Federal Reserve System - Banking Fraud
By Greg Hobbs at NewsMax.com
November 1, 1999
What is the Federal Reserve Bank ( FED ) and why do we have it?
The FED is a central bank. Central banks are supposed to implement a
country's fiscal policies. They monitor commercial banks to ensure that
they maintain sufficient assets, like cash, so as to remain solvent and
stable. Central banks also do business, such as currency exchanges and
gold transactions, with other central banks.
In theory, a central bank should be good for a country, and they might
be if it wasn't for the fact that they are not owned or controlled by
the government of the country they are serving. Private central banks,
including our FED, operate not in the interest of the public good but
for profit.
There have been three central banks in our nation's history. The first
two, while deceptive and fraudulent, pale in comparison to the scope and
size of the fraud being perpetrated by our current FED. What they all
have in common is an insidious practice known as "fractional banking."
Fractional banking or fractional lending is the ability to create money
from nothing, lend it to the government or someone else and charge
interest to boot. The practice evolved before banks existed. Goldsmiths
rented out space in their vaults to individuals and merchants for
storage of their gold or silver. The goldsmiths gave these "depositors"
a certificate that showed the amount of gold stored. These certificates
were then used to conduct business.
In time the goldsmiths noticed that the gold in their vaults was rarely
withdrawn. Small amounts would move in and out but the large majority
never moved. Sensing a profit opportunity, the goldsmiths issued double
receipts for the gold, in effect creating money ( certificates ) from
nothing and then lending those certificates ( creating debt ) to
depositors and charging them interest as well.
Since the certificates represented more gold than actually existed, the
certificates were "fractionally" backed by gold. Eventually some of
these vault operations were transformed into banks and the practice of
fractional banking continued.
Keep that fractional banking concept in mind as we examine our first
central bank, the First Bank of the United States ( BUS ) . It was created,
after bitter dissent in the Congress, in 1791 and chartered for 20
years. A scam not unlike the current FED, the BUS used its control of
the currency to defraud the public and establish a legal form of usury.
This bank practiced fractional lending at a 10:1 rate, ten dollars of
loans for each dollar they had on deposit. This misuse and abuse of
their public charter continued for the entire 20 years of their
existence. Public outrage over these abuses was such that the charter
was not renewed and the bank ceased to exist in 1811.
The war of 1812 left the country in economic chaos, seen by bankers as
another opportunity for easy profits. They influenced Congress to
charter the second central bank, the Second Bank of the United States
( SBUS ) , in 1816.
The SBUS was more expansive than the BUS. The SBUS sold franchises and
literally doubled the number of banks in a short period of time. The
country began to boom and move westward, which required money. Using
fractional lending at the 10:1 rate, the central bank and their
franchisees created the debt/money for the expansion.
Things boomed for a while, then the banks decided to shut off the
debt/money, citing the need to control inflation. This action on the
part of the SBUS caused bankruptcies and foreclosures. The banks then
took control of the assets that were used as security against the loans.
Closely examine how the SBUS engineered this cycle of prosperity and
depression. The central bank caused inflation by creating debt/money for
loans and credit and making these funds readily available. The economy
boomed. Then they used the inflation which they created as an excuse to
shut off the loans/credit/money.
The resulting shortage of cash caused the economy to falter or slow
dramatically and large numbers of business and personal bankruptcies
resulted. The central bank then seized the assets used as security for
the loans. The wealth created by the borrowers during the boom was then
transferred to the central bank during the bust. And you always wondered
how the big guys ended up with all the marbles.
Now, who do you think is responsible for all of the ups and downs in our
economy over the last 85 years? Think about the depression of the late
'20s and all through the '30s. The FED could have pumped lots of
debt/money into the market to stimulate the economy and get the country
back on track, but did they? No; in fact, they restricted the money
supply quite severely. We all know the results that occurred from that
action, don't we?
Why would the FED do this? During that period asset values and stocks
were at rock bottom prices. Who do you think was buying everything at 10
cents on the dollar? I believe that it is referred to as consolidating
the wealth. How many times have they already done this in the last 85
years?
Do you think they will do it again?
Just as an aside at this point, look at today's economy. Things are
booming. Why? Because the FED has been very liberal with its
debt/credit/money. The market is hyper inflated. Who creates inflation?
The FED. How does the FED deal with inflation? They restrict the
debt/credit/money. What happens when they do that? The market collapses.
Several months back, after certain central banks said they would be
selling large quantities of gold, the price of gold fell to a 25-year
low of about $260 per ounce. The central banks then bought gold.
After buying at the bottom, a group of 15 central banks announced that
they would be restricting the amount of gold released into the market
for the next five years. The price of gold went up $75.00 per ounce in
just a few days. How many hundreds of billions of dollars did the
central banks make with those two press releases?
Gold is generally considered to be a hedge against more severe economic
conditions. Do you think that the private banking families that own the
FED are buying or selling equities at this time? ( Remember: buy low,
sell high. ) How much more money do you think these FED owners will make
when they restrict the money supply at the top of this current cycle?
Alan Greenspan has said publicly on several occasions that he thinks the
market is overvalued, or words to that effect. Just a hint that he will
raise interest rates ( restrict the money supply ) , and equity markets
have a negative reaction. Governments and politicians do not rule
central banks, central banks rule governments and politicians.
President Andrew Jackson won the presidency in 1828 with the promise to
end the national debt and eliminate the SBUS. During his second term
President Jackson withdrew all government funds from the bank and on
January 8, 1835, paid off the national debt. He is the only president in
history to have this distinction. The charter of the SBUS expired in
1836.
Without a central bank to manipulate the supply of money, the United
States experienced unprecedented growth for 60 or 70 years, and the
resulting wealth was too much for bankers to endure. They had to get
back into the game. So, in 1910 Senator Nelson Aldrich, then Chairman of
the National Monetary Commission, in collusion with representatives of
the European central banks, devised a plan to pressure and deceive
Congress into enacting legislation that would covertly establish a
private central bank.
This bank would assume control over the American economy by controlling
the issuance of its money. After a huge public relations campaign,
engineered by the foreign central banks, the Federal Reserve Act of 1913
was slipped through Congress during the Christmas recess, with many
members of the Congress absent. President Woodrow Wilson, pressured by
his political and financial backers, signed it on December 23, 1913.
The act created the Federal Reserve System, a name carefully selected
and designed to deceive. "Federal" would lead one to believe that this
is a government organization. "Reserve" would lead one to believe that
the currency is being backed by gold and silver. "System" was used in
lieu of the word "bank" so that one would not conclude that a new
central bank had been created.
In reality, the act created a private, for profit, central banking
corporation owned by a cartel of private banks. Who owns the FED? The
Rothschilds of London and Berlin; Lazard Brothers of Paris; Israel Moses
Seif of Italy; Kuhn, Loeb and Warburg of Germany; and the Lehman
Brothers, Goldman, Sachs and the Rockefeller families of New York.
Did you know that the FED is the only for-profit corporation in America
that is exempt from both federal and state taxes? The FED takes in about
one trillion dollars per year tax free! The banking families listed
above get all that money.
Almost everyone thinks that the money they pay in taxes goes to the US
Treasury to pay for the expenses of the government. Do you want to know
where your tax dollars really go? If you look at the back of any check
made payable to the IRS you will see that it has been endorsed as "Pay
Any F.R.B. Branch or Gen. Depository for Credit U.S. Treas. This is in
Payment of U.S. Oblig." Yes, that's right, every dime you pay in income
taxes is given to those private banking families, commonly known as the
FED, tax free.
Like many of you, I had some difficulty with the concept of creating
money from nothing. You may have heard the term "monetizing the debt,"
which is kind of the same thing. As an example, if the US Government
wants to borrow $1 million - the government does borrow every dollar it
spends - they go to the FED to borrow the money. The FED calls the
Treasury and says print 10,000 Federal Reserve Notes ( FRN ) in units of
one hundred dollars.
The Treasury charges the FED 2.3 cents for each note, for a total of
$230 for the 10,000 FRNs. The FED then lends the $1 million to the
government at face value plus interest.
To add insult to injury, the government has to create a bond for $1
million as security for the loan. And the rich get richer. The above was
just an example, because in reality the FED does not even print the
money; it's just a computer entry in their accounting system.
To put this on a more personal level, let's use another example.
Today's banks are members of the Federal Reserve Banking System. This
membership makes it legal for them to create money from nothing and lend
it to you. Today's banks, like the goldsmiths of old, realize that only
a small fraction of the money deposited in their banks is ever actually
withdrawn in the form of cash. Only about 4 percent of all the money
that exists is in the form of currency. The rest of it is simply a
computer entry.
Let's say you're approved to borrow $10,000 to do some home
improvements. You know that the bank didn't actually take $10,000 from
its pile of cash and put it into your pile? They simply went to their
computer and input an entry of $10,000 into your account. They created,
from thin air, a debt which you have to secure with an asset and repay
with interest. The bank is allowed to create and lend as much debt as
they want as long as they do not exceed the 10:1 ratio imposed by the
FED.
It sort of puts a new slant on how you view your friendly bank, doesn't
it? How about those loan committees that scrutinize you with a
microscope before approving the loan they created from thin air. What a
hoot! They make it complex for a reason. They don't want you to
understand what they are doing. People fear what they do not understand.
You are easier to delude and control when you are ignorant and afraid.
Now to put the frosting on this cake. When was the income tax created?
If you guessed 1913, the same year that the FED was created, you get a
gold star. Coincidence? What are the odds? If you are going to use the
FED to create debt, who is going to repay that debt? The income tax was
created to complete the illusion that real money had been lent and
therefore real money had to be repaid. And you thought Houdini was good.
So, what can be done? My father taught me that you should always stand
up for what is right, even if you have to stand up alone. If "We the
People" don't take some action now, there may come a time when "We the
People" are no more. You should write a letter or send an email to each
of your elected representatives. Many of our elected representatives do
not understand the FED. Once informed they will not be able to plead
ignorance and remain silent.
Article 1, Section 8 of the US Constitution specifically says that
Congress is the only body that can "coin money and regulate the value
thereof." The US Constitution has never been amended to allow anyone
other than Congress to coin and regulate currency.
Ask your representative, in light of that information, how it is
possible for the Federal Reserve Act of 1913, and the Federal Reserve
Bank that it created, to be constitutional. Ask them why this private
banking cartel is allowed to reap trillions of dollars in profits
without paying taxes. Insist on an answer.
Thomas Jefferson said, "If the America people ever allow private banks
to control the issuance of their currencies, first by inflation and then
by deflation, the banks and corporations that will grow up around them
will deprive the people of all their prosperity until their children
will wake up homeless on the continent their fathers conquered."
Jefferson saw it coming 150 years ago. The question is, "Can you now see
what is in store for us if we allow the FED to continue controlling our
country?"
Reproduced with the permission of NewsMax.com. All rights reserved.
Greg Hobbs
users.dircon.co.uk |
