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Guest Post: The 10 Things That Would Be Different If The Federal Reserve Had Never Been Created

Tyler Durden's picture


Reprtinted From The Economic Collapse

10 Things That Would Be Different If The Federal Reserve Had Never Been Created

The vast majority of Americans, including many of those who believe
that they are "educated" about the Federal Reserve, do not really
understand how the Federal Reserve really makes money for the
international banking elite.  Many of those opposed to the Federal
Reserve will point to the record $80.9 billion in profits that the
Federal Reserve made last year as evidence that they are robbing the
American people blind.  But then those defending the Federal Reserve
will point out that the Fed returned $78.4 billion to the U.S.
Treasury.  As a result, the Fed only made a couple billion dollars last
year.  Pretty harmless, eh?  Well, actually no.  You see, the money that
the Federal Reserve directly makes is not the issue.  Rather, the
"magic" of the Federal Reserve system is that it took the power of money
creation away from the U.S. government and gave it to the bankers. 
Now, the only way that the U.S. government can inject more money into
the economy is by going into more debt.  But when new government debt is
created, the amount of money to pay the interest on that debt is not
also created.  In this way, it was intended by the international bankers
that U.S. government debt would expand indefinitely and the U.S. money
supply would also expand indefinitely.  In the process, the
international bankers would become insanely wealthy by lending money to
the U.S. government.

Every single year, hundreds of billions of dollars in profits are made lending money to the U.S. government.

But why in the world should the U.S. government be going into debt to anyone?

Why can't the U.S. government just print more money whenever it wants?

Well, that is not the way our system works.  The U.S. government has
given the power of money creation over to a consortium of international
private bankers.

Not only is this unconstitutional, but it is also one of the greatest ripoffs in human history.

In 1922, Henry Ford wrote the following....

"The people must be helped to think naturally about
money. They must be told what it is, and what makes it money, and what
are the possible tricks of the present system which put nations and
peoples under control of the few."

It is important to try to understand how the international banking
elite became so fabulously wealthy.  One of the primary ways that this
was accomplished was by gaining control over the issuance of national
currencies and by trapping large national governments in colossal debt

The U.S. national debt problem simply cannot be fixed under the
current system.  U.S. government debt has been mathematically designed
to expand forever.  It is a trap from which there is no escape.

Many liberals won't listen because they don't really care about ever
paying off the debt, and most conservatives won't listen because they
are convinced we can solve the national debt problem if we just get a
bunch of "good conservatives" into positions of power, but the truth is
that we have such a horrific debt problem because it was designed to be
this way from the beginning.

So how would America be different if we could go back to 1913 and
keep the Federal Reserve Act from ever being passed?  Well, the
following are 10 things that would be different if the Federal Reserve
had never been created....

#1 If the U.S. government had been issuing debt-free
money all this time, the U.S. government could conceivably have a
national debt of zero dollars.  Instead, we currently have a national
debt that is over 14 trillion dollars.

#2 If the U.S. government had been issuing debt-free
money all this time, the U.S. government would likely not be spending
one penny on interest payments.  Instead, the U.S. government spent over 413 billion dollars
on interest on the national debt during fiscal 2010.  This is money
that belonged to U.S. taxpayers that was transferred to the U.S.
government which in turn was transferred to wealthy international
bankers and other foreign governments.  It is being projected that the
U.S. government will be paying 900 billion dollars just in interest on the national debt by the year 2019.

#3 If the U.S. government could issue debt-free
money, there would not even have to be a debate about raising "the debt
ceiling", because such a debate would not even be necessary.

#4 If the U.S. government could issue debt-free
money, it is conceivable that we would not even need the IRS.  You doubt
this?  Well, the truth is that the United States did just fine for well
over a hundred years without a national income tax.  But about the same
time the Federal Reserve was created a national income tax was
instituted as well.  The whole idea was that the wealth of the American
people would be transferred to the U.S. government by force and then
transferred into the hands of the ultra-wealthy in the form of interest

#5 If the Federal Reserve did not exist, we would
not be on the verge of national insolvency.  The Congressional Budget
Office is projecting that U.S. government debt held by the public will
reach a staggering 716 percent of GDP by the year 2080.  Remember when I used the term "debt spiral" earlier?  Well, this is what a debt spiral looks like....

#6 If the Federal Reserve did not exist, the big
Wall Street banks would not have such an overwhelming advantage.  Most
Americans simply have no idea that over the last several years the
Federal Reserve has been giving gigantic piles of nearly interest-free
money to the big Wall Street banks which they turned right around and
started lending to the federal government at a much higher rate of return
I don't know about you, but if I was allowed to do that I could make a
whole bunch of money very quickly.  In fact, it has come out that the
Federal Reserve made over $9 trillion
in overnight loans to major banks, large financial institutions and
other "friends" during the financial crisis of 2008 and 2009.

#7 If the Federal Reserve did not exist, it is
theoretically conceivable that we would have an economy with little to
no inflation.  Of course that would greatly depend on the discipline of
our government officials (which is not very great at this point), but
the sad truth is that our current system is always going to produce
inflation.  In fact, the Federal Reserve system was originally designed
to be inflationary.  Just check out the inflation chart posted below. 
The U.S. never had ongoing problems with inflation before the Fed was
created, but now it is just wildly out of control....

#8 If the Federal Reserve had never been created,
the U.S. dollar would not be a dying currency.  Since the Federal
Reserve was created, the U.S. dollar has lost well over 95 percent of
its purchasing power.  By constantly inflating the currency, it
transfers financial power away from those already holding the wealth
(the American people) to those that are able to create more currency and
more government debt.  Back in 1913, the total U.S. national debt was
just under 3 billion dollars.  Today, the U.S. government is spending
approximately 6.85 million dollars per minute, and the U.S. national debt is increasing by over 4 billion dollars per day.

#9 If the Federal Reserve did not exist, we would
not have an unelected, unaccountable "fourth branch of government"
running around that has gotten completely and totally out of control. 
Even some members of Congress are now openly complaining about how much
power the Fed has.  For example, Ron Paul told MSNBC last year that he
believes that the Federal Reserve is now more powerful than Congress.....

"The regulations should be on the Federal Reserve. We
should have transparency of the Federal Reserve. They can create
trillions of dollars to bail out their friends, and we don’t even have
any transparency of this. They’re more powerful than the Congress."

#10 If the Federal Reserve had never been created,
the American people would be much more free.  We would not be enslaved
to this horrific national debt.  Our politicians would not have to run
around the globe begging people to lend us money.  Representatives that
we directly elect would be the ones setting national monetary policy. 
Our politicians would be much less under the influence of the
international banking elite.  We would not be at the mercy of the
financial bubbles that the Fed has constantly been creating.

There is a reason why so many of the most prominent politicians from
the early years of the United States were so passionately against a
central bank.  The following is a February 1834 quote by President Andrew Jackson about the evils of central banking....

I too have been a close observer of the doings of the
Bank of the United States. I have had men watching you for a long time,
and am convinced that you have used the funds of the bank to speculate
in the breadstuffs of the country. When you won, you divided the
profits amongst you, and when you lost, you charged it to the Bank. You
tell me that if I take the deposits from the Bank and annul its
charter I shall ruin ten thousand families. That may be true,
gentlemen, but that is your sin! Should I let you go on, you will ruin
fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out and, by the Eternal, (bringing his fist down on the table) I will rout you out.

But we didn't listen to men like Andrew Jackson.

We allowed the Federal Reserve to be created in 1913 and we have
allowed it to develop into an absolute monstrosity over the past

Now we are drowning in debt and we are on the verge of national bankruptcy.

Will the American people wake up before it is too late?


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Thu, 01/13/2011 - 19:02 | 874690 mynhair
mynhair's picture

'We allowed the Federal Reserve to be created in 1913 and we have allowed it to develop into an absolute monstrosity over the past century.'

Geez, dude, I'm not that old.....

Thu, 01/13/2011 - 21:34 | 875051 MarketTruth
MarketTruth's picture

Apologies to all for hopping to the top yet a HUGE FACTOR that seems to be ignored is that the Federal Reserve is owned privately by members that include JP Morgan. So how has the private Fed helped one of their owners  JP Morgan to control markets, maintain a plan by the elites, etc via money creation/profits?

Thu, 01/13/2011 - 22:26 | 875145 Malcolm Tucker
Malcolm Tucker's picture

Excellent cartoon about "The American Dream"! Full of references to banksters, the FED, fractional reserve lending, gold, etc....


Fri, 01/14/2011 - 00:52 | 875356 KickIce
KickIce's picture

Very good.  They certainly dealt with them much more effectively in the past.

Fri, 01/14/2011 - 07:24 | 875575 More Critical T...
More Critical Thinking Wanted's picture


LOL, the logic behind this whole article is a massive FAIL of epic proportions.

Lets start with bullet point #1:

If the U.S. government had been issuing debt-free money all this time, the U.S. government could conceivably have a national debt of zero dollars. Instead, we currently have a national debt that is over 14 trillion dollars.

Besides the inaccuracy of the debt figure (what's a trillion amongst friends?), what would happen is what happened for hundreds of years in various countries all around the planet:

governments (or ruling monarchies) got indebted just as much, sometimes catastrophically, but not to the 'Fed' or 'investors' but to a select few merchants and other rich creditors and other countries.

Those creditors had undue behind-the-doors influence over the policy of those countries and were often the real rulers of those countries. Ask the Hansa.

And yes, those countries were on the gold standard and did not have any central banks - and yes, the results were often catastrophic to citizens.

So yes, if you want to sign away your rights and freedoms as a country you need to do nothing else but elect Ron Paul, abolish the Fed and let the US get indebted towards rich (and unregulated) mega-corporations only, and let US politicians run to them for bail-outs instead of to the printing presses.

That will work out fine I'm sure :-)

Really, has ZH become a propaganda site for TBTF banks, to spout such obvious nonsense?


Fri, 01/14/2011 - 07:56 | 875592 AnAnonymous
AnAnonymous's picture

if you want to sign away your rights and freedoms as a country


So now countries have rights and freedoms?


This said, where is the difference from the past models and today?

Because this diatribe can be sumed up as just this: we are not worse than the others guys we used to describe as the worst things on Earth.

Does not make the US better, though. Contrary to what was allegedly proclaimed at start.

Fri, 01/14/2011 - 09:38 | 875683 More Critical T...
More Critical Thinking Wanted's picture


Because this diatribe can be sumed up as just this: we are not worse than the others guys we used to describe as the worst things on Earth.

It can be summed up as what it said, that item #1 of the article is a false premise already. It gets worse with the other 9 items :-)

One of the more hillarious concepts in the article is the term "debt-free money".

Is the author aware of the plain fact that all forms of money are proxies for promises and are as such instruments of debt? That includes gold coins.

There are very few real examples of "debt free" economies - stone-age barter economies mostly. You know about 'stone money', right?

Barter works in small communities but the pricing is extremely inefficient as the pricing matrix is NxN instead of 1xN. As a result of that inefficiency professions that produce common goods are extremely profitable (blacksmiths, millmen, etc.) and 'rare' skills and professions are under-paid, starving or outright not existing.

All in one pure barter economies were not very good at general scientific progress - and it's no accident that the introduction of central money and more liquid investments brought perhaps the biggest advances in productivity since the dawn of humans and brought the biggest jumps in the standard of living of most developed nations.

The rest of the randpaulesque visions present in this anti-Fed article can be debunked with similarly easy strides. That guy was a genius when it came to choosing rich parents, but he came up short when it came to brains ...


Fri, 01/14/2011 - 11:11 | 875880 Womb Service
Womb Service's picture

One of the more hillarious concepts in the article is the term "debt-free money".


The only epic fail is yours. You can't see the difference between payment in full and a phony warehouse receipt?

Willful blindness or just a plain old troll?

Fri, 01/14/2011 - 18:14 | 877605 RockyRacoon
RockyRacoon's picture

Uh.  Let's go with troll.  Do I win something?

Sat, 01/15/2011 - 13:45 | 878785 More Critical T...
More Critical Thinking Wanted's picture


You can't see the difference between payment in full and a phony warehouse receipt?

Payment in full with what? With a piece of paper, promised by someone to mean something? With some bits twiddled in a computer, promised by someone to mean something? With a piece of metal, promised by someone to mean something?

You need to realize that there is no such thing as 'debt-free money' - it's an oxymoron. There's always a promise involved somewhere, somehow, by some entity.

You'd have to define your terms more precisely and make them less of an oxymoron to have a coherent argument :-)

But I expect only the cricket chirp - why should I be expecting consistent, logical arguments from monetarists?


Thu, 01/13/2011 - 23:08 | 875167 Pegasus Muse
Pegasus Muse's picture

Worth watching:  G Edward Griffin, Creature from Jeckyll Island (A Second Look at the Federal Reserve)


Zeitgeist II Addendum (Full Movie) 

Thu, 01/13/2011 - 23:12 | 875221 Hammer Down
Hammer Down's picture

I read this book a while back - truly eye opening.  Currently working on The Mystery of Banking by Rothbard which is equally impressive.  This may be a little off topic, but I saw recently that Basel III will require liquidity requirements in addition to capital which will raise the required treasury holdings by something like $4T.  Being sold as more protection, but looks to me like a new way to increase treasury demand and keep things afloat for a little longer.  This is my first post by the way - pleasure to be with you all (most of you anyway.)

Fri, 01/14/2011 - 00:13 | 875310 flacon
flacon's picture

Welcome, Hammer Down. 


I am a huge Mises fan. 

Fri, 01/14/2011 - 04:57 | 875526 Midas
Midas's picture

Welcome to the fight club.  Make sure you junk HarryWanger on the way in.

Thu, 01/13/2011 - 21:50 | 875089 Dismal Scientist
Dismal Scientist's picture

Then you're missing the point deliberately, I assume. How hard do you think the bankers of early 20th century lobbied for creation of the Fed, and control of the money supply? As if their future generations were at stake, of course. It was a no brainer...

Fri, 01/14/2011 - 03:09 | 875471 AnAnonymous
AnAnonymous's picture

People make too much of the 1913 year decision.

Pyramiding debt was not new in human history. If you look at it, two groups emerge: one group that was wary about pyramiding debt and another that was eager of exploiting pyramiding debt.

The last group won over the first.

The 19th century US growth was built on pyramiding debt (against Indian lands)

Usually, the way out of a debt scheme is to build a bigger debt scheme.

All it shows is that people in 1910 knew what was going on. It does not signal the start of all.

Fri, 01/14/2011 - 11:28 | 875921 Johnny Dangereaux
Johnny Dangereaux's picture

From the 1920's--A Great Read!!

The Federal Reserve Monster by Jim Jam Jems

Thu, 01/13/2011 - 19:08 | 874705 Salinger
Salinger's picture

cross post


Fed Govenor Fisher (Wednesday jan 12) talks about congress and its role:

Those lawmakers who advocate “Ending the Fed” might better turn their considerable talents toward ending the fiscal debacle that has for too long run amuck within their own house. The Fed does not create government debt; fiscal authorities do. Deficits and the unfunded liabilities of Medicare and Social Security are not created by the Federal Reserve; they are the legacy of those who control the purse strings?the Congress, working with the president. The Fed does not earmark taxpayer money for pet projects in local communities that taxpayers themselves would never countenance; only the Congress does that. The Congress and administration play the dominant role in creating the regulatory environment that incentivizes or discourages job creation.


I think I have said enough, if not too much. In the musty, time-honored tradition of central bankers, I am now happy to avoid answering any questions you might have. Thank you.

Thu, 01/13/2011 - 19:27 | 874758 Don Birnam
Don Birnam's picture

The Pontius Pilate response.

"I wash my hands of this matter."

Fri, 01/14/2011 - 05:02 | 875456 DrLamer
DrLamer's picture

The Pontius Pilate response.

"I wash my hands of this matter."

As a strong supporter of modern Israel, the US people is about TO REPEAT the story of jews, occured AFTER the Pontius Pilate's court. After EXACTLY 40 years, allowed for appeal before God, half of jews (2+ millions) was murdered by Rome's pagans, half of them spreaded around the world for 2000 years.

It means that as of today's morning the US people is about to have been SPREADED around a globe in next 50+ years, along with his gold and silver bullions and coins.

Note: USA has no 40 years to appeal.

The crime: crude oil and computer idolatries, support of Israel, listening to false prophets, including jewish false prophets, etc.

Thu, 01/13/2011 - 20:00 | 874826 Withdrawn Sanction
Withdrawn Sanction's picture

The Fed does not create government debt; fiscal authorities do.

No kidding.  In a similar vein, heroin dealers do not create addiction...they merely enable it.

Fisher's response is remarkably brazen for a central banker whose entire existence is at the pleasure of those he criticizes.  He's either (a) got balls of steel knowing he's untouchable, or (b) someone's struck a nerve.  Given that bankers are neither smart nor brave, I'll say it's (b).

(Thanks for the link.)

Thu, 01/13/2011 - 20:09 | 874844 Rainman
Rainman's picture smart, uber-strong organization can lasso 500 or so critters easily. Besides, the soldier banks are out there spreading the electoral fiat grease. Who is to question the abnormal becoming normal...?

Fri, 01/14/2011 - 09:58 | 875725 trav7777
trav7777's picture

Fed governors certainly act with the air and demeanor of a Senator, and Greenspasm as if he were VP or even co-President during his stint as Chairman.  The Bernank has the deer in headlights look when he really should be behaving during these hearings as if he is doing them a favor by allowing them to speak directly to him.

Thu, 01/13/2011 - 21:48 | 875086 buzzsaw99
Thu, 01/13/2011 - 22:15 | 875133 Salinger
Salinger's picture

just checking out your site now - how come your not on Tyler's blogroll?

Thu, 01/13/2011 - 22:43 | 875160 buzzsaw99
buzzsaw99's picture

We never get on the good blogrolls. I have friends who would like to be on there too. lol


Actually this is the first link I have ever left here so it isn't anybody's fault really. Thanks again for the speech link.

Thu, 01/13/2011 - 19:14 | 874727 Waterfallsparkles
Waterfallsparkles's picture

Bravo.  That is the point.  When the interest is not also created it is taken out of the Economy.  So you  have 100 dollars put into the economy at 10% interest 110% comes out of the Economy.  Until there is nothing left.

Bankers win everyone else is a debt slave forever.

Fri, 01/14/2011 - 11:21 | 875897 A_MacLaren
A_MacLaren's picture

Bankers win everyone else is a debt slave forever.

Precisely.  Steve Keen has modelled this outcome and has been presenting it to those who will watch, listen and understand. 


Why credit money fails
Thu, 01/13/2011 - 19:16 | 874734 hugovanderbubble
hugovanderbubble's picture



Thanks for ideas,

Whats a pity the big IF...IF the Fed... Who audit the fed? who control the SEC? Who Audit the IMF? who audit WB?Wjo audits the NATO ? Who controls the ONU?....Who controls and audit the BIS?...

The system is a smokescreen of a toxic submarine going nowhere.

"In Strict Sense the Fed is not bad, is just the way they manipulate the market for Permabullisment"

Thu, 01/13/2011 - 19:23 | 874745 Waterfallsparkles
Waterfallsparkles's picture

As I have said before.  If I could create Money from 0 and collect interest on that Money from 0, I would print as much Money as I could.  What if I could print 2 Trillion Dollars from 0 Capital and give it to my Banker friends.  I could then receive interest on the 2 Trillion Dollars I just gave away.  I would not have to worry because the American Tax Payer and all of their Children would have to pay for the Money I printed plus all of the accumulating interest.  I would be in 7th heaven.

Yep, print Money give it to my friends and have someone else pay for it.  That sounds like a good plan if I could get away with it.

The best part is that the Americans would never be able to repay me, so I will collect interest forever on capital created from 0.

Thu, 01/13/2011 - 20:02 | 874828 damnitalready
damnitalready's picture

Not to mention stealing, err, foreclosing on the borrowers real property when they default on the loans... sounds like you have yourself a pretty good racket there.

When you put it in that light, though, makes you wonder what the hell congress was thinking to let this monstrosity be created...  I mean, how much cocaine was flowing through the halls of congress in 1913?

Fri, 01/14/2011 - 01:03 | 875363 Enraged
Enraged's picture

I believe the only hope we have remaining is Ron Paul against Zimbabwe BENdover to end this horrible nightmare.  This may be the most important battle of all times to save the U.S., before the revolution against the banksters.  

Thu, 01/13/2011 - 19:28 | 874759 the rookie cynic
the rookie cynic's picture

The Federal Reserve runs this place. It's the ultimate Ponzi-debt-pyramid-scheme from hell. In case you were unaware: you are at the bottom. Sucks to be you.

Thu, 01/13/2011 - 19:31 | 874767 NotApplicable
NotApplicable's picture

#11 Pennies would be made out of copper, and still have value in our economy.

Thu, 01/13/2011 - 19:33 | 874768 Waterfallsparkles
Waterfallsparkles's picture

As far as Income Tax goes.  Being the Income Tax and the IRS was established at the same time as the Federal Reserve.  I also agree that there would be no need for an Income Tax.  The Income Tax which is collected thru the IRS a branch of the Federal Reserve is only to collect the interest on the Debt that the FED has created for 0.  So, in effect we pay a tax on Money that was created from 0 to the Banks of the Federal Reserve.  What a deal.  Think about that when you write your next check to the IRS.

Makes you wonder why you should owe a tax on Money created from 0 when there was no actual consideration for the Debt or the interest.

Thu, 01/13/2011 - 19:42 | 874798 Waterfallsparkles
Waterfallsparkles's picture

After thought.  If the FED prints Money from thin air.  There is no consideration for the Money they print.  Without a Consideration there cannot be any Debt.  There has to be a Consideration for a Debt to be valid.  Without Consideration does anyone owe Income Tax on a Debt that is not valid?

Fri, 01/14/2011 - 05:53 | 875546 Matto
Matto's picture

I just finished reading ellen hodgkin browns Web of Debt which is a great non-technical primer on this topic. 


At one point she mentions a study on income tax - that 1/3rd is wasted in collection & administration of the tax law, 1/3 in paying fed debt and 1/3 in lost productivity/disincentives.

Fri, 01/14/2011 - 09:06 | 875638 wherewasi
wherewasi's picture


I'm not smart enough to know whether or not the FED is the right way to go for the money supply.  But I can't help but wonder WHY we (the sheeple) pay interest on money thatis created literally from nothing.  And then the sheeple have to also pay for the printing of the cash in circulation.  How the f*&^ is that possible?  Who made THAT deal?

Thu, 01/13/2011 - 21:07 | 874996 1fortheroad
1fortheroad's picture

WOW, at least one person on this list has a working brain.

Fri, 01/14/2011 - 00:00 | 875290 tbd108
tbd108's picture

"Socialism (or Fascism for that matter) only takes meaning at the point of a gun." (per Mao). That's your consideration.

Thu, 01/13/2011 - 19:53 | 874809 gwar5
gwar5's picture

We can end the Fed, congress can do it. But politicians are captured with their personal golden tickets.

The American people did not allow creation of the Fed. They didn't want the "Money trusts" to form a Central Bank, but it was done in the dead of night on a Christmas Eve with most out of town. 

It was formed by the old "money trust" banks of the monopolies of JP Morgan and the usual suspects that people didn't want. It was disguised as the "Federal Reserve Bank" -- I think everybody here is already aware of the fraud

The cartel seeks to solve the American debt problem and get their money through selective euthanasia of the baby boomers.

Who knew there was big money in Socialism after all?

Thu, 01/13/2011 - 20:32 | 874918 Judge
Judge's picture

Actually more bad fiction.... You need to take five minutes and actually research the vote on the FRA - it passed overwhelmingly and not in the 'dead of night."  That's just more fiction from Jekyll island....

The people did want the Fed b/c they were tired of the corrupt politicans controlling the money supply for their own gain.  The goal was to find men of sound judgement - appointed by the president and approved by Congress that would then control the money supply as an agency independent of political whimsy.  While not perfect, it has greatly outperformed other systems. 


Simple, historical fact.

Thu, 01/13/2011 - 21:23 | 875028 1fortheroad
1fortheroad's picture

You are just a simple asshole, eat shit and die you fucking moron.

Yes I did junk you, you fucking troll.


Thu, 01/13/2011 - 23:03 | 875209 Ima anal sphincter
Ima anal sphincter's picture


Fri, 01/14/2011 - 01:13 | 875378 Judge
Judge's picture

Lol... that's as witty as it is intelligent.

Well, I guess if you can't discuss the facts, that's all morons are left with.



Thu, 01/13/2011 - 21:55 | 875098 Rick64
Rick64's picture

 Acually there were two bills (Aldrich and Robert Owens) Aldrich's plan wasn't very popular whereas Owen's was, and they kind of meshed the two together so one could argue that they pulled the same tricks back then as they are doing today.

   The primary difference between the two bills was the transfer of control of the Board of Directors (called the Federal Open Market Committee in the Federal Reserve Act) to the government- wikipedia . This was in Owen's bill.

  Successful??  The FED was enacted in 1913 and the Great Depression was in 1929, the worst financial catastrophe in our history. The biggest unemployment in our history ( part of the FEDS mandate is to control unemployment). There were many a crisis that they didn't prevent. How about the present day crisis, why didn't they prevent this one (After 98 yrs you would think they might be better at their job)? Not only did they not prevent it, but they enabled it. Money makes the laws or buys them due to greed, that is part of human nature.

Fri, 01/14/2011 - 01:16 | 875380 Judge
Judge's picture

The Fed didn't cause the GD, and there were several depressions on the gold std as well.  The fed DID help soften many crisis' - most recently after 9/11.  And they didn't casue this one, you'd have to go back to the 95 revision of the CRA which forced banks to make Subprime loans.

Fri, 01/14/2011 - 03:27 | 875464 DrLamer
DrLamer's picture

The Fed didn't cause the GD


The event/process/period like Great Depression can be caused only by The-Person-You-Better-Have-To-Beleive-In. The reason for that? It was A BLASPHEMY by electric coding of WORDS, a substitution of WORDS by electric coded signals. It was first in 1895 (ITU was founded in 1865, international telecomminication union), then in 1905 and finally in 1912 (ITU adopted Morse coding as a standard). The first important use of electric coding blasphemy was... Titanic's radio SOS signal in 1912.

After that God turned His face out the land of USA, and in 1913 a group of wisdom-less, half-brained senators created the FED.

Now the hexadecimal computer blasphemy, substituting the HUMAN's WORDS, is spreaded by USA around the globe.

What else about causes You would like to know?

Fri, 01/14/2011 - 10:03 | 875734 nhsadika
nhsadika's picture

Is this Barney Frank speaking?

Yes, the govt made banks commit fraud on a world-wide precedent scale because we wanted a few poor folks in Detroit to have homes.  And then the govt made them build a system of MBS and derivatives around them.  And then the govt made them give helocs on shakey premises.  And the the govt allowed them to turn a blind eye to obvious liar loans.  And then the govt made them take a bailout of many trillions...

Your comments on the Fed are similarly out of touch with reality, sadly keeping the focus in the microscope (Fed easing after 9/11) you ignore the molten lava pouring into the room.

You should be banned from reality, and exiled to living in your on private lala land.

Fri, 01/14/2011 - 11:45 | 875970 Rick64
Rick64's picture


I didn't say they caused it, but they enabled it and every crisis. I am not debating the gold standard, only that the FED has been a dismal failure unless you are a major financial institution.

  In 2007, Ben Bernanke suggested further increasing the presence of Fannie Mae and Freddie Mac in the affordable housing market to help banks fulfill their CRA obligations by providing them with more opportunities to securitize CRA-related loans

  Responding to concerns that the CRA would lower bank profitability, a 1997 research paper by economists at the Federal Reserve found that "[CRA] lenders active in lower-income neighborhoods and with lower-income borrowers appear to be as profitable as other mortgage-oriented commercial banks".

Sounds like the FED was onboard . Maybe the CRA revision contributed to the problem, but didn't caused it. The financial institutions went way beyond their CRA requirements.  Bundling the garbage MBS with a few A rated ones and calling it AA or AAA rated and then selling CDOs on that garbage en mass is what caused it. Who came up against Brooksley Born when she wanted to regulate the derivatives market (1998)? Greenspan- Fed chairman.  He told her that she didn't know what she was doing and didn't understand the market.  They with the help of the banks and politicians shut her down.

 Furthermore the FED controlled the interest rates and during boom times they are supposed to increase them to reduce the risk of a bubble. Interest rates were considered low during the housing boom and thus made realestate easy to sell. The FED is a bank and works for the banks.

Sat, 01/15/2011 - 15:08 | 878867 Rick64
Rick64's picture

In their view and like the monetarists, the Federal Reserve, which was created in 1913, shoulders much of the blame; but in opposition to the monetarists, they argue that the key cause of the Depression was the expansion of the money supply in the 1920s that led to an unsustainable credit-driven boom. In the Austrian view it was this inflation of the money supply that led to an unsustainable boom in both asset prices (stocks and bonds) and capital goods. By the time the Fed belatedly tightened in 1928, it was far too late and, in the Austrian view, a significant economic contraction was inevitable.

Austrian Economist

Thu, 01/13/2011 - 22:35 | 875159 pods
pods's picture

The people were tired of the boom and bust cycles created by the previous central banks of the US.  

The goal was to find men of sound judgement - appointed by the president and approved by Congress that would then control the money supply as an agency independent of political whimsy.

That was how it was sold.  Were you born at night?  Seems to be a recent night.

The Fed was passed to give the Rothschild's a foothold in our money printing.  Then they waited.  They even made the people happy.  The people had a roaring time, in the 20's.  Then they yanked the rug out, and we went into a depression.  That was checkmate.  Then, with empty coffers,  the government was beholden to the Fed bankers for money.  So they sold out.  Been screwed ever since.

One could argue that it has been settled since the battle of Waterloo.

Take one guess where Evelyn de Rothschild stayed on his wedding night?  If that is not stating exactly who owns who I do not know.


Fri, 01/14/2011 - 01:39 | 875417 Judge
Judge's picture

The Roths (nor any individual for that matter) has ever owned any fed stock or had controlling interest in in bank which was a member of the regionals.



Fri, 01/14/2011 - 10:04 | 875739 trav7777
trav7777's picture

? Rothschild Bank of England was an original shareholder...all the alpha houses on the Street were as well

Fri, 01/14/2011 - 14:25 | 876725 Judge
Judge's picture

Only banks chartered by the states or the Comptroller of the currency may join the fed...  they have to have US offices/branches.  Again, no individual ever has or can join.  The Roths have a minor interest in NY Bank, which amounts to something like 0.05% interest in the NY Fed... hardly influential, much less controlling.

Thu, 01/13/2011 - 23:37 | 875265 SilverIsKing
SilverIsKing's picture

"Simple, historical fact."


Thu, 01/13/2011 - 23:50 | 875283 essence
essence's picture

Every time I research the orgins of the Fed I come up with a 'voted about 10pm on a Dec 23rd when most of Congress was out of Washington on vacation'.

We ALL know by now how things work in D.C. and Congress.

Spread some money around, make some promises, then sneak ones bill thru at the approipate moment when it has the highest chance of being passed. Only this wasn't just some bill. It was the enslavement of the American people. And it was premeditated. Jekyll island was a planned meeting. Those ultra wealthy attendees took pains to keep their anonymity. Why?

Yes, I'll agree there were/are corrupt politicians. That is why any dispensation of the Fed would need to be accompanied by a balanced budget amendent. This to merely
protect against Congress attempting to buy re-election votes (let's get rid of Congresses 5 years in office & FULL med & retirement benefits for life perk while we're in here setting things right... OK,  as PAYBACK for past screwing us).

By the way, did you all notice how the author of this article kept using the term
"International Bankers". Who exactly are the controlling interest in the Fed?

Why was so much of the Fed Trillion dollar bailouts of the last few years going to Europe?  We all know by now that Ben is just the butler obeying his masters wishes
(and Obama for that matter)

The question is ... exactly WHO are the masters.











Fri, 01/14/2011 - 00:12 | 875307 Dr. Porkchop
Dr. Porkchop's picture

This is what irks me about government. How is it that we allow these weird technical tricks and loopholes to exist? Bills passed on the sly when nobody is around, bills snuck in with other bills.

They shouldn't be allowed to do shit unless everyone is there. They should have to work all day, every day, all fucking year like the rest of humanity.

I keep saying it. What a bunch of worthless cocksuckers.

Fri, 01/14/2011 - 01:23 | 875388 Judge
Judge's picture

as far as 'most of the congress being out of town" -   The constitution stipulates that both the House and the Senate must have at least half their members present, a quorum, to vote on any bill.  According to this myth, the Senate voted on the Federal Reserve Act (known as the Currency Bill at the time) deviously in a late night session when most of its members had gone home or had left town for the holiday.  This was done to impose the will of a pro-banker minority on the objecting majority.  Since no quorum was present, the Federal Reserve Act is not valid.

The myth has no basis in fact.  The House passed the bill 298-60 on the evening of Dec. 22, 1913.  The Senate began debate the following day at 10am, and passed it 43-25 at 2:30pm.

What of the missing Senators?  Since there were 48 states in 1913, forty eight votes plus the tie-breaking vote of vice-President Thomas Marshall would have been sufficient to approve the bill even if all absent votes had been cast against the bill.  However, many of the missing Senators had their positions recorded in the Congressional Record.  Of the 27 votes not cast, there were 11 'yeas' (in favor of the bill) and 12 'nays.'  Even if the absentee Senators had been there, the Currency Bill would have passed easily.

President Wilson signed the Currency Bill into law in an "enthusiastic" public ceremony on Dec. 23, 1913.


And international banks nor individuals have ever controlled the fed or had any 'ownership' (is not ownership in the sense we're used to using it) of any of the regionals.  The Fed is a federal agency, just like the CIA, FHA,  ect...

And I agree about the Europe bailouts - I don't agree with a lot that the Fed has done.  But criticize them for what they've actually done or are responsible for, not something made up.

Fri, 01/14/2011 - 02:09 | 875438 essence
essence's picture

How would we know about the inner workings of the Fed when it ...
effectively ISN'T AUDITED.

As for whether it has International contolling entities... once again, we don't know because it effectively ISN'T AUDITED.

Every time we do manage to pull back a bit of the Feds veil we find something stinky.
We see that Ben has FAR exceeded the Feds mandate ...all in favor of the big INTERNATIONAL banks mind you (at the expense of the American public).

And forget the Regionals when talking about the power behind the fed.
The "power' is wrapped up in the politically appointed Fed chairman and the NY Fed.

Money buys politicians, politicians choose the fedhead candidate,  so we know that Ben is someones proxie.
Jamie Dimon, along with some no name NY bank and a lacky from banco popular (out of puerto rico, puerto rico ...WTF?) sit on the NY Feds board.

Lets see ... JP Morgan ceo, no name ny bank head, a puerto rican...ahhh gee, where do you think the power resides when the NY fed board gets together?





Fri, 01/14/2011 - 14:28 | 876731 Judge
Judge's picture

Again WRONG... the Fed his and has been audited every year, and every regional audited.  Both by private audit firms and the GAO - which by law can only audit agencies of the US government.  You can find the audits on each regionals website, and can request the GAO audits.


Seriously, y'all need to do a little basic research into the facts.  Jekyll Island is nothing but poorly written fiction.


Fri, 01/14/2011 - 20:46 | 877975 RockyRacoon
RockyRacoon's picture

Yeah, and the IRS should do such thorough audits!

Sat, 01/15/2011 - 10:50 | 878575 Rick64
Rick64's picture

Federal Banking Agency Audit Act enacted in 1978 as Public Law 95-320 and Section 31 USC 714 of U.S. Code establish that the Federal Reserve may be audited by the Government Accountability Office (GAO).[46] The GAO has authority to audit check-processing, currency storage and shipments, and some regulatory and bank examination functions, however there are restrictions to what the GAO may in fact audit. Audits of the Reserve Board and Federal Reserve banks may not include:

  1. transactions for or with a foreign central bank or government, or nonprivate international financing organization;
  2. deliberations, decisions, or actions on monetary policy matters;
  3. transactions made under the direction of the Federal Open Market Committee; or
  4. a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to items .

 That would be a meaningless audit.

Sat, 01/15/2011 - 10:53 | 878579 Rick64
Rick64's picture

The Federal Reserve System and the individual banks undergo regular audits by the GAO and an outside auditor. GAO audits are limited and do not cover "most of the Fed’s monetary policy actions or decisions, including discount window lending (direct loans to financial institutions), open-market operations and any other transactions made under the direction of the Federal Open Market Committee" ...[nor may the GAO audit] "dealings with foreign governments and other central banks.

Fri, 01/14/2011 - 05:07 | 875470 DrLamer
DrLamer's picture

There is at least ONE USA Federal Judge ruling stating that (paraphrasing) "it is not un-natural that the one who owns the country, rules it".

The problem is that the "democracy" rules by VOTING, but the onwers are ruling by promises, because the money itself IS A PROMISE. You can call money "a debt", but the money is an accepted word of promise, backed by some tangible, tradable and liquid asset.

(Money can be created also by banks by granting a credit, that is a stream of new money, backed by banks' temporarily frosen assets under management. The entities are creating money by issuing an accepted debt).

The most in-corruptible tangible assets are gold and silver. That is why it is highly desirable that a money created by government (biggest entity) be backed by a liquid, fast-traded, widely-acceptable asset, such as gold.

Now you see a corruption of promises and corruption of money.


Fri, 01/14/2011 - 07:19 | 875573 Bitch Tits
Bitch Tits's picture


I was about to take issue with your statement that The Federal Reserve is a federal agency, because for many years now I have been advising others of that fact that it is a privately owned corporation. I used to post links, including government links and links for the Fed banks where that information could be found.

I see now that this is no longer true, as according to the links I now find online, the Federal Reserve and the government now claim that the Fed is, in fact, a federal agency.

I must be getting old, because I can't keep up with the truth anymore. They keep changing it on me.


Fri, 01/14/2011 - 14:29 | 876737 Judge
Judge's picture

It always has been.  It's just the propaganda/lies from Griffin's Jekyll Island got such coverage that the facts actually started coming out when enough people inquired.  Many today however refuse to believe it - I can explain it to them, but I can comprehend it for them.



Fri, 01/14/2011 - 12:37 | 876180 Rick64
Rick64's picture

The Fed is a federal agency, just like the CIA, FHA,  ect...

 Please supply proof of this statement. This is incorrect.

Fri, 01/14/2011 - 14:33 | 876754 Judge
Judge's picture

What kind of proof do you want.   You may read the original Act which specifies it, you may look at the White House's list of gov't agencies, you may go to the phone book and look under the blue pages under US Gov't and find the Fed listed, you can look at the .gov website the fed has - which by law is only available to federal gov't agencies and departments, you can look at the employees which are federal employees, you can look at their appointments by the President and approval by Congress....

You can look at Supreme and Federal Court decisions where the Fed is defended by a US District Attorney, where judges refer to them as an agency where they are exempt from lawsuits as a Federal Agency (Lewis) etc...

Just what standard do you want to apply or what proof do you want - take your pick.

Sat, 01/15/2011 - 14:55 | 877455 Rick64
Rick64's picture

8] In Lewis v. United States,[74] the United States Court of Appeals for the Ninth Circuit stated that: "The Reserve Banks are not federal instrumentalities for purposes of the FTCA [the Federal Tort Claims Act], but are independent, privately owned and locally controlled corporations."

 The Federal Reserve Banks have an intermediate legal status, with some features of private corporations and some features of public federal agencies. The United States has an interest in the Federal Reserve Banks as tax-exempt federally-created instrumentalities whose profits belong to the federal government, but this interest is not proprietary.

The Federal Reserve System has both private and public components, and can make decisions without the permission of Congress or the President of the U.S.

 Each regional Reserve Bank's president is nominated by their Bank's board of directors, but the nomination is contingent upon approval by the Board of Governors.] Each member bank (commercial banks in the Federal Reserve district) owns a nonnegotiable share of stock in its regional Federal Reserve Bank.

 So the Board of governors is elected by the president and approved by congress, but the federal reserve banks are owned by shareholders of regional banks. I don't know of any government agency that is owned by or has shareholders.

 BTW the phone book and websites are not proof of anything.

Fri, 01/14/2011 - 02:09 | 875437 Andy_Jackson_Jihad
Andy_Jackson_Jihad's picture

The question is ... exactly WHO are the masters.


The original members of the FED...the old world Jew banks.  What do I win?  Don't say its gefilte fish.  Oy vey, I hate that!

Thu, 01/13/2011 - 23:13 | 875224 fleur de lis
fleur de lis's picture

The Fed's charter was written by a foreign street rat called Paul Warburg, of Warburg Bank fame, who once told Americans, "you will have world goverment whether you want it or not." Why his rotten bones are allowed to contaminate our soil is something I will never understand. They should be dug up and left in a place to be shat upon by passing dogs.

Thu, 01/13/2011 - 19:56 | 874817 bob_dabolina
bob_dabolina's picture

We have debt free money in the United States.

Our coins.

Thu, 01/13/2011 - 19:58 | 874820 Kaiser Sousa
Kaiser Sousa's picture

Yes, America....

land of a bunch of ignorant easily beguiled, stupid mother fuckers who will fight n a minute over a brawd or their favorite football team but bend over with a smile while getting contiuously fucked by bitch ass bankers...and too chicken shit to do a damn thing SERIOUS about it...if it weren't for my 91 year old mother id vacate this fucking intellecutal and spineless cesspoll with a quickness... 

now, back to ur regularly programmed meaningless bullshit....

Thu, 01/13/2011 - 21:11 | 875010 Kaiser Sousa
Kaiser Sousa's picture

big shout out to the coward that junked without comment...

obviously u fit the description...

Thu, 01/13/2011 - 23:20 | 875241 Jace0228
Jace0228's picture


Fri, 01/14/2011 - 03:36 | 875475 DrLamer
DrLamer's picture

Arrogance, my friend. Arrogance. You are right with the addition of this key word.

A couple days ago one reader commented here on Zerohedge by the church's theory about inability of a human to repair himself, like a machine cannot repair itself.

While theoretically it is not TRUE (because there was no difference between Jesus Christ and any ordinary man, except the sin), but in practice as You can see it in USA - the repair without the "external" influence from-not-this-world is almost impossible.

The only thing You need "to be repaired" is NOT TO BE ARROGANT. Which is not a case in modern USA.

Thu, 01/13/2011 - 19:58 | 874821 nohweh
nohweh's picture

You left out two World Wars, and a few other little ones

Thu, 01/13/2011 - 20:03 | 874833 Scisco
Scisco's picture

Sorry I loose interest an any article that suggests that a government should have the authority to print its own fiat money. Tell me something, how would one restrict the amount printed? I raise this because the debt ceiling worked so well. Until people understand that money must only be used to balance trade, the politician that promises to help everyone through the magic of printing will always win. Granting the power to print to politicians would make the temptation ever greater.

Thu, 01/13/2011 - 22:57 | 875180 harveywalbinger
harveywalbinger's picture

Simple. The interest free Treasury notes must be redeemable in something of value.  Something shiny...  Something precious... In this system, the politicos are limited to spend only as much as can be backed by the precious. 

Sure those that hold the precious will still have most of the power, but we would have been much less likely to end up with a fascist gubmint in a deflationary credit collapse. 

Thu, 01/13/2011 - 23:09 | 875217 Scisco
Scisco's picture

Problem is we already tried that. Still didn't stop the goverment from printing more receipts than shiny backing. I will admitt though, sure did curb monetary growth better than what we have now.

Fri, 01/14/2011 - 10:13 | 875762 trav7777
trav7777's picture


Tell you what, misspellings aside, you've been mindfucked.

The GOLD standard was a fractional, fiat-in-disguise standard.  The system which worked the longest was tally sticks, which were pure fiat.  Eventually, yes that system blew up, but so did gold standards on kited notes and so will our system.

A gold standard favored whoever had the gold.  That would be the banks.  The banks keep this shit around just in case they ever have to back their notes up for a time and downshift a notch into fractional schemes with gold backing until the debt ponzi game can be respun.

Thu, 01/13/2011 - 20:07 | 874838 Hedgetard55
Hedgetard55's picture

"Will the American people wake up before it is too late?"


     You said it is already too late. Otherwise a terrific article.



Thu, 01/13/2011 - 20:11 | 874847 Harmonious_Diss...
Harmonious_Dissonance's picture

Mars will bail us out! Dollar 4-ever!

Thu, 01/13/2011 - 20:15 | 874858 Cursive
Cursive's picture

Central bankers are scum sucking leeches on the economy/society.  Economists call them rent seekers.

Rent seeking:  When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.

Thu, 01/13/2011 - 20:15 | 874859 MGA_1
MGA_1's picture

Would we have prevented WWI, WWII without the fed?  Look at all the tremendous invention that happened over the last 100 years, and that in spite of loose monetary policy.  The last 100 years have been the greatest period of invention in the history of mankind (heck, we even went to the moon).  I think the fed & wall street need a solid trimming, but I'd say the human race has done quite well in spite of it all.

Thu, 01/13/2011 - 20:38 | 874936 UncleFester
UncleFester's picture

"in spite" would be the key words...


Thu, 01/13/2011 - 23:26 | 875248 Jace0228
Jace0228's picture

Wouldn't going to the moon be the equivalent of your average american mortgaging his house and overextending his debt in order to buy a new car and some furniture?

We all know 2 kinds of people, those that save and those that spend. Our problem is our government is run by the latter and not the former.

Sat, 01/15/2011 - 21:33 | 875274 fleur de lis
fleur de lis's picture

Among other major bloodlettings, WW1 was in the planning at the end of the 19th century. Unlike politicians, the European monarchs, you see, would not hand over their subjects, resources, and treasury keys to the central bankers. Nor could they be bought off. And they believed in that irksome thing called sovreignty.

So it was decided to take them out, along with their subjects, so as to thin the ranks of organized resistance and leave the continent as a collection of smaller, squabling states, more dependant on government since high numbers of men would be dead or injured, leaving women and children bereft of their natural protectors, and therefor more manageable. But wars require money, and the biggest treasure chest was...America! So the central bankers set about usurping our Constitution with the aid of American traitors, and started  buying, trading, and murdering their way past officials to destroy the European continent and get Americans to pay for it in blood and treasure. And all the while, Leon Trotsky was bankrolled by the same accursed central bankers in NYC waiting for instructions, and was given 20mm of our tax money to return to Russia and fund the filthy Bolshevik revolution. Our honest and hard-earned money was used to send millions of Russians to early and violent deaths, destroy the biggest Empire on earth, and murder a centuries old dynasty. Read Eustace Mullins' book, "Secrets of the Federal Reserve" for further details on the serial killers who run this racket, and the traitors who served them and still do.

Thu, 01/13/2011 - 20:15 | 874860 Hey Assholes
Hey Assholes's picture

Would I be correct in stating that if the government debt were miraculously paid back, there would be no money left?

Thu, 01/13/2011 - 21:39 | 875067 Pseudo Anonym
Pseudo Anonym's picture

hey asshole, what money are you talking about? Gold or Silver? That's what I want to know.

Thu, 01/13/2011 - 22:41 | 875171 pods
pods's picture

Partially.  It would lead to a crushing deflation, but the money borrowed into existence by private individuals would still be there.  But with government debt paid back, the money supply would contract to the point where there would not be enough money in circulation to pay debts.  So private debt would default and allow the bankers to take possession of real property.

It happens now, but on a small scale.  They keep the looting of real property on the down low, lest the lamp posts would all be full.

If they did it big time, the frogs would jump out of the pot and hang em high.

Ribbit. Ribbit.


Thu, 01/13/2011 - 23:17 | 875204 Pseudo Anonym
Pseudo Anonym's picture

with government debt paid back

with what do you repay (extinguish) gov't debt? with more debt? digital debt? That's what I want to know.

Thu, 01/13/2011 - 23:41 | 875271 pods
pods's picture

Government debt would be paid back through taxes, sales of land, mineral rights etc that the government owns.


Fri, 01/14/2011 - 00:15 | 875313 Pseudo Anonym
Pseudo Anonym's picture

sales of land, mineral rights etc that the government owns

I'm sorry, but are you actually suggesting that you would give land, mineral rights and other tangible assets (gold, silver, oil,..) to Shalom Bernookystein and his hofjuden masters for the billions (if not trillions [swaps]) in digital "credits" that they create every week with a few keystrokes and no other effort? That's what I want to know. And then I am done asking.

Fri, 01/14/2011 - 11:31 | 875930 pods
pods's picture

No, I am not suggesting that. I am merely saying that debts could be discharged like that.

I would crawfish on those phony digital debts, hang every single Fed member and let them rot from a lamp post.  That would discourage anyone in power from trying to usurp the power of money from the people.  The people must control the money, and if they want, take their money and leave the system.  I don't care if it is seashells, gold, or donkey dung. But it must be controlled by the people, not the banks, and not the government.


Fri, 01/14/2011 - 12:17 | 876090 Pinky
Pinky's picture

I'm ignoring the "juden" part of your commentary (bish please just stop it, it distracts from the Vatican!), but unless you were being facaetious just FYI the answer most governments eventually give is "yes. " That's the dirtiest part of this whole fiat ponzi scam.  

To those who wonder: How do you think the banksters took control of all the land/resources/rights in developing countries whose governments accepted IMF loans?  "It's not a flaw; it's a design feature." Confessions of an Economic Hitman should be read by everyone.

Making money out of nothing is peanuts compared to the taking of physical property, the only wealth that really matters.  Thus the post-collapse cleanup is the most lucrative phase, and the ultimate goal: Playing Repo-Man on the stuff life itself is made of: The places we live, the energy we need to stay warm, the food we eat, the water we drink, the air we breathe. The day they own it ALL they will become "as gods" to us, with the power of life and death over humanity. And if they're God they won't ever die, see?

Frankly they're all in need of serious psychiatric attention and a boatload of Prozac as their mental affliction is obvious to anyone who thinks it through. I pity them: Despite their lifelong attempts to control all the variables the banksters will STILL die desperate, anxious and confused, as will we if we suffer from the same subconscious delusions.

OK, back to lunch.

Fri, 01/14/2011 - 05:42 | 875545 blindman
blindman's picture

there would be no federal reserve notes in circulation before

all the debt was paid due to ... interest.  but there is always tomorrow.

well, not always.

Thu, 01/13/2011 - 20:20 | 874878 Amish Hacker
Amish Hacker's picture

Looking at that second chart, of the historical CPI, it sure looks like something significant happened in the early 1970's, some major change that affected the purchasing power of the dollar right up to today. Anyone? Bueller?

Thu, 01/13/2011 - 20:32 | 874917 Hey Assholes
Hey Assholes's picture

That would be August 15th, 1971 when Dick Nixon eliminated the last vestige of a dollar tied to gold.

It is so obvious that a gold standard, or commodity based monetary system is required, no?


Thu, 01/13/2011 - 22:44 | 875175 pods
pods's picture

I actually see what Nixon did as a valiant act.  The gold was outflowing from the treasury for international payment of debts at a rapid pace.  What he did was effectively screw the rest of the world.  Whether he saved the Fed or the Treasury is debatable, as the true ownership of the gold in the US is open for debate.


Fri, 01/14/2011 - 00:44 | 875349 essence
essence's picture

Oh...and you were doing so well with your previous posts.
And then you blow it all by saying Tricky Dickhead did a valiant act.

The US was hemorrhaging Gold, that on account of inflating the USD supply
to pay for the guns & butter of the criminal Vietnam War and LBJs misguided "Great Society".

Reneging on convertability was a low point, an American disgrace.

That chart referenced above shows the consequences.

We should dig up tricky dickhead and sit his putrefied corpse in front on that chart as
retribution for what he did.



Thu, 01/13/2011 - 20:25 | 874894 sunny
sunny's picture

Without the Fed or some such similar entity, we would not have inflation as we do now.  Given that inflation is a tax imposed on the masses by the fiscal policy of the government there would be great difficulty in maintaining zero return programs like the military. Without inflation we could not easily fund wars without a never ending stream of taxes.  We will always need inflation since endless war is at the core of the US identity.


Thu, 01/13/2011 - 20:29 | 874909 Judge
Judge's picture

Wrong.  Simply wrong.

We had inflation and devaluation on the gold standard...

Thu, 01/13/2011 - 20:41 | 874943 UncleFester
UncleFester's picture

You are correct, sir.  But wisdom comes in knowing why we had "inflation and devaluation on the gold standard".



Thu, 01/13/2011 - 23:28 | 875252 SilverIsKing
SilverIsKing's picture

I'll take "Paper Gold" for $800 Alex!

Fri, 01/14/2011 - 19:11 | 877765 UncleFester
UncleFester's picture

Ding, ding, ding (touches finger to nose) we have a winner!

Fri, 01/14/2011 - 01:25 | 875392 Judge
Judge's picture

Agreed.  Neither system is perfect, but we have enjoyed unparalled prosperity under the Fed - and reduced control of capital from a few banking trusts to where capital is availailable to individuals with good credit history and some assets (or should be - prior to Congress mandating Subprime lending.)


Fri, 01/14/2011 - 05:06 | 875530 Hephasteus
Hephasteus's picture

It's not unparalleled. It's been paralleled more times than a geometry pervert in a cartesian coordinate system brothel. Every empire has paralleled it right up to the end. And who is we? the ceo's of the fortune 500?

You need to learn that people don't confuse YOU with WE so easily. So stick your We in your You then yank your we out of your you until you're you is prolapsed on the floor.

Good credit history doesn't matter in your system. Mortgages are money counterfeiting and only 2/3rds the population can ever be homeowners or else the system fucking explodes.



Fri, 01/14/2011 - 19:10 | 877759 UncleFester
UncleFester's picture

"So stick your We in your You then yank your we out of your you until you're you is prolapsed on the floor."  LOL

Easy coming out, but its hard going in.



Fri, 01/14/2011 - 10:22 | 875778 trav7777
trav7777's picture

The Oil Age, dude.

Neither the fed nor this monetary system caused the prosperity.

Fri, 01/14/2011 - 13:10 | 876371 ronin12
ronin12's picture

Judge - your arguments are weak.

The prosperity we've enjoyed is not because of the Fed but in spite of it.

The prosperity we've enjoyed has many causal factors - our system of government, relative amount of freedom, relatively free markets, unique geographic positioning, large natural resources, the (abeit dying) "American Spirit", our gold "winnings" from WWII, rapid and continuing technological advancements, the dollar as reserve currency, and dozens of other reasons.

To say, "we have enjoyed unparalled prosperity under the Fed" as if they aided in some way is ridiculous.

At the minimum, all they have 'accomplished' is massive mis-allocations of capital due to their market manipulations - which impedes progress.

Thu, 01/13/2011 - 20:28 | 874906 Judge
Judge's picture

Whoever wrote this doesn't know the history nor understand the Federal Reserve and it's actions/power....


It's sad to see so many people swallowed up by these works of fiction - who believe it wholeheartedly b/c they refuse to even check the most basic statements of fact.  It's just easier believing the lie and a grand conspiracy theory.  As Voltaire said, it's difficult to free people from chains they revere.

Thu, 01/13/2011 - 20:42 | 874945 UncleFester
UncleFester's picture

Feel free to enlighten...

Fri, 01/14/2011 - 01:28 | 875396 Judge
Judge's picture

I could do it with each of the 10 points, but take #10 for example - the US would be free of debt without the FR.  That's just bunk.

The US debt started in the Civil War, waaay before the Fed started.  The only restriction on Gov't borrowing is the political whimsy.  The Fed has no control or influence over that.  It didn't even exist when it started.


The Fed doesn't make the National Debt, it simply is the agent for the US Treasury, handling it's banking functions.



Fri, 01/14/2011 - 05:09 | 875534 Hephasteus
Hephasteus's picture

Consensus builder.

Find out more at....

Fri, 01/14/2011 - 09:24 | 875660 Buckaroo Banzai
Buckaroo Banzai's picture

What we have here, is a trolling Fed apologist douchebag.

Fri, 01/14/2011 - 09:29 | 875668 Johnny Dangereaux
Johnny Dangereaux's picture

And the War of 1812 was started after the 1st central bank was closed....but the Biddles were still responsible for it.

Tell me, do you get paid by cass sunstine? How's Lucifer these days? I am sure you know him.  I would be insulting scum if i called you that. Death to central bankers and their apologists!

Fri, 01/14/2011 - 10:12 | 875759 nhsadika
nhsadika's picture

As I said above,

You should be banned from reality, and exiled to living in your on private lala land.

What Judge does is focus on one tiny aspect of the matter, to absolve the Fed of all responsibility.  In this case, yes the Fed doesn't determine endless defense budgets, it  merely enables them.  However, the FED through monetary policy is a BUBBLE MAKER, and HELPS create massive malinvestment.  Finally, it is an enable for MASSIVE INTEREST creation which perhaps more than anything is unstainable and leads to collapse.  It is a front-man for the big banks which extract a good portion of the wealth of this nation through the money creation process.   It is a private business parasite living off the people.


Ok, Mr Judge good luck with that one.   Please banish yourself from reality, or at least from this site.

Fri, 01/14/2011 - 13:12 | 876387 ronin12
ronin12's picture

"The only restriction on Gov't borrowing is the political whimsy.  The Fed has no control or influence over that."

Unless of course, the Fed decided to monetize government debt. Good thing, they would never do that! Oh wait a second...


Fri, 01/14/2011 - 19:21 | 877785 UncleFester
UncleFester's picture

Come on Judge, you can do better than that!  Central control of a nation's money supply, debt and credit has been around since the revelution.  Saint Burr shot that London-rep asshole in 1804.  The Fed is just the US modern form of the same special interest.


Fri, 01/14/2011 - 05:08 | 875533 Hephasteus
Hephasteus's picture


Thu, 01/13/2011 - 21:50 | 875091 Croesus
Croesus's picture

By any chance, is your name Ben Bernanke?

Thu, 01/13/2011 - 22:48 | 875184 UncleFester
UncleFester's picture

How long must I wait to be judged?

Fri, 01/14/2011 - 05:08 | 875532 Hephasteus
Hephasteus's picture

Consensus builder.

Tue, 01/18/2011 - 12:04 | 884099 ChoppednScrewed
ChoppednScrewed's picture

What is sad to see is you so vehemently defending an obviously corrupt organization hell bent on destroying your way of life. You're a sick person and obvious stooge lover in cohoots with a life draining entity. Next, your reply will include how much you love the thought of a New World Order. I've read many posts on ZH. Your's would end up being one of the worst displays of idiocy that I've had the displeasure of reading. Good luck, troll boy.

Thu, 01/13/2011 - 20:42 | 874907 Pseudo Anonym
Pseudo Anonym's picture

the international bankers would become insanely wealthy by lending money to the U.S. government

ok, so why waste bandwidth on "if the Fed Never been created" when you (of economic collapse) know who is profiting today from a scam that was put in place almost a century ago? Why the preoccupation w/ the Fed? Why not w/ the hofjuden that run the gig today for their masters? That's what I want to know.

Thu, 01/13/2011 - 20:38 | 874932 nohweh
nohweh's picture

Sunny seems to get it- the three I's- INFLATION, INTEREST, INCOME TAX

Thu, 01/13/2011 - 20:44 | 874951 Dr. Gonzo
Dr. Gonzo's picture

You forgot #11. 

#11. There would be no Israel.


Fri, 01/14/2011 - 04:38 | 875487 DrLamer
DrLamer's picture

Yes, but they did not exactly know why EXACTLY God gathered them in modern Israel.

As long as Jesus Christ DID find 11+ apostles in Judea, the verdict "God vs. Jews" after Pontius Pilate's court was different from Sodom's, and the death penalty to jews WAS DELAYED for 2000 years. Now that court RE-CONSIDERED and the verdict is not in favour to jews.

As USA still (!) supports modern Israel, the "drop dead" verdict now engulfes the USA as well.

Did You miss out the news about scandal with jews' arrogance over FOREIGN journalists in Israel? 13/01/2011
Scribe asked to remove bra during security check in Israel


Harinder Mishra
Jerusalem, Jan 12 (PTI) A pregnant reporter for Arabic al-Jazeera TV channel was allegedly barred from an annual event for foreign journalists addressed by Israeli premier Benjamin Netanyahu for refusing to remove her bra at the security check.

The reporter-cum-producer for the network said she was asked to stand in the queue with colleagues and journalists on her arrival to the event venue....


Try to read this with fun. This is a future of USA. (Big deal: two jewish "securities"  took a bet on can they make foreign journalist naked, including women.) It seems that a couples of members of jewish financial mafia in USA took a bet on how long "the US People" can stand under this raping of US law, raping of justice and raping of financial responsibility.

If digital zombies, called themselves "we the US people" will continue to vote for /support  several mafias in US Congress, White House , in five years I will not give a siver coin for the whole USA.


Thu, 01/13/2011 - 20:46 | 874957 tecno242
tecno242's picture

I appreciate the effort, thought and reasoning behind this article.

However, trying to pretend to know what would have happened had the FED not been created is a pointless effort.

You would be no better than Ben Bernanke claiming he has saved the US economy to say that you can predict what would have happened with such a major shift in the future of US monetary policy.

It's more likley that congress itself would have held the power of the purse and monies, which still happened, followed by lobbyists taking over congress.  Maybe nothing would have changed, it would have only occured faster.

Fri, 01/14/2011 - 00:20 | 875319 Dr. Porkchop
Dr. Porkchop's picture

Well I guess the idea behind congress controlling the money supply is that if they fuck it up, then the people would at least be able to vote the worthless cocksuckers out. That's the theory.

Currently, you've got a hollywood production known as congress that is as predictable as watching the Harlem Globetrotters play the Generals, without the laughs and instead of spinning basketballs with flair, they spin bullshit.

Thu, 01/13/2011 - 21:09 | 875003 PalmiticGlycerin
PalmiticGlycerin's picture

Some other gangsters would have stepped in and started another racket under another name...XYZ Bank... You fill in the blanks.

Thu, 01/13/2011 - 21:28 | 875035 No More Bubbles
No More Bubbles's picture

This whole money scheme is so tired already.  It would be nice if people could get back to doing productive things and stop chasing a fantasy.  Everyone is so invested in either collapse or perpetuating the same scheme.  Either way, it's a broken system and the majority of us are TOAST!

Thu, 01/13/2011 - 21:31 | 875043 blindman
blindman's picture



"In 1919, John Maynard Keynes, later an advisor to Franklin D. Roosevelt, wrote in his book The Economic Consequences of Peace:

"Lenin is to have declared that the best way to destroy the capitalist system was to debauch the currency ... By a continuing process of inflation, governments can confiscate secretly and unobserved, an important part of the wealth of their citizens ... As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless..."



To avoid the mention of central banking, Wilson himself suggested that the regional banks be called 'Federal Reserve Banks,' and proposed a special session of the 63rd Congress to be convened to vote on the Federal Reserve Act. On June 23, 1913, he addressed the Congress on the subject of the Federal Reserve, threatening to keep them in session until they passed it. Wilson got Bryan's support by making him Secretary of State, and in October, 1913, Bryan said he would assist the President in "securing the passage of the Bill at the earliest possible moment."

The Glass Bill (HR7837) was introduced in the House of Representatives on June 26, 1913. The revision mentioned nothing about central banking, which was what the people feared. It was believed that Willis had written the Bill, but it was later discovered that Professor James L. Laughlin, at the Political Science Department of Columbia University, had written it, taking special precaution not to clash with the Bryan plank of the Democratic Party Platform. It was referred to the Banking and Currency Committee, reported back to the House on September 9th, and passed on September 18th.

Sen. Robert Latham Owen of Oklahoma, Chairman of the Senate Banking and Finance Committee, along with five of his colleagues, drafted a Bill which was more open-minded to the suggestions of the bankers. A Bill drafted by Sen. Gilbert M. Hitchcock, a Democrat from Nebraska, called for the elimination of the 'lawful money' provision, and stipulated that note redemption must be made in gold. It also provided for public ownership of the regional reserve banks, which would be controlled by the government.

In the Senate, the Glass Bill was referred to the Senate Banking Committee, and reported back to the Senate on November 22, 1913. The Bill was now known as the Glass-Owen Bill. Sen. Owen, who opposed the Aldrich Bill, made some additional revisions, in an attempt to keep them from completely dominating our monetary system. Sen. Elihu Root of New York criticized some of these revisions, and some points were modified. It was passed by the Senate on December 19th.

Since different versions had been passed by both Houses, a Conference Committee was established, which was stacked with six Democrats and only two Republicans, to insure that certain portions of the original Bill would remain intact. It was hastily prepared without any public hearings, and on December 23, 1913, two days before Christmas, when many Congressmen, and three particular Senators, were away from Washington; the Bill was sent to the House of Representatives, where it passed 298-60, and then sent to the Senate, where it passed with a vote of 43-25 (with 27 absent or abstaining). An hour after the Senate vote, Wilson signed the Federal Reserve Act into law, and the Illuminati had taken control of the American economy. The gold and silver in the nation's vaults were now owned by the Federal Reserve. Baron Alfred Charles Rothschild (1842-1918), who masterminded the entire scheme, then made plans to further weaken our country's financial structure.

Although Wilson, and Rep. Carter Glass were given the credit for getting the Federal Reserve Act through Congress, William Jennings Bryan played a major role in gaining support to pass it. Bryan later wrote: "That is the one thing in my public career that I regret- my work to secure the enactment of the Federal Reserve Law." Rep. Glass would later write: "I had never thought the Federal Bank System would prove such a failure. The country is in a state of irretrievable bankruptcy." " 



Thu, 01/13/2011 - 22:07 | 875123 Milestones
Milestones's picture

An excellent, through article. I have posted on this issue before here on ZH. Of course all the delegation of authority was totally against constitutional law and in Marbury v Madison of 1803, " any law repugnant to the constitution is void. This court and all departments are bound by that instrument." This was the ruling recoginizing that the constitution was the Supreme Law of the Land.

So much for theory!!!   Good read Blindman.      Milestones

Fri, 01/14/2011 - 04:03 | 875499 blindman
blindman's picture

thanks and you welcome

Thu, 01/13/2011 - 21:32 | 875045 rocker
rocker's picture

$$$  How Much Would Gas Cost ???    No Oil Cartel.  No Banking Cartel.  And soon to be:  No Food Cartel.

Thu, 01/13/2011 - 22:09 | 875127 Problem Is
Problem Is's picture

Jamie & Lloyd would have found their true calling...

Shoe Shine Boys...

Thu, 01/13/2011 - 21:32 | 875047 no cnbc cretin
no cnbc cretin's picture

How about 10 things that would have been different if the world

population never rose above 2 billion. Just saying.

Thu, 01/13/2011 - 21:42 | 875071 Joe Sixpack
Joe Sixpack's picture

11. would not exist

12. would not exist

13. would not exist

14. would not exist

15. would not exist

16.  would not exist

17. would not exist




Thu, 01/13/2011 - 21:56 | 875100 Dental Floss Tycoon
Dental Floss Tycoon's picture

"But about the same time the Federal Reserve was created a national income tax was instituted as well."


No, not about the same time.  The very same year, 1913.  Coincidence?  I think NOT!


The 17th Ammendment was also ratified in 1913, Federalizing the US Senate and removing any state control over the Federal government.


1913 was a busy year for the banksters.  The sheeple never knew what hit them.  Still don't.

Thu, 01/13/2011 - 22:09 | 875103 lynnybee
lynnybee's picture


Thu, 01/13/2011 - 22:03 | 875119 fearsomepirate
fearsomepirate's picture

The problem with this post is that it's anachronistic.  Prior to the creation of the Fed, and for several decades after, paper dollars were not what the word "money" meant.  "Money" referred to gold and silver, period, and a "dollar" meant 24.057 grams of silver, period, end.  "Money" was metal, and a note entitling the bearer to a note was simply that, a "note."  The Constitution most certainly does *not* give Congress the power to issuer paper notes, call them dollars, and pretend that they're money. It gives Congress the authority to mint coins, regulate their purity and weight, etc.  It can fix exchange ratios (with disastrous effects, but still, it can).  Hence the Fed had to be created as an independent institution in order to create "paper reserves."  This set up the context in which FDR could steal everyone's gold, the later Bretton Woods agreement, and ultimately the Nixon Shock which finally put us on true fiat money.  It is not unreasonable to say that without the Federal Reserve Act, gold would not have been de-monetized.  It's unlikely that without it, Congress would have been able to convert us to fiat money and crank up the printing presses every time it wanted to run a deficit.

And if we're going to have fiat money, I'd rather have bankers control it than the fools in Congress.  At least bankers have some inkling of the idea that printing with reckless abandon would destroy themselves as well as everyone else.  Politicians, however, lack even the rudimentary knowledge for financial self-preservation and would make Quantitative Easing look downright Misesian by comparison.

Thu, 01/13/2011 - 22:41 | 875170 DarkAgeAhead
DarkAgeAhead's picture

Man, I was thinking about your argument, up until the last paragraph.  The bankers are unaccountable.  But at least in theory, politicians are.  I'd rather we the people run this venture into the ground through our direct stupidity, arrogance and gluttony, rather than some dark hand or back room play.

Nothing about what the Fed is doing now feels like financial self-preservation.  It seems much closer to an intentional looting and pillaging of what was once the US.

Thu, 01/13/2011 - 23:37 | 875263 fearsomepirate
fearsomepirate's picture

I never thought I'd be defending the Fed at all, but it's better than Congressional fiat.  The Fed primarily creates money via the Treasury's issuance debt.  This is "good" (read:  less horrible than the alternative proposed in this article) because John Q Public has a vague sense that debt is bad. The national debt is a political liability.  It goes to high, and politicians get thrown out (see 1994, 2006 and 2010).  If Congress directly created fiat, you think they would tell us how much they printed?  No.  And John Q. Public--such as the author of this article--gets confused when you dress up money-printing in fancy language, cloud the issue by saying it's done without increasing the national debt, and make it sound like it's a ticket to a free lunch.  Keep up "demand-pull" and "cost-push" smokescreens, plus a healthy dose of blaming currency speculators (see:  Great Britain and Black Friday), and the public will never grasp that the pols are devaluing their savings in order to feather their own nests and concentrate their own power, until it takes a trillion dollars to buy a marshmallow.  While a gold standard is infinitely preferable to what we have now, indirectly tying fiat issue to the national debt is preferable to Congress spewing new fiat every time they get a hard-on for a bridge to nowhere.

Think about it:  People here screamed bloody murder when the Ber-nank announced $600B in new fiat this year.  If Congress was doing it, 100% of the deficit would be instantly monetized, and without the political liability of calling it a "deficit" and the opposition party grandstanding about "indebting our children," think they'd stop at a mere $1.4T?  They wouldn't even call it a "deficit."  They'd count money fresh off the presses as "revenue" instead.

Fri, 01/14/2011 - 01:19 | 875385 essence
essence's picture

A balanced budget amendment would go a long ways to countering your argument.

That in conjuction with renouncing fiat currency.

Let's throw in term limits and public financing of elections for good measure.



Thu, 01/13/2011 - 22:45 | 875178 blindman
blindman's picture


"And if we're going to have fiat money, I'd rather have bankers control it than the fools in Congress.  At least bankers have some inkling of the idea that printing with reckless abandon would destroy themselves as well as everyone else.  Politicians, however, lack even the rudimentary knowledge for financial self-preservation and would make Quantitative Easing look downright Misesian by comparison."


 i think this is the big debate for 2011-2012 and i think it will be / should be

the real deal.  an important, long due and needed public discussion.  the

future welfare and prosperity of all depends on its decision. 

i disagree with your position as i think the bankers know they can, have displayed,

destroy everyone else well before their own ultimate demise, and we can't

vote them out, regulate or arrest them.   yet....

Thu, 01/13/2011 - 23:28 | 875249 fearsomepirate
fearsomepirate's picture

Politicians had more direct control over the issue of fiat in the Ming Dynasty, Weimar Germany, Vietnam, Argentina, Chile, and Zimbabwe.  I'm not a Bernanke fan by any stretch of the imagination, but I do think that

a)  He genuinely believes what he's doing right now is the right idea, and

b)  He does know what "hyperinflation" is and would tighten monetary policy if it really got undeniably bad.

People here will interpret that to mean that I think Bernanke's a rock star, but I don't.  I do think he is causing and going to cause a lot of inflation, and I also think he has fallen prey to his own hubris.  But, and this is very important, I do think he will wake up and smell the roses if core CPI inflation goes into the double digits.  But if past experience is anything to go by, politicians will not.  In at least three of the aforementioned examples (Ming, Weimar, Zimbabwe), the higher inflation went, the faster the politicians printed money in order to buy the stuff they wanted.  I do believe there's a point at which the chairman of the Fed would put on the brakes, whoever he may be.  Even if he were a totally evil, corrupt tool of the banks, bankers understand that hyperinflation will wipe them out, too.

And no, you can't vote the politicians out.  Vote one out, and who replaces him?

Fri, 01/14/2011 - 00:20 | 875308 AUD
AUD's picture

The only thing I wouldn't agree on is the, more direct control over the issue of fiat. 

Don't know about the Ming Dynasty but certainly in Germany & Zimbabwe the issuance of currency was through the central bank, but so what if the central bank is staffed by government appointment, sound familiar? "The central bank administers to political dictate" - Melchior Palyi, 1958

The assets of the Fed are largely US government debt & what isn't is defacto government backed by virtue of its presence on the Feds balance sheet. The Fed is illiquid & would be insolvent overnight if government debt lost its 'moneyness', no matter how indepenent Bernanke thinks he is.

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