Federal Reserve Bank Quotes

It is no coincidence that the century of total war coincided with the century of central banking.

I feel robbing a bank would be the highest form of performance art. No need to pay to see me work. The Federal Reserve is subsidizing it.

I will feel no guilt on shutting my door to those who didn't listen.

Money is not an invention of the state. It is not the product of a legislative act. Even the sanction of political authority is not necessary for its existence. Certain commodities came to be money quite naturally, as the result of economic relationships that were independent of the power of the state.

This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President (Woodrow Wilson) signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill.

Not too long ago he had to spend countless hours refining and improving his lucrative investment algorithm to keep money flowing into his accounts, but nowadays he was swimming in earnings received by way of inside information from numerous connections he’d acquired on his rise in the financial and business scene. He was reeling in windfall profits. His connections afforded him with gains that most people couldn’t dream of acquiring in their wildest dreams, and the best part was he didn’t need to use an ounce of his brainpower or intellect to make it happen. He’d reached that upper echelon tier where wealth was casually doled out to those who were on the list, on the take. It was akin to having one’s own money-printing machine sitting in their den. A privately owned banking system that printed money out of thin air and accumulated debt from anyone who laid hands on it—no different than the Federal Reserve.

I was reading in the paper today that Congress wants to replace the dollar bill with a coin. They’ve already done it. It’s called a nickel.

Capitalism is Altruistic, and it requires a certain altruism of each of us.

If the American people ever allow the 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 property until their children will wake up homeless on the continent their fathers occupied. 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 are more dangerous to liberty than standing armies.(1)

You have to include inflation in your annual revenue and expense forecasts. You have to treat inflation as an annual fee your business pays into the economy. If inflation is 2% for example, that means the economy is charging your business a 2% annual fee and so you gotta make sure your income and total assets grow at minimum 2% annually just to keep up.

Von Pein’s family was a little known, but highly influential entity within American banking circles. Banking Royalty, some called it. His grandfather had been one of the chief orchestrators of the Federal Reserve Act of 1913, which effectively took ownership of the bank from the American people.

The Federal Reserve system is unlike any other in the world; it is a crazy genetic mashup of different animals, part private bank and part government agency.

The Federal Reserve bank protected them at our expense: when “conservative” bankers make profits, they get the benefits; when they are hurt, we pay the costs.

fictional entities as the dollar, the Federal Reserve Bank, and the totemic trademarks of corporations.

The accepted version of history is that the Federal Reserve was created to stabilize our economy. One of the most widely-used textbooks on this subject says: "It sprang from the panic of 1907, with its alarming epidemic of bank failures: the country was fed up once and for all with the anarchy of unstable private banking."23 Even the most naive student must sense a grave contradiction between this cherished view and the System's actual performance. Since its inception, it has presided over the crashes of 1921 and 1929; the Great Depression of '29 to '39; recessions in '53, '57, '69, '75, and '81; a stock market "Black Monday" in '87; and a 1000% inflation which has destroyed 90% of the dollar's purchasing power.24

Recent Federal Reserve Bank of Chicago research has found, with a granular level of detail down to the city block, that the refusal to lend to Black families under the original 1930s redlining maps is responsible for as much as half of the current disparities between Black and white homeownership and for the gaps between the housing values of Black and white homes in those communities. Richard Rothstein, author of the seminal book on segregation, Color of Law: How the Government Segregated America, reminds us that there is no such thing as “de facto” segregation that is different from de jure (or legal) segregation. All segregation is the result of public policy, past and present.

Intellectually and compassionately explaining the reason freedom works is required for credibility.

A brick could be used to help America make money. Trust me, this is smarter than letting a central bank like the Federal Reserve make all the money.


By loaning banks money for no interest, you’re really letting them into the casinos with the house’s money, aren’t you?

The circular which was distributed to attract subscribers to the Bank's initial stock offering explained: "The Bank hath benefit of interest on all the moneys which it, the Bank, creates out of nothing.

A prohibition on the hoarding or possession of gold was integral to the plan to devalue the dollar against gold and get people spending again. Against this background, FDR issued Executive Order 6102 on April 5, 1933, one of the most extraordinary executive orders in U.S. history. The blunt language over the signature of Franklin Delano Roosevelt speaks for itself: I, Franklin D. Roosevelt . . . declare that [a] national emergency still continues to exist and . . . do hereby prohibit the hoarding of gold coin, gold bullion, and gold certificates within the . . . United States by individuals, partnerships, associations and corporations.... All persons are hereby required to deliver, on or before May 1, 1933, to a Federal reserve bank . . . or to any member of the Federal Reserve System all gold coin, gold bullion and gold certificates now owned by them.... Whoever willfully violates any provision of this Executive Order . . . may be fined not more than $10,000 or . . . may be imprisoned for not more than ten years. The people of the United States were being ordered to surrender their gold to the government and were offered paper money at the exchange rate of $20.67 per ounce. Some relatively minor exceptions were made for dentists, jewelers and others who made “legitimate and customary” use of gold in their industry or art. Citizens were allowed to keep $100 worth of gold, about five ounces at 1933 prices, and gold in the form of rare coins. The $10,000 fine proposed in 1933 for those who continued to hoard gold in violation of the president’s order is equivalent to over $165,000 in today’s money, an extraordinarily large statutory fine. Roosevelt followed up with a

A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the Nation, therefore, and all our activities are in the hands of a few men ♦ ♦ *, We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilised world — no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of small groups of dominant men.

For the US to be like Russia today,” he wrote, “it would be necessary to have massive corruption by the majority of members of Congress as well as by the Departments of Justice and Treasury, and agents of the FBI, CIA, DIA, IRS, Marshall Service, Border Patrol, state and local police officers, the Federal Reserve Bank, Supreme Court justices, US district court judges, support of the varied organized crime families, the leadership of the Fortune 500 companies, at least half of the banks in the US, and the New York Stock Exchange.

Behind the troubled banks and the increasingly troubled insurance agencies stands "the full faith and credit" of the Government—in effect, a promise, sure to be honored by Congress, that all citizens will chip in through taxes or through inflation to make all depositors whole.80

Trade may seem a very pragmatic activity, one that needs no fictive basis. Yet the fact is that no animal other than Sapiens engages in trade, and all the Sapiens trade networks about which we have detailed evidence were based on fictions. Trade cannot exist without trust, and it is very difficult to trust strangers. The global trade network of today is based on our trust in such fictional entities as the dollar, the Federal Reserve Bank, and the totemic trademarks of corporations. When two strangers in a tribal society want to trade, they will often establish trust by appealing to a common god, mythical ancestor or totem animal.

The only solution was to tie the hands of macroeconomic policy makers.7 Instead of giving the Federal Reserve discretion to trade lower unemployment for higher inflation, the central bank should be forced to accept the fact that a certain amount of unemployment was necessary to keep inflation stable. As we will see, MMT contests this framework.

1836: Following his years of fighting against the Rothschilds’ and their central bank in America, President Andrew Jackson finally succeeds in throwing the Rothschilds’ central bank out of America, when the bank’s charter is not renewed. It would not be until 1913 that the Rothschilds’ would be able to set up their third central bank in America, the Federal Reserve.

What is the attraction of central bankers to issuing their own digital currencies? The answer lies in wider access to second-layer money. Recall that the Federal Reserve issues two types of money, wholesale reserves for private sector banks and retail cash for people. In order to provide monetary stimulus, the Fed issues reserves and hopes that private sector banks will use those reserves to circulate third-layer deposits into the economy by lending money. With a CBDC, the Fed could issue second-layer money directly to people in the form of digital helicopter money; the phrase “helicopter money” comes from Milton Friedman, who in 1969 provided the imagery of dropping cash out of a helicopter in order to stimulate economic demand.

the first century of the US Federal Reserve’s existence has been a failure. Not only has there been incontinent inflation since 1913, the year the Fed came into existence (8 per cent in the preceding 120 years, 2,300 per cent in the succeeding hundred years), but there has been devastating deflation too, and more banking panics, more financial volatility, longer and deeper recessions.

If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.”   Robert H Hemphill, credit manager of Federal Reserve Bank of Atlanta, 1934

And so, as the passengers drifted off to sleep to the rhythmic clicking of steel wheels against rail, little did they dream that, riding in the car at the end of their train, were six men who represented an estimated one-fourth of the total wealth of the entire world. This was the roster of the Aldrich car that night: Nelson W. Aldrich, Republican "whip" in the Senate, Chairman of the National Monetary Commission, business associate of J.P. Morgan, 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 that time, representing William Rockefeller and the international investment banking house of Kuhn, Loeb & Company; Henry P. Davison, senior partner of the J.P. Morgan Company; Benjamin Strong, head of J.P. Morgan's Bankers Trust Company;1 6. 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 who was head of the Warburg banking consortium in Germany and the Netherlands.2

the first century of the US Federal Reserve’s existence has been a failure. Not only has there been incontinent inflation since 1913, the year the Fed came into existence (8 per cent in the preceding 120 years, 2,300 per cent in the succeeding hundred years), but there has been devastating deflation too, and more banking panics, more financial volatility, longer and deeper recessions. Even the Fed’s response to the crisis of 2008 has come under severe criticism, as it effectively bailed out bad assets while doing little to help solvent institutions with needed liquidity

The difference gave China a $420 billion trade surplus (the US carried the opposite, a $420 billion trade deficit with China). Americans paid for those goods with US dollars, and those payments were credited to China’s bank account at the Federal Reserve. Like any other holder of US dollars, China has the option to sit on those dollars or use them to buy something else. Uncle Sam doesn’t pay interest on the dollars China keeps in its checking account at the Fed, so China usually prefers to move them into what is effectively a savings account at the Fed. It does this by purchasing US Treasuries. “Borrowing from China” involves nothing more than an accounting adjustment, whereby the Federal Reserve subtracts numbers from China’s reserve account (checking) and adds numbers to its securities account (savings). It’s still just sitting on its US dollars, but now China is holding yellow dollars instead of green dollars. To pay back China, the Fed simply reverses the accounting entries, marking down the number in its securities account and marking up the number in its reserve account. It’s all accomplished using nothing more than a keyboard at the New York Federal Reserve Bank.

The biggest fear for homeschooled children is that they will be unable to relate to their peers, will not have friends, or that they will otherwise be unable to interact with people in a normal way. Consider this: How many of your daily interactions with people are solely with people of your own birth year?  We’re not considering interactions with people who are a year or two older or a year or two younger, but specifically people who were born within a few months of your birthday. In society, it would be very odd to section people at work by their birth year and allow you to interact only with persons your same age. This artificial constraint would limit your understanding of people and society across a broader range of ages. In traditional schools, children are placed in grades artificially constrained by the child’s birth date and an arbitrary cut-off day on a school calendar. Every student is taught the same thing as everyone else of the same age primarily because it is a convenient way to manage a large number of students. Students are not grouped that way because there is any inherent special socialization that occurs when grouping children in such a manner. Sectioning off children into narrow bands of same-age peers does not make them better able to interact with society at large. In fact, sectioning off children in this way does just the opposite—it restricts their ability to practice interacting with a wide variety of people. So why do we worry about homeschooled children’s socialization?  The erroneous assumption is that the child will be homeschooled and will be at home, schooling in the house, all day every day, with no interactions with other people. Unless a family is remotely located in a desolate place away from any form of civilization, social isolation is highly unlikely. Every homeschooling family I know involves their children in daily life—going to the grocery store or the bank, running errands, volunteering in the community, or participating in sports, arts, or community classes. Within the homeschooled community, sports, arts, drama, co-op classes, etc., are usually sectioned by elementary, pre-teen, and teen groupings. This allows students to interact with a wider range of children, and the interactions usually enhance a child’s ability to interact well with a wider age-range of students. Additionally, being out in the community provides many opportunities for children to interact with people of all ages. When homeschooling groups plan field trips, there are sometimes constraints on the age range, depending upon the destination, but many times the trip is open to children of all ages. As an example, when our group went on a field trip to the Federal Reserve Bank, all ages of children attended. The tour and information were of interest to all of the children in one way or another. After the tour, our group dined at a nearby food court. The parents sat together to chat and the children all sat with each other, with kids of all ages talking and having fun with each other. When interacting with society, exposure to a wider variety of people makes for better overall socialization. Many homeschooling groups also have park days, game days, or play days that allow all of the children in the homeschooled community to come together and play. Usually such social opportunities last for two, three, or four hours. Our group used to have Friday afternoon “Park Day.”  After our morning studies, we would pack a picnic lunch, drive to the park, and spend the rest of the afternoon letting the kids run and play. Older kids would organize games and play with younger kids, which let them practice great leadership skills. The younger kids truly looked up to and enjoyed being included in games with the older kids.

President Theodore Roosevelt had created the bureau in 1908, hoping to fill the void in federal law enforcement. (Because of lingering opposition to a national police force, Roosevelt’s attorney general had acted without legislative approval, leading one congressman to label the new organization a “bureaucratic bastard.”) When White entered the bureau, it still had only a few hundred agents and only a smattering of field offices. Its jurisdiction over crimes was limited, and agents handled a hodgepodge of cases: they investigated antitrust and banking violations; the interstate shipment of stolen cars, contraceptives, prizefighting films, and smutty books; escapes by federal prisoners; and crimes committed on Indian reservations.

Why Did the Stock Market Crash? The most persuasive explanation for the 1929 stock market crash blames the Federal Reserve. Throughout the 1920s, but particularly in 1927, the Fed pumped artificial credit into the loan market, pushing down interest rates from their free-market level. Lower interest rates exaggerated the feeling of prosperity, and misled businesses and investors. In a laissez-faire market where money and banking are not disturbed by the government, the interest rate is a price that tells borrowers how much capital citizens have saved and made available to fund projects. But when the Fed adopts an “easy-money” policy by pushing down interest rates, this signal is distorted and the interest rate no longer does its job of channeling the available capital into the most deserving projects. Instead, an unsustainable boom develops, with firms hiring workers and starting production processes that will have to be discontinued once the Fed slows down its injections of new money. Many economists point to the Fed hikes in interest rates during 1928 and 1929 as the cause of the stock market crash. In a sense this is true, but the deeper point is that the crash was made inevitable by the bubble in the stock market fueled by the artificially cheap credit preceding the hikes. In other words, when the Fed stopped pumping in gobs of new money that pushed up the stock market, investors came to their senses and asset prices plunged back towards their pre-bubble level.

If it was a mistake not to finish school (it wasn't!), it was an even worse mistake to go to work. ("Work! The word was so painful he couldn't bring himself to pronounce it," says a character in one of Cossery's books.) Until I was almost eighteen I had know freedom, a relative freedom, which is more than most people ever get to know. (It included "freedom of speech," which has hung over into my writing.) Then, like an idiot, I entered the lists. Overnight, as it were, the bit was put in my mouth, I was saddled, and the cruel rowels were dug into my tender flanks. It didn't take long to realize what a shithouse I had let myself into. Every new job I took was a step further in the direction of "murder, death and blight." I think of them still as prisons, whorehouses, lunatic asylums: the Atlas Portland Cement Co., the Federal Reserve Bank, the Bureau of Economic Research, the Charles Williams Mail Order House, the Western Union Telegraph Co., etc. To think that I wasted ten years of my life serving these anonymous lords and masters! That look of rapture in Pookie's eyes, that look of supreme admiration which I reserved for such as Eddie Carney, Lester Reardon, Johnny Paul: it was gone, lost, buried. It returned only when, much later, I reached the point where I was completely cut off, thoroughly destitute, utterly abandoned. When I became the nameless one, wandering as a mendicant through the streets of my own home town. Then I began to see again, to look with eyes of wonder, eyes of love, into the eyes of my fellow-man.

From 1942 until 1947, the Federal Reserve—at the behest of the Treasury Department—actively managed the government’s borrowing costs. Even as spending to fight World War II drove the federal deficit to more than 25 percent of GDP in 1943, interest rates trended lower. That’s because the Fed pegged the T-bill rate at 0.375 percent and held the rate on twenty-five-year bonds at 2.5 percent. As MMT economist L. Randall Wray put it, “the government can ‘borrow’ (issue bonds to the public) at any interest rate the central bank chooses to enforce. It is relatively easy for the central bank to peg the interest rate on short-term government debt instruments by standing ready to purchase it at a fixed price in unlimited quantities. This is precisely what the Fed did in the United States until 1951—providing banks with an interest-earning alternative to excess reserves, but at a very low rate of interest.

The phone rang. It was a familiar voice. It was Alan Greenspan. Paul O'Neill had tried to stay in touch with people who had served under Gerald Ford, and he'd been reasonably conscientious about it. Alan Greenspan was the exception. In his case, the effort was constant and purposeful. When Greenspan was the chairman of Ford's Council of Economic Advisers, and O'Neill was number two at OMB, they had become a kind of team. Never social so much. They never talked about families or outside interests. It was all about ideas: Medicare financing or block grants - a concept that O'Neill basically invented to balance federal power and local autonomy - or what was really happening in the economy. It became clear that they thought well together. President Ford used to have them talk about various issues while he listened. After a while, each knew how the other's mind worked, the way married couples do. In the past fifteen years, they'd made a point of meeting every few months. It could be in New York, or Washington, or Pittsburgh. They talked about everything, just as always. Greenspan, O'Neill told a friend, "doesn't have many people who don't want something from him, who will talk straight to him. So that's what we do together - straight talk." O'Neill felt some straight talk coming in. "Paul, I'll be blunt. We really need you down here," Greenspan said. "There is a real chance to make lasting changes. We could be a team at the key moment, to do the things we've always talked about." The jocular tone was gone. This was a serious discussion. They digressed into some things they'd "always talked about," especially reforming Medicare and Social Security. For Paul and Alan, the possibility of such bold reinventions bordered on fantasy, but fantasy made real. "We have an extraordinary opportunity," Alan said. Paul noticed that he seemed oddly anxious. "Paul, your presence will be an enormous asset in the creation of sensible policy." Sensible policy. This was akin to prayer from Greenspan. O'Neill, not expecting such conviction from his old friend, said little. After a while, he just thanked Alan. He said he always respected his counsel. He said he was thinking hard about it, and he'd call as soon as he decided what to do. The receiver returned to its cradle. He thought about Greenspan. They were young men together in the capital. Alan stayed, became the most noteworthy Federal Reserve Bank chairman in modern history and, arguably the most powerful public official of the past two decades. O'Neill left, led a corporate army, made a fortune, and learned lessons - about how to think and act, about the importance of outcomes - that you can't ever learn in a government. But, he supposed, he'd missed some things. There were always trade-offs. Talking to Alan reminded him of that. Alan and his wife, Andrea Mitchell, White House correspondent for NBC news, lived a fine life. They weren't wealthy like Paul and Nancy. But Alan led a life of highest purpose, a life guided by inquiry. Paul O'Neill picked up the telephone receiver, punched the keypad. "It's me," he said, always his opening. He started going into the details of his trip to New York from Washington, but he's not much of a phone talker - Nancy knew that - and the small talk trailed off. "I think I'm going to have to do this." She was quiet. "You know what I think," she said. She knew him too well, maybe. How bullheaded he can be, once he decides what's right. How he had loved these last few years as a sovereign, his own man. How badly he was suited to politics, as it was being played. And then there was that other problem: she'd almost always been right about what was best for him. "Whatever, Paul. I'm behind you. If you don't do this, I guess you'll always regret it." But it was clearly about what he wanted, what he needed. Paul thanked her. Though somehow a thank-you didn't seem appropriate. And then he realized she was crying.

How is money created? An example: You buy a house or take out a mortgage on the excess value of your property. You want 200,000 Dollars. The following happens. The bank’s computer adds these virtual numbers - because that is what they are - to your bank account, and then you have to bleed for the next 30 years, WITH INTEREST. The bank attached a fictional number to your name and for 30 years you need to work to pay the money back. The bank didn’t build your house, nor did it pay for the materials. That was done by people like you and me. They too have to pay, because they also have a mortgage. And when you die, your kids will have to pay taxes on your estate. Often, they have to take out a mortgage of their own to do so[74]. Another example of how banks create money out of nothing: You go to the bank to lend 1,000 Dollars. One year later, you have to pay 1,100 Dollars back, including interest. The additional 100 Dollars come from fellow citizens, for instance in the form of wages or profit sharing. In other words, the extra 100 Dollars come from society. This can only happen when the total amount of money in circulation increases. That increase – inflation – is created when the bank creates more money. In other words: “Interest payments are a direct way to create money.” All the money that exists comes from the bank. This remarkable phenomenon has been described as follows by Mr. Robert Hemphill, Credit Manager of the Federal Reserve Bank in Atlanta: “If all the bank loans were paid, there would not be a dollar in circulation. This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash, or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless situation is almost incredible - but there it is.”[75]

The Federal Reserve The Federal Reserve Bank was founded in 1913. Most people think that this bank is an American Federal Company. That is just as wrong as the conviction that the Bank of England belongs to the British Crown or to the whole of England. The Federal Reserve is in the hands of the Rothschilds and company. In his speech before the Senate, on December 15, 1987, Senator Jesse Helms said: “The principal instrument of the control over the American economy and money is the Federal Reserve System.” The Federal Reserve has a monopoly over the expenditure of the dollar as a world currency and determining the interest rate, and it disposes of a lot more monopolies. How does the Federal Reserve Bank operate? Suppose the United States government needs a couple of billion dollars for its expenses that cannot be paid with taxes income. At that moment it addresses the Federal Reserve Board. Then government bonds for the needed billion dollars are printed in the Bureau of Printing and Engraving. After these bonds are handed over to the bankers of the Federal Reserve, the board grants a loan to the government in the amount of the bond issue. The Federal Reserve draws interest from the government from the day the bonds are delivered. From that day on the government is allowed to draw checks against the Federal Reserve for the amount of the bonds. What are the consequences of this incredible transaction? The government simply saddles the people with a billion dollar debt to the Federal Reserve Bank, apart from the interest on interest that also has to be paid by “ordinary people”. What does the Federal Reserve have to say about “their” money? “Neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper, deposits merely book entries.”[76] When the Federal Reserve needs new, or more, currency to transact its business, it takes the bonds over to the United States Treasury for safekeeping and asks the Treasury Department for the billions of dollars of new currency it needs. The Bank is accommodated on condition that it will pay the printing bill. It only pays for the expenditure costs of the banknotes, which are no more than a mere 500 dollars for ink and paper!

SINCE the financial crisis, it has become commonplace to argue that banks should be run as utilities, not casinos. At least in terms of their financial performance, that seems to be happening. In 2006, the eight American banks that regulators have since labelled “globally systemically important” generated casino-like profits, with returns on equity of 30% on average, according to Oliver Wyman, a consultancy. They are currently managing less than 11%, and there is worse to come: the Federal Reserve recently announced plans to oblige them to raise extra capital. By one calculation that would reduce their return on equity to little over 8%, other things being equal—a lower return than America’s water companies make. And other things are unlikely to be equal. American regulators continue to biff big banks with blistering fines. Then there is the requirement that banks produce “living wills”, explaining how they could be wound down if disaster strikes: the regulators have rejected every single “will” they have received so far as too flimsy. Making banks easier to close down will probably leave them even less profitable.

Politicians are the only people in the world who create problems and then campaign against them. Have you ever wondered why, if both the Democrats and Republicans are against deficits, we have deficits? Have you ever wondered why if all politicians are against inflation and high taxes, we have inflation and high taxes? You and I don’t propose a federal budget. The president does. You and I don’t have Constitutional authority to vote on appropriations. The House of Representatives does. You and I don’t write the tax code. Congress does. You and I don’t set fiscal policy. Congress does. You and I don’t control monetary policy. The Federal Reserve Bank does. One hundred senators, 435 congressmen, one president and nine Supreme Court justices — 545 human beings out of 235 million — are directly, legally, morally and individually responsible for the domestic problems that plague this country. I excused the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered by private central bank. I exclude all of the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman or a president to do one cotton-picking thing. I don’t care if they offer a politician $1 million in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislators’ responsibility to determine how he votes. Don’t you see the con game that is played on the people by the politicians? Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party. What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of Tip O’Neill, who stood up and criticized Ronald Reagan for creating deficits. The president can only propose a budget. He cannot force the Congress to accept it. The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating appropriations and taxes. Those 545 people and they alone are responsible. They and they alone should be held accountable by the people who are their bosses — provided they have the gumption to manage their own employees.

These are a substantial number of “they” who once a year meet to deliberate the fate of national economies and, hence, entire populations. Many of them also believe in the mandate of eugenics, the practice of improving the human race to include reducing the population. Know that we do not have the names of every attendee. Only those who authorize the release of their names get mentioned in the public media. Daniel Estulin, author of The True Story of the Bilderberg Group, wrote that the group’s membership and meeting participants have represented a “who’s who” of the world power elite with familiar names like David Rockefeller, Henry Kissinger, Bill and Hillary Clinton, Gordon Brown, Angela Merkel, Alan Greenspan, Ben Bernanke, Larry Summers, Tim Geithner, Lloyd Blankfein, George Soros, Donald Rumsfeld, Rupert Murdoch, other heads of state, influential senators, congressmen, and parliamentarians, Pentagon and NATO brass, members of European royalty, selected media figures, and invited others. Such invitees have included President Obama along with many of his top officials. Estulin said that also represented at Bilderberg meetings are leading figures from the Council on Foreign Relations (CFR), IMF, World Bank, the Trilateral Commission, EU, and powerful central bankers from the Federal Reserve, the European Central Bank (ECB), and the Bank of England. David Rockefeller, the head of the Rockefeller family financial empire, is believed to have been a leading Bilderberg attendee for years. Other wealthy elite members merely send representatives.

In the February 9, 1935, issue of the Saturday Evening Post, an article appeared written by Frank Vanderlip. In it he said: Despite my views about the value to society of greater publicity for the affairs of corporations, there was an occasion, near the close of 1910, when I was as secretive—indeed, as furtive—as any conspirator.... I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System.... We were told to leave our last names behind us. We were told, further, that we should avoid dining together on the night of our departure. We were instructed to come one at a time and as unobtrusively as possible to the railroad terminal on the New Jersey littoral of the Hudson, where Senator Aldrich's private car would be in readiness, attached to the rear end of a train for the South.... Once aboard the private car we began to observe the taboo that had been fixed on last names. We addressed one another as "Ben," "Paul," "Nelson," "Abe"—it is Abraham Piatt Andrew. Davison and I adopted even deeper disguises, abandoning our first names. On the theory that we were always right, he became Wilbur and I became Orville, after those two aviation pioneers, the Wright brothers.... The servants and train crew may have known the identities of one or two of us, but they did not know all, and it was the names of all printed together that would have made our mysterious journey significant in Washington, in Wall Street, even in London. Discovery, we knew, simply must not happen, or else all our time and effort would be wasted. If it were to be exposed publicly that our particular group had got together and written a banking bill, that bill would have no chance whatever of passage by Congress.

As I saw it, there was a 75 percent chance the Fed’s efforts would fall short and the economy would move into failure; a 20 percent chance it would initially succeed at stimulating the economy but still ultimately fail; and a 5 percent chance it would provide enough stimulus to save the economy but trigger hyperinflation. To hedge against the worst possibilities, I bought gold and T-bill futures as a spread against eurodollars, which was a limited-risk way of betting on credit problems increasing. I was dead wrong. After a delay, the economy responded to the Fed’s efforts, rebounding in a noninflationary way. In other words, inflation fell while growth accelerated. The stock market began a big bull run, and over the next eighteen years the U.S. economy enjoyed the greatest noninflationary growth period in its history. How was that possible? Eventually, I figured it out. As money poured out of these borrower countries and into the U.S., it changed everything. It drove the dollar up, which produced deflationary pressures in the U.S., which allowed the Fed to ease interest rates without raising inflation. This fueled a boom. The banks were protected both because the Federal Reserve loaned them cash and the creditors’ committees and international financial restructuring organizations such as the International Monetary Fund (IMF) and the Bank for International Settlements arranged things so that the debtor nations could pay their debt service from new loans. That way everyone could pretend everything was fine and write down those loans over many years. My experience over this period was like a series of blows to the head with a baseball bat. Being so wrong—and especially so publicly wrong—was incredibly humbling and cost me just about everything I had built at Bridgewater. I saw that I had been an arrogant jerk who was totally confident in a totally incorrect view. So there I was after eight years in business, with nothing to show for it. Though I’d been right much more than I’d been wrong, I was all the way back to square one.

KEYNESIAN ECONOMICS AND STIMULUS Keynesian economics is based on the notion that unemployment arises when total or aggregate demand in an economy falls short of the economy’s ability to supply goods and services. When products go unsold, jobs are lost. Aggregate demand, in turn, comes from two sources: the private sector (which is the majority) and the government. At times, aggregate demand is too buoyant—goods fly off the shelves and labor is in great demand—and we get rising inflation. At other times, aggregate demand is inadequate—goods are hard to sell and jobs are hard to find. In those cases, Keynes argued in the 1930s, governments can boost employment by cutting interest rates (what we now call looser monetary policy), raising their own spending, or cutting people’s taxes (what we now call looser fiscal policy). By the same logic, when there is too much demand, governments can fight actual or incipient inflation by raising interest rates (tightening monetary policy), increasing taxes, or reducing its own spending (thus tightening fiscal policy). That’s part of standard Keynesian economics, too, although Keynes, writing during the Great Depression, did not emphasize it. Setting aside the underlying theory, the central Keynesian policy idea is that the government can—and, Keynes argued, should—act as a kind of balance wheel, stimulating aggregate demand when it’s too weak and restraining aggregate demand when it’s too strong. For decades, American economists took for granted that most of that job should and would be done by monetary policy. Fiscal policy, they thought, was too slow, too cumbersome, and too political. And in the months after the Lehman Brothers failure, the Federal Reserve did, indeed, pull out all the stops—while fiscal policy did nothing. But what happens when, as was more or less the case by December 2008, the central bank has done almost everything it can, and yet the economy is still sinking? That’s why eyes started turning toward Congress and the president—that is, toward fiscal stimulus—after the 2008 election.

the US Treasury instructs its bank, the Federal Reserve, to carry out the payment on its behalf. The Fed does this by marking up the numbers in Lockheed’s bank account. Congress doesn’t need to “find the money” to spend it. It needs to find the votes! Once it has the votes, it can authorize the spending. The rest is just accounting. As the checks go out, the Federal Reserve clears the payments by crediting the sellers’ account with the appropriate number of digital dollars, known as bank reserves.16 That’s why MMT sometimes describes the Fed as the scorekeeper for the dollar. The scorekeeper can’t run out of points.

British and French monetary officials often resisted the creation of national central banks. Their nations having lost military and political influence, they suggested reforming existing currency boards that kept local currencies tied to the franc or the pound sterling. By contrast, unorthodox U.S. money doctors like the Federal Reserve Bank’s Robert Triffin encouraged and aided the creation of national central banks. Triffin understood the necessity of supporting economic nationalism that espoused a strong central bank in former European colonies in order to reorient their economies away from the colonizing metropole—and communist alternatives—and towards the international market.

During the Second World War, just when Chinese were finally being granted the right to apply for naturalization, Japanese were subjected to one of the most spectacular violations of civil rights in living memory. Soon after Japan attacked Pearl Harbor in 1941, Japanese Americans living in the continental United States were rounded up and sent to internment camps. Here they were kept behind barbed wire and guarded by soldiers. The property they left behind was either stolen or sold at a sharp loss. At the time of the evacuation, the Federal Reserve Bank estimated Japanese property losses at $400 million382—a figure that, today, would be many billions. This wholesale internment was far worse than anything done to blacks then or since. Many of the men, women, and children who were rounded up are still living today. If any group in America had wanted to give up, blame white society, and try to live off its victim status, the Japanese could have. Instead, when the war was over, they went back to what was left of their lives and started over. Twenty-five years after the war, they had long since caught up with white society and, as a group, had incomes 32 percent above the national average.383 Asian Americans have not tried to blame others for their troubles or shirk responsibility for their own success or failure. They have looked to their own resources to succeed. White America has clearly oppressed them in the past, just as it has blacks. Some people have argued that Asian immigrants have the advantage of starting out fresh when they get to America, whereas blacks must constantly drag the baggage of slavery and oppression behind them. This obviously does not apply to the descendants of Asians who came to America a century ago practically in bondage and who, in many cases, were treated as badly as blacks. If racism is such an obstacle to success in America, why have Asians overcome it while blacks have not?

central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow 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 Fathers conquered.” -Thomas Jefferson (this describes where we are at today under the Federal Reserve)

The Federal Reserve banks are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this nation is run by the International bankers. Some

The fall of the Roman Empire was caused by what will eventually cause the fall of the United States of America - 'Fractional Reserve Banking'.

other words, the Grace Committee said that all of America’s billions of dollars in annual income tax pays the interest the Federal Reserve Bank charges the US government to print money. Not

The government wants to fool you by doubling the minimum wage and at the same time doubling the money printing. If you look at it critically, they haven't solved the problem of escalated poverty and lack, which is why Bitcoin and other blockchain technology related projects might be your safe haven.

How do you draw the line between a healthy, exciting economic boom and a wanton, speculative stock-market bubble driven by the less savory aspects of human nature? As I pointed out drily to the House Banking Committee, the question was all the more complicated because the two can coexist.

The deals hatched in sleepless sessions at the Federal Reserve Bank of New York or at Treasury were no different. They were products of their moment.

Through Strong’s influence, the Federal Reserve System would prove far more of a boon than a threat to Morgans.

The president’s next sentence was boring but extraordinarily important: “The Federal Reserve is also taking steps to provide additional liquidity to money-market mutual funds, which will help ease pressure on our financial markets.” This was the other half of the money bargain, previously only available to banks: the Fed as lender of last resort. Now, the president was saying, the Fed stood ready to lend against the commercial paper that the money-market funds held and that nobody, but nobody, wanted to buy.

The US’s having a federal debt of $19 trillion or $190 trillion is actually only as relevant as its position in the global power hierarchy. The US will never default as long as it remains a global empire, and all major nations buying US bonds know this deep down. The US can just make it up by way of its central bank, the Federal Reserve, which extends to a financial system with great global power, also ensuring the power of the US dollar. If debts are in dollars, the US simply makes more. Although people often argue that the US is in debt to a private banking cartel (its central bank) and that is a problem in itself, it is really irrelevant in the broad view. The whole thing is mostly a sleight-of-hand arrangement that lets the US government borrow endlessly while the banking system gets special political treatment. No one in the US government and its central bank cartel really cares about US government debt because money is made out of thin air. They only care about public regulation and public perception, not government spending or government debt. In the words of former Federal Reserve Chairman Alan Greenspan: “The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.”51

In 1913, after a lengthy study, Congress and President Woodrow Wilson passed the Federal Reserve Act, which created the Federal Reserve System to act as the nation’s central bank.

When the Fed makes a loan, taking securities or bank loans as collateral, the recipient of the loan deposits the funds in a commercial bank. The bank in turn adds the funds to its reserve account at the Fed. When banks hold substantial reserves, they have little need to borrow from other banks, and so the interest rate that banks charge each other for short-term loans—the federal funds rate—tends to fall. But the FOMC targets that same short-term interest rate when making monetary policy. Without offsetting action, our emergency lending—by increasing the reserves that banks held at the Fed—would tend to push down the federal funds rate and other short-term interest rates. Since April, we had set our target for the federal funds rate at 2 percent—the right level, we thought, to balance our goals of supporting employment and keeping inflation under control. We needed to continue our emergency lending and at the same time prevent the federal funds rate from falling below 2 percent. Thus far, we had successfully resolved the potential inconsistency by selling a dollar’s worth of Treasury securities from our portfolio for each dollar of our emergency lending. The sales of Treasuries drained reserves from the banking system, offsetting the increase in reserves created by our lending. This procedure, known as sterilization, allowed us to make loans as needed while keeping short-term interest rates where we wanted them.

Since the Panic of 1907, when even the most prominent of my colleagues supported the creation of the Federal Reserve, I have been against this institution. Where they saw a preemptive mechanism I saw the forge from which the shackles of regulation would come. Now, 30 years later, in this age of unlimited government intervention, history has proven me right. A slew of poor decisions that blighted Banking Acts of 1933–35. Disturbing factor antagonizing business community. Enemy of American idealism. Usurpation of power. Machiavellian deception of the public. Reckless assault on financial

Not long ago, I read that a Federal Reserve Bank of New York study had found a correlation between Germany’s deaths from the 1918 flu pandemic and support for the Nazis during the 1932 and 1933 elections. Controlling for other possible influences like unemployment and city budgets, the researchers found that high death rates boosted a locality’s support for Adolf Hitler’s party. Preliminary evidence suggests extremist

The Federal Reserve Act was passed by Congress in 1913 while most of its members were on Christmas vacation giving all powers to this newly created central bank to issue legal tender and regulate the money supply as it saw fit.

no progress was made on the tension arising from the U.S. dollar’s status as both the national currency of the United States and the global reserve currency, that is, the currency used for most international transactions, which required most countries to keep a store of it on hand. The U.S. Federal Reserve thus acted as both the country’s and the world’s central bank; the problem in the eyes of many resulted from the fact that the world had no oversight or control over the U.S. central bank or U.S. economic policy more broadly.

But this work paled in comparison to the force and impact of A Monetary History of the United States. What had begun as a favor to Arthur Burns had become a book that would turn the conventional wisdom of academic economists, policy-makers, and politicians alike upside down. The American Historical Review put it simply: “This is one of the most important books of our time.”39 Friedman and Schwartz presented voluminous data on nearly a century of U.S. history; but beyond piling up facts, they also advanced a theory of how money worked in the economy. How did money affect business cycles? Friedman and Schwartz had an answer they considered definitive: money mattered. It was the hidden force behind the ups and downs, the breadlines and the bubbles. Friedman knew the book would make an impact. He knew it was the best work he had ever done, or would ever do. He knew that for all his deviationist politics, for all the force of Keynesian assumption, for all the habitual scorn heaped upon the quantity theory of money, their book would have to be answered. It would compel conversation. The book’s centerpiece was its stunning analysis of the Great Depression. Friedman and Schwartz’s data showed a precipitous 33 percent decline in the quantity of money during what they called “the great contraction.” They convincingly argued that this lack of money transformed an unremarkable dip in the business cycle into a crisis of global proportions. Here was a provocative new explanation for a disaster that continued to cast its shadow across the century. But threaded through the economic argument was another thesis. In 1914, the United States had created a central bank system designed expressly to stabilize the economy. As the lender of last resort, the Federal Reserve Board could have opened the spigots and flooded the economy with cash. Why did it fail to do so?

The only remnants of communist ideology, where the state sets prices, that persist today are to be found in North Korea and at the Federal Reserve (and other central banks around the world that set the price of money in an economy). Happily, it looks like North Korea might be changing for the better.

Central banks across the globe have been hesitant to recognize bitcoin as a form of money, and Tuesday’s vanishing act isn’t helping. Mt. Gox “reminds us of the downside of decentralized, unregulated currencies,” said Campbell Harvey, a professor at the Duke University Fuqua School of Business who specializes in financial markets and global risk management. “There is no Federal Reserve or IMF to come to the rescue. There is no deposit insurance.” However, Campbell said, Mt. Gox’s disappearance “doesn’t mean the end of the road” for bit-coin and other virtual currencies.

Oddly, the United States came rather late into the picture. It was only in 1913, thanks to the efforts of J. P. Morgan, that it got its own central bank, and called it the Federal Reserve Board or the Fed. The Fed would be the ‘lender of last resort’—to save greedy banks which had gone bust—something that happened all too often then.

Stonewalling requests from Congress to find details about what junk mortgages and other “toxic waste” the Federal Reserve was accepting in exchange for its swaps, Chairman Bernanke claimed that politicians had no right to know how the public purse was being put at risk. Bloomberg filed a Freedom of Information Act request, and nearly three years later, in July 2011, the Government Accountability Office provided Senator Bernie Sanders with a report detailing $16 trillion of Fed loans and swaps. It revealed how the officers of Wall Street’s leading banks who sat on the New York Federal Reserve Board gave their own firms the fortune of a century to tide them over. As

The Federal Reserve System had been established to prevent what actually happened. It was set up to avoid a situation in which you would have to close down banks, in which you would have a banking crisis. And yet, under the Federal Reserve system, you had the worst banking crisis in the history of the United States

The Federal Reserve and other central banks could print more money only if they managed to get their hands on more gold.

Stablecoins The ground is currently being laid to set the way for a new type of currency –the stablecoin. What is the stablecoin? The stablecoin is an asset that typically features price stability. Cryptocurrency is notoriously unstable, with volatile prices that are often difficult to predict. The advantage of them is that they give the user total control over their holdings. On the other hand, the US dollar is a great example of a fiat stablecoin, as it offers low volatility and so provides a reliable unit of money to invest in both the short term and the long term. However, the US dollar doesn’t give the user any form of control, as it is monitored by the Federal Reserve Bank and is dependent on the banking network in the US for commercial use. To get a combination of the two –full user control and reduced volatility –is an exciting prospect. Maker is a company that is currently working on a project to make this happen by creating a currency known as the Dai, which is set to become a stablecoin that combines user control with price stability. Social Networks

The transformation of my role at the bank began on February 7, 2007, when HSBC Holdings announced that its bad debts for the previous year would total more than $10.5 billion—20 percent over expectations—due to problems in its portfolio of subprime mortgage derivatives.

Gambling has been fed by knowledge that, if disaster struck, someone else—borrowers, investors, taxpayers—would end up bearing at least some of the losses,” wrote the Economist. At every stop on the securitization gravy train, investment banks generated big fees for themselves. They had no incentive to tap the brakes.

Banks traditionally profited by capturing the difference between the interest rate at which they made loans and what it cost them to borrow. With rates so low, they had to make up what they were losing on that spread with volume, or trash their lending standards to charge higher interest rates to subprime borrowers.

The Fed’s fingerprints were all over this boom, and not just because of Greenspan’s low interest rates. In 1993, in response to initiatives by the Clinton administration to make housing more affordable for minorities and the poor, the Boston Fed produced a widely circulated paper called “Closing the Gap: A Guide to Equal Opportunity Lending.” “Lack of credit history should not be seen as a negative factor” in obtaining a mortgage, the Boston Fed guide noted. As an effort to counter “unintentional” racism in lending markets, the guide sanctioned lowering traditional mortgage-lending standards. Not enough saved for a down payment? No problem. The Boston Fed’s PhDs encouraged banks to allow loans from nonprofits or government assistance agencies to go toward a borrower’s down payment, though such borrowers are more likely to default on their mortgages. The Boston Fed distributed more than ninety thousand copies of this remarkably naïve guide. The mortgage industry, anxious to extend its reach and generate fees, embraced its suggestions.

Setting monetary policy is the job of the Federal Open Market Committee (FOMC), composed of the seven members of the Board of Governors in Washington and the presidents of the twelve District Banks.

As a reminder, among other things, the FOMC sets the fed funds interest rate, the rate at which commercial banks lend reserve balances to each other on an uncollateralized basis in the overnight market.

I worked for one of those who pushed back against the majority. He was the lone member of the FOMC who voted against the professor’s theories at that fateful meeting. He fought the good but lonely fight, and I, in my capacity as trusted adviser, waged many a battle with him. But the sad truth is we lost the people’s war. In a world rendered unsafe by banks that were too big to fail, we came to understand the Fed was simply too big to fight. I wrote this book to tell from the inside the story of how the Fed went from being lender of last resort to savior—and then destroyer—of America’s economic system.

Friend! There’s a subtle feature of speculative behaviour which reflects the public attitude to money itself. When money is in its right place, fulfilling its proper function, men’s minds are fixed upon the goods and services which money can help them to exchange. In such an economic environment the producers of real wealth are seen to earn a fitting reward for their labours and expertise, and in fact productive and community endeavour are portrayed universally as almost the sole means whereby the individual can get himself a goodly share of the world’s riches. Let there just be a change in the emphasis however. Raise the interest rates. Exacerbate the debt structure. Turn money into a commodity which can be bought and sold at a profit. Then you create a breed of men who live by their dexterity at the exchanges. When these men are seen to prosper more considerably than the producers of goods and services, there is a desire amongst the ordinary plodding citizenry to command a share of the action, and to participate in what are seen as easily made profits. Many a fond illusion was wiped out in the collapse of Wall Street share values during the crash of 1929. Whole volumes have been written about its causes and repercussions, and about the sinister shift in real estate ownership which took place during the spate of liquidations and forced sales which followed. But we shall content ourselves meanwhile with the comment that it was just one of a chain of events that were set in motion way back in 1913 when the Federal Reserve Bank was formed to lend money to the Government.

The Economist wrote that the Fed was “taking the unprecedented (and, some say, disturbing) step of financing up to $30 billion of Bear’s weakest assets. This could cost the central bank several billion dollars if those assets fall in value.

This was classic regulatory arbitrage. Bank managers were not unaware of the risks they courted. Wall Street has simply never kowtowed to regulations that pull the plug on profitable businesses. They always find their way around them.

And, as inflation has fallen, so bonds have rallied in what has been one of the great bond bull markets of modern history. Even more remarkably, despite the spectacular Argentine default – not to mention Russia’s in 1998 – the spreads on emerging market bonds have trended steadily downwards, reaching lows in early 2007 that had not been seen since before the First World War, implying an almost unshakeable confidence in the economic future. Rumours of the death of Mr Bond have clearly proved to be exaggerated. Inflation has come down partly because many of the items we buy, from clothes to computers, have got cheaper as a result of technological innovation and the relocation of production to low-wage economies in Asia. It has also been reduced because of a worldwide transformation in monetary policy, which began with the monetarist-inspired increases in short-term rates implemented by the Bank of England and the Federal Reserve in the late 1970s and early 1980s, and continued with the spread of central bank independence and explicit targets in the 1990s. Just as importantly, as the Argentine case shows, some of the structural drivers of inflation have also weakened. Trade unions have become less powerful. Loss-making state industries have been privatized. But, perhaps most importantly of all, the social constituency with an interest in positive real returns on bonds has grown. In the developed world a rising share of wealth is held in the form of private pension funds and other savings institutions that are required, or at least expected, to hold a high proportion of their assets in the form of government bonds and other fixed income securities. In 2007 a survey of pension funds in eleven major economies revealed that bonds accounted for more than a quarter of their assets, substantially lower than in past decades, but still a substantial share.71 With every passing year, the proportion of the population living off the income from such funds goes up, as the share of retirees increases.

The Federal Reserve dictated not only the interest rates at which banks could borrow from one another, as it does today, but also the interest rates that banks could pay on savings accounts.

Kanjorski claims to be repeating an account of events given to him by US Treasury Secretary Henry Paulson and Fed Reserve chairman Ben Bernanke: On Thursday [18 September], at 11 a.m. the Federal Reserve noticed a tremendous draw-down of money-market accounts in the US; [money] to the tune of $550 billion was being drawn out in the matter of an hour or two. The Treasury opened up its window to help and pumped a $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn’t be further panic out there. If they had not done that, their estimation is that by 2 p.m. that afternoon $5.5 trillion would have been drawn out of the money-market system of the US; [this] would have collapsed the entire economy of the US, and within 24 hours the world economy would have collapsed. It would have been the end of our economic system and our political system as we know it.10

Your committee is satisfied from the proofs submitted ... that there is an established and well defined identity and community of interest between a few leaders of finance ... which has resulted in great and rapidly growing concentration of the control of money and credit in the hands of these few men.... Under our system of issuing and distributing corporate securities the investing public does not buy directly from the corporation. The securities travel from the issuing house through middlemen to the investor. It is only the great banks or bankers with access to the mainsprings of the concentrated resources made up of other people's money, in the banks, trust companies, and life insurance companies, and with control of the machinery for creating markets and distributing securities, who have had the power to underwrite or guarantee the sale of large-scale security issues. The men who through their control over the funds of our railroad and industrial companies are able to direct where such funds shall be kept, and thus to create these great reservoirs of the people's money are the ones who are in a position to tap those reservoirs for the ventures in which they are interested and to prevent their being tapped for purposes which they do not approve.... When we consider, also, in this connection that into these reservoirs of money and credit there flow a large part of the reserves of the banks of the country, that they are also the agents and correspondents of the out-of-town banks in the loaning of their surplus funds in the only public money market of the country, and that a small group of men and their partners and associates have now further strengthened their hold upon the resources of these institutions by acquiring large stock holdings therein, by representation on their boards and through valuable patronage, we begin to realize something of the extent to which this practical and effective domination and control over our greatest financial, railroad and industrial corporations has developed, largely within the past five years, and that it is fraught with peril to the welfare of the country.3 Such was the nature of the wealth and power represented by those six men who gathered in secret that night and travelled in the luxury of Senator Aldrich's private car.

Competition also was coming from a new trend in industry to finance future growth out of profits rather than from borrowed capital. This was the outgrowth of free-market interest rates which set a realistic balance between debt and thrift. Rates were low enough to attract serious borrowers who were confident of the success of their business ventures and of their ability to repay, but they were high enough to discourage loans for frivolous ventures or those for which there were alternative sources of funding—for example, one's own capital. That balance between debt and thrift was the result of a limited money supply. Banks could create loans in excess of their actual deposits, as we shall see, but there was a limit to that process. And that limit was ultimately determined by the supply of gold they held. Consequently, between 1900 and 1910, seventy per cent of the funding for American corporate growth was generated internally, making industry increasingly independent of the banks.12 Even the federal government was becoming thrifty. It had a growing stockpile of gold, was systematically redeeming the Greenbacks—which had been issued during the Civil War—and was rapidly reducing the national debt. Here was another trend that had to be halted. What the bankers wanted—and what many businessmen wanted also—was to intervene in the free market and tip the balance of interest rates downward, to favor debt over thrift. To accomplish this, the money supply simply had to be disconnected from gold and made more plentiful or, as they described it, more elastic.

THE Federal Reserve is “the most transparent central bank to my knowledge in the world,” claims its chairwoman, Janet Yellen.

The Fed is still on the same track.” Whatever you call it, the benign economic environment has supported a bull market since 2009, and though there were a few rocky days last week, the main market ingredients seemed to remain in place. For example, on Wednesday a government report on gross domestic product in the second quarter showed that the economy was growing smartly, even rapidly, at a 4 percent annualized rate; yet the Federal Reserve declared that inflation was low enough to allow the slowly moderating pace of its expansive monetary policy to remain on track. In a statement on Wednesday, the Federal Open Market Committee said the central bank would continue to ratchet down its bond purchases as planned, yet it also said its policies would “maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.” The Fed already holds more than $4 trillion in bonds, up from less than $1 billion when the financial crisis started, and it’s still buying more.

When members of Congress asked about the swaps, Bernanke emphasized that the European banks benefiting from the program also made loans in the United States, so the action could be seen as benefiting the U.S. economy directly. But more fundamentally, he was convinced that the world financial system was so deeply interconnected that Europe’s fortunes were the United States’ fortunes too. “In a way,” a European central banker said later, “we became the thirteenth Federal Reserve district.

On October 29, 2008, came an announcement: “Today, the Federal Reserve, the Banco Central do Brasil, the Banco de Mexico, the Bank of Korea, and the Monetary Authority of Singapore are announcing the establishment of temporary reciprocal currency arrangements.” Since its founding, the Federal Reserve had been the lender of last resort for the United States. In late 2008, Ben Bernanke’s Fed became the lender of last resort to much of the world.

However, after several false starts and with the lessons of history fading, America, too, would finally create a permanent central bank, in 1914. For political reasons it could not be called that so it was named the Federal Reserve. Proving the wisdom of the founding generation and several thereafter, the era of central banking in America corresponds almost perfectly with the era of government-business collusion, inflation, boom-and-bust cycles, protracted depressions, military alliances, military bases abroad, foreign wars, standing armies, and massive debt left for future generations.

What are the future prospects for a country that turns from the economic and political principles that made it the world’s economic giant, and towards the European socialist state philosophy?  Who would have ever thought that the world’s leading free enterprise, free market nation would: a.) nationalize its banks; b.) replace the CEO of the nation’s largest industrial corporation by demand of the White House; c.) force itself into a position of majority ownership of that corporation and default on bondholders; d.) force the CEO of the nation’s largest bank to buy a company that could destroy the bank, and then force the CEO to lie to shareholders about the transaction, at the demand of the Secretary of the Treasury and the Chairman of the Federal Reserve?

Lending dollars to the U.S. government is essentially riskless because the U.S. government can always pay such debts. If necessary, the Federal Reserve can print dollars to pay the debt.

thus has been the only commodity whose future price is always equal to the spot price plus the rate of interest over the time period. A million paper dollars held since 1913, when the Federal Reserve Bank was created, would be worth $20,000 today, down 98 percent. A million dollars of gold in 1913 would now be worth $62 million.

In less than twenty years the Federal Reserve brought the money system, banks, exchanges and economy to utter ruin.[77] Every dollar in circulation in the United States is a borrowed dollar and pays its toll of interest to the Illuminati bankers. Nearly eleven trillion dollars in debt has been created since 1913.

It is understood that the Bank need not relinquish the bonds it holds, but will continue to collect interest on them. The Bank then loans the new printed currency into circulation to anyone who can provide it with satisfactory collateral. In less than twenty years the Federal Reserve brought the money system, banks, exchanges and economy to utter ruin.[77] Every dollar in circulation in the United States is a borrowed dollar and pays its toll of interest to the Illuminati bankers. Nearly eleven trillion dollars in debt has been created since 1913. The American people cannot even pay the interest! Every month more than two billion dollars interest has to be paid. It is madness that a government hands over so much power to a private bank that is not controlled by anybody. A power that can create money out of nothing! Why the United States borrow its own money, based on its own credit, at interest, from private bankers? Please bear in mind the fact that the founding fathers made sure that provisions were made by the Constitution for an honest and debt free money system. In part Article 1, Section 8, Paragraph 5 of the Constitution states: “Congress shall have power to coin money and regulate the value thereof.” It is most evident that by this provision, Congress alone should be the money-creating agency

The political and financial network of the Federal Reserve Bank has created a worldwide financial system, in which all private and central banks cooperate. Their objective is to control the economies of all separate countries of the world. The main objective, however, is to let the governments bury themselves in debts so there will be no other way out than to obey the commands of the banks. Hardly any government completely sees through this tactic. They easily let themselves be led to the slaughter.