More on this book
Community
Kindle Notes & Highlights
Read between
July 22 - August 3, 2018
What is the Federal Reserve System? The answer may surprise you. It is not federal and there are no reserves. Furthermore, the Federal Reserve Banks are not even banks.
without the ability to create fiat money, most modern wars simply would not have occurred.
riding in the car at the end of their train, were six men who represented an estimated one-fourth of the total wealth of the entire world.
For nine days the rule for first-names-only remained in effect. Full-time caretakers and servants had been given vacation, and a new, carefully screened staff was brought in for the occasion.
In 1930, Paul Warburg wrote a massive book-1750 pages in all—entitled The Federal Reserve System, Its Origin and Growth. In this tome, he explained: "The results of the conference were entirely confidential. Even the fact there had been a meeting was not permitted to become public." Then, in a footnote he added: "Though eighteen years have since gone by, I do not feel free to give a description of this most interesting conference concerning which Senator Aldrich pledged all participants to secrecy."6
If it were to be exposed publicly that our particular group had got together and written a banking bill, that bill would have no chance whatever of passage by Congress.10
By 1913, when the Federal Reserve Act was passed, those numbers were seventy-one per cent non-national banks holding fifty-seven per cent of the deposits.
between 1900 and 1910, seventy per cent of the funding for American corporate growth was generated internally,
What the bankers wanted—and what many businessmen wanted also—was to intervene in the free market and tip the balance of interest rates downward, to favor debt over thrift. To accomplish this, the money supply simply had to be disconnected from gold and made more plentiful or, as they described it, more elastic.
the bank's promises exceed its ability to keep those promises by a factor of over three hundred-to-one.13
The banks did not fail because the system was weak. The system failed because the banks were weak.
they had to find a way to force all banks to walk the same distance from the edge, and, when the inevitable disasters happened, to shift public blame away from themselves. By making it appear to be a problem of the national economy rather than of private banking practice, the door then could be opened for the use of tax money rather than their own funds for paying off the losses.
the Federal Reserve Act is the work of Mr. Warburg more than any other man in the country. "18
A third brother, Max Warburg, was the financial adviser of the Kaiser who became Director of the Reichsbank in Germany.
a few years later, the Reichsbank would create the massive hyperinflation in Germany which wiped out the middle class and the entire economy as well.
"Before the passage of this Act, the New York bankers could only dominate the reserves of New York. Now we are able to dominate the bank reserves of the entire country."
political parties, after numerous experiments in monetary philosophy, after almost a hundred revisions to its charter, and after the development of countless new formulas and techniques, there has been more than ample opportunity to work out mere procedural flaws. It is not unreasonable to conclude, therefore, that the System has failed, not because it needs a new set of rules or more intelligent directors, but because it is incapable of achieving its stated objectives.
why is the System incapable of achieving its stated objectives? The painful answer is: those were never its true objectives.
The Federal Reserve System is a legal private monopoly of the money supply operated for the benefit of the few under the guise of protecting and promoting the public interest.
five objectives: stop the growing competition from the nation's newer banks; obtain a franchise to create money out of nothing for the purpose of lending; get control of the reserves of all banks so that the more reckless ones would not be exposed to currency drains and bank runs; get the taxpayer to pick up the cartel's inevitable losses; and convince Congress that the purpose was to protect the public.
The name of the game is Bailout. As stated previously, the objective of this game is to shift the inevitable losses from the owners of the larger banks to the taxpayers.
The game begins when the Federal Reserve System allows commercial banks to create checkbook money out of nothing.
most of them do act with great caution when dealing with individuals and small businesses.
One of the reasons banks prefer to lend to governments is that they do not expect those loans ever to be repaid.
If we had a truth-in-Government act comparable to the truth-in-advertising law, every note issued by the
Treasury would be obliged to include a sentence stating: "This note will be redeemed with the proceeds from an identical note which will be sold to the public when this one comes due."
reality finally dawns on the borrower that he is sinking deeper and deeper into the debt pit with no prospects of climbing out.
The Federal Reserve System has legalized and institutionalized the dishonesty of issuing more hat checks than there are hats and
it has devised complex methods of disguising this practice as a perfectly proper and normal feature of banking. Students of finance are told that there simply is no other way for the system to function. Once that premise is accepted, then all attention can be focused, not on the inherent fraud, but on ways and means to live with it and make it as painless as possible.
The people who create the problem seldom suffer the economic consequences of their actions.
The FDIC never will have enough money to cover its potential liability for the entire banking system. If that amount were in existence, it could
be held by the banks themselves, and an insurance fund would not even be necessary.
The central fact to understanding these events is that all the money in the banking system has been created out of nothing through the process of making loans.
The final cost of the bailout, therefore, is passed to the public in the form of a hidden tax called inflation.
We all were acutely aware that never before had a bank even remotely approaching Continental's size closed. No one knew what might happen in the nation and in the world. It was no time to find out just for the purpose of intellectual curiosity.44
The bankers knew full well that the Reagan Administration would not risk the political embarrassment of a major bank failure. That would make the President and the Congress look bad at re-election time.
While explaining this fleecing of the taxpayer to the Senate Banking Committee, Fed Chairman Paul Volcker said: "The operation is the most basic function of the Federal Reserve. It was why it was founded."47 With those words, he has confirmed one of the more controversial assertions of this book.
While the world was stunned by the sheer size of a $700 billion bailout, the reality was even worse.
the real figure was $5 trillion.56 That represents an additional $16,500 in lost savings and purchasing power for every American.
By the end of 2008, bailout of just the financial-services industry during the Bush Administration had reached over $7 trillion, which was ten times the amount originally estimated. It was more than twice the cost of World War II.
90% of the donations to Obama's inauguration fund came from Wall Street firms that received billions in bailout
In its final days of existence before being purchased by Bank of America (with government funds), Merrill Lynch paid $3.6 billion in bonuses with the knowledge and approval of the Bank of America.68
The following week, the Federal Reserve announced it would bail out European banks without Congressional approval.
Money for future bailouts in other countries will be created by the Federal Reserve at the expense of American citizens (without their knowledge or consent) and moved to the central banks of those countries to be distributed to their commercial banks.
We must not forget that the phrase "lender of last resort" means that the money is created out of nothing resulting in the confiscation of wealth through inflation.
the damage done by the banking cartel is made possible by the fact that money can be created out of nothing.
So it was government itself that crashed the junk bond market, not Michael Milken, although the jailed Milken and other former officials of Drexel Burnham Lambert have just agreed to a $1.3 billion settlement of the hundreds of lawsuits brought against them by government regulators, aggrieved investors, and others demanding "justice."
Incidentally, these bonds have since recovered and, had the S&Ls been allowed to keep them, they would be in better financial condition today. And so would be the RTC.
With the California upstarts out of the way, it was a simple matter to buy up the detested bonds at bargain prices and to bring control of the new market back to Wall Street.
This comfortable arrangement between political scientists and monetary scientists permits Congress to vote for any
