It’s sad to say, but important to point out, that none of our elected officials, Congress, the President or the American people are willing to address the “elephant” in the midst of our financial economic crisis/failure: The Federal Reserve Bank.
If asked how the Federal Reserve Bank works, most people would say they are our Government’s Central bank that regulates how our money is spent. Their job is to keep our economy stable.
What most people don’t know is that the Federal Reserve Bank IS NOT “FEDERAL” at all, meaning they are not part of our Government. To put it in layman terms, they are an independent agency/organization/business “hired” by our Government through an act of Congress in 1913 called the Federal Reserve Act.
The idea for the creation of this “business entity” was to stabilize the nations many private banking entities and keep them from having another financial crisis. This was endorsed as the best way to protect the people of the United States.
The website, FederalReserveHistory.org, describes the events that led up to its creation as follows:
“With the nation confronting another financial crisis in 1907, and the United States the only one of the world’s major financial powers without a central bank, the nation was forced to turn to Wall Street. Finance mogul J.P. Morgan, who had bailed the government out of a financial crisis in 1895, organized private sector investments and lines of credit to stabilize the banking system amid its latest panic.
“Recognizing that the nation could not continue to rely on wealthy individuals to stem an economic and financial crisis, Congress passed the Aldrich-Vreeland Act on May 30, 1908. The legislation provided for the issuance of emergency currency and created the eighteen-member National Monetary Commission, chaired by Sen. Nelson Aldrich, to determine what changes were necessary to the nation’s monetary system and laws related to banking and currency.”(1)
It may sounds reasonable, however some points that most of us overlook due to fear and ignorance of how the bank system works and what puts a nation in financial panic are the following:
Another point that should be made at this conjecture is that since the establishment of the Federal Reserve Bank, “it has presided over the crashes of 1921 and 1929; the Great depression of '29 to '39; recessions in '53, '57, '69, '75, and '81; a stock market "Black Monday" in '87” (2); the Great Recession of 2008-9 (requiring taxpayers to bailout mortgage companies, automobile industry, & banks) (3); and today 2015-16 our current crisis.
At this point it is imperative that we learn once and for all, how banks operate so we can get a complete and full understanding of why the Federal Reserve Bank was created and what makes a nation go into financial crisis, panic, recessions and depressions.
What is a bank?
A banks function to provide a place where anyone can deposit their income for safe keeping. Back in the day, before there was paper money, people carried around gold, silver, gems, etc. So instead of lugging it around, banks were created to safe keep your money in exchange for a “paper note(s)” of the same value. Today, it’s mostly digital, however the same principle applies. We deposit our earnings/income for safe keeping.
How does the bank benefit from our deposits?
The bank profits or benefits from our deposits by collecting the interest from loans to other individuals, businesses or governments. However keep in mind that they are loaning out the “original depositors” earnings/income. The interest they collect is distributed to the owners of the bank in the form of dividends and the “original depositors” usually a very small percentage only if they promise to not withdraw their money within a certain time frame.
Why would a bank go into failure?
The bank loaned out more money than they have in “reserves” (another term for “original depositors earnings/income” or cash-on-hand or assets) or/and owners equity and are not able to pay the “original depositors” bills (checks written to other businesses) or withdrawals made.
Are we starting to get the picture about what is going on here?
-The Worker deposits money in the bank
-The bank loans Worker deposits to other Individuals, Businesses & Governments for a fee (interest).
-If the Individual, Business or Government cannot pay back the loan and the bank does not have enough reserves/cash-on-hand/assets or enough “owner equity” then the bank goes belly up unless another bank or wealthy individual can bail them out.
This is the basic model for how all financial institutions work. This is how all Central Banks in the world work. This is also how the Stock Market came into existence to increase the abilities of the wealthy to keep creating money off of promises of future earnings.
So what does all of this have to do with the Federal Reserve Bank?
This banks function as the central bank of America (although independent & not part of our government) is to be able to bail out these private own banks if they get into an upside down situation by issuing a “promissory note” a.k.a. Federal Reserve note (look at your money) which contracts them to pay back the loan with interest.
Where does the Federal Reserve get this money to loan to the banks that go belly up?
From taxpayers of course!!
This is not easily seen because it uses a complex system of 12 Reserve banks that operate the same way the smaller banks do but in a larger scale. The undeniable truth is that the money created by the Federal Reserve has no asset-backing it. It is created out of the promise of borrowers to pay them back with interest which means they create money or Federal Reserve notes out of thin air. (See this video to understand much clearer Thrive-https://www.youtube.com/watch?v=MUzUnLHcHkg).
Since 1913 the National Debt has increased from approximately 3 Trillion to 19 Trillion today. This reflects an increase in spending of about 155 Million per year over the last 103 years. (For more information: US National Debt by the Year http://www.polidiotic.com/by-the-numbers/us-national-debt-by-year/ and US Debt Clock http://www.usdebtclock.org/index.html)
Now this brings us to ask a few questions: If the goal of establishing the Federal Reserve Bank was to stabilize the nation then why is the wealth inequality in this nation widening each year? Why are taxpayers held accountable for bailing out the banks, corporations and investors who are members of the Federal Reserve System? A Harvard professor conducted a study in 2011 that shows that 40% of our nation’s wealth is owned by the top 1% wealthy. (See short YouTube video https://youtu.be/QPKKQnijnsM). This number has greatly increased since 2011.
Another article from CNN Money shows that 62 individuals have as much wealth as half of the entire world http://money.cnn.com/2016/01/17/news/economy/oxfam-wealth/. In other words, they help to make up the 1% wealthy who depend the idea of central bank-created-money-out-of-thin-air. While they increased their wealth by more than 500 Million dollars between 2010 – 2015, the 3.8 billion people in the bottom half lost approximately 1 Trillion dollars with no real explanation of how or why.
James B. Glattfelder, a physicist shared on TedTalks, how he used a formula to determine the interconnectivity of persons, places or things by tracing the common threads they have in them. He showed how this model can be used in the world of finance too. His study showed that all the business entities in the world have these companies in common:
Prudential Financial
Morgan Stanley
Citigroup
Merrill Lynch
Bank of America Corp
State Street Corp
JP Morgan Chase & Co
Goldman Sachs
Bear Stearns
Lehman Brothers
T. Rowe Price
UBS AG
Barclays PLC
Deutsche Bank AG
AXA
Credit Suisse
Commerzbank AG
Franklin Resources
(To hear Glattfelder’s explanation watch video - https://www.youtube.com/watch?v=NgbqXsA62Qs)
The corporations that can be linked back to these main companies include retail stores, grocery stores, banks, educational institutions, governments, factories, pharmacies, manufacturing plants, etc. Any time funds are passed between these institutions or stocks are bought the link is made and the interest goes into the pockets of their shareholders or owners.
Always do your “due diligence” research for yourself. Be willing to put aside any pre-taught ideas about how our economy works.
For more information:
The Biggest Scam in History - https://www.youtube.com/watch?v=iFDe5kUUyT0
The Creature from Jekyll Island: A Second Look at the Federal Reserve (available
As a side note:
The US Debt clock is an excellent resource to try to understand the bigger picture of the money flow not just in the United States but also the world. Remember what we discussed about Reserves being cash-on-hand or assets-on-hand? If you look at the assets the United States has in gold (http://www.usdebtclock.org/gold-precious-metals.html) you will note that we only have 287 Million in gold. Yet the national debt is in the trillions.
(1)Federal Reserve History, http://www.federalreservehistory.org/Events/DetailView/10
(2)The Creature from Jekyll Island: A Second Look at the Federal Reserve, http://www.amazon.com/The-Creature-Jekyll-Island-Federal/dp/0912986212
(3)List of Recessions in the United States from Wikipedia, https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States
If asked how the Federal Reserve Bank works, most people would say they are our Government’s Central bank that regulates how our money is spent. Their job is to keep our economy stable.
What most people don’t know is that the Federal Reserve Bank IS NOT “FEDERAL” at all, meaning they are not part of our Government. To put it in layman terms, they are an independent agency/organization/business “hired” by our Government through an act of Congress in 1913 called the Federal Reserve Act.
The idea for the creation of this “business entity” was to stabilize the nations many private banking entities and keep them from having another financial crisis. This was endorsed as the best way to protect the people of the United States.
The website, FederalReserveHistory.org, describes the events that led up to its creation as follows:
“With the nation confronting another financial crisis in 1907, and the United States the only one of the world’s major financial powers without a central bank, the nation was forced to turn to Wall Street. Finance mogul J.P. Morgan, who had bailed the government out of a financial crisis in 1895, organized private sector investments and lines of credit to stabilize the banking system amid its latest panic.
“Recognizing that the nation could not continue to rely on wealthy individuals to stem an economic and financial crisis, Congress passed the Aldrich-Vreeland Act on May 30, 1908. The legislation provided for the issuance of emergency currency and created the eighteen-member National Monetary Commission, chaired by Sen. Nelson Aldrich, to determine what changes were necessary to the nation’s monetary system and laws related to banking and currency.”(1)
It may sounds reasonable, however some points that most of us overlook due to fear and ignorance of how the bank system works and what puts a nation in financial panic are the following:
- The US was the only major power at that time without a Central Bank.
- The panic or financial crisis was created from “private sector investments” and “lines of credit” issued by private individual banks
- The government did not want to rely on "wealthy individuals" to bail out the bankers whose “private sector investments” and “lines of credit” created the financial crisis
- The government was “bailed out” by one of the wealthy bankers, J.P. Morgan, who was able to stay afloat when other private banks and investment companies went belly up.
- The “money” that was misused during all of the financial crisis were not “banker profits” but the hard-working people/citizens of the United States who entrusted the banks & investors to safe-keep their money
- If the government does not to rely on the “wealthy individuals” to bail out the “private sector investors” & “lines of credits” then who are they relying on????
Another point that should be made at this conjecture is that since the establishment of the Federal Reserve Bank, “it has presided over the crashes of 1921 and 1929; the Great depression of '29 to '39; recessions in '53, '57, '69, '75, and '81; a stock market "Black Monday" in '87” (2); the Great Recession of 2008-9 (requiring taxpayers to bailout mortgage companies, automobile industry, & banks) (3); and today 2015-16 our current crisis.
At this point it is imperative that we learn once and for all, how banks operate so we can get a complete and full understanding of why the Federal Reserve Bank was created and what makes a nation go into financial crisis, panic, recessions and depressions.
What is a bank?
A banks function to provide a place where anyone can deposit their income for safe keeping. Back in the day, before there was paper money, people carried around gold, silver, gems, etc. So instead of lugging it around, banks were created to safe keep your money in exchange for a “paper note(s)” of the same value. Today, it’s mostly digital, however the same principle applies. We deposit our earnings/income for safe keeping.
How does the bank benefit from our deposits?
The bank profits or benefits from our deposits by collecting the interest from loans to other individuals, businesses or governments. However keep in mind that they are loaning out the “original depositors” earnings/income. The interest they collect is distributed to the owners of the bank in the form of dividends and the “original depositors” usually a very small percentage only if they promise to not withdraw their money within a certain time frame.
Why would a bank go into failure?
The bank loaned out more money than they have in “reserves” (another term for “original depositors earnings/income” or cash-on-hand or assets) or/and owners equity and are not able to pay the “original depositors” bills (checks written to other businesses) or withdrawals made.
Are we starting to get the picture about what is going on here?
-The Worker deposits money in the bank
-The bank loans Worker deposits to other Individuals, Businesses & Governments for a fee (interest).
-If the Individual, Business or Government cannot pay back the loan and the bank does not have enough reserves/cash-on-hand/assets or enough “owner equity” then the bank goes belly up unless another bank or wealthy individual can bail them out.
This is the basic model for how all financial institutions work. This is how all Central Banks in the world work. This is also how the Stock Market came into existence to increase the abilities of the wealthy to keep creating money off of promises of future earnings.
So what does all of this have to do with the Federal Reserve Bank?
This banks function as the central bank of America (although independent & not part of our government) is to be able to bail out these private own banks if they get into an upside down situation by issuing a “promissory note” a.k.a. Federal Reserve note (look at your money) which contracts them to pay back the loan with interest.
Where does the Federal Reserve get this money to loan to the banks that go belly up?
From taxpayers of course!!
This is not easily seen because it uses a complex system of 12 Reserve banks that operate the same way the smaller banks do but in a larger scale. The undeniable truth is that the money created by the Federal Reserve has no asset-backing it. It is created out of the promise of borrowers to pay them back with interest which means they create money or Federal Reserve notes out of thin air. (See this video to understand much clearer Thrive-https://www.youtube.com/watch?v=MUzUnLHcHkg).
Since 1913 the National Debt has increased from approximately 3 Trillion to 19 Trillion today. This reflects an increase in spending of about 155 Million per year over the last 103 years. (For more information: US National Debt by the Year http://www.polidiotic.com/by-the-numbers/us-national-debt-by-year/ and US Debt Clock http://www.usdebtclock.org/index.html)
Now this brings us to ask a few questions: If the goal of establishing the Federal Reserve Bank was to stabilize the nation then why is the wealth inequality in this nation widening each year? Why are taxpayers held accountable for bailing out the banks, corporations and investors who are members of the Federal Reserve System? A Harvard professor conducted a study in 2011 that shows that 40% of our nation’s wealth is owned by the top 1% wealthy. (See short YouTube video https://youtu.be/QPKKQnijnsM). This number has greatly increased since 2011.
Another article from CNN Money shows that 62 individuals have as much wealth as half of the entire world http://money.cnn.com/2016/01/17/news/economy/oxfam-wealth/. In other words, they help to make up the 1% wealthy who depend the idea of central bank-created-money-out-of-thin-air. While they increased their wealth by more than 500 Million dollars between 2010 – 2015, the 3.8 billion people in the bottom half lost approximately 1 Trillion dollars with no real explanation of how or why.
James B. Glattfelder, a physicist shared on TedTalks, how he used a formula to determine the interconnectivity of persons, places or things by tracing the common threads they have in them. He showed how this model can be used in the world of finance too. His study showed that all the business entities in the world have these companies in common:
Prudential Financial
Morgan Stanley
Citigroup
Merrill Lynch
Bank of America Corp
State Street Corp
JP Morgan Chase & Co
Goldman Sachs
Bear Stearns
Lehman Brothers
T. Rowe Price
UBS AG
Barclays PLC
Deutsche Bank AG
AXA
Credit Suisse
Commerzbank AG
Franklin Resources
(To hear Glattfelder’s explanation watch video - https://www.youtube.com/watch?v=NgbqXsA62Qs)
The corporations that can be linked back to these main companies include retail stores, grocery stores, banks, educational institutions, governments, factories, pharmacies, manufacturing plants, etc. Any time funds are passed between these institutions or stocks are bought the link is made and the interest goes into the pockets of their shareholders or owners.
Always do your “due diligence” research for yourself. Be willing to put aside any pre-taught ideas about how our economy works.
For more information:
The Biggest Scam in History - https://www.youtube.com/watch?v=iFDe5kUUyT0
The Creature from Jekyll Island: A Second Look at the Federal Reserve (available
As a side note:
The US Debt clock is an excellent resource to try to understand the bigger picture of the money flow not just in the United States but also the world. Remember what we discussed about Reserves being cash-on-hand or assets-on-hand? If you look at the assets the United States has in gold (http://www.usdebtclock.org/gold-precious-metals.html) you will note that we only have 287 Million in gold. Yet the national debt is in the trillions.
(1)Federal Reserve History, http://www.federalreservehistory.org/Events/DetailView/10
(2)The Creature from Jekyll Island: A Second Look at the Federal Reserve, http://www.amazon.com/The-Creature-Jekyll-Island-Federal/dp/0912986212
(3)List of Recessions in the United States from Wikipedia, https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States
