The Federal Reserve

[Gary Oak]

JFK I read had started printing American dollars independant of the Federal Reserve among the many things he was doing. I also read the Mikey Jackson was about to start talking openly about the Federal Reserve scam and that this was why they knocked him off. This article is worth reading and understanding I believe

Where Does Money Come From? The Giant Federal Reserve Scam That Most Americans Do Not Understand

http://theeconomiccollapseblog.com


-- ------------------------------------------------------------------------------

How is money created? If you ask average people on the street this question, most of them have absolutely no idea. This is rather odd, because we all use money constantly. You would think that it would only be natural for all of us to know where it comes from. So where does money come from?

A lot of people assume that the federal government creates our money, but that is not the case. If the federal government could just print and spend more money whenever it wanted to, our national debt would be zero. But instead, our national debt is now nearly 16 trillion dollars.

So why does our government (or any sovereign government for that matter) have to borrow money from anybody? That is a very good question. The truth is that in theory the U.S. government does not have to borrow a single penny from anyone.

But under the Federal Reserve system, the U.S. government has purposely allowed itself to be subjugated to a financial system in which it will be constantly borrowing larger and larger amounts of money. In fact, this is how it works in the vast majority of the countries on the planet at this point.

As you will see, this kind of system is not sustainable and the structural problems caused by such a system are at the very heart of our debt problems today.

So where does money come from? In the United States, it comes from the Federal Reserve.

When the U.S. government decides that it wants to spend another billion dollars that it does not have, it does not print up a billion dollars.

Rather, the U.S. government creates a bunch of U.S. Treasury bonds (debt) and takes them over to the Federal Reserve.

The Federal Reserve creates a billion dollars out of thin air and exchanges them for the U.S. Treasury bonds.

So why does the U.S. government go to all this trouble? Why doesn't the U.S. government create the money itself?

Those are very good questions.

One of the primary reasons why our system is structured this way is so that wealthy people can get even wealthier by lending money to the U.S. government and other national governments.

For example, last year the U.S. government spent more than 454 billion dollars just on interest on the national debt.

Over the centuries, the ultra-wealthy have found lending to national governments to be a very, very profitable enterprise.

The U.S. Treasury bonds that the Federal Reserve receives in exchange for the money it has created out of nothing are auctioned off through the Federal Reserve system.

But wait.

There is a problem.

Because the U.S. government must pay interest on the Treasury bonds, the amount of debt that has been created by this transaction is greater than the amount of money that has been created.

So where will the U.S. government get the money to pay that debt?

Well, the theory is that we can get money to circulate through the economy really, really fast and tax it at a high enough rate that the government will be able to collect enough taxes to pay the debt.

But that never actually happens, does it?

And the creators of the Federal Reserve understood this as well. They understood that the U.S. government would not have enough money to both run the government and service the national debt. They knew that the U.S. government would have to keep borrowing even more money in an attempt to keep up with the game.

That is why I call the Federal Reserve a perpetual debt machine. The Federal Reserve was created to trap the U.S. government in an endlessly expanding debt spiral from which there is no escape.

And the Federal Reserve is doing a great job at what it was designed to do. Today, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.

Another way that money comes into existence in our economy is through the process of fractional reserve banking.

I originally pulled the following simplified explanation of fractional reserve banking off of the website of the Federal Reserve Bank of New York, but it has been pulled down since then. But I still think it is helpful in understanding the basics of how fractional reserve banking works....

"If the reserve requirement is 10%, for example, a bank that receives a $100 deposit may lend out $90 of that deposit. If the borrower then writes a check to someone who deposits the $90, the bank receiving that deposit can lend out $81. As the process continues, the banking system can expand the initial deposit of $100 into a maximum of $1,000 of money

When you put your money into the bank, it does not say there. The bank only keeps a relatively small amount of money sitting around to satisfy the withdrawal demands of account holders. If all of us went down to the banks right now and demanded our money, that would create a major problem.

If I put 100 dollars into the bank and the bank lends out 90 of those dollars to you, now it looks like there are 190 dollars floating around. I have "100 dollars" in my bank account and you have "90 dollars" that you just borrowed.

The new debt that you have taken on (90 dollars) has "created" more money. But of course you are going to end up paying back more than 90 dollars to the bank, so more debt has been created than the amount of money that has been created.

And that is one of the big problems with our financial system. It is designed so that the amount of debt and the amount of money are supposed to be perpetually expanding, and the amount of debt created is always greater than the amount of money that is created.

So is it any wonder that our society is swamped with nearly 55 trillion dollars of total debt at this point?

A debt-based financial system is unsustainable by nature because it will always create debt bubbles that will inevitably burst.

Are you starting to see why so many Americans are saying that we need to abolish the Federal Reserve system?

Our founding fathers never intended for our financial system to work this way.

According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress is supposed to have the authority to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures".

So why has this authority been given to a private institution that is dominated by the big Wall Street banks and that has actually argued in court that it is "not an agency" of the federal government?

Thomas Jefferson once said that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing....

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing.
But instead, we have become enslaved to a system where government borrowing actually creates our money.

The borrower is the servant of the lender, and we have allowed our government to enslave us to the tune of nearly 16 trillion dollars.

There are alternatives to this system. Things do not have to work this way.

Unfortunately, the vast majority of our politicians consider the Federal Reserve to be good for America and steadfastly refuse to do anything to change the status quo.

So if you are waiting for "solutions" to these problems on the national level you are going to be waiting for a very long time.

The debt problems that the United States and Europe are experiencing did not come into existence by accident. They are the result of fundamental structural problems with the financial system.

A debt-based financial system is always going to fail in the long run. Unfortunately, most Americans still do not understand this and so we will all get to suffer the consequences.

[Blue Frost]

Andrew Jackson got rid of the banks in government, I believe Wilson let them back in .
For ever dollar created the Reserve makes three cents off it, or at least that used to be the price.
The reserve is the biggest banks in the country with people like Bernanke there puppet .
It's all a scam on us so they can devalue, and take our real money.
The only ones who really win are the banks, not the people.

[Twilight turtle]

There's an interesting story came out yesterday about Barclays bank... they were messing with or fixing something to do with interest rates to mask all the losses... something like that, I only saw the headline on the front of a newspaper stand outside a shop today. I think they were feeding false information out somewhere.

[Blue Frost]

Money is always a lie since it has no backing, it's just a note that says it has a value.
The only reason it works is because people put trust in the ones printing it .
It was a grave disservice to the world when we came off the gold standard, and a masterpiece of a scam on us all.
The bankers are who made out, and a few gangster politicians that was paid off like Nixon.
Bill Clinton made it worse when he allowed finance, mortgage, and investment to get in bed with banks, also voiding the Glass Stegal act.
Always a thief in power someplace.

[Dagon]

There's an interesting story came out yesterday about Barclays bank... they were messing with or fixing something to do with interest rates to mask all the losses... something like that, I only saw the headline on the front of a newspaper stand outside a shop today. I think they were feeding false information out somewhere.

Barclays: Cameron says bank faces 'serious questions'

Prime Minister David Cameron has said that Barclays Bank management has "serious questions" to answer over how it manipulated banking lending rates. Barclays was fined

[Dagon]

LOL! Here is the Barcley's response:

[youtube][/youtube]

Barclays boss Bob Diamond says he will not resign

The boss of Barclays has insisted he will not resign after staff rigged the key lending rate between banks. Bob Diamond was speaking at a meeting of analysts at US bank, Morgan Stanley. And in a letter agreeing to give evidence to MPs, Mr Diamond condemned the inappropriate behaviour of a "small number" of employees who had tried to make profits for their own benefit. [ Deja-fuckin-Vu to a square root! I swear - every time it is a single rogue trader! Whether it is Iceland, States or ANY of the Euro nations!!]

On Thursday, the prime minister said the bank's management faced "serious questions" after it was fined

[Blue Frost]

That fine looks bad, but to the bank it's really nothing compared to what they grab from everyone's accounts by not giving them interest.

[Dagon]

For ANYONE with even the slightest interest in this - I BEG of you watch this award winning documentary:

[vimeo]23086688[/vimeo]

You have there black on white what happened and by the extension what is happening now in Europe.
Cheers.

p.s.
If you find it informative, please buy it - to support indy documentary film makers who often put not only their careers on the line, but also their lives!

[Blue Frost]

WoW that's a long one.
Ill watch it later, I know a little about their crash, and rebuilding.
They are a model of what Grease, and Spain should do.

[Dagon]

That fine looks bad, but to the bank it's really nothing compared to what they grab from everyone's accounts by not giving them interest.

So, you think that gambling client's money away, encouraging their own clients to invest into failed enterprises why insuring those investments (so, when they fail - the banks get huge insurance payments) is wrong?! Surely, if that would be against the law, someone would be behind bars by now... as opposed to removal of these very few regulations that were still in place before 2008, so these very same bankers can now bet even larger amounts of money. This is a primal example of unregulated FREE MARKET at its best!

Add to that holding nations hostage (by essentially the very definition of "blackmail") into repetitive payoffs (sorry, I mean: "The Bailouts") without as much as reducing 1 cent from these nation's debts. At this very moment, EU's Central Bank is committing "a grab" of all EU nations sovereignty in the name of "EU Integration". Yet the only thing that they want to integrate is the complete control over every nation's economy...

The moment EU will agree to develop " The US' Federal Reserve-style" institution that would "regulate" all money printing across these nations & integration of all nation's debt into a one pool with shared responsibility (what Jos

[Blue Frost]

It's far from a free market, government has a hand in it all. If it was a free market they would be accountable with no insurance from the government . Also most the money they gamble don't even exist except on paper.
The money lost is the person with investments, and it all goes to some fat cat .
In a free market they are forced to be responsible, or they loose it all.

[Blue Frost]

I wish it was a free market, then there would be competition for my money giving me more interest.
Choice

[Dagon]

In a free market they are forced to be responsible, or they loose it all.

I disagree - In theory, with an assumption that we live in a just world... maybe, but that is an utopian idea. In a truly free market - that very responsibility you speak of would be seen as a restriction! Therefore, its very design in practice will always lead you (in its final stages) towards 1% of wealthy untouchables, about 9%-14% of paramilitary lackeys and rest: the serfs.

Cheers.

[Blue Frost]

If the banks in a free market was not a good bank it would fail, and if not giving good product people wouldn't use them.
Also if you wanted more safety you could buy your own risk insurance.

[Dagon]

If the banks in a free market was not a good bank it would fail, and if not giving good product people wouldn't use them.

Your statement seems logical, but unwise, because you're assuming that all people are intelligent, wise and rational beings.
If it were true: no one would buy: cigarettes, alcohol, fast foods, cheaper GMO foods, shitty cars, anything with that god damn apple logo on it, nor millions of the shite that is sold every day...

[Blue Frost]

No not at all, people are dumb, and irrational on the most part, that's why we have what we do now.
Like a good business you would have good reason to want to keep customers so you would try hard, and keeping bad executives that wouldn't happen like now.
I'm not saying get rid of government, just get it out of doing business where they cant even balance their own budgets.

[Dagon]

Like a good business you would have good reason to want to keep customers so you would try hard, and keeping bad executives that wouldn't happen like now.

Once again: it could only work in a perfect world of people who no longer feel jealousy, greed, etc... but so would Communism. The place you think of is unreal, as in "Utopia". For that to work, one has to ignore the failings in the very nature of the human being. Not to mention that it often is more profitable and faster to run business into a ground than carefully nourishing it over time.

If we would lack these negative emotions, the corporations like Monsanto would never came into existence, banks boards of directors would not be filled with parricides, etc.
By removing regulations that discourage EXPLOITATION - one is asking for it.

[Blue Frost]

I don't see it that way, that's why you buy some insurance if it fails. You fire the executives, and a free market isn't capitalism as in government, it's more anarchy with government only there to do the job of protecting the people, managing social projects, collect taxes, and what ever. Government involvement in business has tainted whats called Free markets, it's not a free market.

[Blue Frost]

[Dagon]

LOL!

[youtube][/youtube]

Efficiency and progress is ours once more
Now that we have the Neutron bomb
It's nice and quick and clean and gets things done

Away with excess enemy
With no less value to property
No sense in war but perfect sense at home...

The sun beams down on a brand new day
No more welfare tax to pay
Unsightly slums gone up in flashing light

Jobless millions whisked away
At last we have more room to play
All systems go to kill the poor tonight

Gonna Kill Kill Kill Kill
Kill the poor...Tonight

Behold the sparkle of champagne
The crime rate's gone, feel free again
Oh life's a dream with you, Miss Lily White

Jane Fonda on the screen today
Convinced the liberals it's okay
So let's get dressed and dance away the night
While they...Kill Kill Kill Kill
Kill the poor...Tonight