The Federal Reserve System is not federal; there are no reserves; and, it is not a system, but a criminal syndicate.

Let's Just Dump It!

The title is one of the more vituperous summations of the institution. And it's not unfair because there is a lot of truth in it.

it's the ultimate scam. This was a brilliant, brilliant swindle. That it has been so long-lived is remarkable, as are the results of what they have achieved with it. I’ll try to walk you through the most basic elements of money and banking and then finance and currencies generally. But the real point that I hope readers will take with them is an understanding that this institution has cheated all of us of our citizenship.

For those people who read my stack, you can find a few different articles on this subject. The most revealing is Blood Running in The Streets. Mobs of Rioters and
Demonstrators Threatening Banks and Legislatures... As a matter of fact, you can shorten an economics four year degree down to the time it takes to read that post because there is more truth in it than you will receive in all the wasted time of four years.

I recently have been reading from Congressman Louis McFadden's litany of rants in 1933. I had forgotten that he actually brought charges that are still sitting in limbo somewhere that nobody ever acted on.

He was a grand old gentleman, and it is a pity we don't have legislators today of his caliber or his determination to protect this country and our liberties. He was nearly the last of a breed, I am afraid. Well, there are a few, but they are so out numbered as to be ineffective. Two that come to mind are Rand Paul and Thomas Massie.

The Fed is one of several pet peeves I have given voice to multiple times throughout the years. Another is the 16th Amendment, and I've posted a review of Bill Benson’s work “The Law That Never Was” and I’ve mentioned Joe Banister, who, while still a badge carrying/gun carrying IRS agent, had his epiphany listening to an interview of Devvy Kidd by Geoff Metcalf. All this bad stuff happened around the same time. I don't think that was mere coincidence. Here is a page with lots of information about the fraud of the Fed and IRS.

And obviously it wasn't a coincidence, not in the least bit. John Maynard Keynes played a large role in the establishment of the International Monetary Fund, which is the international satellite of the Fed. This quote is from a book Keynes wrote after World War I called "The Economic Consequences of the Peace." In talking about a fiat money system, he had this to say: "Should government refrain from regulation/taxation, the worthlessness of the money becomes apparent, and the fraud can no longer be concealed." You see, it is a brilliant move psychologically, because we get our “money”, even though the notes are colored tickets with no inherent value. Nonetheless, it is our “money”. We receive money from our work and our investments, and it is the natural course of human beings to protect what they have. When the government wants some of our “money” in the form of taxes, we try to defend against that, and we are thereby in that act giving value to the “money” that it really doesn't have.

The reason I put money inside of quote marks is because what we use as “money” doesn’t fit the proper definition, which is something that is durable, divisible and a store of value. Fed notes don’t even come close to THAT definition!

Quoting from McFadden’s expose: "Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks, hereinafter called the Fed. The Fed has cheated the government of these United States and the people of the United States out of enough money to pay the nation's debt. The depredations and iniquities of the Fed have cost enough money to pay the national debt several times over." And that was just his warm-up. He was really upset, and obviously, he had cause to be. The huge frustration now is, with the exception of Rep. Ron Paul, does anyone really have a clue? Well, that is why I’m posting this. You can read a number of clues on my stack.

But really, the citizens' best bet was Ron Paul, who understands this issue top to bottom and was always crossing swords with Mr. Greenspan in his annual testimonies. He is a brilliant gentleman and a great defender of the Constitution, and really, American citizens would not be able to own gold today were it not for Ron Paul. It’s too bad that people didn’t support him for President in 2008. I personally see him as the last representative that was worth his weight in gold. Have you heard Trump slam the Fed? If so, let me know when. I must have missed it.

I remember from reading "The Creature from Jekyll Island." Some of the games that went on with the framers of the Fed are frankly right out of an old dime-store novel.

There's a fascinating detail that shows just how determined these people were. Jekyll Island was a private reserve of J.P. Morgan. They had built a club on the island, and a lot of Manhattanites would go down there in the winter for duck hunting. Later, several of the robber baron families built their private homes there. But in 1913, only J.P. Morgan's spread was located on this island off the coast of Georgia. They were so determined to maintain secrecy that every servant on the island was removed, and an entirely new staff of servants was hired out of Atlanta and brought to the island.

About the only thing they didn't do was cut their tongues out after the meetings. They didn't want them to be able to recognize the people there and to be confused about where they were and so forth. Those are the lengths they went to, the sort of extremes that they felt necessary to protect their scheme from exposure.

A few days before the Fed passed, Sen. Root denounced the Fed as an outrage on our liberties. He predicted: "Long before we wake up from our dream of prosperity through an inflated currency, our gold -- which alone could have kept us from catastrophe -- will have vanished, and no rate of interest will tempt it to return." You talk about prophetic!

We're on the verge of that today, I think sometimes. It's a fantastic scheme. It's just so fantastic. There have been other paper-money schemes throughout history, and all of them have collapsed. But because the United States was a young, dynamic country, we were able to fund this system off the prosperity and wealth that our ancestors created in the 19th century. Then, when we became a world power, we were able to keep this game going by exporting the inflation.

Realize we had central banks prior to the Fed. One President Jackson got rid of. In a titanic battle, he brought that to a conclusion. There was the First Bank of the United States founded by Alexander Hamilton, and that was succeeded by a Second Bank of the United States. That's the one that Andy Jackson brought to an end.

Nikolai Lenin once said, "The best way to destroy the capitalist system is to debase the currency." Let me explain what fiat money is all about.

Fiat money is money that derives its value from a government edict. I'm king and say this piece of paper is worth something because I say so. And the first step to getting there is: I will accept this currency as “legal tender” for tax payments; then I move to making the issuance of the legal tender a monopoly, my government’s monopoly. But here's the weird thing. Congress has the authority to coin and mint money. Why would they give up something that powerful to the Fed in direct violation of the Constitution and their oaths of office?

Because the Fed gives them a scapegoat. We are constantly told it is so excellent that the Fed is independent because that way, the financial system does not become politicized. And just think, citizens, how terrible it would be if all those politicians were handling the money. We have our disappointments with the political class, so that makes sense -- but it really doesn't. The Fed allows the political class to use a private structure -- which is the banking consortium that actually owns the Fed -- as a scapegoat. No matter what happens, they can blame the Fed when times turn bad. And any action that the Fed takes, depending on whose ox is gored amongst the public -- exporters, importers, farmers, whoever -- their champions in the legislature can curse the Fed while their opposition cheers it. Congress is really a co-conspirator with the Fed.

There are two things I want us to try to cover for sure. First, what the Fed is and what it does and doesn't do, and secondly, how this fiat money works. Fiat money is designed to fail. It is designed for inflation. And that's another curse we constantly are confronted with, that the Fed is a "hawk" on inflation. This statement is risible because … what is inflation? Read “Thank You Federal Reserve…What would we have done without you?”

It is too much money chasing too few goods. And the only issuer of money in the United States is the Federal Reserve System. By the way… the Federal Reserve System is in fact the 5th Plank of the Communist Manifesto…SURPRISE! So, of course the Fed is the source of inflation. It is not a hawk against inflation, it is only a means to control inflation for the benefit of the financial elite.

Allegedly, just before John F. Kennedy was killed, he had ordered the printing of a whole bunch of U.S. Notes that would not be Federal Reserve Notes. That is the only conspiracy theory behind the assassination that makes complete sense to me; the others do not. When I heard it, I thought, yeah, that would do it, because of the power of the Fed. It is very hard for the citizen to imagine the power of this institution. And for the financial elite to be threatened, if indeed they were, it would then probably be worth knocking off a U.S. president.

We have to ask ourselves if Congress were to disenfranchise the Fed and just take back the power to mint and coin money? What would happen I believe If they were acting in unison, an effective method could be devised. But I don't think you can ever get to the point where a debate could lead to a consensus to act. Frankly, I don't think this Congress could agree on the sun rising in the morning. And most likely you didn’t know, there were three attempts on McFadden's life. And he died under mysterious circumstances, according to Eustace Mullins.

I remember once upon a time I asked someone how come no one tried to take out Andrew Jackson, and I was told there had been an assassination attempt against him I wasn't aware of at the time. Most likely there were more than one, but they didn’t want we the people to panic.

There is so much motive. It was Rothchild who said, "I care not for a nation's laws, if you give me control of the money," because the money will drive everything. Nothing can touch you if you have control of the money. And this is why we are cheated as citizens, because we cannot discipline or control “our” government. Through the use of fiat money, the government has the power of creating unlimited debt. All we are reduced to doing in elections is deciding whether the blue team or the red team is going to get the patronage.

Here is what was John Locke's view of money. He viewed was that money is property. And, therefore, since in the normal course of business a man lends money -- his property -- he must receive in return money of equal value if justice and commerce were to flourish. So this was a huge step historically because the people immediately agreed. In those days, the king would debase the currency by calling it in and reminting it, and each time he reminted it, he would take about 10 percent and replace it with a base metal in the coin. So the crown gained 10 percent, and the people lost 10 percent. Merchants would shave the coins and melt down the shavings. That's actually one of the reasons we have those ribs around our coins now. Of course no one is going to shave copper clad coins, so it’s just a gesture these days. The milled edge was to stop the coin shaving by merchants. You could end up with a quarter the size of a dime.

And if you examine old coins, you'll see where they were chipped away for whatever precious metal they contained. It was very common. In fact, the Fed is really exactly that same system in a modern dress, and institutionalized.

Here is where I’ll explain how wealth moves and is transferred. What actual function does the Fed have besides having the Fed Chairman scaring people once a quarter you see, the Fed actually emits the money. How does it do that? Usually by buying up old government bonds. The Treasury will issue bonds; people buy the bonds, and money comes into the treasury. That transaction takes money out of circulation. In order to emit money, the Fed reverses the action and buys back bonds. These transactions are done under the Fed’s Open Market Operations.

The Fed controls discount rates. The discount rate is what the Fed charges banks for loans, and thereby controls short-term rates for the economy. Long-term rates are set by the market. Even though setting the discount rate is said to be a relatively small tool, it is enough most usually to control the market, and more. When the Fed inflates or emits money, you have a lag before that effect hits the market or the economy of about 18 months. In the presidential cycle, the ideal situation is to start printing the money 18 months before Election Day. That way, you have a nice robust economy before the voters go to the polls.

Here are a few examples. Back in '75 when President Ford was told it was time to start printing money, being an estimable man, he said no; we don't have to. We've got a pretty good economy. I don't want to inflate. It will create a problem later. But Jimmy Carter came in and he wasn't going to make Ford's mistake, so he started printing money right away. He printed and printed money, and he got the system completely out of whack. We ended up with twenty-one percent interest rates. Sounding familiar? Have we seen this again, over and over since ‘75?

There would be a point where you could actually see a headline in the Wall Street Journal that said, "Fed to expand money supply/Interest rates rise." That's how goofy it got. Then look at what George Bush did. George Bush thought he had victory in hand because he had 90 percent approval rating after the Gulf War. So he didn't need to inflate. Late in '92, he saw he was in trouble finally, and he called in Jimmy Baker. Jimmy Baker got hold of the Fed and said start printing money. But unfortunately, it was too late. The beneficial effects started hitting the economy in January, just in time for Clinton’s inauguration. So we see that the three men in recent history who chose not to inflate for their own re-election all lost. That's the power of the Fed. That's the way in which we are manipulated as voters.

Back in 1941, there were some hearings in Congress, and Congressman Patman was talking to one of the Fed governors, and he asked him, "How'd you guys get that $2 billion to buy these government securities back in '33?" And the response was, "Out of the right to issue credit money." So Patman says, "And there's nothing behind it except our government credit?" And the answer was, Yeah. That's what our money system is. If there were no debts in our money system, there wouldn't be any money.

That is where people become confused, because we are taught in our economics classes that money is a store of value, a unit of account and a means of exchange. But the Federal Reserve Note, which is what a so-called dollar is, is an instrument of debt, not of value.

Have you ever wondered what happened to gold in Fort Knox? No one is entirely sure. Fort Knox hasn't been audited in a very long time. Actually, most of the gold is kept in Manhattan underneath the New York Fed, and you can tour the vaults and see the gold holdings therein. When FDR confiscated all private gold in the United States, that gold eventually went to form the gold quota for the United States in the International Monetary Fund and also in something called the Exchange Stabilization Fund, which is under the control of the treasury secretary.

You might be wondering who establishes the quota. That happened originally at Bretton Woods in 1944 at a multinational conference which was called in order to restructure the international financial system. The United States has the largest membership in the IMF. We control about 18 percent, but it's enough for us to control the entire institution. And each nation when they join the Fund has to put in so much gold and so much currency. So, the gold that the United States contributed was provided by our ancestors after FDR confiscated it from them.

I’ve been writing and talking about this stuff for over a decade, and the one thing I have never fully understood is why the political leadership -- who care more about power than anything else -- would give up Article I, Section 8, Paragraph 5? That's a heavy hammer. But it was an opportunity also, because by having given it up they can now dream up programs to benefit their particular constituencies which all taxpayers end up funding. Not really. It’s all just created out of thin air. All they have to do is have Treasury sell government bonds. The politicians get votes from their respective client groups, and the entire population gets the debt, whatever that REALLY is. They don't have to come to us, the citizens, anymore and ask for funding. Refer to the meme above. I’m still wondering to this day how they sold this snake oil to the American people.

I’m pretty convinced that after Andy Jackson finally shut down the Second Bank of the United States, the bankers did not stop scheming, nor did the financiers. Throughout the Civil War there was great profiteering as one might expect. Lincoln brought in a greenback that was a just a fiat money, but the nation returned to the gold standard some years after the Civil War. The Founding Fathers never wanted a “gold standard”. They wanted us to USE gold. There was an ineffective system instituted. It was sort of a halfway house to central banking called the National Banking System. The idea was that big national banks would police the smaller state banks. Of course, no one policed anyone, and because of dishonest banking, panics and breakdowns were rampant in the system. This was very unsettling to the population. So the people ended up having “managed” panics and breakdowns.

They thought, and they were told, they would escape these because of the Fed’s managed system, and even better they would get an “elastic” currency that could accommodate America’s dynamic business development. In fact, it's interesting that because on the gold standard, prices actually fall year to year as economic development occurs. The “static money” argument is a red herring. In the late 19th century, we were on the gold standard and there was an explosion of wealth and prosperity for people. So the bankers stepped in, and it is believed they organized the panic of 1907 to bring back the bad memories just as they began a campaign to establish the Fed. And it's beyond "believed." It’s pretty clearly documented.

The reason the Founding Fathers wanted us using GOLD AND SILVER is explained in the booklet A Caveat Against Injustice or an Inquiry Into the Evils of a Fluctuating Medium of Exchange by Judge Roger Sherman

One reason Congressman McFadden was so exercised in those congressional hearings I’ve been quoting from is because when the Fed was established, not all banks belonged to it. There were still independent country banks. In 1920, the Fed raised interest rates unexpectedly and unnecessarily with the result that the artificial contraction of credit put thousands of banks out of business and bankrupted thousands of formerly prosperous farmers. That was to coerce independent people and banks into the system.

So you have to ask if it is better to have a government-controlled system or a privately controlled system. What you want is a private banking system. You don't really want the government in it. The government should be responsible to fulfill the biblical edict of "ye shall have honest weights and measures." Government should set the standards and then let the private bankers compete for market share within the confines of the monetary clauses of the United States Constitution. We, the customers of those banks, should be responsible to be attentive to our banks' business and bottom line. And as the banks compete against one another under the natural restrictions of the Constitution, honesty and sound banking are rewarded by an increasing market share.

The inevitable question that comes up whenever we talk about the ubiquitous, nefarious and noxious Fed is: What can we do about it?

It's become such a huge system that so many people live off of now. The political class has been completely corrupted by this ability to spend and spend, and they are no longer dependent on us to get the money for their operations. The problem is the same one you have with taxation arguments -- complexity. Both the Fed and the tax code are extremely complex. They treat us like mushrooms. They keep us in the dark and feed us B.S. The public is overwhelmed with propaganda and conflicting statistics whenever any changes are proposed. We're a busy people. We can't focus on these issues to give them their proper due, so when the arguments begin, honest reformers are easily defeated. My idea of how to end this abusive system is to end withholding.

Why would we do that? Because when the citizen has to sit down once a year and write a check to the government himself directly, you will suddenly change the character of this country. At that point, people will start paying as much attention to the cost of government as they do their garbage collection service. And then people will start asking questions and demanding some results.

Once while speeking with a woman about the national retail sales tax idea and the figures she offered about the "imbedded cost" of the government, the key thing being "imbedded." She claimed it's about 23 percent, and you never see that. People just accept it because they are not compelled to sit down and write a check for it.

In fact, very often they get a check back from the government, so they think of the Internal Revenue Service as a sort of savings institution, and the government as their benefactor. The propaganda the Fed uses so routinely -- this isn't an anomaly that just happened. Before Jekyll Island, these guys were master propagandists.

In the late 19th and early 20th century, not very many of our universities offered a Ph.D. So many of our academics were actually completing their education in Germany. Germany had built a great social state under Bismarck, and these academics became admirers of Bismarck. When they returned to the United States, they encountered an economy that needed only so many people who could speak classical Greek or perform abstract mathematics, for instance. They needed jobs, so an unholy alliance between tremendous wealth and academia was formed. These so-called scholars, mostly historians, economists and social scientists, became the mouthpieces for a “reform” of the banking system. And they followed Karl Marx right to the last letter of the Communist Manifesto. So here we are today.

I’m remember back about Alan Greenspan. I know the guy was a company guy, bought and paid for. And he used to hang out with Ayn Rand, and he even wrote an article for one of her books about a quarter of a century ago on the gold standard.

Dr. Gary North wrote a wonderful piece about Greenspan called "Jazzman." Greenspan is an improviser. We can see this in his early career. My research shows he played with Benny Goodman.

He studied at Juilliard, then he moved to economics. He did not finish his doctorate. He went to work as an economist on Wall Street. He has gotten honorary doctorates subsequently, of course. While he was on Wall Street, he came under the influence of a man named Arthur Burns, who was a former Fed governor under Nixon. He was from the Viennese school of economics, and he believed that the economy was best controlled through monetarism -- the supply of money. Milton Friedman is the more famous proponent of monetarism. Alan Greenspan became Burns' protégé. So I think he got a taste for money and power and forgot all about gold and Ayn Rand. Although to this day, he does pay lip service to gold. But it's like the politician talking about a tax cut -- we'll go back to the gold when the debt is paid off, and on that happy day we’ll have a big tax cut too. It's pretty much like a politician talking about ethics. When the debt is paid and we have prosperity for all, then we'll return to the gold.

The emperor has no clothes. And we wonder why it’s such a mess. Well follow up with these and you’ll understand more than they want you to.

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Can You All Say CONSTRUCTIVE FRAUD? FED 101 - Do you REALLY think your taxes pay for anything?

A Plea For The Constitution of The United States Wounded in the House of It's Guardians - Part I

I've Heard it Said...TAXATION IS THEFT And it's also slavery...

The Law - 2024As It Always Should Be - Part One

A Dirty Little Secret About Federal Taxes What If You Could Counterfeit...LEGALLY?

Credit is Debt is Slavery by the late Bruce G. Mc Carthy

Want to Stop All of The Warring? Take away the big Government Tit

A Caveat Against Injustice or an Inquiry Into the Evils of a Fluctuating Medium of Exchange

What Debt Ceiling? Jacob is telling it the way it is, just like "Blood Running In The Streets..."

+ a few more…

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