Recently I have had questions related to the Federal Reserve and the covert side of the financial world. This was published in April 2012 and a Part 2 was published about three days later. I will re-post them both and another one this week and if this captures your interest I will go a notch deeper and re-post some articles I wrote about Tavistock which might perk your interest? C Brewer
My very close friend, Phil Sizer, has been trying to educate me about the Federal Reserve System for several years. I have read some books and several articles and it is one of the most mystifying subjects I ever tried to understand. I found on eHow.com an article written by Joseph Nicholson that provided me with some history to share. I still lack the knowledge to fully comprehend how this agency, more covert than the CIA, ever came to exists. What really intrigues me is that Congress has no conception of what, why or how they operate. I hope this posting will generate some interest in a lot of Americans to make sure their Congresspersons can explain it before the vote in November. As the news media has never tried to report on the FED, I certainly intend to ask my Representative to explain it to me. C Brewer
A central bank of the United States has been a covert operation since its inception. Opposition to the bank was the issue that created the Democratic Party. This was the beginning of the modern two party political systems we have today. Since its inception in the early 20th century, the Federal Reserve has steadily assumed more control over U.S. monetary policy and the economy. Progressives had never tried to make giant leaps in change until President Obama started the blitz the day he was sworn in. Progressive’s who created and continue to support a central bank cite Constitutional authority under the “necessary and proper” clause of Article I.
Alexander Hamilton used this when the Bank of the United States was established under his tenure as Treasury secretary in the administration of President Washington. The creation of the central bank was vigorously opposed by then-Secretary of State Thomas Jefferson, who said that “banking establishments are more dangerous than standing armies.” The 20-year charter of the first bank expired in 1811. Five years later a second Bank was created and the struggle to dissolve the bank was the central focus of Andrew Jackson’s populist two-term presidency.
The Federal Reserve System, or (Fed), was created by act of Congress in 1913. The reason was prompted by a banking crisis in 1907. At that time, the dollar was tied to a gold standard. This made it more difficult for the government to borrow money and accumulate budget deficits. The conservative financial interests of that time desired a flexible currency that could fluctuate in value as needed. The central banking concept had proven to be very unpopular in the previous century. Then the banking interests devised a relatively decentralized banking system to oversee a more elastic currency. Woodrow Wilson, who signed the act into law and said a few years later, “I have unwittingly ruined my country … Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be … one of the most completely controlled and dominated governments in the civilized world.”
The power of the Fed over the U.S. economy became more powerful in the 1920’s. New York Fed President Benjamin Strong began the use of open market operations which is a term that refers to the Fed’s ability to purchase U.S. Treasury notes and bonds with fiat banking units, resulting in the increased supply of money in circulation. This started what was known as the Roaring ’20s, a period of financial prosperity and a stock market boom. When reality of the funny money became overt, the banks withdrew the liquidity of the money supply, the stock market crashed and set off the chain of events that resulted in the Great Depression.
During the Depression, Congress passed a myriad of bank changes. The Glass-Steagall Act required U.S. Treasuries as collateral for Federal Reserve lending. This established a limit on the Fed’s power to create money. Congress, in 1935, created the Federal Open Market Committee. This separated the Department of the Treasury and the Fed, and gave the Fed sole power over open market operations and therefore the money supply. Congress, after World War II added the maintenance of maximum employment to the Fed’s mandate. In 1956, the Fed was granted authority to regulate bank holding companies, businesses that own more than one private bank. The Humphrey-Hawkins Act, in 1978, required the Fed chairman to report money policy and goals to Congress twice annually.
In opposition to the first central bank, Thomas Jefferson stated, “If the American people ever allow the banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.” In the late 1970s, this prediction came true with double-digit inflation that nearly destroyed America. Congress had removed the dollar from the gold standard a few years earlier which was provided the bankers’ dream for an elastic currency. Fed Chairman Paul Volcker, by raising interest rates and controlling open market operations, gradually removed the financial burdens that had nearly ruined America.
Two months into the tenure of Volcker’s successor, Alan Greenspan, the stock market crashed again. Chairman Greenspan asserted the Fed’s role as “lender of last resort,” promising liquidity, and was able to revive confidence in the U.S. economy. Under Greenspan’s rule, during the Clinton administration, the Glass-Steagall Act was repealed. Banks entered a new 1920s-like era of speculation. The attacks of Sept. 11, 2001, again forced Greenspan to act. He lowered the Fed’s benchmark interest rate to 1 percent, stimulating an economic expansion that ultimately ended with the bursting of the housing market bubble in 2007. Greenspan, however, retired prior to the collapse, leaving the emergency to his successor, Ben Bernanke, who was ultimately forced to drop rates to 0 and to accept less credit-worthy collateral for Fed funds.
January 20, 2009 we were introduced to President Obama and “Change”. What he has done to finish the Socialist dreams of all Progressive’s, will be laughed at by historians for many years. He fully understands that to achieve these dreams, it will require America to go bankrupt. He nearly made it in three years but enough people woke up and slowed the train wreck down and will require another four years to finish the job. What scares me is he looks like he can mesmerize enough women to join his welfare legions to pull this off.
Thanks Phil, I will continue to read and share facts about this covert operation. CB