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The Federal Reserve Bank Must Be Destroyed
Submitted by Patrick Barron via Mises Canada blog,
“Delanda est in Susidium Foederatum Bank”
(The Federal Reserve Bank Must be Destroyed)
During the years of the Roman Republic, Cato the Elder ended every speech with the phrase “Delanda est Carthago” (Carthage must be destroyed). Rome had fought two wars with Carthage, yet the threat to the Republic remained. Cato saw Carthage as an existential threat and concluded that Rome would not be secure as long as Carthage existed. So fervently did he hold this view that he ended every speech, even about completely different subjects, with the famous phrase. I believe that we Austrians need to adopt a similar phrase to remind the American people that the US faces an existential threat from the machinations of the Federal Reserve Bank. “Delanda est in Susidium Foederatum Bank”…The Federal Reserve Bank must be destroyed. Like Carthage, the Federal Reserve Bank cannot be controlled or restrained. Either it or our republic will survive, but not both. For the sake of our nation, the Fed must be destroyed.
Founding the Fed Instead of Ending Fractional Reserve Banking
The Fed was founded under false economic premises–to prevent bank runs by providing temporary liquidity to banks which found themselves unable to redeem their certificates and demand deposits for cash and/or specie. The real cause of illiquid banks–fractional reserve banking–was never seriously addressed. It was assumed that banks had the legal right to invest their customers’ demand funds in loans and that runs were caused by over indulging in this practice. But as Murray N. Rothbard explain in What Has Government Done to Our Money?, loaning demand funds instantly places the bank in an insolvent position, for it cannot redeem all of its demand accounts for cash or specie. Through the process of lending demand funds, the banks have created fiduciary media out of thin air, reducing their reserve ratio below one hundred percent. If the banks do this on a very modest basis, the public may not be aware of the fraud. However, once the rumor starts that the bank is illiquid, there is a literal “run” to the bank to withdraw demand funds. In such a case, even a bank that only modestly lent its demand funds might find itself unable to honor all withdrawal claims and would be forced to close its doors.
(NOTE: Central Banking was established to legitimize counterfeiting fraud, aka – Fractional Reserve Banking)
The Federal Reserve Bank, as the lender of last resort, was supposed to prevent such occurrences by providing temporary, penalty rate loans to struggling banks. Note that there is nothing that a central bank could provide that could not be provided by another private bank. In fact the banking panic of 1907 was stemmed by private bank interventions led by J. P. Morgan. However, Morgan realized that such private bailouts were very risky and presented a case of moral hazard; i.e., that bankers, confident of a bailout by the Morgan banking empire, might book riskier, higher yielding loans. So rather than face the real cause of banking crises and lobby to outlaw fractional reserve banking, the Morgans, Rockefellers, etc.–who did not want to forego the financial benefits of lending demand deposits–lobbied instead for government to create a lender of last resort, a central bank, which we named the Federal Reserve Bank.
Fed Policy Causes Depressions and Then Prevents Recovery
Over time this entity, new to Americans, would expand its role in fruitless attempts to cure crises caused by ITSELF. The Fed caused and exacerbated crises by allowing, facilitating, and expanding the practice of fractional reserve banking. In the 1920’s the Fed began to expand the money supply to prevent prices from falling, justifying its new role as one of maintaining a stable price level. But printing money to prevent falling prices caused malinvestment in the structure of production and led to a depression by the end of the decade.
Rather than do nothing and allow the purging of bad investments and liquidation of malinvestment, which would re-establish a sustainable structure of production, as it had done at the beginning of the decade in the depression that no one remembers, the Fed intervened monetarily to pump up reserves while the Hoover administration intervened fiscally to prevent price deflation and maintain high spending levels. All this is well documented in Murray N. Rothbard’s America’s Great Depression.
Yet even an interventionist Fed could not prevent the massive bank failures of the 1930’s, due to many factors which included restrictive bank branching laws. But the primary cause of the bank failures was *again* the banks’ adherence to fractional reserve banking practices which resulted in their inability to honor all demand deposit redemption requests for specie and/or cash.
In the Roaring Twenties fractional reserve banking had expanded the money supply well beyond the ability of banks to stem all the runs. Again the banks and the politicians refused to dig deeper into the real cause of the problem. Rather than separate banking into deposit and loan functions–the former would require one hundred percent reserves and the latter would require strict asset-liability management to ensure that loans matured on the same schedule as time deposits, what is commonly known as funding loans out of savings–the government suspended specie redemption and eventually formed the FDIC to “ensure” bank deposits.
However, the FDIC’s “insurance” program was nothing more than an explicit promise that the Fed would print enough money to redeem all ensured deposits, thus insuring the continuation of fractional reserved banking, the very problem that was used as the excuse to establish the Fed; the very problem–bank instability–the Fed was sold to the public to solve. So, once again, a solution to cure a problem caused by the Fed itself resulted in even more power for the increasingly government run banking system.
The Monetary Genie Was Out of the Bottle
Once the politicians realized that the Fed could print money at will, the genie was out of the bottle. Money growth did expanded at a modest rate for a few decades, due mainly to the efforts of prudent men such as Fed Chairman William McChesney Martin (1951 to 1970) and fiscally conservative politicians such as President Dwight Eisenhower (1953 to 1961). However, it was inevitable that less prudent men, such as President Lyndon Johnson and all Fed chairman with the exception of Paul Volcker, would rise to power on their promises to fund all manner of government programs with what was now seen to be unlimited money.
This was the key revelation!
Money printed in unlimited quantities could cure all ills, or so it was claimed, and to its everlasting shame the economics profession provided sufficient “academic” cover to support these spurious assertions. Now everyone understood that the Fed could monetize–i.e., purchase government debt itself–any amount of government spending. The economics profession refused to consider the inevitable consequences of these irresponsible monetary policies. Instead it cherry picks historic price data to prove them to be non-inflationary and endorses changes to unemployment calculations to prove them to be fiscally sound, too. These whores, these house economists have their eyes glued to the rear view mirror of spurious government statistics as the race car of state hurtles toward an economic cliff of depression and perhaps even hyperinflation.
Money Production and Banking Subject to Commercial and Criminal Law
It matters not who is in charge of the Fed or what rules Congress may insist that it adopts. Once money printing, via fiat or fractional reserve credit creation, is seen to be both feasible, justified, and legal nothing and no one can stop it. The political pressure to fund government programs will be irresistible. Everyone knows that the Fed seemingly has the ability to solve their problem by monetizing the federal debt. Should it refuse to do so, we would see riots in the streets similar to what is happening in Europe as protesters target the European Central Bank.
The only solution is to destroy the monster that makes it all possible, the Fed. Without the ability to sell its debt to its own central bank, government would be forced to live within the means set by the will of the people through their elected representatives. The scales would eventually fall from the eyes of both politicians and public as its becomes clear that what government spends comes at the expense of the private economy. The public would no longer be fooled by government propaganda that its spending spurs the private economy, when it is clear that the only way government can spend is to tax the people or suffer the crowding out effect of private investment by government borrowing. Money production must be moved to private hands that are subject to normal commercial and criminal law, where money printing is nothing more than counterfeiting. Banks, too, must be subject to normal commercial and criminal law, which requires them to treat a demand deposit as a bailment for which they must keep one hundred percent reserves. Loan banking would be subject to the normal principles and well understood practices of sound asset-liability management, whereby loans are funded by real savings and the maturities of both loans and deposits must be coordinated in order for lending banks to honor their liquidity commitments. The path to the destruction of our nation through endless wars and welfare would end with the destruction of the Fed.
Delanda est in Susidium Foederatum Bank!
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"In the park I saw a daddy
With a laughing little girl that he was swinging.
And I stopped beside a Sunday school
And listened to the songs they were singing.
Then I headed down the street,
And somewhere far away a lonely bell was ringing,
And it echoed through the canyon
Like the disappearing dreams of yesterday."
[ Money production must be moved to private hands that are subject to normal commercial and criminal law, where money printing is nothing more than counterfeiting.]
And where was Mises and the hordes of other private money advocates when Liberty Dollars Bernard Von Nothaus was ruthlessly taken down, robbed and called a monetary terrorist by the thugs in DC?
Where were those purveyors of real money backed by specie? Why was his Kangaroo court empty of them?
I'll tell you why,,,, Mises is an organization, like all the others, that keep themselves in business by attacking and demonizing the present thieves at the FRB. They know the reason for their existence will end when the FRB ends. Therefore they're all talk and no substance. They will never actively participate in ending their money tree,,, the FRB.
Mises is the polar opposite of the Keynesians they pretend to hate. I refer Mises as Ferengi Capitalists akin to the crony Capitalists of today. Only difference is style. Neither serve the People. They only serve themselves just like the Keynesian thieves of today.
The answer imo is very limited banking and only specie as money. Yes there can be credit but the specie will limit it drastically. Yes growth will be slowed but at the same time steady, not the rabbit like approach we have today full of booms and busts. And anyone doing anything like the banks of today should be immediately incarcerated and possibly hung when considering the numbers of people they do harm.
The vampires must be destroyed.
All inclusive capitalists.
the global stall.
the fed ain't going nowhere.
embrace the fascism.
privatize profits socialize losses.
I'm lovin it. Everything is AWESOME.
EBT still working.
Legal tender laws are the KEY. That is how they force the people to accept fiat backed by nothing in violation of the 5th amendment requirement that the government must pay you fair value when it "takes your property". They got legal tender laws in by "packing the s. ct.". http://www.thetruthaboutthelaw.com/they-make-you-use-money-that-is-backe...
The only solution is to destroy the monster that makes it all possible, the Fed.
Having done that, then what?
World War is inevitable; the totalitarian bankster American Empire of debt is in complete control. The criminals will blow up the world rather than be brought to Justice.
The NSA is an extension of Professor Nash’s “Game Theory” with advanced computer technology “technocracy” which is the “dream come true” for the Washington Empire of totalitarian bankster fascist (merger of corporate monopoly with government).
The Washington Empire NSA is an arm of the bigger global bankster “vampire octopus on the face of mankind” totalitarian financial operation of debt servitude.
Americans are 60 Trillion dollars in debt to whom, the criminal banksters? The American Empire of debt didn’t just happen and no one in the Fed saw it coming; it was planned by the Washington criminal Rockefeller banksters via the Council on Foreign Relations and their traitor puppets in Congress.
Prosecute the criminals for treason, cancel the criminal debt and therefor save ourselves and the rest of the world from the criminal debt and world war.
Americans will regain the respect from the rest of the world by returning to business and dissolving the Federal Reserve. You kill the vampire octopus by cutting its beak out and it can do no more damage; than the octopus dies and you eat him.
The public executions for treason, televised to the rest of the world to prove that we are serious, will be widely received and cheered on as we chop the totalitarian, incurable psychopathic, criminal’s heads off.
Here's why GATTACA
It's just a matter of time before some Zero idiot starts insisting Fed members need to die.
First of all: good luck with that shit. The last time anyone seriously tried to take on the bankers was in the 1930s, and his name was Adolf Hitler. He got his ass handed to him, and got to become the most reviled figure of the 20th century for his trouble. And in those days the bankers didn't have anything like their present global dominance.
Secondly: all of you guys insisting that money creation needs to be in private hands... that's what we have now. Think it's working? Once again I'd point to Nazi Germany; they de-coupled their currency from the central banking system. It was issued directly by the government and was NOT backed by precious metals. By creating a system of money that didn't place the people in debt due to the very nature of it's existance, Germany become the one Western nation that wasn't mired in the depression. This notion that people doing shit such as issuing currency for profit can in any way be trusted is stunningly naive.
the fed is an awsome organization that works exactly as designed. embrace it, because it ain't going anywhere. When U join the team "everything is AWESOME"