Teach Peace Moment: Federal Reserve

The Federal Reserve (the Fed), using fiat money, is a threat to domestic and international peace. By design it produces from time to time in a total financial collapse as demonstrated in 1929. Sound hard to believe? Take a bite of the apple of knowledge offered in this Teach Peace Moment starting with the Federal Reserve Introduction video.

A quote from Thomas Jefferson about the Bank of the United States sums up the Fed.

"[The] Bank of the United States... is one of the most deadly hostility existing, against the principles and form of our Constitution... An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries."

To understand the current economic crisis, and an even greater one on the horizon, one needs to understand the Federal Reserve banking system (click here for an introductory Federal Reserve video.) and money as debt.

 

Did you ever wonder why the Federal Reserve is not funded by Congress?

The short answer is the Federal Reserve is not owned by the government. The Federal Reserve was designed by a banking cartel off the coast of Georgia on Jekyll Island in November 1907. The Federal Reserve Act was approved by Congress on December 23, 1913.

 

The Federal Reserve Act established 12 regional Federal Reserve Banks. The Reserve Banks issue shares to “member banks” that are non-government corporations. The shares issued can’t be sold or traded. Dividends are set by law at 6 percent a year. This unique provision preventing the public trading of Fed stock enabled the banking cartel to operate with secrecy. Ongoing secrecy is facilitated because the Securities and Exchange Commission only requires publicly traded corporations to disclose major shareholder information.

 

On the surface, the Federal Reserve System is presented as neither government nor private because it does not seek to generate profits and is supposed to exist for the benefit of American citizens. The Fed earns money from buying and selling Treasury debt in the open market, money on currency trades, money on foreign debt interest paid, and via the discount rate or money it lends to banks. The Fed returns most of the earnings to the U.S. Treasury.

 

Below the surface, at the shareholder bank level and as documented in books written by Kah, Mullins, and Shauf, the Fed is a phenomenal money making machine for the banking cartel that created it. The key reason is the Fed is the agency of inflation. Inflation is a hidden tax and comes from a banking system that literally creates money out of nothing. Congress, in order to avoid raising taxes, goes to the Fed to have the money created for what is more like a service charge than true interest on a loan (as the bulk of direct Fed earnings return to the U.S. Treasury). Fed created money begins to grow the money supply which has a negative impact on the purchasing power of the dollar also known as inflation. The banks benefit because the Fed created money, when deposited into a commercial bank, can increase $1 into another $9. Private banks earn interest, above the rate of inflation, on this much larger sum of money. Government overspending results in the previously borrowed money being repaid with even bigger loans to pay the interest on the original loan.

 

Sadly, via the above formula, the U.S. taxpayer is paying interest to private banks on government borrowed funds instead of benefiting from a citizen issued currency. The amazing truth is the Fed shareholders have a financial interest in increasing the U.S. debt, which is just one of many mind boggling conflicts of interest.

Fed advocates claim the Fed is controlled by the U.S. government. Actually, there is little meaningful oversight of the Fed. Yes, the Fed chairman and the members of the Fed’s Board of Governors are selected by the President and confirmed by the Senate.  As documented by author William Greider in his book Secrets of the Temple, during President Carter’s administration the Wall Street forces that help a president rise to power have tremendous weight on Fed appointments. In addition, Fed board members have 14 year terms, a fact which vaporizes their post-confirmation accountability to the White House or U.S. taxpayer. The Fed does have a requirement to send the Fed Chairman to deliver a public relations moment on Capitol Hill twice a year.

The money as debt game is believed to be kept in play in part because the private banking cartel hires economists and agents to promote confidence in the Fed. Wall Street executives almost always have secrecy agreements with their firms that discourage openness on a firm's internal operations. Nonetheless, many people have stepped forward with books like the Creature From Jekyll Island by G. Edward Griffin.

A Not So Merry Christmas

The Fed was approved just before Christmas in 1913 after much of Congress had left for the holiday. In a sad twist of history, the 2008 financial crisis is the direct result of the Commodity Futures Modernization Act passed just hours before Congress recessed for Christmas on December 15, 2000.

Senator Louis T. McFadden

On May 23, 1933 the Chairman of the House Banking and Finance Committee, Senator Louis T. McFadden spoke out against the Federal Reserve owners:

“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.

This evil institution has impoverished and ruined the people of these United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Fed and through the corrupt practices of the moneyed vultures who control it.

Some people think that the Federal Reserve Banks are United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders.

In that dark crew of financial pirates there are those who would cut a man's throat to get a dollar out of his pocket; there are those who send money into states to buy votes to control our legislatures; there are those who maintain International propaganda for the purpose of deceiving us into granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime.”

 

For Senator Louis T. McFadden’s detailed criticism of the Federal Reserve owners, click here.

The Founding Fathers "planted the seeds"

Historian Alexander Del Mar, in his 1988 book The History of Money in America, explained how the Founding Fathers left the door open for private banks to issue currency and credit.

"Never was a great historical event [The American Revolution] followed by a more feeble sequel. A nation arises to claim for itself liberty and sovereignty. It gains both of these ends by an immense sacrifice of blood and treasure. Then when victory is gained and secured, it hands the national credit - that is to say a national treasure over to private individuals, to do as they please with it! ... Americans of the revolution had before them ... the historical examples of Greece and Rome. In all these states the main contention from first to last between the aristocratic and popular factions arose out of and centered in the monetary system; that greatest of all dispensers of equity or inequity. They had only to take care that the seed they planted was genuine and uncontaminated. Nature was certain to do the rest. Well they planted; and now look at the fruit and see what it is that they planted! They planted financial corporations ... they planted private money ... they planted financial exemptions from public burdens...In a word they planted another revolution."

Was the oversight in the Constitution assigning the function of money creation to the federal government but not describing the mechanism for issuing currency and credit intentional?  The oversight was indeed intentional as issuing currency and credit was at the heart of the American Revolution. To stress this point, just a few years earlier in 1751 the English Parliament passed the Currency Act which banned  New England colonies from issuing money.

Who are the owners?

Federal Reserve shareholder names are a highly safeguarded secret. The fact that this information is not available to the American people should speak volumes.

The Fed secrecy surrounding the identity of the member shareholders has enabled supporters of the Fed to correctly claim that there is no verifiable source even when insiders leak identities such as the Rothschild banking dynasty.

Author Eustace Mullins in his 1983 book Secrets of the Federal Reserve, reported that the top eight shareholders of the New York Fed were, in order from largest to smallest as of 1983, Citibank, Chase Manhattan, Morgan Guaranty Trust, Chemical Bank, Manufacturers Hanover Trust, Bankers Trust Company, National Bank of North America, and the Bank of New York (Mullins, p. 179). At first glance, the owners of the Fed are U.S. banks but the next question is who are the majority owners of the U.S. banks?

What is the "veneer" of the Federal Reserve?

To determine how international bankers are connected to Fed ownership, a few dots must be connected. First in 1913 the Fed sold shares to banks in the district that the Fed operated in. All of these banks were U.S. banks (the veneer level) but this does not mean that they were owned by U.S. citizens.

Eustace Mullins reported that the top eight banks owned about 63 percent of the New York Fed's outstanding stock. Mullins then showed that many of these banks are owned by a dozen European banking organizations, mostly British, and most notably the Rothschild banking dynasty. Through their American bank ownership, they are able to select the board of directors for the New York Fed and to direct U.S. monetary policy. Mullins explained,

"... The most powerful men in the United States were themselves answerable to another power, a foreign power, and a power which had been steadfastly seeking to extend its control over the young republic since its very inception. The power was the financial power of England, centered in the London Branch of the House of Rothschild. The fact was that in 1910, the United States was for all practical purposes being ruled from England, and so it is today." (Mullins, p. 47-48).

Does a version of the Fed exist internationally?

The Fed private banking cartel enforced by public law was replicated on a global scale with the creation of the Bank for International Settlements (BIS). The BIS was established by the Hague agreements of1930 and is headquartered in Basel, Switzerland. The privately owned BIS coordinates with 55 member central banks including the Fed. The BIS owners facilitate global monetary control by helping manage Gresham’s Law that bad money drives out good.

Lewis v. United States

The courts have ruled that the Fed is a private corporation. For example, a 1982 court ruling regarding the Federal Reserve Bank (Lewis v. United States, 680 F.2d 1239) came to this conclusion. “Examining the organization and function of the Federal Reserve Banks, and applying the relevant factors, we conclude that the Federal Reserve Banks are not federal instrumentalities for purpose of the Federal Tort Claims Act, but are independent, privately owned and locally controlled corporations."

In the phone book the Federal Reserve is listed as a private corporation, just like Federal Express.

For additional information on the history of deception, click here.

Education is the key to a more peaceful world. To restore our democracy we must have sufficient background to perform our role as citizens.

Peace be with you, Dave Dionisi

Dave Dionisi is a former senior officer at Metlife and led personal financial planning for Prudential and Direct Advice. He is the author of Perfect Money Planning. His education in finance includes a BA, MBA, ChFC, and CLU. Well in advance of the corporate media he correctly warned in American Hiroshima that the Bush administration was seriously considering to attack Iran. He does not support nationalizing banks or the $700 billion wealth transfer scheme but does support fiscal responsibility including the issuance of money by the U.S. government.

 

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Resources:

10. Lusitania: A classic example of the Federal Reserve and war

11. Bank for International Settlements on Wikipedia

12. Federal Reserve on Wikipedia

13. Freedom to Fascism video

 

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