of their associated second-level families bankrolled Karl Marx and the Russian Revolution.

  • The Venezuelan subsidiary of Rockefeller-owned Standard Oil (as it was before it was split into several smaller companies like Exxon, Texaco and Mobil, although all really still owned by the Rockefellers) supplied oil to Hitler during WW II.

  • Working for the second-level Brown and Harriman families, the third-level Prescott Bush acted as banker and financier for Hitler during WW II. When the US gov't found out, they confiscated his German assets under the Trading with the Enemy Act. However, the US gov't didn't find all the German assets, so Bush continued to run those he had left. After the war, all of those assets were returned and form the basis of the Bush family fortune.

  • It was Lord Rotschild who engineered the Balfour Declaration and delivered it to the Zionists. That declaration committed Britain to establishing a Jewish homeland in its Mandate of Palestine.

  • The US has long given Israel far more in aid, per capita, than to any other country. The US sells Israel arms. The US turned a blind eye to Israel developing nuclear weapons.

  • Most of the neocons, who are either key players in the Bush administration or exert major influence upon it, are of jewish descent and strong supporters of Israel. They are Zionists who support the "Likkudniks" in Israel. The Likkudniks want all Palestinians out of Israel, and to conquer surrounding countries until they have established "Greater Israel" and returned to the boundaries of the biblical lands of Israel and Judea. This is, supposedly, a precondition for the Jewish and Christian versions of the end times.

  • The Rothschilds, and their second-level subordinate families, are all of Jewish descent.


Supposedly-democratic Senator Jay D Rockefeller is amongst those calling for an investigation into how the Bush administration abused intelligence over Iraq. Given that Rockefeller-owned oil companies have made record profits as a result of the Iraq war, this is rather surprising. The only conclusion is that the Rothschilds have decided that Bush has departed too far from their plan and has to be replaced before he does more damage.

1 Comments:

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Thursday, January 05, 2006 11:30:00 PM  

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