THE FEDERAL RESERVE FOR DUMMIES
Submitted by Olde Reb
“What difference does an increase in the National Debt make? We owe it to ourselves.” virtually every congress-critter has declared. Such a paraphrased program gives the federal government/ congress purchasing power not previously available—to buy votes from home. Unfortunately, the inflation created dilutes the purchasing power and value of assets owned by individuals. The system also conceals the immense transfer of value to bankers, which has justified the intense subterfuge and arm-twisting necessary for the Fed’s creation—that this paper exposes. The inherent destructive forces, evidenced by historic Rothschild banking1 and mathematical analysis, are also identified.
The 19th century Rothschild banks established a line of credit for the King provided he pledged collateral with a written promise to pay gold with interest to the bearer at a time in the future. The book-entry Rothschild credit was used to satisfy obligations incurred by the king. The credit continued to be circulated in the kingdom between merchants. The bankers sold the king’s promise to investors for hoarded gold. The promise (security) was renewed by the bank on its maturing date and became perpetually rolled-over. 2
VOILA !!! The king made the suppliers of services happy with Rothschild credit; the bankers had the gold from investors; the investors gained interest on their assets and a promise the king would eventually return their gold—which would never happen.3 Everything went smoothly as long as the bankers could sell the promise and the investors, or merchants, did not demand the gold.4 The king would pay the interest with more credit from the bank so the credit cost nothing. The schemes stole the wealth from the people with its book-entry fiat money5 until the people brought a catastrophic climax.6
The Federal Reserve system does the same thing with the U.S. government’s deficit spending. The banking wizard is hiding behind Frank Baum’s curtain of the government image Federal Reserve marquee7 as obscurant to any public inquiry.8
The Federal Reserve Bank of New York will grant credit (not “create money”) in an account of the U.S. government in an amount that the government will pledge. 9 The government will expend the book-entry-credit account (deficit spending) to pay for goods and services consumed by the government. The suppliers are content. Evidence that the supplier has received a credit voucher is obvious. The heading of the currency given to the supplier by a local commercial bank is Federal Reserve Note; i.e., a debt obligation of the Federal Reserve. Historically, it was identified to be redeemable for gold, silver, or lawful money. It is now identified as a “tender” (substitute) required by law to be accepted for an imprinted number of dollars. What you have is what you get. [It is touted to the public as a loan.] 10
To sell the promise from the government at the highest price, the Federal Reserve (as fiscal agent for the government) will hold an auction but will imply it is an auction by the government.11 Acceptance of bids, determining the interest rate, and the amount of deficit spending permitted is controlled by the BOG.12 Government regulations establish the funds from the auctions are controlled exclusively by the FRBNY; i.e., a franchisee of the BOG13. 14
The roll-over of approximately $12 trillion debt from prior years (publicly held maturing) is annually auctioned and disbursed by the FRBNY. The approximate $1 trillion auctioned for deficit spending is evidenced by TreasuryDirect as “new cash.” 15 [Currently new cash can be 100% to a negative (input) of the issue.] Since all values are determined by the Fed, they must be given to TD.
The difference in handling of the two accounts is the supreme camouflage. Funds for roll-over securities are credited by the FRBNY to a government account. The FRBNY then pays the Primary Dealers among others (from the government account) for their task in collecting the maturing securities from the public. There is no increase in the National Debt nor is there any inflation as a result from these transactions.
If the funds from deficit spending securities (new cash) were to be used in redeeming Treasury securities in the market (i.e., paid by the FRBNY for government expenses), it would eliminate any increase in the National Debt. It would, in effect, buy back the securities that created the debt. It would also eliminate any increase in money in circulation (inflation). That clearly does not occur. Request for documentation from TreasuryDirect as to the destination of the funds are ignored.
WHERE DO FUNDS FROM THE AUCTIONS OF DEFICIT SPENDING SECURITIES GO?
The Primary Dealers receive the bulk of auction funds for their task in redeeming maturing securities. If the Primary Dealers include shareholders of a privately held incorporated Board of Governors of the Federal Reserve, they would not have to reveal corporate records.16 The commingling of new cash funds could be completely hidden from view. 17 The deficit spending amount 18 would be clear profit for the owners of the BOG.19 No other destination of the funds appears viable.
The statutory charter of the Federal Reserve stipulates profit of the operation belongs to the government. 20 No consideration appears to be received by the government for the funds. Consideration for commercial bank loans involve a risk; such a condition does not appear applicable to the instant action.
Each annual trillion dollars of deficit spending transfers $3 billion DAILY for an entire year to the unidentified owners of the Board of Governors. The recent trillion dollars of deficit spending in one month transfers $34 billion daily for four weeks. The source of wealth inequality becomes obvious. If the securities can not be auctioned at an acceptable price, they accumulate on the Fed’s balance sheet. They would then appear to become a claim by the Fed against the taxpayers.
An abundance of such covert funds would go a long way to advance David Rockefeller’s utopian world government identified in his autobiography MEMOIRS. The project was mentioned decades earlier by Carroll Quigley in TRAGEDY AND HOPE. Funds from Wall Street could be used to dominate foreign nations as documented by John Perkins in CONFESSIONS OF ECONOMIC HIT MAN and William Blum in KILLING HOPE; CIA AND U.S. MILITARY INTERVENTIONS. Unused funds could be laundered in the stock or bond market. 21
The proposed Goldman Sach’s government budget (whoops, Trump’s budget) includes huge deficit spending increases (increased military spending with cuts in social programs) with unrealistic increases in national productive/tax base.22 This is the same scheme Wall Street and the CIA have used to bankrupt other nations for four decades. 23 The psychopathic Wall Street warmongers demand a humongous deficit busting military expenditure, but this statement may reverse cause and effect. 24 Douglas Valentine identifies chaos by U.S. elements in foreign nations is being duplicated in the 50 states.25 Whether this involves the development of the United Nations, NATO, drugs, or a virus26 depends on the observer.
Bankruptcy of the Nation is inherent. The FR Ponzi scheme creates an expanding National Debt with no possible way to pay it off. The principle of a ‘loan’ is created by deficit spending. [Notice that the ‘loan’ (sic, credit that is never negated) is from the Federal Reserve system but the taxpayers have become responsible for it.] The required interest to pay it off is never created. Only more debt, with the new principal being used to pay the prior interest, delays the Ponzi’s collapse. The growth required to perpetuate such a scheme, of interest upon interest upon interest, is exponential as evidenced in any graph of the National Debt. A contract that cannot be culminated is an act of fraud and is void from its inception.
Academic centers, MSM, and publishers fear retribution for exposure.
Unrelated use of the Fed’s new Special Purpose Vehicles (SPV) program to sell Wall Street’s trash to the Treasury Department (read Stephen Mnuchin of Goldman Sachs) at inflated prices to procrastinate bankruptcy of Wall Street banks will additionally balloon the national debt but will be used to avoid bankruptcy of Wall Street banks. 27 BlackRock, allegedly owned by insiders, is central to the scam. 28 Unrelenting access to government funds, while the tax base is destroyed by compelled national unemployment and corporate bankruptcies by a created virus29, is a textbook recipe for insolvency.
If the scheme is not altered, Wall Street internal memos identify the “ultimate goal” is to collect on the $24 trillion National Debt. 30 During national bankruptcy, the FRBNY will handle redemption of the PD’s tendered securities they have purchased in the market for pennies. They will demand face value from the U.S. Treasury; i.e., a financial rape of the nation. They are all one clan. Hello Greece and a U.S. troika controlled by financial entities.31
National bankruptcy would duplicate the Greek chaos within the United States.32 The financiers’ objective in Greece 33 is not to exploit, but is to destroy the nation. 34 Indeed, national sovereignty has been acquiesced by Greece to the Troika (financiers) as the terminal end of Goldman Sach’s “shitty” three billion Euro debt. 35
Get ready to kiss your 401(k), your government benefits, your pension, and your bank accounts goodbye, with strikes prohibited, health care costs escalated, perpetual war, mass layoffs (including government personnel), and economic chaos—among other dire occurrences. The economic chaos initiated by the virus, which has served to destroy the tax base and make the budget unsustainable, may be only the prelude.
The U.S. has four options:
The entire situation can be ignored with the public meekly submitting to Wall Street’s collection of the fraudulent $24 trillion National Debt and accept the fate of Greece [Greece has surrendered national sovereignty control to Goldman Sachs/Troika. Approval by Troika (financiers) is required for all government actions.] The New World Order will become established.
They can assert public pressure on congress-critters to audit relevant accounts and investigate Wall Street. The GAO has authority to audit the handling of government funds by any entity. 36 It has made at least two reviews of the FRBNY’s handling of funds [but not audits] from auctions of Treasury securities. The FRBNY has exclusive handing of such funds. Ref. 31 CFR 375.3. All that is required for the GAO to review the handling of government funds is a request by a Congressional committee. Unfortunately, it is rumored that votes can be purchased as cheaply as $50,000.
Citizens can use the FOIA37 to demand relevant official Fed documents for analysis as affirmed by the Second Circuit Federal appellate court.38
Torches and Pitchforks.
It all depends on how submissive the American people have become.
*This essay is not copyrighted. Feel free to distribute.
1 European origin of the Federal Reserve is well known. Ref. http://www.apfn.org/apfn/
4 After the hook was set, the bankers would clandestinely demand token payments of gold from the king until his coffers were emptied and he was bankrupt. After the king was bankrupt and the people resisted increased taxes, bankers (who controlled the roll-over of prior debt and the paying of interest) would demand the king sell his assets to the bankers (for the banker’s make-believe book entry credit) at fire-sale prices (as in Greece) so interest on the king’s promises could be paid. Consider the irony of it. For the king to have a bit of purchasing power to advance the kingdom, the kingdom was lost. The people finally wised up and revolted.
5 The Magna Carta as a rebellion against the war-mongering by London financiers is an interesting observation of Benjamin Ginsberg. It has been omitted from history books. 1000 years hasn’t changed the financiers’ war-mongering obsession. Ref. Michel Chossudovsky, GLOBALIZATION OF WAR; Douglas Valentine, CIA AS ORGANIZED CRIME ; https://www.commondreams.org/
6 A debt-based national economy without specie backing is a Ponzi scheme inherently destined for bankruptcy but that is another story. Ref. https://www.scribd.com/doc/
8 A favorite line is the government borrows money. It is impossible to see that what was not there before the event could be borrowed. It would appear that the Fed did not put up any legal consideration for the agreement. A contract without legal consideration by both parties is void from its inception. Nor can it be rational that the Federal Reserve had $20 trillion a century ago while they purchase $100 Ben Franklins for 15 cents each from the US government. [The Fed does not ‘print money’ (sic); it buys it from the government.] Another inane concept is that the government borrows from the public. If there is any logic to this concept, how is the public then in debt ?
9 A Treasury Bill, Bond, or Note is backed by the taxing power of the U.S. FDR removed domestic demand for gold. President Nixon removed the pledge of gold for other nations. Cynics might conclude the FRBOG had confiscated the government’s gold by that time. China received bogus gold bars from the Fed.
10 A loan involves money exchanging hands. There is no increase in money in circulation (inflation) with a loan.
12 This was a surprise for President Clinton. Appointees to the BOG are selected from a short list submitted to the government (by the Wall Street owners of the corporate Board of Governors ?).
13 The BOG has regulatory and administrative authority over the 12 FR banks. Any of the 108 directors can be fired without cause and without recourse. Ref. 12 USC #248(f).
14 The 1992 GAO report reveals the FRBNY electronically receives auction bids [ http://www.gao.gov/assets/90/
15 Ref. https://www..gov/instit/
16 The Federal Reserve banks have twice been adjudicated as privately owned corporations for the issues at bar. This should not be confused with the privately owned closely held corporate ownership of the Board of Governors of the Federal Reserve alleged herein. A query of “Who owns the Fed ?” allows an evasion of owner allegation.
17 Audit reports (by professional accounting firms) of the Federal Reserve are conducted in accordance with guidelines established by the BOG. The accounts relevant to this writing are private client accounts, not operational accounts, and have never been audited.
19 Status as a government agency is not applicable for an entity created for private profit, or for theft.
20 The FR system is required to give all revenue in excess of expenses to the U.S. Treasury. 12 U.S.C. § 289.
21 http://farmwars.info/?p=15338 A FACE FOR THE SHADOW GOVERNMENT ; GLOBALIZATION OF POVERTY and GLOBALIZATION OF WAR, both by Michel Chossudovsky; https://www.newscientist.com/
23 Congressional funding of some covert foreign political action by the CIA in the 1980’s is detailed in https://consortiumnews.com/
27 https://www.bloomberg.com/ opinion/articles/2020-03-27/
31 Bankers have successfully lobbied for bankers to receive super priority for derivatives, in the event of government default. http://www.
32 Smedley Butler declined an offer from Wall Street to be the leader of a U.S. coup in the 1930’s. Ref. WAR IS A RACKET by Smedley Butler.
33 It was started with a mere $2.8 billion loan foisted by Goldman Sachs and known to be unpayable. http://america.aljazeera.com/
36 31 U.S.C. §714(b). Such federal statute restrictions are not applicable when the GAO is considering their mission to “ensure the accountability of the federal government [money] for the benefit of the American people.” CRS report id, p3. Ref. Footnote 1 and 7.
37 FOIA requests directed to the Federal Reserve system are codified at 12 CFR 261. 12 CFR § 261.3 (a) identifies the Secretary of the Board of Governors as custodian of all Federal Reserve records. 12 CFR § 261.3 (c) directs service to the Secretary of the Board. Procedures for requesting records are detailed at 12 CFR § 261.12.(b) and (c).
38 “So long as records at the [Federal Reserve Banks] satisfy the plain language meaning of 12 C.F.R. § 261.2(i)(1), they qualify as agency records of the Board and are subject to FOIA requests. … Records of the Board include . . . all information coming into the possession and under the control of the Board, any Board member, any Federal Reserve Bank, or any officer, employee, or agent of the Board or of any Federal Reserve Bank, in the performance of functions for or on behalf of the Board that constitute part of the Board’s official files; or [records] [t]hat are maintained for administrative reasons in the regular course of business in official files in any division or office of the Board or any Federal Reserve Bank in connection with the transaction of any official business…The FRBs give all revenue in excess of expenses to the U.S. Treasury. 12 U.S.C. § 289.” Bloomberg L.P. v. Bd. of Governors of Fed. Reserve Sys., 649 F. Supp. 2d 262, 274 (S.D.N.Y. 2009), aff’d, 601 F.3d 143 (2d Cir. 2010).