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Damage created by the Federal Reserve

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By Robert E. Beckner

The Federal Reserve is a privately-owned and tax-exempt bank that is dominated by foreign bankers.

It obtains Federal Reserve notes from the U.S. Treasury at deeply discounted prices, then sells them back to us at face value and charges interest for “loaning” it to us. That is partly one reason we have trillions of dollars in our national debt (11.4 trillion). Some would say this debt is making America legally bankrupt. Without a doubt, it is a great financial scam in world history the way it operates. There are those who also call the Federal Reserve one of the most corrupt institutions the world has ever seen.

The Fed is a type of bank known to the rest of the world as a “Central Bank”, one that has been granted a monopoly over the issuance of currency, with the ability to regulate the price of credit and interest rates, too. Therefore, it can determine how much money flows through the economy. They alone are authorized to issue a nation’s money supply, giving them complete control over America’s finances.

On March 19, 2009, the Fed announced it was purchasing one trillion dollars in government debt (toxic loans made by banks) and long term Treasury Bonds and mortgage-backed securities.  The Wall Street gang, the financial media and various political groups had a fit. Even the Fed Chairman, Ben Bernawke’s diehard defenders were shocked.

This move, in their opinion, would bring about long-latent inflammatory forces that would badly hurt any prospects for a robust recovery. Even the far left liberal New York Times said it was dangerous that the Fed was taking risks, by diluting the dollar even more, thereby setting the stage for more future inflation.

The Fed is to “get the economy flowing again.” They feel by giving out these lines of credit to “intermediate” banks would open up their lending practices, but it’s clear that hasn’t worked in the past or through TARP; do they expect it do work now? Banks will simply leave the money sit at the Fed, earning them interest.

What’s going to happen is that when conditions do improve, everyone will begin to start spending it on way too few goods and services! We will have double and triple digit inflation in America. The activities of central banks in general and of the Federal Reserve in particular, are the cause of inflation. The public tends to believe that inflation is raising prices, but in reality inflation denotes an increase in the money supply of which rising prices are the most visible effect.

In an effort to stem the long standing complaints about the Federal Reserve, Texas Congressman Ron Paul has introduced two bills, the first, HR 833 that would abolish the Federal Reserve and repeal the Federal Reserve Act altogether. This is highly unlikely for Congress to do, so Paul introduced another bill, HR 1207, the Federal Reserve Transparency Act of 2009, which had more than 40 co-sponsors as of March 23, 2009. This bill would clear up secrecy and complete freedom from congressional oversight. It also provides for a complete and thorough audit of the Fed.

Without a doubt, it is time to end the Fed, since none of the economic devastation we are now experiencing could have come about without the help of the Federal Reserve and kindred Central banks abroad such as the Bank of England. The evils of inflation, the deadly illusions of economics bubbles, and the migration of wealth from the savings of the middle class to the asset portfolios of the wealthy and well connected are all products of the Federal Reserve.

We can look at the former chairman, Alan Greenspan, as having laid the foundation for the greatest asset bubble in history. His policy of keeping interest rates far below market valuations encouraged reckless speculations that caused the dot.com bubble; his next round of interest cuts drove the frenzy in real estate, as well as the stock bubble. These are being liquidated now, along with the trillions in phony wealth that these errors in judgment produced.

Until the Federal Reserve is abolished and replaced with a gold/silver-based banking system, Americans will not enjoy the economic and financial freedom our ancestors enjoyed. They do this because on the average day in 2008, the deficit was 455 billion dollars. Thus each average day the government spent over 1 billion dollars more than it took in. So how does the government pay its bills of “Social Security, Medicare, federal employees, and defense contractors”?

If they are a billion short, they just send a Treasury Officer to the Federal Reserve building where they write out a check – however; this check has no assets backing it. It is what they call “fiat” money, created from nothing. If you did that you would go to jail. In the Federal Reserve, it’s perfectly legal. The technical term the Fed uses for this is “monetizing the debt”.

“Fiat” money gives the government the potential to spend without limit. This banking cartel is still linked to corporations that do business with our government, such as Halliburton, Bechtel, AT&T, etc. They can earn virtually unlimited revenues from government contracts.

The billion dollars the government got of “fiat” money is then deposited in banks, to be loaned out. In fact, this billion dollars becomes 10 billion since under Federal Reserve rules, a bank only has to keep 10 percent of deposits in reserve. Thus nine billion can now be loaned out.

Now, printing money is no longer necessary, they can do it electronically. Politicians know that by letting the Fed finance their expenditures with money made from nothing, they know they can spend without raising taxes. I wonder if our president knows this; he’s big on raising taxes. He should also know that tax increases are a “kiss of death” at re-election time, just ask George Bush, Sr.

When the Fed produces more currency which makes prices rise, we fail to blame the Fed or politicians. We tend to blame the grocer or the gas station manager or various other businesses. All the while the Fed is responsible and the prices are not going up; it’s the value of your dollar going down. How did George Bush, Jr. pay for the Iraq war? He did not raise taxes; in fact, he gave us tax credits and rebates. His secret was to let the Fed pay for the war with the infamous “fiat” money. Of course, this caused inflation which made the cost of food, energy, etc. go up. You can see that inflation is a tax, one that is hidden from the public.

You note the background on the Fed says it has been granted a monopoly over the issuance of currency and regulates the price of credit and interest notes and it determines how much money flows through the economy. Remember this is a World Bank, not a U.S. Government one. When you read the U.S. Constitution, Article 1, Section 8, it says “The Congress shall have power to lay and collect taxes …. to coin money and regulate the value thereof”. The Federal Reserve Act of December 23, 1913, transferred this authority from elected representatives to bankers. At that time, President Wilson allegedly said, “I have unwittingly ruined my country” when he signed the Federal Reserve Act.

Robert E. Beckner lives in Majestic Oaks with his wife, Sarah. He is a retired private investigator and insurance adjuster. He has also been a photographer and served with the Military Police in the Marine Corps.