It is telling to see the kind of resistance Congressman Ron Paul’s H.R. 1207, Federal Reserve Transparency Act is getting in the U.S. Senate. To quote Congressman Paul directly, in part:
“Claims are made that auditing the Fed would compromise its independence. However, by independence, they really mean secrecy. The Fed clearly cherishes its vast power to create and spend trillions of dollars, diluting the value of every other dollar in circulation, making deals with other central banks, and bailing out cronies, all to the detriment of the taxpayer, and to the enrichment of themselves. I am happy to challenge this type of ‘independence’.
“They claim the Fed is endowed with special intellectual abilities with which to control the market and that central bankers magically know what the market needs. We should just trust them. This is patently ridiculous. The market is a complex and intricate thing. No one knows what the market needs other than the market itself. It sends signals, such as prices, that should be reacted to and respected, not thwarted and controlled. Bankers are not all-knowing and cannot ignore the rules of supply and demand. They might act as if they are, but their manipulation of the market just ends up throwing it wildly off balance, which gives us the boom and bust cycles.
“They claim the Fed must remain apolitical. No organization is apolitical that relies on the President to appoint the Chairman. In fact, it is subject to the worst sort of politics – power to create trillions of dollars and affect the value of every dollar in the country without the accountability of direct elections or meaningful oversight! The Fed typically enacts monetary policy that is favorable to particular administrations close to elections, to the detriment of long term considerations.”
The disincentive to those in government to allow the Federal Reserve’s activities to be laid bare should, just based on Ron Paul’s statements, be obvious. How though, specifically, does the Federal Reserve – not a government agency, mind you, but a private, run-for-profit monopoly – actually function?
Let’s say the U.S. government needs to borrow $300 billion. That’s a small amount based on present government spending, but let’s use that figure hypothetically. The Federal Reserve simply makes a log entry for that amount. They then write a check for $300 billion, and send it to a securities dealer. The securities dealer then issues the Federal Reserve a government security bond for the equivalent amount in U.S. government assets, in turn allegedly backed by the hollow “good faith” promises of the U.S. Congress, supposedly on behalf of all Americans, i.e., taxpayers. The securities dealer then deposits this check in his bank – a bank which is of course a member of the Federal Reserve System, as every one of them in America is. The bank then sends this check back to the Federal Reserve for payment. The Federal Reserve then credits the securities dealer’s account(s) $300 billion. The monies are then dispersed to the U.S. government.
The actual printing and shipment of Federal Reserve Notes, however, is not entirely without cost to the Federal Reserve. As of 1994, William H. Ferkler, Manager of Public Affairs for the U.S. Bureau of Engraving & Printing said: “As we have advised, the Federal Reserve is currently paying the Bureau approximately $23 for each 1,000 notes printed. This does include the cost of printing, paper, ink, labor, etc. Therefore, 10,000 notes of any denomination, including the $100 note would cost the Federal Reserve $230. In addition, the Federal Reserve must secure a pledge of collateral equal to the face value of the notes.”
Not a bad return on $230 created out of thin air in the first place! And what is, pray tell, the “collateral equal to the face value of the notes”? Why it’s the land, labor, and overall assets ostensibly owned by you and I. In other words, the members of the U.S. Congress, in supposedly “representing” us all, have arrogated the sum total of our live’s work and property, and handed it over to the Federal Reserve. Without the express consent of even one of us.
It is monetarily impossible to pay off the kind of debt that the U.S. government has created at the hands of the Federal Reserve System. The level of taxation required coupled with the economic growth necessary to accomodate this is purely a lunatic’s fantasy. How did this get so out of control?
The Creature from Jekyll Island is a good place to start. Though the title sounds like a horror novel, and the book reads like one, G. Edward Griffin’s volume is non-fiction. It details how the way was paved by bankers for the creation of the Federal Reserve and passage of the Federal Reserve Act on December 23, 1913 – just before the holiday recess when most members of Congress were out of Washington, D.C. Prior to 1913, the U.S. Treasury was exclusively responsible for printing and issuance of U.S. gold and silver certificates. The constitutional precedent for this was that tying a unit of currency to a specific weight of numismatic metal limited the amount of money in circulation. Consequently, those in government could only tax and spend on a very limited basis, and government would be then constrained in size and scope commensurately. When viewed in this light, it’s not hard to see why politicians were so eager to abdicate their constitutional responsibility by forming such an unholy alliance with the bankers. It also demonstrates just how ineffective things like constitutions are at keeping governments within specified “boundaries.” Moreover, giving any government authority and oversight of a standardized monetary system to begin with is very dangerous and ill-advised, to say the least. You’ve seen what has resulted from the advent of the Federal Reserve – runaway taxation and spending, massive government growth, corporate and bank bailouts to the tune of trillions, and future generations stuck paying the bill at the point of government’s guns.
No doubt, Ron Paul’s bill in the House of Representatives is shaking some people in the Federal Reserve up, and we’ve seen just how resistant those in the Senate are to it. They’re not about to bite the hands that feed them without a fight. The real issue though, is not about auditing the Federal Reserve, or holding its members accountable, or even returning the U.S. dollar to a gold standard overseen once again by the U.S. Treasury. What truly needs to be done is to eliminate altogether the elements that have allowed this situation to arise in the first place once and for all. Yes, that means outright abolishing the Federal Reserve – or at least, the U.S. government dissolving its bonds with the Federal Reserve to let it sink or swim on its own in a free market – which would of course mean its effective death sentence. However, as stated, what is needed is not any form of government-sanctioned currency, but a truly free market in money. This can only be a reality in the absence, not only of a Federal Reserve, but of the very institution of government itself.
In a free currency market, money – a mutually agreed upon form of exchange for goods and services among two or more parties – would be dictated only by what the market would bear. My personal guess is that gold – with a solid history of over 5,000 years of human history as an indicator – is poised quite nicely to assume that role, as is silver. All the more so now with e-technologies which allow for the transfer of minute grains of precious metals, in order to more effectively facilitate common everyday sales and purchases, as opposed to larger transactions. However, that’s just my opinion. Undoubtedly, the market would deal with the issue of money in numerous ways of which we can only speculate.
Speculate, that is, until both the Federal Reserve and government itself, are history.
Michael, if by "we" you mean yourself and a handful of others who actually wish to pay off the "debt" the Treasury Department "owes" to the Federal Reserve, fine, but certainly don't include me or any others who do not and never did consent to paying off such "debt" in the first place. Since there was nothing in any way "responsible" about allowing the Federal Reserve a monopoly over the creation and issuance of fiat currency in the first place, there is certainly nothing irresponsible about abandoning it forthwith to sink or swim on its own in a free market. Yes, this might cause a bit of a stir in the markets initially, but soon to follow in the absence of inflation and income taxation would be a prosperity and abundance such as America — and much of the world in turn — has never known. Further, the "monopsony" and "oligopsony" of which you speak is enabled by governments, and does not exist in spite of it. Read your von Mises and Hayek first, before coming on here and labelling such things as a "market failure."
Before abolishing the Federal Reserve, we must first repay the debt owed to it by the Treasury – and before we pay that debt, we must pay off the debt held by the public and the Social Security system. To do that, taxes must be raised on those with the ability to pay without reducing their spending. If you are willing to do that, you can talk responsibly about abolishing the Fed.
As to the residual currency – I am in favor of maximizing the employee-ownership of capital – as this would allow for the setting of wages in a fair market, rather than the current market which is characterized by monopsonistic competition – and in some cases outright monopsony or oligopsony. Find a way to deal with this market failure and you can dispense with government.
Michael, I was never a Kennedy fan, but we did/do share one thing in common: "Most men look at what is and say, Why? I look at what never was and say, Why not?"
Alex, have it your way – however promising the make the currency worthless and abandoning the debt won’t win the movement enough adherants to bring about change. You are of course free to stick to your guns and argue for something that will never happen.
When Kennedy started us to the Moon, he had a plan and funding.
We'll be free when we're dead.
What sort of an attitude is "We'll be free when we're dead." I don't know what is the matter with a lot of you Americans. You sit back and let the scum have their way. This not only applies to your "Federal" Reserve but your politicians, who as you may or may not know, are only puppets to those who control your "Federal" Reserve. i.e. the so called Ruling Elite.
Your American War Of Independence was not fought for independence alone. It was because the King of England at the time, King George 111 was ripping off your country. Brave men went to war and fought for you while you now sit back in your comfy chairs and watch your TV.
Get behind Alex Knight, Ron Paul, Dennis Kuninch, Alex Jones and all who want these parasites out of your county even if it has to be by force. They have been ripping you off since 1913 and you just sit back and let it continue.
They are scum. They not only have your currency printed and loan it back to the government at interest, they get their puppet president to create wars and they finance BOTH sides.
They also have the power through their dishonest banking buddies to create booms and busts and they do it to feather their own nests.
DO SOMETHING ABOUT IT.
Get rid of them. Get PROPER presidents. You will not have proper presidents while this lot is there. Look at who Obama has for his helpers. ALL members of the Bildaberg group, The Trilateral Commission and The Council for Foreign Relations. He didn't choose them. He was told by this 'Ruling Elite' to choose them. You are living in dangerous times not only for your country but for the whole world.
I pinched this from someone else but I agree so I just cut and past it:
"The federal debt is a fraud that has been created virtually "out of nothing" by the Federal Reserve. A private banking organization that masquerades as a government agency for the purpose of further enriching the ultra rich. It does this by charging interest on credit literally created out of thin air. Sound preposterous? These claims are documented in Chapter 2 with official quotations that you can obtain yourself if you wish verification. The fact that these claims sound so utterly preposterous is what allows them to be so easily dismissed by the American populace, and what allows the Federal Reserve to continue its fraudulent control over our economy."
So he is saying: The sheeple find it too difficult to believe and dismiss the claim as something preposterous so they get away with it and the sheeple suffer because of their laziness and know-it-all but know nothing attitude.
Don't be one of the sheep. Learn at least the basics of what is really going on in the world. You won't do that by looking at your mainstream media TV. It is also under the control of the 'Ruling Elite' They seem to hold all the aces but in this day of the computer, it is not impossible to win. In fact they are getting worried especially when Bernanke cops flack and obviously lies his way out of difficult situations.
It’s not my intention to hog this although it’s a pity some more are not commenting on such an important topic especially if I am able to do it from Australia but I just want to pass on something to add credence to my last post and that will do me for today.
It is a from a recent article of Bob Chapman’s. US financial newsletter writer.
“You may not know it yet, but we are winning. The Internet, shortwave and Satellite have the elitists on the run. This is even more pronounced today than at the Bilderberger Meeting in Greece in June. Governments and central banks are under severe pressure. Just look at irate constituents at Town Hall meetings and 277 co-sponsors of Ron Paul’s HR 1207, a bill to investigate and audit the Fed. Ex-treasury Secretary Paulson and Fed Chairman Bernanke were just treated to the worst grilling in the history of the House and were called crooks and criminals by Congress people. Bernanke couldn’t explain where $500 billion came from and as well the disappearance of $2 trillion. When these events happened the dollar strengthened, but Bernanke only found this to be a coincidence. Congressman Grayson laughed in Bernanke’s face. We had this tape in the last issue in the US section, and after we ran it, it mysteriously disappeared from C-Span. So much for a free media and open society.”
Another newsletter writer who is very savvy with what is going on is Clive Maund.
You can Google an article of his by typing in: Clive Maund. its effect on resource stocks
It is 3 years old and the 9/11 incident he speaks of says about 30% of the population believe the government at least had a hand in it. Something like that anyway. I believe the figure is now close to 50% so that’s not too bad for 3 years.
http://www.youtube.com/watch?v=_dmPchuXIXQ&fe…
What anyone who wishes to end the Fed must face is that this type of banking system is necessary as an adjunct to finance stock speculation in limited liability corporations. In the unlikely event the Fed is abolished, something like it will be in the offing. If you don’t want the Animal Farm scenario, you must first replace speculation in Stock with something entirely different – that being employee ownership of workplaces and with it employer financing of most consumer and housing debt.
It’s not just the central bank that has to go, its all of the banks and the stock exchanges to. Unless you are willing to go that far, talking of abolishing the Fed is nonsense.
You wouldn't happen to be one of these slimebag bankers by any chance? LOL
They didn’t go to the trouble of tricking president Wilson into signing what he did which includes the Jeckyl Island thing, to be Mr. Nice Guys. The are in it for themselves and look out for you if you get in their way.
You can believe president Kennedy was assassinated by Lee Harvey Oswald if you like. You can believe in the tooth fairy also. It is pretty clear to me who did it. Google Executive Order 11110
They usurped the government by deception and need to be tossed out on their arse (ass to you)
You talk about dishonesty in the markets. They, with the cooperation of the government and their banking buddies, manipulate markets via the futures market. It is not a “free” market. The plunge protection (PPT) team was founded to keep high volatility out of markets but they abuse this power to the hilt also and don’t seem to care who knows it.
With a PROPER government and president (not one they want) and these slimebags disposed of, you will see things as they should be and if it presents obstacles to get back to the way it was before they infested your country, then so be it. No pain = no gain.
Central banks and fractional reserve banking arose in concert with stock exchanges. You can't abolish one with out banning the other one.
Now if you wish to ban stock exchanges, I'm willing to listen – else your equation is under specified.
@Michael — I affirm and support the desirability of worker ownership. Additionally, I assert that workers are often the morally legit owners of an enterprise and that this is then directly at odds with the matter of who the state says owns a particular enterprise.
However, it would be a very distinct claim, one that I don't believe you've demonstrated, to further assert either that only worker ownership is morally defensible or the related claim that only worker ownership would be tolerated without the state. I do believe there are good reasons to suspect, though, that market competition without the state would result in a gradual but strong tendency towards greater worker ownership — but that's a question of economic prediction rather than of what stateless property law ought to look like.
In short, the history of joint ownership in the context of statism doesn't seem likely to directly tell us much about what joint ownership without statism would look like — at least, not without more being said as to the reasons for thinking so beyond merely noting that X and Y were contemporaneous.
Fractional Reserve banking is a disgrace. There is one law for bankers and a different law for every other type of business.
I don't see this connection you make between stock exchanges and banks. Nobody wants to ban stock exchanges or even futures exchanges. However if you said there is a nexus with the futures markets and banks I would agree. An underhanded one to manipulate that needs something done about it.
I look every day for an answer to this thing you have about stock exchanges a fractional reserve banking being connected Michael and I don't see anything. To be blunt, I don't think you have an answer because there is none, except probably something you wrongly assumed.
So as even Alex Knight appears to be uninterested, despite the lengthy article he wrote, and has disappeared, this seems like I'm wasting my time so I'll do the same.
Goodbye.