How can that be? Well, for one thing it is not federal although it is commonly referred to as the “FED.” For another thing there are no reserves. Some would even argue they are not banks in the normal sense of the word, but rather glorified accounting firms.
The basic plan for the FED was drafted at a secret meeting held on November 1910 at the private resort of J.P. Morgan on Jekyll Island off the coast of Georgia. Those who attended represented the great financial institutions of Wall Street and Europe.
The reason for secrecy was simple. Had it been known that rival factions of the banking community had joined together, the public would have been alerted to the possibility that the bankers were plotting agreement in restraint of trade—which of course, is exactly what they were doing. What emerged was an agreement by a cartel to create yet another American Central Bank.
That’s right, this would not be the first, but rather the third and, by far, the most successful attempt to create an American central bank system. The first two, while deceptive and fraudulent pale in comparison to the scope and size of the fraud being perpetuated by our current FED. However, what they all had in common was“fractional banking.”
Fractional banking, or to be more precise, fractional lending is the ability to create money from nothing, lend it to someone else and charge interest to boot. The practice evolved before banks existed. Goldsmiths rented out space in their vaults to individuals and merchants for storage of their gold or silver. The goldsmiths gave these “depositors” a certificate that showed the amount of gold or silver stored. These certificates were then used to conduct business.
In time the goldsmiths noticed the gold in their vault was rarely withdrawn. Sensing a profit opportunity, the goldsmiths issued double receipts for the gold, in effect creating money (certificates) from nothing and then lending those certificates (creating debt) to depositors and charging interest as well. Since the certificates represented more gold than actually existed, the certificates were “fractionally” backed by gold. Eventually some of these vault operations turned into banks and the practice continued.
Keep that fractional banking concept in mind as we examine our first central bank. The first such bank was called the First Bank of the United States (BUS) and was created in 1791 after bitter dissent in the congress and was chartered for 20 years. A scam not unlike the current FED, the BUS used its control of the currency to defraud the public and establish a legal form of usury.
The bank practiced fractional lending at a 10 to1 rate, ten dollars of loan for each dollar on deposit. This misuse and abuse of their charter continued for the entire 20 years of their existence. Public outrage over these abuses was such that the charter was not renewed and the bank ceased to exist in 1811. Contrast that with our money today that doesn’t even have the benefit of a 10—1 ratio to support its value.
The war of 1812 left the country in economic chaos and was seen by the bankers as another opportunity for easy profit. They influenced Congress to charter the second central bank, the Second Bank of the United States (SBUS) in 1816. The SBUS was more expansive than the BUS. They sold franchises and literally doubled the number of banks in a short period of time. The country began to boom and moved westward, which required money.
Things boomed for a while but then the banks decided to shut off the money, citing the need to control inflation. This action on the part of the SBUS caused bankruptcies and foreclosures. The bank then took control of the assets that were used as securities against the loans. The wealth created by the borrowers during the boom was then transferred to the central bank during the bust.
Andrew Jackson won the presidency in 1828 with the promise to end the national debt and eliminate the SBUS. During his second term President Andrew Jackson withdrew all government funds from the SBUS and in January 8, 1835, paid off the national debt. He is the only president in history to have this distinction. The charter of the SBUS expired in 1836.
Without a central bank to manipulate the money supply, the United States experienced unprecedented growth for the next 60 to 70 years. The resulting wealth was too much to endure for the bankers and some politicians, and they had to get back into the game.
On March 13, 1907 a financial panic was triggered by rumors that the Knickerbocker Bank and the Trust Company of America were about to become insolvent. The rumors were started by the House of Morgan. There was a run on the banks. Morgan helped avert the panic that he initiated by importing $100 million worth of gold from Europe to stop the run on the banks. It provided America with the perception and rationalization that what the United States needed was a central banking system.
The senate created the National Monetary Commission to study the problem. Senator Nelson Aldrich (father-in-law to John D. Rockefeller, Jr.) headed the commission. To investigate the matter the commission toured the continent to study the European central banking system. It took nearly two years and $300,000 of tax-payer’s money to wine and dine the men of the European central banking system before the committee was able to complete their study.
Now, let us go back to the secret meeting on Jekyll Island in November of 1910. What emerged was an agreement with five objectives: stop the growing competition from the nation’s newer banks; obtain a franchise to create money out of nothing for the purpose of lending; get control of reserves for all banks so the more reckless ones would not be exposed to currency drains and bank runs; get the taxpayers to pick up the cartel’s inevitable losses; and convince Congress that the purpose was to protect the public. It was realized that the bankers would have to become partners with the politicians and that the structure of the cartel would have to be a central bank.
In addition to formulating its own agenda the cartel was to write the recommendations for the National Monetary report. Present at Jekyll Island were Nelson W. Aldrich, the Republican “whip” in the Senate, Chairman of the National Monetary Commission, business associate of J.P. Morgan and as mentioned earlier, father-in-law to John D. Rockefeller, Jr.: Abraham Piatt Andrew, Assistant Secretary of the U.S. Treasury; Frank A. Vanderlip, president of the National City Bank of New York, the most powerful of the banks at the time, representing William Rockefeller and the International Investment banking house of Kunn, Loeb & Company. Henry P. Davison, senior partner of J.P. Morgan Company: Charles D. Norton, president of J.P. Morgan’s First National Bank of New York. Benjamin Strong, head of J.P. Morgan’s Bankers Trust Company; Paul M. Warburg, a partner in Kuhn, Loeb & Company, a representative of the Rothschild banking dynasty in England and France, and brother to Max Warburg, head of the Warburg banking consortium in Germany and the Netherlands.
The Federal Reserve Act of 1913, after a huge public relations campaign engineered by the Bank of England, was slipped through Congress during the Christmas recess with many members of Congress absent. President Woodrow Wilson pressured by his financial and political backers, signed it on December 23, 1913. President Wilson’s top advisor during his two terms was a man named Colonel Edward M. House, whose biographer called him the “unseen guardian angel” of the Federal Reserve Act, helping to guide it through Congress. Thus a small group of Americans, including some congressmen, had successfully deceived their own countrymen.
A number of those Americans, including Colonel House, John P. Morgan and John D. Rockefeller went on to become founding fathers of an organization known as the Council on Foreign Relations (CFR) that was formally established in 1921. Previously a number of CFR founders were members of an older one-world organization, known as The Round Table.
Remember we earlier said the FED is not federal. It is a private for-profit corporation that is the third, and by far, the most successful attempt to create an American Central banking system. The Federal Reserve System is a network of 12 central banks to which most national banks belong and to which state chartered banks may belong. Individuals and privately owned banks own the stock of the FED. The FED is the only for-profit corporation in America that is exempt from both federal and state taxes. Today, the FED banks are not only owned and controlled by CFR members but they are liberally staffed with them as well.
So, who are actually the major owners of the 12 central banks? They are: Rothschild Bank of London: Warburg Bank of Hamburg; Rothschild Bank of Berlin; Lehman Brothers of New York; Lazard Brothers of Paris: Kunn Loeb Bank of New York; Israel Moses Seif Banks of Italy; Goldman Sachs of New York; Warburg Bank of Amsterdam and Chase Manhattan Bank of New York.
As far as the word “reserve” is concerned, there are no reserves of intrinsic value backing up our paper money. And the word “system” was chosen rather than “bank” to disguise the fact that Congress was creating yet another central bank. The name, Federal Reserve System, was carefully and deliberately selected to mislead the American public.
Not only was the Federal Reserve Act, which gave the FED the ability to create money, passed in 1913, but so was the sixteenth amendment which gave the congress power to collect income tax. After all, if the FED is used to create debt who is going to repay the debt? The income tax was created to complete the illusion that real money had been lent and therefore real money had to be paid back.
Wait a minute - what’s all this talk about “creating debt” and the “illusion” that real money has been lent? Aren’t we dealing with real money? The answer is, not really. And that’s were the scam, and thus the problem for all of us except the privileged few, comes in to play.
Imagine if you will that you had the power to print money, but rather than spending it yourself you sold it for virtually nothing, to someone else. Then when you needed money you borrowed it from that same person but at the full face value of that money.
For example, the government wants to borrow $1,000,000 from the FED. They call the Treasury and say, print 10,000 Federal Reserve Notes (FRN) in units of one hundred dollars. The treasury then charges the FED 2.3 cents for each note printed or $230 for the $1, 000,000 of FRN. The FED then lends the $1,000,000 back to the government at face value PLUS interest. To add insult to injury the government has to create a bond for the $!,000,000, as security for the loan. This is called making money out of nothing since the Federal Reserve Notes are not backed by anything of “intrinsic value” (i.e. gold or silver).
It is more complex than this but in essence that’s how the system works. In many instances no money is actually printed as the entire process is no more than ledger entries in somebody’s bookkeeping system. That is why some refer to the Federal Reserve banks as nothing more than a glorified accounting company rather than an actual bank in the normal sense of the word.
Crazy and ridiculous, you say? Who would ever make a deal like that? Crazy it is, but that is the deal, in effect, that the United States government made with the Federal Reserve back in 1913. A deal for which the American people (mostly unknowingly) have been suffering the grave consequences. A deal that if not voided soon will mark the end of our country and our way of life as we know it.
All our paper money has the words Federal Reserve Note written across the top of the bill. And that is exactly what it is, a note of obligation. The obligation is that of the United States Government, and the party to whom the obligation is owed, is the private corporation referred to as the FED. Almost everyone thinks that the money they pay in taxes goes to the U.S. Treasury to pay the expenses of the government. Do you want to know where our tax dollars really go? Look on the back of any check made payable to the IRS and you will see it has been endorsed as, ”Pay any F.R.B. Branch or Gen. Depository for credit U.S. Treas. This is in payment of U.S. Oblig.” The FED takes in about one trillion dollars per year, tax free and those banking families and the organizations previously listed, get a large portion of that money.
Most people have very little concept of how much money a trillion dollars really is. One way to think about it however is, if you had gone into business on the day Jesus was born, and your business lost a million dollars a day, day in and day out, 365 days a year, it would take you until October 2737 to lose one trillion dollars. That’s a lot of money folks but the outstanding public portion of the national debt according to the U.S. National Debt Clock is now $8,820,537, 025,126 as of May 31, 2007. That’s over 8 trillion dollars owed to the FED by every 302, 0333, 238 U.S. citizens, or put another way, $29, 203 per citizen. The total outstanding U.S debt, public and private, is now estimated to be over 24 trillion dollars.
And to think our congress is allowing, on average, one billion dollars of new debt to be created every 80 days, debt that is continuing to be piled on top of existing debt. While not as large a figure as a trillion, a billion minutes ago the Roman Empire was flourishing (1900 years). The fact is no one plans to pay off that debt—certainly not the FED, since its owners keep accumulating more and more wealth from the accumulation of interest on the continually growing national debt. Every time Congress approves more money for a war, foreign aid or some special interest group, the debt grows larger and the owners of the FED, essentially members of the CFR, continue to make more money off the ever increasing amount of interest. An understandable question is, why do our representatives and senators go along with such a plan? Why would they allow, an organization that is owned by a number of foreign families and investors, to control and manipulate the U.S. money supply?
The answer lies in how the money is created. Since the Federal Reserve Note has no intrinsic value itself, it is really the payment of the interest by the U.S, government which creates the money (payment of more FRN to the FED) that is then circulated through our economy. Without the interest there is no profit. Remember, banks make money off the interest created by making loans, not when loans are paid off. The FED bankers love war and expansion because they require our government to borrow large sums of money.
Since no one is concerned about paying off these loans which constitute our national debt there is little or no concern about congressmen creating more new loans (bills) for their favorite pork barrel project or special interest groups. It is this process that allows our congressman to enjoy unlimited revenue without having to visibly raise taxes. After all, no one plans to pay the money back. All the talk about whether a flat tax or a national sales tax, etc would be the best way to balance the budget and lower our national debt is just so much ‘smoke” since there is no way we can ever hope to pay off a debt of this magnitude. Without this sweetheart deal for our congressmen, the monetary/political partnership would probably be dissolved and congress would close down the FED.
Considering what some of our predecessors have said about the Federal Reserve System, it is unbelievable that this arrangement has not only came to pass but that it has prospered for so long.
In 1964 the House Committee on Banking and Commerce put out a study entitled Money Facts which contains a good description of what the FED really is. “The Federal Reserve is a total money-making machine. It can issue money or checks. And it never has a problem making its checks good because it can obtain the $5 and $10 necessary to cover the checks simply by asking the Treasury Department’s Bureau of Engraving to print them.”
Any one person or any one closely knit group who has a lot of money has a lot of power. Now imagine a group of people who have the power to create money
Over at least the past 85 years, who has been responsible for all the ups and down in our country? Think about the depression of the late 1920’s and all through the 1930’s. The FED could have pumped lots of money into the market to stimulate the economy and to get the country going again, but did they? No, in fact they restricted the money supply quite severely, and as a consequence enriched themselves as they picked up the assets and collateral of all those individuals and businesses they drove into bankruptcy and default.
Speaking about the stock market crash in March 1929, Louis McFadden who was Chairman of the House Banking Committee back in the1930’s said, “It was not accidental, it was a carefully contrived occurrence ...the international bankers sought to bring about a condition of despair so that they might emerge as ruler of us all.”
Thomas Jefferson said, “The Central Bank is an institution of the most deadly hostility existing against the principles and forms of our constitution….if the American people allow the private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their forefathers conquered. The issuing power of money should be taken from the banks and restored to congress and the people to whom it belongs. I sincerely believe the banking institutions having the issuing power of money, are more dangerous to liberty than standing armies.” History seems to support his statement.
No man did more to expose the power of the FED than Louis T. McFadden. On June 10, 1932 (almost exactly 75 years ago today) he remarked in the Congressional Record, “Mr. Chairman we have in this country one of the most corrupt institution the world has ever known. I refer to the Federal Reserve Board, a government board that has cheated the government of the United States out of enough money to pay the national debt. The depredations and the inequities of the Federal Reserve Board and the Federal Reserve Banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our government. It has done this through the mal-administration of that law by which the Federal Reserve Board exist and through the corrupt practices of the moneyed vultures who control it.”
One should never forget that the CFR founded, owns, and controls the Federal Reserve System. It is our tax money going to the CFR owners thru the FED that is funding the CFR’s efforts to destroy our country’s sovereignty. The FED’s
destruction of our country’s monetary system is the direct consequence of the CFR’s continuing effort to destroy the financial independence of our country’s people.
The CFR has outdone Baron M. Rothschild by not only taking control of our nation’s currency but by also taking control of those who make our country’s laws.
Can we and will we as a nation, muster the resolve and courage necessary to take our country back from those despicable moneyed vultures and the unconscionable politicians who now greedily await our demise as a sovereign nation?
As the saying goes…” the day grows late and the road ahead lays steep.”
NOTE—For those interested in learning more about the Federal Reserve System, may I suggest:
1 - Go to the internet and do a Google search on the “Federal Reserve System”, or do a Google search on the “Federal Reserve System and the Council on Foreign Relations”, and start reading.
2—For $20 you can purchase what many believe to be the best researched, the best documented, the most interesting and best written book about the Federal Reserve System. You can order “The Creature from Jekyll Island” by G. Edward Griffin, simply by calling 1 800 595-6596 or by going to www.realityzone.com (I realize no financial gain off the sale, its just a great book on this subject.)
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