The dirty, dirty fed...

[Michael]

I never post due to ignorance, but really like these threads here. Its a good example of how well informed debate with opposing beliefs can lead the middle man to more understanding.

A request though to Michael and Chud (if I may): Seems someone like me would be more swayed to unequivocally agree with you if you could propose a good system, rather than just pointing out flaws in the current one. Ideas?

Hi Brady, I know what you mean, there are a lot of interesting threads on RSF that are fun to read. I'm not going to try and create a new monetary system, but I can suggest a few things:

1) YOU need to educate yourself. I used to know nothing about this topic until a former EF member named EYE began talking about it and pointed me to three films that are listed in my signature with google vid links: Money as Debt, America: Freedom to Fascism, and The Money Masters. Watch them (in that order)!

2) Whatever system we have, honesty needs to be a high priority. The current system has a long history, thousands of years actually going back to Babylon, as simply a complex method of stealing by bankers who are in a position of advantage because of having knowledge of how to manipulate the system to their benefit, and also due to ignorance of simple facts by most of the people who participate in the system. Our current system is debt-based; the power to create money from nothing is a monopoly given to a privately owned, secretly operated, totally opaque central bank that practices something called fractional reserve banking, a completely dishonest system that uses inflation as a huge tax against the people for the sole benefit of the bankers; and whatever inflation doesn't squeeze out of us, loan interest eventually gets.

3) Because everything you do, and especially all your labor, is translated into money, economic freedom is paramount. Without an honest monetary system, we are all —to one extent or another— spending massive amounts of our lives working to pay off not only our own debts, but those of the government as well. As it stands, the average American works 5-6 months per year to pay their various taxes, and almost none of this money goes to pay for any government services. Almost all of it goes to pay interest on debt for money created by a private federal bank, when the Constitution of the US gives this power to Congress. In effect, we have become debt slaves to a private, central bank that need not exist.

I say it need not exist because for many years, the USA did not have:
— A private central bank. From the time of President Jackson in the mid-1830's until the midst of the Civil War in 1864 under Lincoln, the USA did not have a national bank at all, and it wasn't until 1913 that we got a private central bank. The un-constitutional law for the current one was created in secret by the world's richest bankers in 1910 and the legislation finally passed in a Christmas Eve Congressional coup in 1913 when only 11 members of the House of Representatives edit: Sentaors were present to vote on the Federal Reserve Act of 1913: not even a quorum! Everyone else was home for the holidays. Article I, Section 8 of the Constitution of the United States expressly gives the Congress alone the authority to tax, coin and regulate money, and to borrow. This authority was un-constitutionally given away.

— An income tax. There was no income tax in the USA before 1913. Article I, Section 9 of the Constitution of the United States expressly forbids direct taxes such as income taxes. The Supreme Court has ruled numerous times, before and after the passage of the Sixteenth Amendment, that wages are not subject to an income tax. Furthermore, the Sixteenth and Seventeenth Amendments are invalid as an insufficient number of states ratified them, which has been proven over and over again. Money collected for the federal income tax does not go directly to pay for any services of the federal government, but only pays for interest on the debt for money the Federal Reserve created, which the US Congress should have created debt-free.

So we already have examples of monetary systems in the history of the USA without private central banks, without income taxes, and without the massive wars and financial instability that were seen since the inception of the private Federal Reserve Bank, which go hand-in-hand with such banks around the world. In fact, were it not for private central banks loaning money to both sides of wars, requiring the victor to pay his and the loser's debts, we would not be able to borrow enough money for long-term conflicts or war-time economies, and neither would other nations.

The Constitution of the United States was written for the purpose of creating a limited federal government, with as little power as possible —reserving most power to the states and to the people as expressly stated in the 9th and 10th amendments— so that this power could not be misused and abused. Income tax and inflation tax provide an obscene amount of money, and therefore power, to the federal government and a beguiling temptation to all those in Washington, D.C. who hold the keys to power.

[chud]

I agree with what Michael said. An honest money system, not fractional reserve banking.
Also, capitalism should be allowed to exist in its pure form; i.e., if institutions make risky loans (or create risky financial instruments) which then default, the institution in question should be allowed to fail. This would encourage responsible, rather than irresponsible, behavior.
We also need accountability and transparency in our financial system, an idea which contradicts the concept of the Federal Reserve. The Fed must go.

[Teazer]

Here ya go Michael - you knew I couldn't resist one of your posts!!

google vid links: Money as Debt, America: Freedom to Fascism, and The Money Masters. Watch them (in that order)!

keeping in mind they might not be accurate, or at least a bit misleading.
I took a quick look at the start of 'America: Freedom to Fascism'.
The Fed of 1913 is in no way the same as that after the 1930’s. Take a look at Wikipedia for the differences and relevant law changes regarding its governance. Anything that refers only to stuff prior to the 30’s is most likely omitting some very important details.
The whole government borrowing from the Fed and repaying with interest ignores the next step of the process where the Fed returns any profits to pay down the national debt. The subsequent stuff about lowering of welfare has no basis in fact.

It then went onto the income tax thing. I’ll leave that stuff aside beyond saying the folks that don’t pay have been taken to court and from my recollection always lost. Sometimes they weren’t found guilty of deliberate conspiracy to not pay due to their honest beliefs, but they all had to pay fines & their unpaid taxes. It sounds like the legal system is sufficiently impressed by the evidence for income taxes legality at least.

2)..... simply a complex method of stealing by bankers

Most of it was actually stealing by kings and governments using debasement of currency back before the fractional reserve system and independent central banks. It still happens a lot when central banks are directly controlled by the government or ruler which seems to be what some of the proponents of alternative systems are after.

the power to create money from nothing is a monopoly given to a privately owned, secretly operated, totally opaque central bank

Which is controlled indirectly by Congress, governed by law by a cross-section of individuals the majority being non-bankers, ownership being mandated by the law written by Congress giving low fixed interest rates only (IE banks can't get extra profit from the Fed printing money), all Fed profits being channeled back into the Treasury to pay down the national debt, audited annually by the GAO for non-monetary policy stuff at least, with a mandate to keep prices and markets stable while promoting economic growth. Yes, it could be less opaque.

that practices something called fractional reserve banking, a completely dishonest system

According to some who prefer other dishonest systems. This one at least is cheap, flexible and well known.

that uses inflation as a huge tax against the people for the sole benefit of the bankers;

How is inflation beneficial to a banker? Bankers hate inflation (particularly when unexpected) since they borrow in the short term markets which fluctuate but generally lend at longer terms at more fixed rates (where the value of the repayment is reduced by inflation). It can be popular in Congress, since it reduces the value of the repayments in the short run, though in the end using that kind of policy hurts them too.

and almost none of this money goes to pay for any government services. Almost all of it goes to pay interest on debt for money created by a private federal bank, .

your source for that being? Wikipedia had for 2003
“In 2003 $318 billion was spent on interest payments servicing the debt, out of a total tax revenue of $1.95 trillion”.
This other site had a more recent figure….
“In Fiscal Year 2008 (FY08), the U. S. Government spent $412 Billion of your money on interest payments* to the holders of the National Debt.” http://www.federalbudget.com/
It’s certainly up from there, but almost all of it going to interest? I think not.

…when the Constitution of the US gives this power to Congress. In effect, we have become debt slaves to a private, central bank that need not exist.

So there are two main alternatives –
One is letting Congress control the money supply directly, which invariably leads to rampant inflation. For starters they’d pay off the national debt overnight, but everybody’s dollars would be worth much less. Direct government control of the money supply is what has allowed all the famous cases of hyperinflation which gets to thousands or millions of percent per year. (eg Zimbabwe, posw WW1 Germany & Hungary etc).

The other is having a fixed backing of the currency by some limited and valuable resource, for instance requiring gold to back all dollars issued. This system has some nice properties when everybody uses it, and for small countries tends to stabilize currencies and reduce the effects of speculation. However, unless all the major countries use it, there is nothing to stop the government from changing the conversion rate of dollars to gold whenever they like to help reduce government debt. So you end up with exactly the same inflation problem only via a slightly different mechanism and again in the hands of the government. However you get no flexibility in the money supply to help offset major shocks to the system like 9/11 or the credit markets stopping due to asset pricing problems. (Some consider that a good thing.) You also have to pay for holding a large pile of assets in a vault doing nothing rather than being invested productively. There are several other technical problems.
Good luck on trying to get other countries to get back on the gold standard. It’ll never happen for the reasons mentioned above.

From the time of President Jackson in the mid-1830's until the midst of the Civil War in 1864 under Lincoln, …….

Remember what I said about history lessons that stop before the major banking laws in the 1930’s? All was not entirely shiny back in those days either.

In fact, were it not for private central banks loaning money to both sides of wars, requiring the victor to pay his and the loser's debts, we would not be able to borrow enough money for long-term conflicts or war-time economies, and neither would other nations.

Governments have been borrowing to pay for wars for the history of mankind. No change there.

The Constitution of the United States was written for the purpose of creating a limited federal government, with as little power as possible —reserving most power to the states and to the people as expressly stated in the 9th and 10th amendments— so that this power could not be misused and abused. Income tax and inflation tax provide an obscene amount of money, and therefore power, to the federal government and a beguiling temptation to all those in Washington, D.C. who hold the keys to power.

A paragraph I actually agree with! Voters should carefully monitor their representatives and hold them accountable for their spending and lawmaking.

[Michael]

Here are some links to the movies I mentioned, as well as a book about the Federal Reserve private bank, and some other educational material about money. Everything you do, your labor, everything you buy, is translated into money. Because your lifespan is limited and you can only work a certain amount of time each day, your very life's blood is measured in terms of money. Without a reasonably good understanding of money, you can not understand the society in which you live. Money is the greatest power and method of control and direction over any society.

Money as Debt, a 47 minute educational, animated video that explains where money comes from. Watch it on youtube. Watch it on google video.

Paul Grignon's documentary is the REAL Economics 101 for the twenty-first century. It's perfect for teaching your kids and all of your family about where money comes from. I plan to use it in my college classes and am now sharing it with my adult friends. This crucial information has been kept from us, and we need to learn it and spread it far and wide!

America: Freedom to Fascism (2006) is a 1 hour and 49 minute documentary that explains the history of the income tax in the USA, made by Aaron Russo, the producer of such films as Trading Places (1983) with Eddie Murphy and The Rose (1979) with Bette Midler. Watch it on google video. IMDB link.

Through extensive interviews with recognized experts and authority, the director shows an astonishing revelation of how the Federal Government and the Bankers have fooled the American public by taking their wages and putting it in the pockets of the private bankers. The director goes so far as to interview one of the "master-minds" of the IRS Code, and you can draw your own conclusions as to how the system works.

The Money Masters: How International Bankers Gained Control of the US (1996)
Watch it on google video.

3 1/2 hour non-fiction, historical documentary that traces the origins of the political power structure. The modern political power structure has its roots in the hidden manipulation and accumulation of gold and other forms of money. The development of fractional reserve banking practices in the 17th century brought to a cunning sophistication the secret techniques initially used by goldsmiths fraudulently to accumulate wealth. With the formation of the privately-owned Bank of England in 1694, the yoke of economic slavery to a privately-owned "central" bank was first forced upon the backs of an entire nation, not removed but only made heavier with the passing of the three centuries to our day. Nation after nation has fallen prey to this cabal of international central bankers.

G. Edward Griffin wrote a book about the creation of the Federal Reserve Bank in 1993, called The Creature from Jekyl Island. The book explains how a group of six men representing the most powerful banks in the world met with a powerful US Senator in 1910 at a private island off the coast of Georgia to write the legislation that would later become the Federal Reserve Act of 1913.

A popular book on the Federal Reserve, The Creature from Jekyll Island has been a business bestseller; it has been reprinted in Japanese, 2005, and German, 2006.

G. Edward Griffin posted this on his website to answer criticism of his book, The Creature from Jekyl Island.

G. Edward Griffin gives a five minute talk on the cartel structure of the Federal Reserve System and the 1910 "money trust" meeting on Jekyll Island responsible for drafting the principles of the Owners-Glass Bill/Federal Reserve Act signed into law by President Wilson. Clip from the film "FIAT EMPIRE - Why the Federal Reserve Violates the U.S. Constitution."

If you want to further explore Mr. Griffins arguments about the Fed by listening to a lecture, you can get it off youtube, audio only:
Creature from Jekyl Island, A Second Look at the Federal Reserve, part 1 of 7
Creature from Jekyl Island, A Second Look at the Federal Reserve, part 2 of 7
Creature from Jekyl Island, A Second Look at the Federal Reserve, part 3 of 7
Creature from Jekyl Island, A Second Look at the Federal Reserve, part 4 of 7
Creature from Jekyl Island, A Second Look at the Federal Reserve, part 5 of 7
Creature from Jekyl Island, A Second Look at the Federal Reserve, part 6 of 7
Creature from Jekyl Island, A Second Look at the Federal Reserve, part 7 of 7

Another lecture on the Fed by G. Edward Griffin, one hour and 20 minutes long. Download here.

A 50 minute interview with G. Edward Griffin from October 28, 2006 where he discusses the Federal Reserve.
Download the MP3. Transcript of the interview.

The Ludwig Von Mises Institute offers ten educational films and accompanying MP3's on this page.

Mises also offers a 42 minute film from 1996 called Money, Banking, and the Federal Reserve.
Watch it on youtube.
Watch it on google video.

Thomas Jefferson and Andrew Jackson understood "The Monster". But to most Americans today, Federal Reserve is just a name on the dollar bill. They have no idea of what the central bank does to the economy, or to their own economic lives; of how and why it was founded and operates; or of the sound money and banking that could end the statism, inflation, and business cycles that the Fed generates.

Fiat Empire is a one hour film arguing that the Federal Reserve bank, which is neither federal and has doubtful reserves, is simply unconstitutional and harmful. Watch it on google video.

Watch this award-winning film to find out why some feel the Federal Reserve's practices of facilitating fiat money are a violation of the U.S. Constitution and others feel it's simply "a bunch of organized crooks." Find out what fiat money and fractional reserve banking are and why the mainstream media has strict orders to NEVER discuss the mechanics of the banking system -- unless they are prepared to lose their special privileges.

Another interesting and short film (47 minutes) about the Federal Reserve and its creation is called The Monopoly Men, hosted by Dean Stockwell, which aired in 2000 as part of the Phenomenon: The Lost Archives series.
You can watch it on google video.

During the Wilson Presidency, the U.S. Government sanctioned the creation of the Federal Reserve. Thought by many to be a government organization maintained to provide financial accountability in the event of a domestic depression, the actual business of the FED is shrouded in secrecy. People of the world will be shocked to discover that the principal business of the FED is to print money from nothing, lend it to the U.S. Government and charge interest on these loans. Who keeps the interest? Good question. Find out as the connective tissue between this and other top secret international organizations is explored. Each episode of Phenomenon: The Lost Archives offers an in-depth exploration of an event that defies explication, or examines the untold secrets behind the stories you thought you knew. Hosted by Dean Stockwell, each tape investigates the facts behind the legends. In Phenomenon: The Lost Archives -- Monopoly Men, viewers investigate the Federal Reserve, a mysterious entity that controls the flow of the national economy and money supply. The history of this organization is examined as well as its contemporary assignments.

EDIT: added book downloads

The Secrets of the Federal Reserve by Eustace Mullins. Download in Word .doc format.
Audio book download of The Secrets of the Federal Reserve

Fractional Reserve Banking as Economic Parasitism (62 pages)
A Scientific, Mathematical, & Historical Expose, Critique, and Manifesto
by Vladimir Z. Nuri

Nature of Money by John Kutyn (124 pages)

Here is some relevant Wiki fun:
http://en.wikipedia.org/wiki/Central_Bank
http://en.wikipedia.org/wiki/Gold_stand ... erve_today
http://en.wikipedia.org/wiki/Hyperinflation

[Teazer]

Black discusses candidly what's wrong with letting those who created the financial crisis be the ones who are in control of fixing problems they created....

the tool at the very center of mortgage collapse, creating triple-A rated bonds out of "liars' loans" — loans issued without verifying income, assets or employment — was a fraud, and the banks knew it.

That was actually a very good video, as well as a bit shorter than your usual
We had been talking about the level of fraud if any at the Federal Reserve. This video was talking about the fraud at specialty mortgage lenders. As he mentions, the Bush administration got rid of, or confused much of the regulation and oversight of these companies, as well as some of Clinton's law changes. Some of the current regulation is looking at centralising all this oversight.

edit: this one....from a few posts back. (Damn, you cut & paste quick Michael!!)
PBS Journal with Bill Moyers

[Michael]

That was actually a very good video, as well as a bit shorter than your usual
We had been talking about the level of fraud if any at the Federal Reserve. This video was talking about the fraud at specialty mortgage lenders. As he mentions, the Bush administration got rid of, or confused much of the regulation and oversight of these companies, as well as some of Clinton's law changes. Some of the current regulation is looking at centralising all this oversight.

Glad you liked it! Definitely one of the best discussions on what's happening with the financial crisis. I got turned onto William Black because he appeared on the Alex Jones show, which is where I get a lot of my information. Jones has the best expert guests on the widest variety of topics imaginable, so just keep that in mind next time, Teazer, before you start poo-poo-ing people as you usually do.

edit: this one....from a few posts back. (Damn, you cut & paste quick Michael!!)
PBS Journal with Bill Moyers

Actually, it took me almost two hours to make that post with all those links. I went and found other threads we've had on this topic and tried to create a master post with all the relevant links people can use to educate themselves so that Brady won't have an excuse to be ignorant of basic economics any longer. LOL

Since I started reading and watching films about money in August of 2007, I've come to understand the obvious fact that living in any society without a basic knowledge of money and economics is like being a child with no comprehension of how things work. Economics and money is how most things work, sports or which celebrities or politicians have been arrested or died are just distractions. Money is even more important than martial arts! Not the love of money, mind you, but the understanding of money is more important than MA.

[Brady]

Thanks for the response Teazer and the in depth linking Michael! I've actually watched a couple of those videos but will gladly make my way through the rest as well.

[Michael]

Good for you, man! It's got to know type stuff. I have been adding a few more links to the post as I keep finding more good info. Don't want to overkill, but there are a lot of easily digestible references out there.