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The US Does Not Own Or Control Its Money System
What is money?
Most of our adult lives are devoted to making this stuff.
Next to food, water, and sleep it’s the #1 concern for most human beings in the
US. Nearly 80% of divorced couples cite financial difficulties as a reason for
the divorce. And the American
Psychological Association reports that 73% of Americans cite money as a source
of significant stress.
And yet, despite being the medium for every economic
transaction in our financial system, few if any individuals actually understand
what money is and how it works in today’s Federal Reserve banking system.
So I ask again, what is
money?
The common answer is: Dollar bills or coins.
The common answer is wrong.
The US monetary system is in fact entirely backed-by debt.
Dollars are not actually assets, they are debt-backed instruments produced by
the Federal Reserve. I realize this is difficult to swallow, but have a look at
the Dollar bill itself.
Note the top of the bill does NOT read “US Dollar” or
“official currency of the United States.” Instead it reads “Federal Reserve Note.”
So this bill is in fact, NOT produced or controlled by the
US Government. . Instead, it’s a note issued by the Federal Reserve.
The confusion continues if you look around the rest of the
Dollar’s front. Nowhere does it state that the bill was produced by the US
Government or was generated in a Federal facility. Instead you see a black
circle on the left that reads “Federal
Reserve Bank of San Francisco,” indicating that this particular note entered
circulation via the Federal Reserve Bank of San Francisco.
But surely this is just a round about way of saying the
Dollar is the US’s currency, right? After all, the Federal Reserve is a branch
of the US Government.
Wrong. The Federal Reserve is in fact a privately held organization. If you go to the Federal
Reserve’s website you will see that while it IS a .gov web address (http://www.federalreserve.gov/), the
site itself is for “The Board of Governors of the Federal Reserve System,” or
the management of the Federal
Reserve, NOT the Federal Reserve System itself.
Nowhere does this site state what the Fed really is, who
owns it, or how it even operates. Instead, all you see are profiles of the various
members of the Board of Governors (including current Fed Chairman Ben Bernanke)
and articles detailing the data the Fed tracks and the policies it enacts.
Imagine if General Motors’ website made no mention of cars
or trucks but simply focused on GM’s management team and the policies they
employ at the company. THAT’S the equivalent of the Federal Reserve’s website.
Now, the Federal Reserve DOES maintain another website that
focuses more on the Federal Reserve Banking System’s services, however this
website is NOT a .gov site, but a .org site: http://www.frbservices.org/, meaning it
has NO involvement with the US Federal Government/
Which brings me to shocking truth #1: The US Government neither owns nor controls the US Federal Reserve.
At best, the US Federal Reserve is a quasi-governmental organization.
The President of the United States does choose the Chairman of the Federal Reserve’s Board of
Governors. However, even this setup is a farce as the Fed presents candidates
from whom the President can choose from. Moreover, the confirmation of a Fed
Chairman takes place in Congress, whose members receive incentives both
monetary and other from Fed lobbyists as the below quote attests:
"I
was advised that rejecting [Bernanke's] nomination would cause markets to nose
dive, which would hurt retirees and families saving for their future. I am not
enthusiastic in my support. " - Senator Barbara Mikulski (D- MD)
Thus, even the Government’s appointment of the Chairman of
the Board of Governors of the Federal Reserve is a farce. It is at best a
dramatic gesture meant to instill the notion that the Fed is somehow affiliated
with or controlled by the US Federal Government.
However, in reality the Fed is a totally separate entity, a
privately held organization controlled by the most powerful people on the
planet. To put it plainly, the Fed is a cartel permitted to operate and control
the US monetary system with the approval of the US Government.
This is why the US Dollar states “Federal Reserve Note”
instead of “Currency of the United
States” or “Produced by the US Government for the Citizens of the United States
of America” or some such thing.
The US Government didn’t create the US Federal Reserve
system, all it did was give the latter its seal of approval metaphorically (by
passing the Federal Reserve act of 1913 which created the Fed as a legal entity
and gave it control of the US monetary system) AND literally (by placing the US
Treasury Seal on every Federal Reserve Note the Fed produces):
It’s one of the best hidden
secrets in the world… and yet it’s staring all of us in the face. How many
Americans realize this? Better yet, how many Americans realize that our
entire money system is in fact backed by debt?
1 in 100,000?
1 in 1,000,000?
Best Regards
Graham Summers
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Some of it is hidden (eg. DuPont), much of it is not (eg. European royal lines). But you also have to understand how they think ... even when individual families have (temporarily) lost much of their wealth. I do have connections with them (know some personally) and also a long family history. I have also researched the connections all the way back to 4,000 years ago ... and it more than likely goes back even further. The secret to their longevity and power is a combination of attitude and a very deep involvement in illegal activities ... not just money. Their preferred method of acquiring wealth is through plunder.
Blood is thicker than gold.
dear i-dog,
I'm enioing our korrespondense. I think I understand "blood is thiker than gold". As diskretion is more valuable than money?
please enlighten me further:
How would you kharakterize the mentality, attitudes, & praktises of these families of whish we speak?
How do these praktises enhanse their longevity? 4000 years ago is a very long time, even for the iapanese.
The operational logik for sush an organization would be useful in understanding.
yours is an interesting perspetive, please share,
Beef
No. I mean that blood is everything. These people believe in the "divine right of kings" (though they are not at all religious, except when expedient) and have their family histories to support this belief. You'd be surprised how many famous names and events they encompass in continuous bloodlines over those 4,000 years of history.
Since they rely on plunder, drug trafficking, inter-marriage and monopolies to make a quick buck at any time, they don't need money as such (unless it is yours, or some inbred idiot family member makes a huge mistake).
It's too complicated and long a story to cover here. And it's OT. Just know that more than 95% of "conspiracy" websites and internet radio hosts are ignorantly (many, deliberately) spreading disinformation and confusion interwoven with their real anti-NWO stuff -- to keep the path muddied.
Use reason, evidence, and critical thinking, if you ever decide to look into it further ... and avoid the UFO, religious and Mayan calendar bullshit (though they are fostering a belief in these things to keep the sheeple confused and scared).
They can be thwarted, even at this late stage, but they are more persistent than cockroaches and more ruthless than any mafioso.
ok, well, we can agree to disagree. Thank you for presenting your case.
No matter how long the bloodline, as homo sapiens sapiens, they would not be immune to:
1) http://en.wikipedia.org/wiki/Illusion_of_control
2) http://en.wikipedia.org/wiki/Illusory_superiority
3) http://en.wikipedia.org/wiki/Fundamental_attribution_error
these specific cognitive biases would prevent them from realizing that they, as individuals or as members of a family, clan, or class exercise little control over their organizations, and none at all over the expanding scope of knock-on effects which the machinery produces.
One may be able to arrange to benefit from the robot, without the ability to steer it, or even less turn it off.
When you see the Rhodeses, kindly ask them if they would engage in their mining & mineral extraction in outer space, please. I hear the Jupiter Trojans are nice this time of year. Should they be Gods among men, they can certainly strive to be Angels among the heavens.
Yours,
Beef
@beef
in the kase of a family business the identity
and existense of the authority are the same entity.
the survival/growth kalkulus is the key konsideration.
in the kase of a family growth is accompanied with
labor and pain and demands on resources and many other
wonderful things. the kalkulus for a korporation is
similar but way different. .....
korporations have no physikal existanse but feed and
feed off of life forms and matter in their sphere of
influense. since they have no physikal existanse they
feel no pain, they know no limits or boundaries other
than the limits plased on them by the limitations in the
minds of their hosts and the pain limits of the host
and the hosts are replaseable.
but these hosts become intoxicated with
the ephemeral and limitless potential, resourses available
by assosiation, bekome powerful and resourseful and possessed
by another mind and identity of greater worldly importanse.
perhaps their, korporations, nature requires some
regulation? nahhhh.....
perhaps that is what happened to the konstitution, foresaken
for a less regulated identity that dekanted away and now
okkupies another ephemeral sphere through a phase shange.
rish vs. poor. konnected vs. not. nationalism vs. globalism.
human vs. mekanikal........android moment.
kannabalism returning through deflation or market korrections. ?
mysteriously, my see key has also shit the bed.
but know this, behind every korporate klown you will find
nothing. perhaps a disoriented stranger in disarray. the us in the
u.s.a..
hi Blindman! sorry about your See key. Thanks for stiking with the posting regardless.
I agree with your reasoning here. Something more is needed within our ekono-ekosystem to shek the the predation of these mashines.
Human-headed or robot-headed, their unrestrained aktivities, while providing many material benefits, have pushed western sivilization towards sosial kollapse.
Sheers,
Beef
PCR +1
Blindman +10
Kobe +100
+1, Blindman, but this is much bigger than the USA, or even Western civilization, and much older than the British or Dutch empires, or even Venice.
Yea ... verily so. They could teach survival skills to cockroaches.
An excellent rant.
This article is the biggest "So What?" I have ever read.
Yeah, the system is backed by debt? What did you think it was backed by?
Money is a promise to pay. What else would it be?
It used to be either a promise to redeem in gold or silver, correct? A long time ago, Americans used to be savvy about money which forced the money changers to veil their deceitful plan as a commodity backed financial system. After years of dumbing down the general public enough through the state controlled public education system, we are now just a herd of lost sheep with no clue as to what is really going on right before our eyes. The money changers got Nixon to switch the game back in the early 70s and let the games begin.
If everyone read the book "The Creature from Jekyll Island" by Griffin, the American public would suddenly become mass aware. Only to wish......
Nevertheless, in the end, this is going to end very badly for the money changers.
When making a fool of yourself, it is best not to do it in bold!
Money is a tradable "good" - for example: shells, pebbles, gold, silver, copper.
Fiat currency, on the other hand was a "promise to pay" (in real money, ie. a Promissory Note, or IOU) until Nixon removed even that vestige of usability. Now it is simply a piece of paper that is "legal tender" for the payment of taxes.
If money is printed by the government on behalf of the working populace, then it is not a debt instrument, it is truly a convertible currency. But when it is issued by a private Federal Reserve, it is a record of a debt to the FRB raised by the US Government ... and the government must not only repay that debt but also pay interest on that debt to the FRB out of future tax revenues (theft).
That's what else it could be.
I feel like that peasant in Monty Python and the Holy Grail.
Money used to be, and ought to be, a commodity that was selected by the people who need a medium of exchange, unit of account, and store of value, in a free market over a long period of time with the unique properties of:
(a) non-declining marginal utility
(b) the narrowest spread between bid and ask
(c) a high ratio of stocks to flows
(d) the highest marketability in the large and the small
oh yeah, and (e) not something that can be created by whim or fiat!
Money is not a promise to pay. You have been bamboozled. Money, real money, has no corresponding liability. To believe otherwise is.... well... stupid.
How curious that the infamous gold-hating troll JohnnyBravo has used the exact same arcane argument a number of times here in the past as well. I am sure that it is nothing but a wild coincidence, however.
I also admit that the story that real money has no corresponding liability is wishful thinking.
An obvious truer scotsman fallacy.
I am neither of these gentlemen. Dismissing the fact that money is credit against all the other values is denial.
I have read this "johnny bravo" and he and I are coming from different places on gold.
First, he's gonna get killed on that $1450 bet and this "cup and handle" stuff is not something I believe.
I don't believe in the rhetoric of goldbugs, obviously, but at this point gold is unstoppable for a while. The only technical that matters is time, as far as I'm concerned.
In terms of the intrinsic value of gold, all these people who seem to have just discovered Mises should keep in mind that Karl Marx had exactly the same beliefs about gold as Mises. I'm very familiar with this kind of Platonic notion of commodity equivalence Marx and Mises embrace and it's bull.
The idea of gold-based banking is not even worth debating. It was tried for hundreds of years and it failed. The difficult and important thing is to get people to understand that money is not a thing but a relationship.
It seemed to me that Johnny Bravo was talking gold down because he was short. I don't think gold CAN be talked down at this point and I'm not short.
Maybe 'banking' failed after hundreds of years, but gold 'currency' was used for thousands of years. Governments hate it because it limits spending and expansion of power. Little wonder that it eventually 'fails' (read: gets hijacked). And we've had 100% fiat for, what, a few decades...and of course now it is failing due to its own inherent worthlessness. Comparatively speaking, the fiat money experiment seems a lot less worth debating than PM's.
Without a connection to reality, your money-as-'relationship' concept is destined to fail due to inevitable disagreements on what the value of money is. When the value of money is determined by government decree, there can be no 'faith' in it.
The ability of governments to affect the market value of physical gold once it is in use as a currency, will be very limited...nowhere near the ease with which they debase fiat paper.
I don't know much about 'intrinsic value'. It doesn't matter much. But I do know that real stuff is more valuable than printed notes backed by a very fallible and corrupt government.
You caught that too eh?
It's not necessarily bad that a currency is backed by debt at all...
The problem is that there's a bias... a big one... in how the credit created is put into the system...
And there's an inherent sustainability problem with the whole model in the long run... (the vid below makes a good case though other viewpoints are possible. (fortunately I'm not an economist and am open to alternatives)
Promise to pay what, exactly?
That is the point.
That is the point indeed. The US debt is not a US problem. It is the others' problem. They are the ones who are going to face the USD promise, what it will buy and in what amount.
Legally valid book-entry settlement - as has been the case starting around the late 1300's.
Sidestepped the question: Pay exactly what? What thing of value is it backed by?
Promises to pay are backed by promises to deliver. It's called "payment intermediation". Money is the relationship between creditor and debtor. Legal, book-entry money puts the entire economy on the same balance sheet.
What you goldsters seem to have forgotten is that the money system doesn't work in spite of the fact that money is only notional, but because money is only notional. In the 1300's merchants and traders had a choice: keep demanding payment in physical or accept book-entry settlement. They chose book-entry settlement because it works better. In a physical currency system, wealthy people constantly distorted commodity prices by controlling the flow of specie and there was nothing anyone could do about it. Notional accounting allowed traders to overcome these artificial barriers through credit-arbitrage.
Entrepreneurs could then value flows of goods and services rather than artificially constrained flows of gold and silver. That's why governments enforced fixed specie exchange rates - to stop gold-hording from disrupting the economy.
Consider: what would happen to the economy if, instead of book-entry bank money or physical gold, people saved by filling up big tanks in their back yards with all the world's crude oil. In that case, the economy grinds to a screeching halt because hording causes shortage.
The only reason people "save" money in gold is that very few people really need gold in the first place. Aside from its corrosion resistance, gold is the savings commodity of choice because it has very little real, practical value. You can bury all the shiny rocks you want in your back yard and nobody cares because nobody cares if there's a shortage of shiny rocks except other shiny rock collectors.
Gold to $1700, BTW. Get while the getting is good.
Promises are promises; with physical payment there is NO promise, just satisfaction.
Payment inter-mediation is a fancy way of saying that you have invited a third-party into your transaction. When you do that, there are numerous ways that the third party will get a cut of the action...
Money is A relationship between creditor and debtor; there are other relationships available.
Money, according to The Constitution, is gold or silver.
What we call money today is given any power by legal tender laws, that make you obey at the end of the barrel of a gun, and from a general lack of understanding.
I would disagree with this assumption, if anyone chose book-entry settlement it was for ease of use in large to very large transactions because of weight. A promise to pay is not even remotely better than full settlement.
I need to stop here, but would love to continue debating this point when time permits...
I junked you because of this dumb-ass statement. "it has very little real, practical value".
NASA, the Medical, and Computer industry ( to name just a few ) would disagree with you.
Us pocket protector guys also give it to girls who thank us with sex..
Gold has both a high practical and very high percieved value.
I enjoy reading a clear reality-based statement like the Monetary Red's. The problem isn't the Federal Reserve. The problem is Congress (and therefore the voters). The handling of the currency by the Fed has been responsible. It wasn't the Fed that took us out of Bretton Woods. It wasn't the Fed that racked up 9 trill in debt. It wasn't the Fed that "learned that they could buy the people's vote with the people's own money." (de Toqueville) So long as the election process is essentially driven by activist elites and TV ads (money), rather than calm vetting of candidates' CV's and other evidence of character, and so long as important issues do not go to direct voter decision, our dire mess will continue to worsen. We are currently forced to vote for a candidate "right" on one or two issues, thereby ceding her the ability to bargain away sense on ten other important issues. It does not work. And given technological advances, this so-called representative democracy, a relic of frontier days and poor communications, is an unnecessary evil.
Roping,
I'm sure you and I are miles apart on political issues, but I appreciate your words and I agree about direct democracy. A few years ago, I moved from a state without voter initiatives to a state that has them and although voter initiatives do sometimes create wacky results, I think that people are only going to learn about the issues if they are responsible for some of the choices made on them.
I think this Fed has done a pretty decent job dealing with a terrible situation - given their pre-existing ideas and preferences. It's worrisome, of course, that the Fed has accepted paper well below the grade they should have, but that's life. Congress has, of course, been fiscally irresponsible for decades.
But the thing I know about both those institutions is that the are very transparent relative to private banks. As we all know, private banks create the vast, vast majority of money and they do it on increasingly dodgy accounting terms. That scares the sh&t out of me
end the fed before it ends you.
"end the fed before it ends you". -blindman
The full horror of the Fed Reserve system goes beyond just financial theft within the USA.
The authors of the Constitution saw that the surest road to tyranny went by way of militarism and war.
In an attempt to avoid that, they tried to put control of the purse-strings in the hands of the citizens as much as possible through Congress.
The Fed Reserve system alters both the limitations and control of those purse-strings. Much criticism is directed at how ponzi fiat financing transfers wealth to an insider elite while placing the general public into debt servitude.
But even worse, unlimited fiat financing by the Fed Reserve system not only enables the growth of militarism and endless war, but promotes it.
This has become especially true since the dollar attained world reserve status after WW2, and with the development of trans-national corporations and global cartels.
To purchase commodities, nations must obtain fiat dollars, issued by the Fed in exchange for a variety of emoluments. Chief among those commodities required to be purchased with dollars is petroleum. A dollar purchase requirement also means a dollar sell requirement. Thus Mideast sheikdoms must be established and dominated, and extraction and marketing controlled.
The petrodollar ponzi racket needs an enforcer. That role is served by the global Pentagon, now subservient not to US citizens, but to a cartel of global finance and warfare merchants. Thus the cartel’s wealth and power is obtained at the cost of blood and debt for citizens.
The global Pentagon, the world’s biggest institutional consumer of petroleum, is of course on intimate terms with the big oil industry. So, even though the global Pentagon is the world’s biggest environmental polluter and abuser, the connection between environmental degradation and militarism is rarely considered by mainstream media.
Intended consequence or unintended, the Fed Reserve system not only undermines the economy and political freedoms, but by promoting a global empire of full-spectrum dominance, threatens the planet and all that it contains.
I agree with the obvious facts you underline that for trading commodities for example, countries have to buy USD. Or that a network of security has been woven around the world and countries have now to pay an entry fee on the commodity market etc...
Should all this not lead to tell that the USD is not backed by debt but by the wealth of all the non US entities which sell their real wealth as a guarantee for the value of the USD?
The USD is not backed by US wealth. It is backed by everyone else but the US' wealth. That is not debt.
@r,
you make clearly insightful and important comments. imo
http://maxkeiser.com/
.
September 16th, 2010 by stacyherbert
Stacy Summary: We look at the scandals of the ‘living’ dead centenarians collecting pensions in Japan and of Iceland’s ex-premier defending his innocence against charges of ‘economic recklessness.’ In the second half of the show, Max goes to Detroit to talk global deflationary collapse with Nicole ‘Stoneleigh’ Foss of Automatic Earth.
.
nicole foss gets it. imo
You are correct. Centralization and decentralization are human cycles of evolution. The CB model exacerbates the scope and length of the conflicts. In the age of WMD, the word 'contain' is an impossible task. The liquidity skid mechanisms of the CB model are actually quite good. The model needs to evolve. Pouring new wines into old wineskins does not work.
Silver. Good for vampires, werewolves, & Federal Reserve board members.
+1913
long live "united states notes"
ditto
Amen, and remember ZH'ers:
"Give me control over a nations currency, and I care not who makes its laws" -- Baron M.A. Rothschild, same guy who helped create the central banking system used today... and family that basically owns the City Of London and both the US and UK central banking system.
This City Of London (not to be confused with London) is that 'hidden' support of the USA by 'those banks' in London who are buying USA debt TD continues alluding to.