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Guest Post: EU Finance Ministers Push Through ESM Treaty in Fishy Fly-by-Night Move

Tyler Durden's picture


Submitted by The Prudent Investor

EU Finance Ministers Push Through ESM Treaty in Fishy Fly-by-Night Move


Europe's most important treaty on the European Stability Mechanism (ESM), which will lead the EU into a financial dictatorship, has been pushed through by EU finance ministers late Monday evening.

But the latest version of the ESM cannot be found on English and German EU websites. A link on consilium EU only leads to a 'file not found' message and the German EU website "Europa von A - Z" does not mention the ESM at all. This reminds one of the secrecy around the Federal Reserve Act, that was pushed through in 1912. Is the EU Commission now playing the same fishy game 100 years later?

Media reports from last midnight only said that the ESM treaty was agreed on by EU finance ministers and mentioned January 30 as the date when the treaty will be officially signed.

Significant changes have been made, a few media reported.

The capital of the ESM will now be only €80 billion instead of the €700 billion proposed in the only available draft version from July 2011 (see treaty text below). The finance ministers also agreed to bring the ESM into existence one year earlier by July 2012, putting national governments under immense pressure to ratify the ESM treaty without sufficient public discussion.

German state TV ZDF reported shortly after Monday midnight that the fund shall have a financing volume of €500 billion, but this figure is a moving goal post. IMF head Christine Lagarde proposed a volume of €1 trillion whereas Italian prime minister Mario Monti and Austrian finance minister Maria 'Mizzi' Fekter said later that the ESM should be upped to €750 billion. Such important changes cannot be found in publicly released EU documents anywhere on the web. The ESM will be the successor of the European Financial Stability Fund (EFSF) which lost its AAA rating a few days ago.

It does not exactly reassure Eurozone citizens when European leaders throw around figures between €500 million and €1 Trillion, proving they have no other clue than to fight debt with more debt if the fund is going to be leveraged inthe proposed style.

It all the more troubling that last night's agreement changes have not been communicated by the EU at all. It reminds one of the ACTA act that was signed in a non-public meeting of the Agriculture and Fishing Commission and is designed to destroy the freedom on the internet. As a side note: Anonymous brought down the websites of three Austrian ministries and the Austrian chancellery on Monday evening, protesting that Austria will be one of the first countries to ratify this attack on internet freedom. This was not reported by Austrian state broadcaster ORF.
I have published my objections to the ESM in this post from last December. Nothing has changed since except for the reduction of the proposed capital and the date the treaty shall go into effect. The ESM and its staff will be completely immune and cannot be sued, but can sue itself. This stinks.

Here is a video describing the democratic shortfalls of the ESM treaty in German with English subtitles.




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Tue, 01/24/2012 - 08:53 | 2091820 Bazinga
Bazinga's picture

Better to ask forgiveness than permission. But then the EU finance ministers NEVER ask for either...

Tue, 01/24/2012 - 09:01 | 2091850 GetZeeGold
GetZeeGold's picture



Hide and seek....bitchez!

Tue, 01/24/2012 - 09:25 | 2091916 economics1996
economics1996's picture

Printing money does not solve problems, it just rips off people and makes them less inclined to work for a living.

Tue, 01/24/2012 - 09:41 | 2091965 fonzannoon
fonzannoon's picture

I think it makes people work more and harder because from where I am standing people don't recieve the printed money, just the inflation.

Tue, 01/24/2012 - 10:03 | 2092050 Silver Alert
Silver Alert's picture

I haven't received a raise in a couple of years now. I can't wait for hyperinflation to start adding zero's to my paycheck and getting me a raise every week if not daily or hourly.

Tue, 01/24/2012 - 10:21 | 2092155 DogSlime
DogSlime's picture

@Silver Alert - I can't wait for hyperinflation to start adding zero's to my paycheck


It won't, though.

Prices will skyrocket and your wages will stay the same.  You think these bastards will allow you to have the same quality of life?

The elite must be supported.  There's less to go round now.  If they are to become richer, you must become poorer.

Price inflation will vastly outstrip wage inflation - they'll see to that.

Tue, 01/24/2012 - 09:09 | 2091859 Chief KnocAHoma
Chief KnocAHoma's picture

Same game of layering they played on Jekyll Island about 100 years ago. Better  learn to live within their system and look for opportunities as they waste time and energy fighting them.

We are now able to force a modecum of transparency, but this system will be here for the balance of my life and most likely the balance of my childrens life. Maybe my grands, when they get here, will be live under different rules. Hopefully better ones.

Remeber Christ threw the money changers out of the Temple as was hanging on a cross within three days.

Tue, 01/24/2012 - 09:20 | 2091906 economics1996
economics1996's picture

Look on the bright side, there are a lot of players in the EU and the odds of a few breaking away are high.

Tue, 01/24/2012 - 10:19 | 2092138 El Oregonian
El Oregonian's picture

"Remeber Christ threw the money changers out of the Temple as was hanging on a cross within three days."

Lucky for us, eh?

Tue, 01/24/2012 - 10:30 | 2092198 Chief KnocAHoma
Chief KnocAHoma's picture

I thanks him for it EVERYDAY.

Tue, 01/24/2012 - 11:35 | 2092461 RiverRoad
RiverRoad's picture

He also said, "It's easier for a camel to go through the eye of a needle than for a rich man to enter the gates of heaven."  Could be Romney's well as theirs.

Tue, 01/24/2012 - 13:04 | 2092906 Chief KnocAHoma
Chief KnocAHoma's picture

Because the rich men of His time were charging interest, and making money changing money as parasites on the productive class... wait...

Maybe He was really on to something.


Tue, 01/24/2012 - 09:24 | 2091917 slaughterer
slaughterer's picture

Being an EU finance minister means never having to say you are sorry. 

Tue, 01/24/2012 - 10:16 | 2092118 FreeSlave
FreeSlave's picture

This is a creation of a "Europen FED", the one that most of us want to abolish here in US... I cant believe Europeans will allow this BS to happen…


Tue, 01/24/2012 - 08:53 | 2091822 cossack55
cossack55's picture

To rhyme historically, they should have done it on Christmas Eve. 

Tue, 01/24/2012 - 09:03 | 2091853 GetZeeGold
GetZeeGold's picture



Obummers recess appointment would have clinched it.

Tue, 01/24/2012 - 08:55 | 2091824 PaperBear
PaperBear's picture

Does it look like the formerly secret cabal trying to rob all of us is crubmling as the following post suggests ?

Benjamin Fulford 1-23-12…”Secret government regime change in Asia nears completion, Satanic cabal in West crumbling”
Tue, 01/24/2012 - 08:55 | 2091825 GeneMarchbanks
GeneMarchbanks's picture

'It does not exactly reassure Eurozone citizens when European leaders throw around figures between €500 million and €1 Trillion, proving they have no other clue than to fight debt with more debt if the fund is going to be leveraged inthe proposed style.'

That's only to appease the banking cartel. Europeons stopped paying attention long ago...

Tue, 01/24/2012 - 08:55 | 2091826 Fips_OnTheSpot
Fips_OnTheSpot's picture

Here's the english version of the same video

Tue, 01/24/2012 - 09:05 | 2091860 Irish66
Irish66's picture

great video, thanks

Tue, 01/24/2012 - 09:07 | 2091872 Manthong
Manthong's picture

Isn't that special.

Looks like they modeled it after our Eeconomic Stabilization Fund (ESF).


Tue, 01/24/2012 - 09:11 | 2091881 GetZeeGold
GetZeeGold's picture



It's as good as a Presidential pardon in the pocket of a Mafia top boss......screw me.

Tue, 01/24/2012 - 08:55 | 2091827 Captain Kink
Captain Kink's picture

Will the European Sheeple do anything about it?  No.  Will the states of the periphery utter a word?  No.  Will the markets react? (probably higher!) They can do whatever they want! I am just fuking disgusted anymore.

I am giving up on what should happen and focusing on what will happen.  Madness.

Tue, 01/24/2012 - 09:15 | 2091893 YHC-FTSE
YHC-FTSE's picture

+1 Most of us have posted that sentiment more than once on ZH! 


The only thing to do when faced with a Ponzi scheme of this size, depth, and hell, all-encompassing ludicrousness, is opt out or play the game. a) Land, agriculture, self-sufficiency b) Play the Ponzi for what it is, get in there early, and be the first to come out with profit. I dare say many on ZH are doing a bit of both. When the whole world is dining with captain Insano and his minions on the bailout printer, you've got to feign insanity yourself to avoid being ripped apart by the zombies. 

Tue, 01/24/2012 - 09:30 | 2091932 chinaguy
chinaguy's picture

Hey Captain,

That's a good first step, don't get is what is can't prepare, or invest properly until you can see things you do...get to work.

Tue, 01/24/2012 - 11:12 | 2092361 Captain Kink
Captain Kink's picture

I have the preparations in place, PMs, getaway shack and some land in the country.  Still need G&A.  Have been playing the markets to protect capital and got very long equities around the new year, along with more paper PMs.  need to convert those to more physical.  They will print and spend to infinity, and nobody cares.  When will people wake up to this?  All the european news is exhasperating, but we are in the exact same boat here in the US.     

Can they really get away with it?  Will they just destroy the value of savings and purchasing power and the masses will not react?  There may not be a day of reckoning out there.  The math favors a reckoning, but with the apathy and the seemingly unlimited gall of TPTB, I am no longer certain...

Tue, 01/24/2012 - 08:56 | 2091830 GerritB
GerritB's picture

I thought the EU was democratic, think again!!

Tue, 01/24/2012 - 08:57 | 2091832 Irish66
Irish66's picture


Tue, 01/24/2012 - 08:59 | 2091833 Mae Kadoodie
Mae Kadoodie's picture

There's something happening here, what it is aint exactly clear.

Tue, 01/24/2012 - 09:00 | 2091844 Sanksion
Sanksion's picture

There's a man with a gun over there ...

Tue, 01/24/2012 - 09:06 | 2091861 GetZeeGold
GetZeeGold's picture



I think it's time we stop now......whats that sound? Everybody look what's going down.

Tue, 01/24/2012 - 09:09 | 2091879 cossack55
cossack55's picture

tellin' me that i've got to beware.

Tue, 01/24/2012 - 09:37 | 2091954 francis_sawyer
francis_sawyer's picture

If somebody starts in with KUMBAYA... I'm outta here...

Tue, 01/24/2012 - 09:52 | 2092018 slewie the pi-rat
slewie the pi-rat's picture

paranoia strikes deep

step outa line, theMan come, and take you awaaaaaayyyy

Tue, 01/24/2012 - 09:56 | 2092022 francis_sawyer
francis_sawyer's picture

OK... WTF... If you can't beat em, join em...

What a field day for the heat...

Tue, 01/24/2012 - 08:58 | 2091836 Capitalist10
Capitalist10's picture

Like Obamacare, they had to pass it before you could find out what was in it.

Tue, 01/24/2012 - 08:58 | 2091838 lolmao500
lolmao500's picture

Moving volume... what a bunch of crap. It won't be a moving volume, it'll be ``to begin``.

Tue, 01/24/2012 - 09:03 | 2091843 Wakanda
Wakanda's picture

Rushed legislation at night with no text.

That's scary shit.

Somebody is very, very afraid.  I can smell their fear and hear the munching worms tunneling into their brains.

Tue, 01/24/2012 - 09:09 | 2091876 disabledvet
disabledvet's picture

From backdoor bailout to Midnight Madness. Shutting down the Internet? In Europe?! Priceless indeed!

Tue, 01/24/2012 - 09:00 | 2091845 NERVEAGENTVX

so much for disclosure. I'm sure the the banking cabal feel that this is not prudent information for the proles to posess. "Just relax we've got it all under control, go back to sleep children".

Tue, 01/24/2012 - 09:01 | 2091849 westerman
westerman's picture

I have been demonstrating a fair amount this past year. This year I am taking to the streets hardcore. This is a dictatorship. This is no different from the Soviet union. There is no point in voting anymore. My vote is whatever I can throw at the police.

Tue, 01/24/2012 - 09:03 | 2091858 HD
HD's picture

May I ask your country?

Tue, 01/24/2012 - 09:02 | 2091851 Manthong
Manthong's picture

Looks like Anonymous has got a few important new rush projects in the cue. 

Tue, 01/24/2012 - 09:02 | 2091852 HD
HD's picture

Never ends. Our freedom and safety are entirely contingent on the whims of those with extrodinary wealth and power.

Tue, 01/24/2012 - 12:42 | 2091855 LouisDega
LouisDega's picture

I heard the garbage men and the school bus outside this morning. Its all good. Now, Take a deep breath, Collect your thoughts and go home.... Just go home.

Tue, 01/24/2012 - 09:04 | 2091856 roy10
roy10's picture

I have been saying this for a while. The ESM is DOA. It will soon be put to a quiet death.

The markets are telling the Europeans that they can let Greece and Portugal default without major consequences. Greece has already been told that there will be no more bailouts and I believe Portugal will get a similar message soon.

The ECB is firewalling Italy/Spain, which make the ESM completely obsolete.

Tue, 01/24/2012 - 09:10 | 2091878 GeneMarchbanks
GeneMarchbanks's picture

You can't play con games when none of the players have any confidence. The 'markets' only exist in your head and anything their voice is telling you shouldn't be trusted. Greek + Portuguese default would have unintended consequences as you well know so there can't be another solution where everybody gets "theirs". Major creditor pain is unavoidable.

Tue, 01/24/2012 - 09:41 | 2091967 roy10
roy10's picture

Italian bonds headed towards 5% beg to differ. Spanish bonds headed under 5% also differ.

Markets seem to have all the confidence in the world in Draghi. IMO, the Greek/Portuguese defaults are a done deal and this is just about the only place in the world where anybody cares. Markets have moved on.

Tue, 01/24/2012 - 09:49 | 2092002 GeneMarchbanks
GeneMarchbanks's picture

The dispute isn't over defaults which have already happened but over the consequences of those defaults which haven't been quite yet processed by the 'markets'. I admit the line sounds terrific --reassuring-- but ultimately means absolutely dick over the medium term.

Tue, 01/24/2012 - 09:54 | 2092020 roy10
roy10's picture

Sovereign defaults have been happening for centuries. Since Italy/Spain have clearly decoupled from Greece/Portugal (with the help of Draghi), any other consequences are minor.

We are moving to a new stage. 

Tue, 01/24/2012 - 10:09 | 2092085 GeneMarchbanks
GeneMarchbanks's picture

I hope you are right. I'll invest as if you are dead wrong.

Tue, 01/24/2012 - 10:25 | 2092173 roy10
roy10's picture

It's not about my opinion - it's what the markets have been signaling in the most clear manner. Greece/Portugal do not matter anymore.

Tue, 01/24/2012 - 10:29 | 2092197 GeneMarchbanks
GeneMarchbanks's picture

Good point. Market Religion spouts only facts. I forgot about that detail.

Tue, 01/24/2012 - 10:51 | 2092284 taraxias
taraxias's picture

What markets???

Perhaps you didn't get the memo so let me break it gently to you...... THERE ARE NO FUCKING "MARKETS" LEFT ANYMORE.

Tue, 01/24/2012 - 12:26 | 2092706 roy10
roy10's picture

There's that pesky S&P thing that goes up every single day. That market.

Tue, 01/24/2012 - 09:32 | 2091935 slaughterer
slaughterer's picture

Correct.  The "secret plan" is

A.) to show concern about Greece while building up the firewall (LTRO 1.0 and 2.0, ESM, ESFS, IMF, etc. etc.)

then, once the firewall is built up

B.) to push Greece into default and kick Greece out of the EZ (Greece = the scapegoat, the cruise ship that sinks, the example that nobody else wants to be) while imposing fiscal slavery on those countries that want to stay in the  EZ via the ESM treaty.

Tue, 01/24/2012 - 09:42 | 2091976 roy10
roy10's picture

I don’t think Greece/Portugal will be pushed out of the EZ. They will simply restructure their debt and wipe out bondholders step by step.

The only game in town right now is the ECB. The ESM is a sham. It will never be used. It seems like markets have absolute faith in Draghi.

Tue, 01/24/2012 - 11:58 | 2092555 Captain Kink
Captain Kink's picture

Yes, fatih that when push comes to shove he will print the money to save the Union, with or without Germany's consent.

Tue, 01/24/2012 - 15:16 | 2093490 roy10
roy10's picture

Don't be naive enough to think it has been happening without German consent.

Tue, 01/24/2012 - 09:06 | 2091863 connda
connda's picture

It's never good to let the little people know anything.  Shite mate, they might get pissed.

Tue, 01/24/2012 - 09:05 | 2091864 Catullus
Catullus's picture

All Governors, Directors, and Associate Directors and staff members shall be immune from any legal proceedings for their actions.

Sounds a lot like TARP.


Tue, 01/24/2012 - 09:07 | 2091867 Judge
Judge's picture

Secrecy around the Federal Reserve Act of 1912??  Seriously?  Do y'all ignore or rewrite history much??

FIrst of all the bill passed in Dec of 2013 - can't even get the year right.  The House and Senate debated it and passed it over a two day period and President Wilson signed it at a very public and enthusaistic ceremony on the 23rd. 

Facts and stuff.... the Conspiracy theory nuts get old on this board.

Tue, 01/24/2012 - 09:10 | 2091880 Sandmann
Sandmann's picture

Hell Congress is getting really slow - no wonder you all are so frustrated. I mean 100 years to pass a Bill and the Fed has been operating without legal basis since 1913 !


Makes the EU look sooo democratic

Tue, 01/24/2012 - 09:15 | 2091892 Judge
Judge's picture

You can be ignorant of the law, but don't go bragging about it.  The Fed is legal, the law passed properly, the SCOTUS has ruled repeatedly and there's no respected constitutional attorney that would even consider taking such a a case or arguing such.  Only the moonbats keep repeating the refrain, as if that will make it true.

Tue, 01/24/2012 - 09:44 | 2091979 Dr. Engali
Dr. Engali's picture

As far as SCOTUS goes, Some people will say anything if you line their pockets enough.

Tue, 01/24/2012 - 12:02 | 2092564 Captain Kink
Captain Kink's picture

@ Judge:  Sandman is being sarcastic, as you wrote 2013 instead of 1913...  Put down the hatchet, he was jsut poking a little fun at your error, as you suggested that the post erred with respect to the year of the crime.

Tue, 01/24/2012 - 12:40 | 2092788 Judge
Judge's picture

point... I didn't catch that...


Tue, 01/24/2012 - 09:13 | 2091888 disabledvet
disabledvet's picture

2013 eh? Careful folks...this guy thinks he's from another dimension. ...And he may be ...AND HE MAY BEEEEE, hehehehehe

Tue, 01/24/2012 - 09:25 | 2091915 Catullus
Catullus's picture

The House and Senate debated it and passed it over a two day period and President Wilson signed it at a very public and enthusaistic ceremony on the 23rd. 

Do you have a citation for that since you're presenting "fact and stuff"?

Tue, 01/24/2012 - 09:47 | 2091992 Dr. Engali
Dr. Engali's picture

Wikipedia , the most trusted of sources :)

Tue, 01/24/2012 - 10:18 | 2092126 Judge
Judge's picture

Sorry, but Jekyll Island is a bad work of fiction.... you can look at the Congressional Record for the true events.  Or here's a couple of NYT's articles if you can access them:

"Money bill goes to Wilson today," New York Times, pp. 1-3, Dec. 23, 1913.
"Wilson signs currency bill," New York Times, pp. 1-2, Dec. 24, 1913

Again, the facts matter.  Not the fiction.

Tue, 01/24/2012 - 11:15 | 2092370 chubbar
chubbar's picture

Judge, Here is a full description of the politicing that went on behind the scenes to get this bill passed, who was involved, etc. It is chock full of quotes, article quotes and congressional notes. You can choose to believe whatever you want but you are completely wrong to the point I am questioning your intent with pushing this position. The articles you reference are contained within this link and give background to what the NYTs position was on the matter at the time.

This is but a small excerpt but it lays to waste your claim that this act was some sort of above board legislation. Educate yourself.

.........."Warburg did most of the talking. He had a new suggestion in regard to grouping the regular reserve banks so as to get the units welded together and in easier touch with the Federal Reserve Board."

George Sylvester Viereck in The Strangest Friendship in History, Woodrow Wilson and Col. House wrote: "The Schiffs, the Warburgs, the Kahns, the Rockefellers, the Morgans put their faith in House. When the Federal Reserve legislation at last assumed definite shape, House was the intermediary between the White House and the financiers."20

On page 45, Viereck notes, "Col. House looks upon the reform of the monetary system as the crowning internal achievement of the Wilson Administration."21

The Glass Bill (the House version of the final Federal Reserve Act) had passed the House on September 18, 1913 by 287 to 85. On December 19, 1913, the Senate passed their version by a vote of 54-34. More than forty important differences in the House and Senate versions remained to be settled, and the opponents of the bill in both houses of Congress were led to believe that many weeks would yet elapse before the Conference bill would be ready for consideration. The Congressmen prepared to leave Washington for the annual Christmas recess, assured that the Conference bill would not be brought up until the following year. Now the money creators prepared and executed the most brilliant stroke of their plan. In a single day, they ironed out all forty of the disputed passages in the bill and quickly brought it to a vote. On Monday, December 22, 1913, the bill was passed by the House 282-60 and the Senate 43-23.

On December 21, 1913, The New York Times commented editorially on the act, "New York will be on a firmer basis of financial growth, and we shall soon see her the money centre of the world."

The New York Times reported on the front page, Monday, December 22, 1913 in headlines: MONEY BILL MAY BE LAW TODAY--CONFEREES HAD ADJUSTED NEARLY ALL DIFFERENCES AT 1:30 THIS MORNING--NO DEPOSIT GUARANTEES--SENATE YIELDS ON THIS POINT BUT PUTS THROUGH MANY OTHER CHANGES "With almost unprecedented speed, the conference to adjust the House and Senate differences on the Currency Bill practically completed its labours early this morning. On Saturday the Conferees did little more than dispose of the preliminaries, leaving forty essential differences to be thrashed out Sunday. . . . No other legislation of importance will be taken up in either House of Congress this week. Members of both houses are already preparing to leave Washington."


20 George Sylvester Viereck, The Strangest Friendship In History, Woodrow Wilson and Col. House, Liveright, New York, 1932

21 Ibid.

"Unprecedented speed", says The New York Times. One sees the fine hand of Paul Warburg in this final strategy. Some of the bill’s most vocal critics had already left Washington. It was a long-standing political courtesy that important legislation would not be acted upon during the week before Christmas, but this tradition was rudely shattered in order to perpetrate the Federal Reserve Act on the American people.

The Times buried a brief quote from Congressman Lindbergh that "the bill would establish the most gigantic trust on earth," and quoted Representative Guernsey of Maine, a Republican on the House Banking and Currency Committee, that "This is an inflation bill, the only question being the extent of the inflation."

Congressman Lindbergh said on that historic day, to the House:

"This Act establishes the most gigantic trust on earth. When the President signs this bill, the invisible government by the Monetary Power will be legalized. The people may not know it immediately, but the day of reckoning is only a few years removed. The trusts will soon realize that they have gone too far even for their own good. The people must make a declaration of independence to relieve themselves from the Monetary Power. This they will be able to do by taking control of Congress. Wall Streeters could not cheat us if you Senators and Representatives did not make a humbug of Congress. . . . If we had a people’s Congress, there would be stability.

The greatest crime of Congress is its currency system. The worst legislative crime of the ages is perpetrated by this banking bill. The caucus and the party bosses have again operated and prevented the people from getting the benefit of their own government."

The December 23, 1913 New York Times editorially commented, in contrast to Congressman Lindbergh’s criticism of the bill, "The Banking and Currency Bill became better and sounder every time it was sent from one end of the Capitol to the other. Congress worked under public supervision in making the bill."

By "public supervision", The Times apparently meant Paul Warburg, who for several days had maintained a small office in the Capitol building, where he directed the successful pre-Christmas campaign to pass the bill, and where Senators and Congressmen came hourly at his bidding to carry out his strategy.

The "unprecedented speed" with which the Federal Reserve Act had been passed by Congress during what became known as "the Christmas massacre" had one unforeseen aspect. Woodrow Wilson was taken unaware, as he, like many others, had been assured the bill would not come up for a vote until after Christmas. Now he refused to sign it, because he objected to the provisions for the selection of Class B. Directors. William L. White relates in his biography of Bernard Baruch that Baruch, a principal contributor to Wilson’s campaign fund, was stunned when he was informed that Wilson refused to sign the bill. He hurried to the White House and assured Wilson that this was a minor matter, which could be fixed up later through "administrative processes". The important thing was to get the Federal Reserve Act signed into law at once. With this reassurance, Wilson signed the Federal Reserve Act on December 23, 1913. History proved that on that day, the Constitution ceased to be the governing covenant of the American people, and our liberties were handed over to a small group of international bankers.

The December 24, 1913 New York Times carried a front page headline "WILSON SIGNS THE CURRENCY BILL!" Below it, also in capital letters, were two further headlines, "PROSPERITY TO BE FREE" and "WILL HELP EVERY CLASS". Who could object to any law which provided benefits to everyone? The Times described the festive atmosphere while Wilson’s family and government officials watched him sign the bill. "The Christmas spirit pervaded the gathering," exulted The Times.

In his biography of Carter Glass, Rixey Smith states that those present at the signing of the bill included Vice President Marshall, Secretary Bryan, Carter Glass, Senator Owen, Secretary McAdoo, Speaker Champ Clark, and other Treasury officials. None of the real writers of the bill, the draftees of Jekyll Island, were present. They had prudently absented themselves from the scene of their victory. Rixey Smith also wrote, "It was as though Christmas had come two days early." On December 24, 1913, Jacob Schiff wrote to Col. House,

"My dear Col. House. I want to say a word to you for the silent, but no doubt effective work you have done in the interest of currency legislation and to congratulate you that the measure has finally been enacted into law. I am with good wishes, faithfully yours, JACOB SCHIFF."

Representative Moore of Kansas, in commenting on the passage of the Act, said to the House of Representatives:

"The President of the United States now becomes the absolute dictator of all the finances of the country. He appoints a controlling board of seven men, all of whom belong to his political party, even though it is a minority. The Secretary of the Treasury is to rule supreme whenever there is a difference of opinion between himself and the Federal Reserve Board. AND, only one member of the Board is to pass out of office while the President is in office."

Tue, 01/24/2012 - 11:30 | 2092439 Judge
Judge's picture

Again, the historical record agrees with me and what I posted.  There is nothing factual in what you posted that contradicts it.   In addition, one must understand the context of the era - teh Panic of 1907 and the bank failures, the bank acts of 1863 and 1864.   In addition, the nation has experienced unparalled gains in productivity and prosperity over the past 75 years.

is the fed perfect - oh hell no.  I'm a huge critic of some of their recent polices, and they are human.  But there's no real debate, it's a bad system, but like capitalism, simply better than the other options - at least the ones I've seen.  That's why it's critics have to resort to fiction in order to criticize or condemn it.

Tue, 01/24/2012 - 12:14 | 2092624 chubbar
chubbar's picture

What you posted was "Jekyll Island was a fiction". It was not a fiction as several attendees wrote published articles about that event in later years.

The article above is very comprehensive concerning quotes, facts and articles from that era. The link I posted before that one was fairly comprehensive about why central banking is inherently bad and unfair. I don't see anyone resorting to fiction here. The references are contained therein and if you find one that is inaccurate then please cite the correction. There were several prominent international banking families intimately involved in both crafting and buying off politicians in order to get the Federal Reserve act of 1913 passed. Is it your position that this was done because these bankers felt the world deserved a better banking system or do you believe, as I do, that they were acting in their own best interest?

Tue, 01/24/2012 - 12:44 | 2092804 Judge
Judge's picture

Jekyll Island is fiction.  I've done some work on it, but don't have the documentation with me here.  If there is a way to upload the doc to this site later, I'd be glad to.  It is largely fiction in the guise of research, with many 'facts' that simply didn't occur.

And it's not uncommon for bills affecting a specialized industry to be drawn up with input from the industry.  Some act like that automatically makes it wrong.

Judge it on it's true merits and versus competitive systems.  Not on fictions.

Tue, 01/24/2012 - 14:00 | 2093136 chubbar
chubbar's picture

The below excerpt includes the article from which it was posted and indicates that Jekyll Island did occur. Now, I wasn't there and neither were you so all I really know is what I read. This article was either written or was not. If it exists and is authentic then I believe you are incorrect in your assertion. There seems to be plenty of evidence besides just this article that events as described at Jekyll Island did occur. I'm not sure how common it was to have a specialized industry be directly (and secretively) involved in writing legislation back in 1913 but I know it's common today. The only fact about that trip that I find relevant is whether a group of bankers got together to write this legislation in secret. If you have facts to disprove that ascertion I'd certainly be interested in hearing about it.

"How do we know? For example, Frank Vanderlip who was at the meeting wrote an article that appeared in the Saturday Evening Post on February 9, 1935 and I'd like to read for you just a short excerpt from that article. This is what Vanderlip said: "I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System. We were told to leave our last names behind us. We were told further that we should avoid dining together on the night of our departure. We were instructed to come one at a time and as unobtrusively as possible to the railroad terminal on the New Jersey littoral of the Hudson where Senator Aldrich's private car would be in readiness attached to the rear-end of a train to the south. Once aboard the private car we began to observe the taboo that had been fixed on last names. We addressed one another as Ben, Paul, Nelson and Abe. Davison and I adopted even deeper disguises abandoning our first names. On the theory that we were always right, he became Wilbur and I became Orville after those two aviation pioneers the Wright brothers. The servants and train crew may have known the identities of one or two of us, but they did not know all and it was the names of all printed together that would've made our mysterious journey significant in Washington, in Wall Street, even in London. Discovery we knew simply must not happen."

Why not? why the secrecy? what's the big deal about a group of bankers getting together in private and talking about banking or even banking legislation. And the answer is provided by Vanderlip himself in the same article. He said: "If it were to be exposed publicly that our particular group had gotten together and written a banking bill, that bill would have no chance whatever of passage by Congress." Why not? Because the purpose of the bill was to break the grip of the money trust and it was written by the money trust. And had that fact been known at the get-go, we would never have had a Federal Reserve System because as Vanderlip said it would have had no chance of passage at all by Congress. So it was essential to keep that whole thing a secret as it has remained a secret even to this day. Not exactly a secret that you couldn't discover because anybody can go to the library and dig this out, but it is certainly not taught in textbooks. We don't know any of this in the official literature from the Federal Reserve System because that was like asking the fox to build the henhouse and install the security system."

Tue, 01/24/2012 - 16:04 | 2093699 Sean7k
Sean7k's picture

No period of prosperity surpasses that of 1870 to 1890. The only one that is similar would be part of the 1920's and the period after 1945, when we had the manufacturing world to ourselves because of war damage. (History of Money and Banking In the US" Rothbard). 

Further, that unparalled prosperity is a fiction. When you add in the loss of 14,000 tons of gold that transferred to trading partners between 1951 and 1971 as well as the present debt of 15 to 200 trillion (depending on whether you want to count all liabilities) your prosperity was borrowed into existence. This is what the FED does- it is fractional reserve banking. 

The only real money we have are the silver and gold coins minted by the treasury. Why? They are the only legal tender without counterparty risk- the very definition of money. 

Are you intentionally naive and patriotic or just stupid?

Tue, 01/24/2012 - 09:49 | 2091951 Sean7k
Sean7k's picture

Facts and stuff: it was passed in the dead of night after much of Congress had left to go home for the Christmas holiday. Please read "the Creature of Jekyll Island". 

Is it legal? Sure. Because the SCOTUS says so? Well, since the SCOTUS has ruled in a fashion that is more political than constitutional throughout its' history- that statement is pretty meaningless. Setting up a Federalist court to be the final arbitrator on government actions, when that government is the sole source of its' power is like asking the fox to protect the hens. 

You can be intentionally naive and patriotic, but why would you choose to do so? Provides a chronological history of the bill. The number of senators missing from the final conference vote is telling.

Tue, 01/24/2012 - 10:20 | 2092148 Judge
Judge's picture

What of the missing Senators?  If all were present, the bill still would have passed.   Since there were 48 states in 1913, forty eight votes plus the tie-breaking vote of vice-President Thomas Marshall would havebeen 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.1 Of the 27 votes not cast, there were 11 'yeas' (in favor of the bill) and 12 'nays.'1 Even if the absentee Senators had been there, the Fed Bill would have passed easily.

again, give up the fiction....

Tue, 01/24/2012 - 15:48 | 2093636 Sean7k
Sean7k's picture

It was unusual for Congress to push through important legislation after members had left for the holidays. The senators that stayed, stayed for a reason- they were told to. 

As for Jekyll Island- it is a very well researched and referenced book of NON-FICTION. As for you, you have provided nothing to back up anything you have had to say. You're depending on a written version (one of many) of history fed you by the government that created the act for the benefit of a few european bankers. What a rube...

Tue, 01/24/2012 - 09:41 | 2091971 Dr. Engali
Dr. Engali's picture

Let me suggest a good book for your pleasure. It's The Creature from Jekyll Island by G. Edward Griffen. It's a good book very well written.

Tue, 01/24/2012 - 10:22 | 2092159 Judge
Judge's picture

And most of it is fiction.  A poorly researched book.  I've read it.

Tue, 01/24/2012 - 15:50 | 2093640 Sean7k
Sean7k's picture

References and citations please.

Tue, 01/24/2012 - 09:45 | 2091988 chubbar
chubbar's picture

Judge, There was secrecy surrounding the formation of this act but I do believe it was passed legally. Here is a primer on how it came into being, the make up of the FED, the reason it works against our interests as a people. You can ignore or dismiss it as you feel necessary but the claim that it was born in secrecy is accurate.           (you have to scroll down a bit to get to the story)

Tue, 01/24/2012 - 09:13 | 2091887 Sandmann
Sandmann's picture

The EU operates without legal basis. It set up a Foreign Service without any Treaty. It implemented a Constitution which had been rejected; then implemented a Lisbon Treaty to consolidate existing Treaties to incorporate parts of the rejected Constitution.  European Union is an extra-legal construct which works on Executive Privilege overriding all legal constraints.

Legislatures across the Continent have delegated their authority to Executives which have pooled sovereignty in an Accountability-Free Zone, in fact the EU Politburo


Tue, 01/24/2012 - 09:22 | 2091903 disabledvet
disabledvet's picture

And Paul Volcker was outraged that the Fed would illegally monetize Wall Street's staggering losses (hahaha! Hard money guy...yeah right!)...not only that but when now current Chairman Bernanke said this wasn't happening under oath before Congress he was telling the truth! Right up there with "Barak Obama: greatest Civil Rights President in history!l" where's Jimmy Carter when you need him? Your Party is TOtALLY PHUCKING INSANE!

Tue, 01/24/2012 - 09:18 | 2091900 HD
HD's picture

I think this is the same way the Emperor got the funding to build the Death Star...

Sith Lords are job creators.

Tue, 01/24/2012 - 09:23 | 2091912 AU5K
AU5K's picture

How do you say "power grab" in all EU languages...

Tue, 01/24/2012 - 09:33 | 2091937 HD
HD's picture

How do you say "power grab" in all EU languages...

"Going Greek"

Tue, 01/24/2012 - 09:28 | 2091925 Calmyourself
Calmyourself's picture

What is being said here is that the rule of law is over.  We are now ruled by men and no contract, law, rule or regulatory body will rescue us.  Every law that can be sidestepped will be, every regulatory body will be muzzled, every contract abrogated.  Anything, I mean ANYTHING, will be done in further continuance of the ponzi.  That is all you need to know, plan accordingly.

Tue, 01/24/2012 - 11:28 | 2092431 RiverRoad
RiverRoad's picture

Yes.  This isn't just going to end's going to end much worse than that.

Tue, 01/24/2012 - 09:28 | 2091927 falak pema
falak pema's picture

This must go through EU parliament. It should not be imposed by decree. This is a basic decision that bypasses national parliaments and therefore requires some public elective decision making/censorship after debate.

Tue, 01/24/2012 - 09:33 | 2091939 Irish66
Irish66's picture

They are skipping that step.

Tue, 01/24/2012 - 10:27 | 2091938 Ima anal sphincter
Ima anal sphincter's picture

They're pushing "too fast - too hard." Their financial system (Ponzi Scheme) is collapsing. Their desire for a NWO has NEVER faded, but its foundation is built on controlling the currencies. They're substituting governmental control in it's place. It won't work and they are scared, trying anything they can think of to keep the cart rolling. The mule has been dragging it with one wheel missing for quite awhile now. He has stopped pulling. The owner keeps whipping him to prod him on. Mr. mule is getting very pissed off and the owner is about to feel a powerful kick that will not only knock him out of the cart, but quite possibly kill him.

Tue, 01/24/2012 - 10:58 | 2092301 entropos
entropos's picture

The Klan. Pushin' Too Hard.

Tue, 01/24/2012 - 09:38 | 2091958 Central Wanker
Central Wanker's picture

The Grand Theft Euro is about to get completed. Extensive capital controls to follow.

Stack up precious metals while you can!

Tue, 01/24/2012 - 09:43 | 2091977 Hobbleknee
Hobbleknee's picture

TAKE NOTE:  This is the same way the Federal Reserve was thrust upon us in 1913.  TPTB create these deals under duress and nothing is uncovered until decades later.  Look, for example, how long it took for John Q Citizen to figure out The Fed is not federal.


Compare gold and silver prices

Tue, 01/24/2012 - 09:48 | 2091996 littleenglander
littleenglander's picture

And look who is heading it up:


Tue, 01/24/2012 - 10:08 | 2092075 rsnoble
rsnoble's picture

This looks like something that could be good for +1000 on the DOW when it's announced.  They aren't going down without a fight,  hard telling how long they can keep this bs going.  They'll have 90% of the people homeless in order to keep this mess of shit from falling apart.

Tue, 01/24/2012 - 10:46 | 2092270 Calmyourself
Calmyourself's picture

When you see people in the streets of 1st world nations going hungry you know the time is near.  Batten down the hatches, the police state wil lbe well advanced by then of course but the people will at that point say enough and it will be messy and we will get our Robespierre, oh yes.

Tue, 01/24/2012 - 11:51 | 2092534 RiverRoad
RiverRoad's picture

Keepin' my knitting needles handy.

Tue, 01/24/2012 - 10:12 | 2092096 rsnoble
rsnoble's picture

BTW anyone ever feel like they have one leg attached to some huge machine that just keeps heading towards a cliff?  It keeps attaching more people and slowing down, you hope it stops but it never does.  So I guess you can either cut your leg off and lie bleeding to death along the tracks or wait to go over the cliff.  You're going along, rather you like it or not.

Tue, 01/24/2012 - 10:16 | 2092119 Judge
Judge's picture

Sorry, but Jekyll Island is a bad work of fiction.... you can look at the Congressional Record for the true events.  Or here's a couple of NYT's articles if you can access them:

"Money bill goes to Wilson today," New York Times, pp. 1-3, Dec. 23, 1913.
"Wilson signs currency bill," New York Times, pp. 1-2, Dec. 24, 1913

Again, the facts matter.  Not the fiction. 

Tue, 01/24/2012 - 10:21 | 2092133 barkingbill
barkingbill's picture orf is reporting it but not mentioning how bad ACTA really is.

Tue, 01/24/2012 - 10:22 | 2092158 flyme
flyme's picture

The ESM is not dead, but alive and kicking...

Statement of Commissioner Olli Rehn

to the International Monetary and Financial Committee

on behalf of the European Commission

Washington, D.C., 16 April 2011 agreement has

been reached to establish a permanent stability mechanism that will serve to safeguard the

financial stability of the euro area. The European Stability Mechanism (ESM) will replace the

role of the European Financial Stability Facility (EFSF) and the European Financial

Stabilisation Mechanism (EFSM) in providing external financial assistance to euro-area

Member States after June 2013. Access to ESM financial assistance will depend on adherence

to strict policy conditionality. The agreed lending capacity of EUR 440 billion of the EFSF

will be made fully effective.”  Paraphrased 19. page 12 The purpose is to front-load and accelerate fiscal consolidation was indispensable to limit contagion risks and prevent an adverse feedback loop between financial markets and fiscal policies concerning sovereign debt.  The ESM will provide a permanent crisis resolution framework and will assume the role of both the European Financial Stability Facility (EFSF) and the European Financial Stabilisation Mechanism (EFSM) in providing external financial assistance to euro area Member States from 1 July 2013. The terms of the ESM, including its governance, capital structure and repartition, location, instruments and IMF involvement, were agreed by the euro area summit on 11 March and confirmed by the European Council on 24-25 March. The ESM will have an effective lending capacity of €500bn (a total subscribed capital of €700bn, from which €80bn will be in the form of paid-in capital and €620bn in a combination of committed callable capital and of guarantees from euro area Member States).

Setting up the ESM requires an amendment to The Treaty on the Functioning of the EU (Article 136).” 

This was essentially the renegotiated framework that the UK opted out of. Hence the framework is already in existence. That is why no amendment is needed. The end goal as always in Euroland is fiscal and political consolidation.

Tue, 01/24/2012 - 10:28 | 2092193 Comay Mierda
Comay Mierda's picture

reminds me of "You have to pass the bill in order to find out what is in it" - NP

Tue, 01/24/2012 - 11:17 | 2092392 levelworm
levelworm's picture

I'm more interested about who made that video?

Tue, 01/24/2012 - 11:31 | 2092447 flyme
flyme's picture

EU tidbits

QUESTION: Fiscal cooperation.

MR. LIPSKY: No fiscal -- no clear cut –

QUESTION: Is this fixed now with this solution, would you say?

MR. LIPSKY: Well, “fixed” is, once again -- these are all strong categorical terms. Let’s say first came the Maastricht Treaty, then the recognition, if you remember -- you may be too young to remember. I remember.

QUESTION: No, no. Thank you very much. (inaudible) thank you.

MR. LIPSKY: First came Maastricht and the recognition that there were entry requirements, but no subsequent requirements, hence the Stability and Growth Pact. It was -- there was uncertainty about the effectiveness of the stability and growth pact. And, in fact, some of the first countries to have problems meeting the requirements were core countries. And the fact that nothing happened certainly served to create large questions in the mind of investors and others about the effectiveness of the Stability and Growth Pact.

In addition, it was recognized there were no mechanisms for fiscal coordination or potentially financial support within the euro zone. This crisis has thrown these longstanding questions into very high relief in the specific case of Greece, for example. It was clear that the mechanisms for reaching a solution for Greece or let’s say -- “solution” is too strong a word maybe and support for that program. An economic policy adjustment program and support for that program for Greece was very uncertain, hesitant and somewhat clumsy, but in the end reached a conclusion.

Now the euro area, the EU in support and the IMF have clarified that this is a -- broadly put, this is a template that will be used in the future, and the stabilization mechanism means that the financing of -- on the European side of potential support programs will be dramatically more agile, more effective and more transparent.

Mr. Lipsky: What has been clarified is that the euro zone is an integral part of the IMF, and the IMF has a role, an integral role in the -- in sustaining economic and financial stability in the euro zone and more broadly.


Transcript of a Press Briefing by International Monetary Fund First Deputy Managing Director John Lipsky on the Euro Countries Stabilization Measures

Washington, D.C.
Monday, May 10, 2010

Tue, 01/24/2012 - 11:43 | 2092495 flyme
flyme's picture

Tyler, Euroland is acronmyn-land, if you know the right one to look for, the information easily flows...

Try ECOFIN Council

"This is the first time the European Commission has applied the new rules of the strengthened Stability and Growth Pact (SGP), which are part of the so-called "six-pack" on economic governance, which entered into force on 13 December 2011."

Olli Rehn, the European Commission Vice-President for Economic and Monetary Affairs and the Euro said that the process "shows that the six-pack is already delivering. It has given the European Commission teeth to act when countries fail to bring their deficits under control and reduce their debt. Fiscal discipline is crucial to reinforce confidence in our public finances. I stand by my word: I am determined to fully use this new powerful set of tools from Day One."

[Here's your framework bones] "The Excessive Deficit Procedure (EDP) is established in the EU Treaty (Article 126) to ensure that Member States correct gross fiscal policy deviations. The various steps of the EDP are listed in the Treaty and specified further in the Stability and Growth Pact (SGP) legislation - an essential element of substantial reform that reinforces economic governance, including the EU fiscal framework."

Wed, 01/25/2012 - 09:16 | 2095882 Peter in wonderland
Peter in wonderland's picture

This is MEMO, not the actual agreement. Probably new "improved" communication method of the EU to hide all root stuff and release just simple and easy teasers. What a lie.

Tue, 01/24/2012 - 14:23 | 2093233 Carmagnole
Carmagnole's picture


At least the google cache copy


It's in a dialect of Politicolegalese from outter Banksteria, reading it now but I don't know how many traps, pitfalls and landmines are in there.

I suggest you save the page on your own, I've no idea how fast google will update to the 404...

Do NOT follow this link or you will be banned from the site!