This page has been archived and commenting is disabled.

The History Of The Federal Reserve System

Tyler Durden's picture




 

For better or mostly worse, the Federal Reserve has been governing the monetary system of the United States since 1914. The visual history below maps the rise of the Fed from its origins as a relatively minor institution, often controlled by Presidents and The Treasury to its supposedly independent and self-aware current position as, arguably, the most powerful entity in the world. And because we always like to be 'fair-and-balanced' we juxtapose this clarifying truth of the maniacal growth of the Fed's balance sheet and shift from passive to hyperactive - highlighting every major macro-economic and political event on the way - with G. Edward Griffin's 1994 speech on 'The Creature From Jekyll Island'.

 

Full Infographic available here.

1914-1936

1936-1968

 

1968-1999

1999-2010

 

And The Creature From Jekyll Island:

 

 

and the full free edition of the visual history here:

History of Federal Reserve Free Edition

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 07/05/2012 - 21:41 | 2590723 iDealMeat
iDealMeat's picture

Fuck You Bernanke.

Thu, 07/05/2012 - 21:44 | 2590728 knukles
knukles's picture

Had to figure the John Birch Society would come in handy one day.

Say, where are grandpa's old "Impeach Earl Warren" signs?

Thu, 07/05/2012 - 21:49 | 2590736 economics9698
economics9698's picture

I wish I had a job where I could print money for 6 cents and sell it for $1.

Thu, 07/05/2012 - 22:25 | 2590790 jeff montanye
jeff montanye's picture

i'll bite.  where's the six cents?  i imagine the cost at the electronic margin is several orders of magnitude cheaper.

Thu, 07/05/2012 - 22:33 | 2590803 Muppet Pimp
Muppet Pimp's picture

OT:

Re-post of Steve Keen at INET

http://www.debtdeflation.com/blogs/2012/04/16/inet-presentation-minskian...

It is worth the 20 minutes IMO.  Steve is on point right here.  The basis of modern economic theory is going to be changing, period.

Fri, 07/06/2012 - 02:15 | 2591011 fnord88
fnord88's picture

Why do we still even need banks? Why has ZH not done any articles on peer to peer lending? Seems like it has the power to render all banking obsolete. Savers connect directly with borrowers, cut out the middleman. The IT revolution should mean we are looking at all kinds of new financial systems, although i do know of one company 10 years ago that built a paypal like system for instantaneous international transfers, but was sued out of exiistance by the government as it made tax too difficult.

Fri, 07/06/2012 - 08:30 | 2591196 GetZeeGold
GetZeeGold's picture

 

 

I wish I had a job where I could print money for 6 cents and sell it for $1.

 

It use to only be 5 cents.......not even the Fed is immune to inflation.

 

Fri, 07/06/2012 - 08:45 | 2591358 paulypaul
paulypaul's picture

The 5 / 6 cent can also be printed, so its completely free.

Fri, 07/06/2012 - 11:45 | 2592100 Hopeless for Change
Hopeless for Change's picture

Printed? HA!!! That would take hardware and paper.  The 'money' is created with a mouse click and a keyboard stroke.

Fri, 07/06/2012 - 04:14 | 2591071 Cadavre
Cadavre's picture

Seven, eight, nine and eleven may or may not be a numerological consideration to the majority of the Walmart masses, but in the case of the FED, is sure seems as the publisher of Tikkun once forwarded in his newsletter regarding an honorarium to be bestowed on a group of rabbis as a case of the "chosen of the chosen". There have been 14 FED chairs since it was hatched, with the latest to bear the "special mark" being our very own and one time South Carolina Porn King's bookkeeper during summer break from ivy league bankster madrases, Harvard. The numbers 7,8,9 and 11, are the only FED chairs not to have been London's Shadow Banking WZO parish queen debut antes.

Cute, hospital food-esque graphic - like a National Geographic insert foldout suitable for classrooms - BUT - to nurture the festering pestilence at the core of every corruption and failed ethic to virulently blossom into the world we see around us today required tankers of man-blood fed direct into the vampire squid's carotid artery.

Understood .. understood ... no need muddling to cutsie tutsie national geographic Wheaties Box cover girl aura of the article's infographic with some factual detail .. that;s why g*d invented ZH ..as a backstop .. a strut .. an attentive helping hand so that off-book shunted facts can be underscored .. so lets let Benjamin Freeman fill in those uncomfortable details the infographic avoids ...

The Zionists in London sent these cables to the United States, to Justice Brandeis: “Go to work on President Wilson.  We're getting from England what we want.  Now you go to work, and you go to work on President Wilson and get the United States into the war."  And that did happen. That's how the United States got into the war.  We had no more interest in it; we had no more right to be in it than we have to be on the moon tonight instead of in this room.

     Now the war -- World War One -- in which the United States participated had absolutely no reason to be our war. We went in there -- we were railroaded into it -- if I can be vulgar, we were suckered into -- that war merely so that the Zionists of the world could obtain Palestine.   Now, that is something that the people  in the United States have never been told. They never knew why we went into World War One. Now, what happened?

    After we got into the war, the Zionists went to Great Britain and they said: “Well, we performed our part of the agreement.  Let's have something in writing that shows that you are going to keep your bargain and give us Palestine after you win the war.”   Because they didn't know whether the war would last another year or another ten years.   So they started to work out a receipt.   The receipt took the form of a letter, and it was worded in very cryptic language so that the world at large wouldn't know what it was all about.   And that was called the Balfour Declaration.

    The Balfour Declaration was merely Great Britain's promise to pay the Zionists what they had agreed upon as a consideration for getting the United States into the war.   So this great Balfour Declaration, that you hear so much about, is just as phony as a three dollar bill.   And I don't think I could make it more emphatic than that.

     Now, that is where all the trouble started.  The United States went in the war.  The United States crushed Germany.  We went in there, and it's history. You know what happened.  Now, when the war was ended, and the Germans went to Paris, to the Paris Peace Conference in 1919, there were 117 Jews there, as a delegation representing the Jews, headed by Bernard Baruch.  I was there: I ought to know. Now what happened?  

... what are we going to do?  The life you save may be your son's.  Your boys may be on their way to that war tonight; and you you don't know it any more than you knew that in 1916 in London the Zionists made a deal with the British War Cabinet to send your sons to war in Europe.  Did you know it at that time?  Not a person in the United States knew it.  You weren't permitted to know it.

     Who knew it?  President Wilson knew it.  Colonel House knew it.  Other 's knew it. Did I know it?  I had a pretty good idea of what was going on:  I was liaison to Henry Morgenthau, Sr., in the 1912 campaign when President Wilson was elected, and there was talk around the office there.

     I was 'confidential man' to Henry Morgenthau, Sr., who was chairman of the Finance Committee, and I was liaison between him and Rollo Wells, the treasurer.  So I sat in these meetings with President Wilson at the head of the table, and all the others, and I heard them drum into President Wilson's brain the graduated income tax and what has become the Federal Reserve, and also indoctrinate him with the Zionist movement.

     Justice Brandeis and President Wilson were just as close as the two fingers on this hand, and President Woodrow Wilson was just as incompetent when it came to determining what was going on as a newborn baby.  And that's how they got us into World War I, while we all slept.  

     Now, at this moment... at this moment they may be planning this World War III, in which we don't stand a chance even if they don't use nuclear bombs.

Thu, 07/05/2012 - 22:44 | 2590826 Oh regional Indian
Oh regional Indian's picture

 A verbal history of the Federal reserve:

Fiat Every Dollar

Meaning, no let-up till it's all debased. That 97% or whatever the dollar has been debased since 1913? It's not at 100% because the last stage is always the long and hard stage, eh? They have to pump, pump and pump some more, every day, till all that's left is air.

Also, they have made sure that a recovery with-in the bounds of this system is impossible. Cannot go back to any of the turning points (especially 1933 and 1971) and lest anyone forget, LBJ's famous coinage debasement, sliver pulling new coinage act of 1967 (ish, I forget the exact year)......

It clearly seems like it was meant to be a 100 year experiment and it looks like they've suckceeded.

And of course the lie begins with the name. Not Federal and no reserves....

Mission suck-cess-pool!

ori

un-in-tended-con-sequences

 

Thu, 07/05/2012 - 23:53 | 2590888 TruthInSunshine
TruthInSunshine's picture

The Non-Federal Reserve-less Non-Bank is just the latest entity & iteration of the literal Ponzi scam that perpetuates pure fiat monetary systems (see remarks/footnotes below regarding Plaza Accord and Nixon Shock, which closed the Bretton Woods pact) that some refer to as fractional reserve banking (see Modern Monetary Theory as described and admitted to in their own publication, 'Modern Money Mechanics' - Modern Money Mechanics is a booklet produced and distributed free by the Public Information Center of the Federal Reserve Bank of Chicago; MODERN MONEY MECHANICS*) , whereby this non-bank entity and front for The Money Masters uses taxpaying slaves, many of whom ostensibly believe they are free and sovereign citizens of a sovereign "nation," as collateral, to conjure what they claim is 'money,' but that which is really debt (since there is nothing of inherent value backing it), from thin air, leveraging it up by many multitudes (money multiplier/deposit multiplier, derivative contracts and other forms of leverage can ratchet this debt up by a magnitude of a thousand times or more from the point of inception/creation), getting a nation to endorse it as monopolistic fiat (and enforce the monopolistic recognition of it as such for the payment debt, both public and private, via codified law and corollary enforcement agencies). 

 * The Federal Reserve Bank of Chicago, describing, in small part, the ruse of Modern Money Mechanics (quote from Page 6, last paragraph):


"What they [banks] do when they make loans is to accept promissory notes in exchange for credits to the borrowers' transaction accounts. Loans (assets) and deposits (liabilities) both rise by [the amount of the "loan"]."


When was the last time you lent money to a friend and suddenly found you had more funds? 

Theoretically, and just for illustration purposes, even if 95% of loans go bad (or more), the fractional reserve bankers lose nothing. They created this fiat money from nothing and received the protection of the nation in distributing fiat monopoly currency. Not only do they lose nothing, they actually gain any real assets that were pledged as collateral to securitize most of the loans that went 'bad' - Harvest.

Repeat this process of Harvest by first inflating the money supply, getting people deeply indebted (many of whom weren't indebted before), and soon enough, with enough cycles of harvest, what belonged to many will be concentrated in the hands of a few, all via the sham that is fractional reserve banking.

It's the biggest scam in the history of mankind.

Once a person grasps this basic concept, they'll understand why events have taken place as they have (Bretton Woods*; Plaza Accord; Federal Reserve Act of 1913; closing of the gold standard in 1971*, etc.), and they'll finally grasp how a select few have rigged the game to be able to harvest assets continually, and concentrate wealth and power, by doing nothing other than maintaining Deep Capture of a nation's legislative and judiciary branches (and executive, in the case of the U.S.) of government.

*On August 15, 1971, the United States unilaterally terminated convertibility of the dollar to gold. As a result, "[t]he Bretton Woods system officially ended and the dollar became fully fiat currency, backed by nothing but the promise of the federal government." This action, referred to as the Nixon shock, created the situation in which the United States dollar became the sole backing of currencies and a reserve currency for the member states. At the same time, many fixed currencies also became free floating.

If you could print a currency at no cost, that had no instrinsic value, and get the legal system to recognize it as the only legally permissibly 'tender' to satisfy all debt, public and private, would you print as much as you could, loan it out to as many entities and people as you could, and sit back, not caring whether 90% or 9% of the loans were repaid, since it cost you nothing to produce the loan, meaning that you can only gain assets (securitized) and indebt institutions (create indebted parties that you can then garnish), and literally lose not one atom of anything of inherent value?

Further, if you had access to an entity that could do the above, and you could borrow that currency at absurdly low interest rates, and moreover, you had an express or at least implicit taxpayer guarantee against losses (too big to fail), would you also not do exactly the same?

If you're the former entity, you literally can lose nothing, no matter how reckless your actions or lending standards.

If you're the latter party, your risk of loss is inconsequential, since you're backed by the taxpayers (involuntarily), and even if you weren't, if you're a very large entity able to tap absurdly low interest loans from the former, unless you are galactically idiotic on a level that equals Lehman or beyond (where derivatives did them in, along with a non-bailout), you'd be hard pressed to lose money if even - completely hypothetical and arbitrary % - 20% of the cheap interest money you borrowed and then re-loaned out wasn't paid back to you.

If you're the former, you have not only no risk, but you can't possibly lose anything, since your investment is nothing.

If you're the latter, your risk is incredibly small.

This is why our economy, under fractional reserve banking practices, using currency created from thin air, tied to absolutely nothing of inherent value, and bestowed monopoly status as legal tender, is a factual, literal Ponzi Scheme.

This is why we had to close the gold standard, lest we couldn't show "growth" (even though it was merely nominal, credit/debt based transactions) in our official GDP going forward.

You don't even have to tie the fiat to gold in order to force the economy to produce honest numbers and detect the real level of economic growth or contraction: tie the currency to anything that has inherent value, and that can be stored, and that isn't infinite in quantity.

The mind bender part for the newly initiated (as I was at one time) to the Matrix is that there's no real 'debt' from the perspective of the fractional reserve central bank; it's hard for those steeped in conventional economics to rip out the notion from their brain that the fractional reserve central bank can't lose anything (they didn't lend anything of value or that cost them anything - they have ZERO skin in the game), and that their favored entities that are TBTF have only slightly less risk (because they will always be able to socialize their losses via taxpayer bailouts in the wake of busts, while they retain their ill-gotten gains during the booms), and that what most refer to as debt in this system is only a liability for the debtor. If the debtor doesn't repay what was they borrowed (a monopoly currency that cost the lender nothing to produce), they can lose their farm, construction equipment, home, machinery, infrastructure, vehicle, etc. that was used to securitize or collateralize the loan, or even if the loan was unsecuritized, they can at least see their revenue or wages garnished, be sent into involuntary bankruptcy (where their general pool of assets will be seized upon by creditors, including lenders), and squeezed in other ways.

The only way to avoid this is to not play the game. During crack up booms, you miss out on fiat-based gains, if you don't play the game, and the incentive for playing that game is that if your timing is correct, you can get rid of all debt and convert the excess fiat gains into hard assets having inherent value or other things of inherent value, before the fractional reserve alchemists induce another inflationary-deflationary (or vice-versa) harvest.

If one were fortuitous enough to play the game, and have the skill and/or luck to convert fiat gains into real wealth before the boom turns to bust, they'd probably be idiotic to repledge their real wealth assets as collateral for loans ever again (I say probably, because there are exceptions to every general rule, but these people would have to be extremely smart, competent and or connected to the alchemists in such a way that they'd be assured a bailout in the event of another bust whereby their real assets are pledged as collateral for fiat loans).

The Harvest is the end game for the fractional reserve bankers and their minions. As just one example of the rape that is harvest, even generations of families that were land rich (let's say a family that has owned two square miles of prime farmland yielding high value crops for three generations, carrying no debt) can find that an economic downturn suddenly forces them to take the step of obtaining a loan, pledging their farm and equipment as collateral, in the belief that the loan will allow them to survive the downturn and become more profitable at some future point - they're now 'harvestable.'

By pledging real assets to secure a loan of fiat money (conjured from thin air at no cost), one is playing right into the hands of The Money Masters.

On the more macro front, all is well in the scam of compelling nations (via Deep Capture) to 'borrow' the very "money" they need to fund their operations.

The Military-Financial-MultinationalMoneyMaster Complex is alive and well.

 

Fri, 07/06/2012 - 00:12 | 2590914 Paul Atreides
Paul Atreides's picture

Money masters is by far hands down the best documentary on the history of banking in the USA and covers how the scam was started (more then once) and perpetuated. I am glad you post this comment whenever Tyler drops some Fed history related article, I thoroughly enjoy reading it's eloquent no nonsense description of the fractional reserve scam and have found no other written piece like it, it isn't available anywhere else so I must assume that it is original and that you are the author.

Kudos and +1 to you sir, I wish I could write as well as you but unfortunately my brain is now 20 years plus hard wired for coding and mathamatics.

 

Fri, 07/06/2012 - 02:05 | 2590965 TruthInSunshine
TruthInSunshine's picture

Thanks, but I can't take credit for the writing or analysis on the link The Money Masters.

It took "the conspiratorial" nature of the internet, which in many ways resembles the wild west in terms of dissemination of information, and a menu of information choices varying from the non-Main Stream Media/government approved textbooks, to awaken me.

Zero Hedge, as just one example, literally broke the HFT scam wide open, and the 'conventional' media outlets such as Bloomberg piggy-backed of the Tylers' efforts.

Let's face it; most of the "conspiracy" things on published via internet rags are rubbish.

There are notable exceptions, however, where "conspiracies" in terms of concerted actions and of propping up falsehoods about the economy, monetary policy, fundamental issues pertaining to "what money is", etc. (that have pre-packaged 'answers' tantamount to dogma that are so deeply ingrained in the conscience of the public via the repetitive propaganda that is spread by proxies of those who depend on the current system to continuing so they can continue to steal) can actually be supported in very objective, very complete, and very detailed analyses using such things as direct evidence, actual facts and basic arithmetic, and it is in this area that the internet has truly democratized and revolutionized the access to many of the truths TBTB have worked so hard for so many generations to keep buried from inquiring minds.

Zero Hedge isn't infallible (I voice quibbles with some of ZH's works from time to time, as should be expected where debate and disagreement serves a useful role in obtaining a better understanding of the topic/question at hand), but it and a few other select sites have ushered in this awakening, whether through posting original content (e.g. the HFT fiasco) or linking the original works of others.

When it comes to stripping away the layers of the rotten onions and multiple Ponzi Scams of such things as fractional reserve banking, the federal reserve, dark pools, HFT (and quote stuffing and other variations on the theme), democratization of information based on well reasoned analyses by many individuals and entities who never received the official license and weren't officially sanctioned to spread their opinions, theories, cases, analyses, facts and datum is truly causing TPTB to squirm, even if just a wee bit for now, but increasingly so, as more people are awakened each day.

Fri, 07/06/2012 - 02:18 | 2591013 Clashfan
Clashfan's picture

Bloomberg may be "piggy-backing," but do we really want this female reporter that close to our backsides? Is this real? Can anyone tell? If so, ZH ought to have fun with it.

http://www.dailymotion.com/video/xquxle_reporter-caught-off-guard-with-s...

Fri, 07/06/2012 - 02:22 | 2591014 Clashfan
Clashfan's picture

I mean, that looks real! Is it real? Do any of you watch BBerg enough to comment with authority? That's some weird stuff, man, for a financial news reporter to be doing--or is it?

Run it in slow motion, and watch her face as she realizes that they've caught her playing with her strapon. It's like they either did it on purpose or switched because of the sound problem, but wow.

Thought you folks would like this. Hope it doesn't cross any boundaries. :)

Fri, 07/06/2012 - 09:01 | 2591402 Disenchanted
Disenchanted's picture

 

 

 

I couldn't get the video to work right, but if it is real she's needed at the SEC...

 

That's that Sarah Eisen with the alleged toy isn't it?

 

This says it was a faulty microphone pinned under her dress(no mention as to why she would need a 'microphone' under her dress) and calls it a wardrobe blooper...(video removed)

http://www.allvoices.com/contributed-news/12173898-news-anchor-sara-eise...

 

blurry pic: http://img.gawkerassets.com/img/17mmvq96r7f5hjpg/original.jpg

Fri, 07/06/2012 - 17:32 | 2593353 Clashfan
Clashfan's picture

Sorry, but there's absolutely no way that this is a microphone.

http://wf1027.tumblr.com/post/24763059276/reporter-caught-off-guard-with...

Fri, 07/06/2012 - 17:33 | 2593355 Clashfan
Clashfan's picture

Yes, the credit line calls her Sarah Eisen. She's hot, and she's wearing a huge toy under her dress.

Fri, 07/06/2012 - 17:43 | 2593383 Disenchanted
Disenchanted's picture

 

 

 

LOL!

"Strap-on Friday

Way more fun than silly socks Tuesday"

 

http://verydemotivational.files.wordpress.com/2012/05/demotivational-pos...

Fri, 07/06/2012 - 02:24 | 2591015 rambo1028
rambo1028's picture

Absolutely agree! I am a perfect example of how far reaching the awakening is.....

I am a working poor (broke but not eligible for assistance), single mother, LPN, who hasn't even owned a stock since 2004. I came here looking for answers because things didn't seem right. What "they" were telling me and what I saw as reality didn't match at all. Now this site had replaced the outlets who do nothing but spread disinformation.

Posts like yours help people like me come to grips with reality....even if it's an ugly, ugly, ugly reality.

Fri, 07/06/2012 - 04:15 | 2591070 Henry Chinaski
Henry Chinaski's picture

Chew on this:  Is it a coincidence that the Federal Reserve System was established at the same time as federal income tax?  What better way to drive people into debt than tax incentives.  The more you think about this objectively, the more diabolical and conspiratorial the system appears. 

The Federal Reserve/income tax scam is just the baseline racket.  It's only when the banksters get really greedy and reckless, like in the subprime mortgage scam, that people even take notice. 

Next up: Student loan debacle.

Fri, 07/06/2012 - 05:50 | 2591113 rambo1028
rambo1028's picture

I say bring it! Uncle Sam has me on their tax list and a note for a school loan. I struggle to make rent and feed my family with the ridiculous amount of money they take from me every month. Health insurance has been a faraway dream for years now. When they force me to buy it (bc I won't be getting assistance by my calculations) it WILL break me. They have destroyed me and everyone like me unless they put a stop to the mandate (not likely) or can find a way to make insurance honestly affordable (def not likely). Creating a whole class of people with nothing to lose....probably wasn't one of their better ideas....

Fri, 07/06/2012 - 06:12 | 2591121 rambo1028
rambo1028's picture

Btw this is exactly how they force us into dependence. If I worked just a little less, they would "help" me. If I moved to a nicer place, where the rent was a little higher, they would "help" me. If I had another child, they would "help" me. I will do NONE of the above and if I am going down...I am going down swinging. For full disclosure.... on nights when I cannot sleep (like tonight) for worries over how I am going to manage this month... it is difficult not to wonder if I am making the wrong choice by standing fast with my integrity intact. Then I remember...integrity is one thing they CANNOT take unless I allow them to....

Living on the edge bitchez!

Fri, 07/06/2012 - 10:26 | 2591729 TruthInSunshine
TruthInSunshine's picture

Good point on the "coincidental" timing of the rise of/creation of the new apparatchik with the passage of The Federal Reserve Act of 1913 (that was actually institiated, de facto, in 1910 on Jekyll Island), Henry.

Fri, 07/06/2012 - 05:24 | 2591101 WTFx10
WTFx10's picture

Two things to remember

"TRUTH is the enemy of the STATE"
Paul Joseph Goebbels was a German politician and Reich Minister of Propaganda in Nazi Germany

    “Truth hurts. Maybe not as much as jumping on a bicycle with a seat missing, but it hurts.”

                                      -Naked Gun

Fri, 07/06/2012 - 05:37 | 2591108 rambo1028
rambo1028's picture

"Truth is treason...." RP :) Trust me when I say I am fully awake. I will say...keeping up with the truth is ugly and a lot of work. I understand why so many people who know in their guts that something is very very wrong with this picture prefer to keep their heads buried in the sand. Truth be told, sometimes I wish I could unknow some of the stuff I know to be true...if only just for a day or two. I am sometimes able to forget for an hour or two...with a little help that is. :)

Fri, 07/06/2012 - 09:50 | 2591631 TruthInSunshine
TruthInSunshine's picture

As an extremely wise, just and profoundly generous (in all manner) mentor of mine used to remind me:

 

You can't "un-ring" a rung bell.

Fri, 07/06/2012 - 01:41 | 2590978 IBelieveInMagic
IBelieveInMagic's picture

While it makes sense that the fractional reserve currency is unfair in many ways as it advantages the "creators" of "money", one could say that one redeeming aspect of this form of money is that it does encourage risk taking and consumption that provides fuel to economy. If there is no risk taking, how can we have progress? Smart borrowers take on calculated risk with higher probability of success, whereas the average person is lured/lulled into taking on easy debt that is often brain dead failures -- but both kinds of risk taking has provided fuel for economic progress (of course it can be characterized as pulling future consumption forward). Yes, failures do stand to lose control of assets but in many cases, even they did not have much skin in the game (for eg. in case of zero down loans, what is the risk of the "investor"? or Donald Trump's investments? and it should be OK if they are stripped of the asset in which they had no equity). Yes, the current system also imposes punishment in the form of impaired credit history and income docking -- this could be acceptable if it is egregious case of reckless credit taking.

The losers are the ones who actually re-mortgaged their assets like the farmer in your example but even this can be rationalized if it is merely inherited asset.

So, to summarize, it is hard to claim that complete nations have been fooled into participating in a giant scam -- the system is tolerated as it has some obvious faults but also has some redeeming features that has enabled improved living. Unfortunately, we humans have not been able to conceive an alternative system that is perfect -- all systems will be gamed by the smart and connected.

Fri, 07/06/2012 - 01:59 | 2591004 TruthInSunshine
TruthInSunshine's picture

Fractional reserve banking systems using pure fiat money (i.e. units printed at zero cost/backed by nothing of value) are insidious as they always, inevitably lead to greater and greater boom-bust periods, because they inherently depend on the issuance/uptake/creation of greater and greater aggregate amounts and waves of debt in order to perpetuate and kick the can as a result of the last 'bust' cycle (think of the housing bubble replacing the dot.com one).

Additionally, with each successive boom, debt is issued and taken on to finance increasingly marginally productive activities and increasingly marginally useful goods (some would argue, and rightfully so, that we've crossed the rubicon into net-net negative sum value activities and goods - think of the law of diminishing returns in the context of increasingly negative externality costs - whether pollution, human injuries or deaths due to toxins, the production of weapon systems, etc. - associated with production). 

Here's an example of how this works, based on recent events: Even Krugman, in either a moment of unintentional candor or just a slip of the tongue, succinctly summed up the scam that is fractional reserve banking using pure fiat money that's printed at zero cost & backed by nothing of value:

2002 NYTimes article: Paul Krugman says we need a housing bubble

By PAUL KRUGMAN, published 2002

Writes the future Nobel laureate in the NY Times, August 2, 2002:

“To fight this recession the Fed needs…soaring household spending to offset moribund business investment. [So] Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”

 

*Krugman's Caught in Lie on Housing Bubble

 

Fri, 07/06/2012 - 02:02 | 2591007 A Nanny Moose
A Nanny Moose's picture

Wouldn't a better histogram of the Fed be the purchasing power of the dollar, or an inflation chart?

Fri, 07/06/2012 - 02:12 | 2591010 rambo1028
rambo1028's picture

I have added these documentaries to my list of to watch stuff...but I don't think it would be wise to watch them right now. I am already so angry and sad they might just be the last straw. I have done a ton of reading about the fed tho.

How on earth do you guys keep going and stay (halfway) sane?? I feel like everyone around me can feel that something isn't right but when I try to help them figure out what that feeling might be coming from....they get a glazed over look im their eyes or they get really mad and insist that it's a bunch of tin foil hat jibberish that I am talking about.

It's so clear to me and I hope more people will figure it out before TSHTF or else I feel we will end up with worse tyranny than we have now.....they will use the chaos as the ultimate and final power grab.

Fri, 07/06/2012 - 05:22 | 2591098 WTFx10
WTFx10's picture

The shock wears off then you get mad. You have to try to inform as many as possible .Shake them out of the daze the government and the MOB (banks) propaganda puts them in. I worked on one person for 6 months before he finally took off the blinders. It can be done .Work on the people who have money to lose who are depending on their 401ks and all the other gambling games the bankers have set up for us. Use the fear of losing it to your advantage. Fear can be used for good too. Not just against perceived terrorism. Show them History and how it usually ended up exactly the oppisite of what the government told us

Fri, 07/06/2012 - 09:38 | 2591583 juangrande
juangrande's picture

The root problem is exposed by this posting when the reader was repeatedly asked " Wouldn't you do this,too?" Too many put in this position would do just what is being done. Some say this is human nature. I say this is a collective "Samsara". Overcoming this fear based consciousness is the only solution to this continuing/repeating destructive pattern. It is fear which keeps us blind and in line.

So, you gotta ask yourself, "What am I doing today to free myself from fear?" This is, after all, the only meaningful purpose in life. Realizing truth!

Fri, 07/06/2012 - 07:17 | 2591168 X86BSD
X86BSD's picture

Haha. Thanks for the laugh! What absoulte drivel. 

Fri, 07/06/2012 - 01:58 | 2591003 A Nanny Moose
A Nanny Moose's picture

Yeah, but in the event of a boating accident, paper sorta floats.

Fri, 07/06/2012 - 06:42 | 2591137 jekyll island
jekyll island's picture

G. Edward Griffin's book is a must read for everyone.  It was the beginning of enlightenment for me, although it was not without violence:  I threw the book against the wall at least three times because I was so pissed off by what the gubmint was doing.  I need to get a new book.  If you haven't had the chance to read this yet I offer it my highest recommendation.  It is well over 500 pages but well worth it.   

Thu, 07/05/2012 - 21:49 | 2590735 dick cheneys ghost
dick cheneys ghost's picture

Ok Girls, what is the alternative.........What will replace the current ponzi-based, debt-based fractional reserve banking system?????????

 

What happens when 'the fed' dies?

Thu, 07/05/2012 - 21:53 | 2590738 economics9698
economics9698's picture

100% fractional reserve banking.  Banks print their own currency backed by 100% gold and silver.  This was sort of the system from 1837-62.  

Thu, 07/05/2012 - 22:00 | 2590756 Turin Turambar
Turin Turambar's picture

errr, you mean 100% reserve banking.  Fractional reserve banking is what we have now, and it's of the devil.

Thu, 07/05/2012 - 22:03 | 2590758 economics9698
economics9698's picture

100% fractional reserve banking prevents explanation of the money supply.  This is important because it prevents malinvestment and rations money.

Very simply when the economy is “hot” consumers demand more money, gold or silver, and the value increases, interest rates increase, and capital users, large time investors, stop investing because the cost of money is to costly to build that new factory, mine, or other high end capital project.

When the economy cools and consumers switch to savings money is cheaper, interest rates fall, and capital users decide to build that new factory, mine, or other project.

There is a constant interaction between consumers and capital users.  With central banks this relationship is broken.  When the economy is hot the Federal Reserve (2003-04) can decide interest rates should go DOWN.

This means both consumer and producers are using money and spending, spending, spending, with the inevitable bust when they look at each other and realize there are 6 million more houses built than needed.

Ludwig von Mises used the example of a contractor building a house, there are not enough bricks (production capacity) tio build a three story house but the politicians/bankers do not want the contractor to realize this so they get him drunk.  Everything is going well, everyone is having a good time until the day comes where there are no bricks and the contractor has two thirds of a house he cannot sell, the bust.

Having money backed by gold or silver simply means that the money supply is restricted and the interaction between consumers and capital users is maintained intact.

Thu, 07/05/2012 - 22:08 | 2590766 economics9698
economics9698's picture

Turin we have a reserve requirement of 10% for large banks.  This means they can expand the money supply by a factor of 10 or $100 becomes $1000.

Money multiplier = 1/reserve requirement 

100% fractional reserve banking means I put $100 into my account.  If I want to authorize the bank to make a loan I can at a specific interest rate.  If not the bank DOES NOT loan out my money.

Thu, 07/05/2012 - 23:39 | 2590890 MillionDollarBogus_
MillionDollarBogus_'s picture

Through history, every fiat currency has failed.

The dollar is a fiat currency.

Only question is; when does it fail..??

Fri, 07/06/2012 - 00:36 | 2590949 otto skorzeny
otto skorzeny's picture

dude-don't besmirch the MBD name. I pine for Trav777.

Thu, 07/05/2012 - 23:39 | 2590891 MillionDollarBogus_
MillionDollarBogus_'s picture

Through history, every fiat currency has failed.

The dollar is a fiat currency.

Only question is; when does it fail..??

Thu, 07/05/2012 - 23:49 | 2590907 akak
akak's picture

Having lost ~97% of its former value in the last 80 years, one could argue that the US dollar has 97% failed already.

Fri, 07/06/2012 - 00:37 | 2590947 FEDbuster
FEDbuster's picture

As Dr. Marc Faber said, "the next 97% loss of value won't take as long".

The fiat dollar will remain the reserve currency as long as the US military forces it on the rest of the world.   As we have seen recently, some bigger countries can get away with their direct currency trades, but little guys not so much.  China is still the biggest bagholder.   "Those are IOUs, they are just as good as money........"  

http://www.youtube.com/watch?v=7GSXbgfKFWg

 

Fri, 07/06/2012 - 07:50 | 2591203 New_Meat
New_Meat's picture

"This means they can expand the money supply by a factor of 10 or $100 becomes $1000."

Well, when you do the math, and consider "velocity of money" it is a Taylor series, so it is worse than you show.  'course, these days v(money)=0;

- Ned

Tue, 07/10/2012 - 20:06 | 2604118 Turin Turambar
Turin Turambar's picture

There is NOTHING FRACTIONAL about 100% reserves!  $100 of a commodity is required to be held for a $100 note to be issued.  Read Rothbard's Mystery of Banking if you don't understand.  I assume that you are familiar with him since you mentioned Mises.

The FRACTIONAL part is the problem.  This is how money is created out of thin air and inflates the money supply.

Thu, 07/05/2012 - 21:59 | 2590754 francis_sawyer
francis_sawyer's picture

How about funding for wars dries up (for starters)...

Thu, 07/05/2012 - 22:03 | 2590759 disabledvet
disabledvet's picture

i mean "the Spanish American War cost the American people a telephone tax"...and that was it. Hmmm. "for starters indeed."

Fri, 07/06/2012 - 09:29 | 2591550 Disenchanted
Disenchanted's picture

 

 

 

profiteering from war requires that the population be made to think militarization is part of our 'greatness'(American Exceptionalism) aka false patriotism...

 

http://orlingrabbe.com/wp-content/uploads/2012/07/wpid-tumblr_m0ljw9XEl7...

Thu, 07/05/2012 - 21:59 | 2590755 chump666
chump666's picture

Nothing.  You'll still be poor.

The Fed is designed 100% for Wall Street and now will connect it's self to mad Mario's (ex Goldman) overhang: the ECB via the swaps from hell.  The system is breaking down in realtime, we got a problem that re-inflation (equities) money printing via three CB's BoE, China, ECB all cut at the same time and printed...it did nothing.

Endgame closing in.  Cartel implosion a few mths out.

Riot.

Fri, 07/06/2012 - 12:45 | 2592318 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

That brings back memories. 

It seems we were somewhat distracted.

http://coins.thefuntimesguide.com/2008/09/lincoln_memorial_cent-2.php

 

 

Fri, 07/06/2012 - 05:13 | 2591095 WTFx10
WTFx10's picture

I'm making 68,000 a year now i am poor. But would love to see the thieves making zero and behind bars in chains knowing they are not stealing what little I have to work for.

Thu, 07/05/2012 - 22:30 | 2590797 ATG
ATG's picture

Do you mean, how did we ever prosper four centuries without a Fed and just the Spanish Silver Dollar Pieces of Eight that provided sound legal tender?

http://en.wikipedia.org/wiki/Spanish_dollar

Armed citizens and Freedom maybe...?

Thu, 07/05/2012 - 23:14 | 2590859 SgtShaftoe
SgtShaftoe's picture

Nobody knows... But if history is a guide hard assets are a safe bet. There are so many decisions yet to be made shat will shape the outcome. Likely the natural forces will force a cascade failure, and descaling, globalization should still be a powerful force, but political forces are far more likely to be local In nature rather than in a festering pond of shit - dc.

Fri, 07/06/2012 - 01:59 | 2591006 A Nanny Moose
A Nanny Moose's picture

If we free the slaves, there will be nobody left to pick the cotton and tobacco.

Well, the slaves are free and I am wearing a pair of Levis.

Fri, 07/06/2012 - 10:36 | 2591684 TruthInSunshine
TruthInSunshine's picture

The key is successfully continuing to convince the 'slaves' that they are free.

And then you collateralize their asses and those of their enslaved children in synthesized manner, and overload them with debt (even the ones who know the drill and try to resist - if you don't consume more than you produce, they're doing this to you anyways, via the deficit spending that has led to actual "national debts" that are far greater than even officially reported; see estimates of actual U.S. nation debt by David M. Walker*, former Comptroller General of the U.S. or Laurence Kotliloff**) many times over, just like cattle futures or CDOs, since if you're the great who meat to beat, you think of them in the same terms as cattle (or sheep).

If too many*** of the sheeple awaken, it threatens the social & economic order that allows the Banksta Raping of the Citizenry to continue.

 

*What Every American Should Know About the National Debt

**Reagan Adviser Kotlikoff: US Is Really $211 Trillion in Debt

*"Too many" is far less than the majority or even a large plurality, but something that crosses a statistically significant % of the population at large, with some claiming a mere 3% (III) is sufficient (and they cite to major historical events where a very low % of the population acted as the spark or catalyst that set off fundamental changes in what was then the old order), while others arguing that it may take a % that is larger than that.

Fri, 07/06/2012 - 06:43 | 2591138 jekyll island
jekyll island's picture

If you read Griffin's book he takes an entire chapter to spell out how to end the fed and replace fiat with sound money.  

Thu, 07/05/2012 - 21:57 | 2590746 bob_dabolina
bob_dabolina's picture

The Federal Reserve was born in the warm salty region of Satan's loins and nurtured on the areola of Cerberus's warm and supple mammary.

Now the Federal Reserve engages in coitus with us,  insidiously and not always with our knowledge or consent.

Damn it feels good to be a taxpayer.

Thu, 07/05/2012 - 21:58 | 2590751 NumberNone
NumberNone's picture

Slightly off topic but a BofE banker stabbed himself to death in a park.  Amazing how many people off themselves with multiple stabs wounds or gunshot wounds to the back of their own heads.  

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9376436/Stressed-Bank-of-England-official-stabbed-self-to-death.html

Thu, 07/05/2012 - 22:04 | 2590760 Cursive
Cursive's picture
died from self-inflicted stab wounds to his chest and cuts to his arms.
Yeah, sure, self-inflicted.  Until I get a better account, I'll just assume he was "suicided."  My tin foil hat is on super buzz right now.  That, and how many different ways can you spell diamond?
Thu, 07/05/2012 - 22:08 | 2590762 bob_dabolina
bob_dabolina's picture

diemond, dimond, dimund, diemund, diamund

That's all I got

And for the record, many people slash their arms before stabbing themselves in the chest. Very common way to go.

Thu, 07/05/2012 - 22:13 | 2590772 francis_sawyer
francis_sawyer's picture

you forgot the most obvious way... "asshole"

Thu, 07/05/2012 - 22:26 | 2590794 HoofHearted
HoofHearted's picture

You forgot Dimon and its French pronunciation "Demon"

Thu, 07/05/2012 - 23:11 | 2590853 francis_sawyer
francis_sawyer's picture

How about the Rastafarian way...

Die MON...

Thu, 07/05/2012 - 22:23 | 2590786 ATG
ATG's picture

Dimon...

Thu, 07/05/2012 - 22:25 | 2590792 disabledvet
disabledvet's picture

wtf does it mean "an inquest has heard"? isn't it suppose to be "an inquest reveals" or "a Judge has been informed" or something or other? Maybe the Telegraph meant "a rumor at an inquest was revealed today." Really? Right up there with "during our conquest it was discovered that blah-ble-blah-ble-blah was happening." To which we might respond "what is blah-ble-blah-ble-blah?" And then someone would answer..."that means bloo-ble-blah-blee-bloo" and then we would respond "arfstonful" and they would answer "hoopty-doop" and all would be good. Except for the dead guy part.

Fri, 07/06/2012 - 06:48 | 2591143 jekyll island
jekyll island's picture

If I read the article correctly he is not a banker, he was over information technology.  Bankers don't have a guilty conscience.   

Sat, 07/07/2012 - 08:57 | 2594515 Clashfan
Clashfan's picture

Now this is an interesting piece, NNone. Thanks for this.

Thu, 07/05/2012 - 22:05 | 2590761 Freebird
Freebird's picture

Just another Liebor casualty - there's millions of victims don't you know

Thu, 07/05/2012 - 22:11 | 2590769 midgetrannyporn
midgetrannyporn's picture

the fed is a criminal organization.

Thu, 07/05/2012 - 22:41 | 2590819 toomanyfakecons...
toomanyfakeconservatives's picture

Agreed... expect to see the bigger traitors and dirty rats in chains and orange jumpsuits in the near fiuture... http://tinyurl.com/cs5cyjo/

Thu, 07/05/2012 - 22:22 | 2590771 ATG
ATG's picture

Re often controlled by Presidents and The Treasury:

Name one.

The current Treasury Secretary was head of the NY Fed. 

Princeton President Woodrow Wilson, who signed the Fed and IRS plan into law in 1913, campaigned against the Money Trust for votes and served it for Mammon, not the other way around.

http://en.wikiquote.org/wiki/Talk:Woodrow_Wilson#.22I_am_a_most_unhappy_man....22

Where else do Janus politicians get their monopoly money to stay in office, if not for tax-favoured banks, corporations and foundations of the Money Trust that SCOTUS ruled enjoys free speech like natural persons?

Much like 0Care, Shovel Ready and TARP, The Fed was sold to the peons by bicameral D Congress as a "fine Christmas present of currency reform to aid business (and all voters)."  

It called for a systematic revision of banking laws in ways that would provide relief from financial panics, unemployment and business depression, and would protect the public from the "domination by what is known as the Money Trust.

http://en.wikipedia.org/wiki/Federal_Reserve_Act 

Right.

plus c'est la même chose...

Thu, 07/05/2012 - 22:38 | 2590812 toomanyfakecons...
toomanyfakeconservatives's picture

Have you ever taken the oath and shouldered a rifle? Seriously...

Thu, 07/05/2012 - 22:23 | 2590787 world_debt_slave
world_debt_slave's picture

a gaggle, a pod, a swarm or whatever you wanna' call them all, they're all criminals in my book.

Thu, 07/05/2012 - 22:47 | 2590811 toomanyfakecons...
toomanyfakeconservatives's picture

More fuel for the looming MASS ARRESTS. Obama, Brenanke, and over 1000 other top traitors in chains and orange jumpshits all in one fell swoop. http://tinyurl.com/cd5cyjo/

 

Attention Peanut Gallery: Please save the comments unless you've served a term in the military or otherwise taken the oath, and have a more than an armchair grasp on law, politics, and reality.

Thu, 07/05/2012 - 22:53 | 2590830 SgtShaftoe
SgtShaftoe's picture

How about a equal comparison of the CIA? The federal reserve is evil and shit, but every anvil needs a hammer.

Things for Research:

Ray McGovern
Chalmers Johnson
And many others... Just check out YouTube.

Thu, 07/05/2012 - 23:00 | 2590842 Paul Atreides
Paul Atreides's picture

Cocain Import Agency

Thu, 07/05/2012 - 23:13 | 2590857 aldante
aldante's picture

They always get the best stuff too....

Fri, 07/06/2012 - 10:45 | 2591819 TruthInSunshine
TruthInSunshine's picture

Cocaine, etc., etc. etc.

It's a much more diversified portfolio than most Americans care to hear about or acknowledge.

From one of the iconic symbols of the Main Stream Media proxy, itself:

 

U.S. Turns a Blind Eye to Opium in Afghan Town - NYTimes.com www.nytimes.com/2010/03/21/world/asia/21marja.html?...all

Mar 20, 2010American Marines in an opium poppy field in Marja, Afghanistan.

Thu, 07/05/2012 - 22:59 | 2590839 DelusionalGrandeur
DelusionalGrandeur's picture

Attention Peanut Gallery: Please save the comments unless you've served a term in the military or otherwise taken the oath, and have a more than an archair grasp on law and politics.

Fucking A! This cabal needs to be put in front of a firing squad for committing treason in the very least, then maybe, just maybe this nefarious behavior will fucking STOP!

Thu, 07/05/2012 - 23:29 | 2590874 SgtShaftoe
SgtShaftoe's picture

I did my time behind a rifle. I am thankful for the education, but have grown to loathe the teacher. I think it would have been better to have never served many days, but am glad of the skills. It's double edged. What can I say?

Fri, 07/06/2012 - 00:32 | 2590942 otto skorzeny
otto skorzeny's picture

piss off tin soldier

Thu, 07/05/2012 - 22:59 | 2590840 DelusionalGrandeur
DelusionalGrandeur's picture

Attention Peanut Gallery: Please save the comments unless you've served a term in the military or otherwise taken the oath, and have a more than an archair grasp on law and politics.

Fucking A! This cabal needs to be put in front of a firing squad for committing treason in the very least, then maybe, just maybe this nefarious behavior will fucking STOP!

Thu, 07/05/2012 - 23:12 | 2590854 CheapBastard
CheapBastard's picture

Excellent review...simply excellent. I'm fowarding this to my thick-skulled nephew.....thank you!

Thu, 07/05/2012 - 23:18 | 2590862 cranky-old-geezer
cranky-old-geezer's picture

 

 

Bottom line, Fed was created to silently replace real gold-redeemable U.S. currency with unbacked worthless Federal Reserve Notes, the vehicle for looting all of America's wealth and giving it to the government and crony wallstreet bankers.

Fed's method of looting America's wealth is (a) open ended government borrowing and (b) pumping & dumping the economy every 10 years or so, with wallstreet bankers tipped off ahead of time so they can profit on the upside and downside.

Most recent pump & dump was the housing bubble, started by the Fed with loose credit 2001 - 2007, then popped by the Fed by tightening up credit in '08, causing the housing market crash. 

Loose credit over several years followed by sudden tightening of credit causing a financial crash.  We've seen that pattern time after time.  It's so consistent.

 

Fri, 07/06/2012 - 06:55 | 2591145 jekyll island
jekyll island's picture

All the inner circle bankers were tipped off by the Fed prior to the stock market crash of 1929.  The Warburgs, Rockefellers, etc. all got their money out and then bought high quality stocks for pennies on the dollar due to the depression.  History has a way of repeating itself, we are probably nearing another depression.  

Thu, 07/05/2012 - 23:21 | 2590867 Seasmoke
Seasmoke's picture

its probably just me, but all i see is Jews and Israel all over everything

Fri, 07/06/2012 - 00:34 | 2590945 otto skorzeny
otto skorzeny's picture

its not just you-it's me and tamboo too. hey-that rhymes. they are all over everything only insofar as they control most top spots in banking and govt and dictate our middle-east policy- other than that-not much.

Fri, 07/06/2012 - 05:03 | 2591087 WTFx10
WTFx10's picture

They are all connected to the Rothschild's Criminal Banking Empire all money flows to the BIS eventually.

Funny how Martin Armstrong gives us his history of Banks but never mentions the owners , He just keeps bitching about marx and people borrowing without ever wanting to pay back. Never once mentions that the Rothschild's Criminal Banking Empire is the head of the squid.

Actually i have noticed many who bitch and complain and have it all figured out but they always stop before they reach the top, the Rothschild's Criminal Banking Empire.

The CENTRAL BANK OF CENTRAL BANKS. What Nation on the planet holds control over this Private Company?

It seems none so we are a Colony of a Private Corporation. We lost our nation by handing it to the criminals through some mysterious contract clause that states a private corporation can control a sovereign state through the control of its money.

Time to break the contract and the planet has to do a Marx on the Rothschild's (confiscate and spread the stolen goods or we could just follow the rule of law and prosecute and imprison just like we do for organized crime.

But it would have to take balls and our government is run by bank employees and israel ,so I do not forsee sanity arriving anytime to soon.

Jews are jews, jewish criminals are jewish criminals Prosecute the CRIMINAL

Thu, 07/05/2012 - 23:38 | 2590871 TruthInSunshine
TruthInSunshine's picture

dt. apologies

Thu, 07/05/2012 - 23:41 | 2590896 valkir
valkir's picture

Benny,you know what we think about you.About your creators ,too...

Thu, 07/05/2012 - 23:41 | 2590897 q99x2
q99x2's picture

You look at the lifers in prison and you see far better than the scum at the FED.

For a while those lifers could get away with it too.

Thu, 07/05/2012 - 23:57 | 2590911 spekulatn
spekulatn's picture

Nicely done ZH.

Any chance Mr. Taibbi could lend his talents to the story of the FED?

Fri, 07/06/2012 - 00:28 | 2590937 Centurion9.41
Centurion9.41's picture

Said it before and will say it again..... this needs to be on a LOG SCALE otherwise it's highly misleading in relationships expressed and picture painted.

Factually true, but but representitvely deceptive. In short, the creator is playing the same BS game of half-truths as the cabal pulls to build emotional support.

Trying to win over the ignorant to the truth using the same deceptive tactics is to prove oneself simply a different evil.

Fri, 07/06/2012 - 00:53 | 2590964 Bunga Bunga
Bunga Bunga's picture

Get over it, US is just a corporation owned by the City.

Fri, 07/06/2012 - 01:14 | 2590980 Oh regional Indian
Oh regional Indian's picture

Succint Truth. Just about says it BB.

ori

Fri, 07/06/2012 - 02:47 | 2591021 Raul Duke
Raul Duke's picture

so im an uneducated fool and this is my understanding of monetary system. first of all - gold or silver backed money, sounds nice but there is only so much gold and/or silver so if one should set lets say x dollars per y ounces of gold or silver - you would get so much dollars in circulation and not more ! ofc this applies if there is no fractional reserve system AT ALL. that would mean that people in USA and by now hald of the world if not more would have to fight either over the dollar or over the gold / silver because simply put there wouldnt be enough for everyone out there. one could ofc manipulate the x dollars per y ounce every now and then but just like its being done today with interest rates and printing it would devaluate dollar to the point where people would simply go after gold or silver wherever possible and by any means neccesary.

fractiona resrve monetary system (not backed up by anything of REAL value) is therefore absolutely genius way of creating enough money for everyone in the world, ofc with all the downsides of devaluation etc. but at least people are not splitting eachothers skulls for a piece of gold or whatever. and its the way towards the worlds reserve currency, which i believe was the idea whole time. another genious move was petrodollar. lets see how far any of these can go.....

now the FED is creating this money for the US government but they are doing that by issuing debt, debt to the very US government and the people who are supposed to use that money. i see several reasons why someone sometime ago thought that would be a good idea. first it would create a dynamic on the market as money (and/or debt) would become a commodity that could be traded on the market and in that way it could create processes which would create even more money. more money is good, aside from unfortunately devaluing the basis through inflation but at least we can somehow avoid the trap of gold backed money; every person in a state that issues fiat money would be able to get their hands on money and MORE money over the time, is that moneys VALUE more or less over the time, well at least if everyone is loseing because of inflation - its EVERYONE, the banks the government, the industry, the people, everyone. so its kinda fair (in a twisted ways, yes -.-). besides the US government can nationalize the FED anytime and proclaim all of the debt as non existent. aside from the trap with China. i dont think that US can nationalize the FED anytime soon as long as China is holding wast amounts of US debt, they would go absolutely crazy if that would happen. so traps everywhere.....

so where is the problem ? FED is issuing money on behalf of the government and charging a fee for that, therefore making profit on every dollar ever made. how far can this go ? well, only so far as the economy is creating REAL value through industry, trade, whatever, in a bigger pace than the debt is growing. this can go on only so far because the capitalist system cannot outgrow the inflation. you just cannot grow forever and each and every year, especialy if the only incentive in the "last stages" is to pay back debt. which is growing one way or the other, the number of people is increasing and everyone wants their dollar, government spending, wars, catastrophies, bailouts, etc. etc. so where does the capitalist system turns its gaze upon ? upon anyone and anything that has ANY kind of value in their hands, be it fiat money or goods or commodities or even debt, it doesnt matter, all money is good just as long as it pays debt. so in the end we get the socialism / communism system instead of capitalism. 

what can be changed ? remove the fee that the FED is collecting on every dollar ? yes that would work for some time but we forget that the rest of the banks are also collecting fees. which would mean that just like how we now have the FED as the ultimate debt holder, eventualy we would have one bank or a small number of banks holding the debt in the very same way the FED is doing today. its inevitable. this way we at least control the institution which is holding the "all" of the debt. put the FED under government control, meaning if someone is making money out of "our" money why cant does that have to be a private person or persons, why not the people ? yes but isnt that a sure way to dictatorship ? someone with so much power and with access to so much money would just wreck the economy every now and then, FED is acting like a security check, if you are going to borrow then you have to be aware of consequences. has that stoped the excesive spending ? well not quite, one thing they forgot when they implemented this system is that people who own the FED like money more then they like to play the good "patron" of the economy. FED simply has never said no.

alternatives ? none. i dont see them. you want enough money for everyone ? fractional reserve system, theres no way around it. you want effective power control ? one bank. i beleive that even after some big reset of the capitalist system it would all revert to sqare one and start again in the same way we have it today. not that im saying that there will be a big reset ever. this game can be played indefinitely long and in my opinion it will be played. 

a decade ago we had huge companies, conglomerates, just owning the system and becoming so rich and powerfull as states. today those companies are "owned" by banks. the entire economy is owned by banks, the very idea of making money out of money and playing the financial system is genious in itself. but why so excessively, why is industry out of focus ? its not just the debt that the companies have amassed, its the production game and the trap of everlasting growth in capitalist system, again triggered by the monetary system we have, thats to blame. we have produced everything so far, not much place to grow anymore and unlike the monetary game, the production game cannot be played forever. there just isnt infinite amount of, lets say, oil in the world. or anything else for that matter. 

so what now ? well, i think that someone has seen this comming and that they have another geniuos idea that will keep this thing going even after he worlds resources are depleted. some new resources will arise in time. its a given thing. or is it ? there are wars after all, and scams, and N.W.O., something will come along the way. fiat money is here to stay i am sure of that.

excuse me for my poor english and correct me where im wrong....

 

Fri, 07/06/2012 - 05:12 | 2591085 Disenchanted
Disenchanted's picture

 

 

SECRETS OF THE FEDERAL RESERVE By Eustace Mullins  (1952)

 

alt. site: Secrets of the Federal Reserve by Eustace Mullins

 

and an excerpt from:

The World Order: A Study in the Hegemony of Parasitism
The history and practices of the parasitic financial elite
-- by: Eustace Mullins, 1984

excerpt @  http://modernhistoryproject.org/mhp?Article=WorldOrder&C=1.1#America

 

A notable advantage of J.P. Morgan's work for the House of Rothschild was the carefully cultivated belief that Morgan, if not openly "anti-Semitic", avoided participating in operations with Jewish banking firms, and that his firm would not hire anyone of Jewish background. It was the same deception which Nathan Mayer Rothschild had hired Morgan's predecessor, George Peabody, to perform in London. It was a traditional belief on Wall Street that if you wished to deal with a "gentiles only" firm, you went to J.P. Morgan; if you wanted a Jewish firm, there were a number of houses available, but the most influential, by far, was Kuhn, Loeb Co. In either case, the customer was never made aware that he was dealing with an American representative of the House of Rothschild.

 

Jacob Schiff, who brought the Kuhn, Loeb firm to its preeminent role in American finance, was born in the Rothschild house at 148 Judengasse, Frankfurt, which the Rothschilds shared with the Schiff family. In 1867, Abraham Kuhn and Solomon Loeb, two Cincinnati dry goods merchants, founded the banking house of Kuhn, Loeb. In 1875, Jacob Schiff arrived from Frankfurt to join the firm. He married Therese, Solomon's daughter. He also brought a large amount of Rothschild capital into the firm, enabling it to expand tenfold. In 1885, Loeb retired; Jacob Schiff ran the firm from 1885 to 1920, when he died.

 

At no time has the House of Rothschild ever indicated publicly that it had any interest in the firm of Kuhn, Loeb Co. George R. Conroy stated in Truth magazine, Boston, Dec. 16, 1912:

 

"Mr. Schiff is head of the great private banking house of Kuhn, Loeb & Co., which represents the Rothschild interests on this side of the Atlantic. He has been described as a financial strategist and has been for years the financial minister of the great impersonal power known as Standard Oil. He was hand-in-glove with the Harrimans, the Goulds and the Rockefellers in all their railroad enterprises and has become the dominant power in the railroad and financial world of America."

 

This is one more revelation of the hidden power of the Rothschild interests in America. Not only has it directed the Rockefeller enterprises from the time that National City Bank of Cleveland, a Rothschild bank, financed the early expansion of Rockefeller's South Improvement Co. which enabled him to crush his competitors through illegal railway rebates, but it has also been the power behind the scenes of the Harriman fortunes, now Brown Brothers Harriman. It explains the frequent appointments (never elections) of W. Averell Harriman, the dominant power in the Democratic Party, while his partner's son, George [H.W. Bush], is the Republican vice-president, a heartbeat away from the Presidency of the United States. [elected president in 1988 --ed]


It explains the secret writing of the Federal Reserve Act by Paul Warburg of Kuhn, Loeb & Co., and the even more secret deals which caused it to be enacted into law by Congress. It explains how the United States could fight World War I with:

 

 

Meanwhile, Paul's brother, Max Warburg, headed the German espionage system and another brother was German commercial attache in Stockholm, traditional listening post for warring nations. Jacob Schiff had two brothers in Germany who were financing the German war effort. It was a classic case of a "managed conflict", with the Rothschilds manipulating both sides from behind the scenes. At the Versailles Peace Conference, Bernard Baruch was head of the Reparations Commission, Max Warburg, on behalf of Germany, accepted the reparations terms, while Paul Warburg, Thomas Lamont and other Wall Street bankers advised Wilson and the Dulles brothers on how "American" interests should be handled at this all-important diplomatic conference.

 

Why that's just crazy talk! Isn't it?

Fri, 07/06/2012 - 05:42 | 2591111 Disenchanted
Disenchanted's picture

 

 

 

Something to keep in mind...from another excerpt from Mullin's The World Order

http://modernhistoryproject.org/mhp?Article=WorldOrder&C=8.0#Divide

 

Divide and Conquer


The World Order rules through a simple technique: Divide and Conquer (divide et impera). Every natural or unnatural division among people, every occasion for hatred or greed, is exploited and exacerbated to the limit. The polarization of racial and ethnic groups in the U.S. is accelerated by a flood of government decrees, originating in foundation "studies", which are designed solely to set American against American. Only in this way can the World Order maintain its iron grip on the daily lives of the people.

 

The World Order also rules by the principle of "1984" -- no groups of two or more people are allowed to gather unless the World Order has a representative present. If you start a club of dandelion fanciers, the Order will send someone who will be quietly helpful, avoid taking the front position, and who will offer to pay the rent of a meeting place or the printing of the minutes. In more radical groups, the Order's representative will be the first to suggest dynamiting a building, assassinating an official, or other violent action.

 

The international terrorism of the Communist Party originated in a small club of German and French workingmen in Paris, dedicated to quiet reading and discussion, until Karl Marx joined. It was then converted into a revolutionary group. This one example explains the Order's determination to allow no group, however insignificant, to remain unmonitored.

 

The World Order adopted the Hegelian dialectic, the dialectic of materialism, which regards the World as Power, and the World as Reality. It denies all other powers and all other realities. It functions on the principle of thesis, antithesis and a synthesis which results when the thesis and antithesis are thrown against each other for a predetermined outcome.

 

Thus the World Order organizes and finances Jewish groups; it then organizes and finances anti-Jewish groups. It organizes Communist groups; it then organizes and finances anti-Communist groups. It is not necessary for the Order to throw these groups against each other -- they seek each other out like heat-seeking missiles, and try to destroy each other. By controlling the size and resources of each group, the World Order can always predetermine the outcome.

 

In this technique, members of the World Order are often identified with one side or the other. John Foster Dulles arranged financing for Hitler, but he was never a Nazi. David Rockefeller may be cheered in Moscow, but he is not a Communist. However, the Order always turns up on the winning side.

 

A distinguishing trait of a member of the World Order, although it may not be admitted, is that he does not believe in anything but the World Order. Another distinguishing trait is his absolute contempt for anyone who actually believes in the tenets of Communism, Zionism, Christianity, or any national, religious or fraternal group, although the Order has members in controlling positions in all of these groups. If you are a sincere Christian, Zionist or Moslem, the World Order regards you as a moron unworthy of respect. You can and will be used, but you will never be respected.

 

Fri, 07/06/2012 - 05:47 | 2591112 Laretes
Laretes's picture

Fun fact: I ran a half marathon in Appleton, WI.

Thread derail end.

Fri, 07/06/2012 - 06:02 | 2591114 falak pema
falak pema's picture

long story short : FED is a private cartel that creates money out of nothing with the collusion of government and to the detriment of the people using the Fractional reserve mechanism which just fuels inflation. And now its gone global as hegemonial reserve! 

What the FED did with the USD, the Seven Sisters did with Oil cartel in 1928. The creature of Jekyll Island for the Oil cartel was the creature of Achnacarry Castle; where Shell, Anglo Persian (BP)  and Standard oil of New Jersey (Rockafella) formed the precursor cartel which led to the Seven Sisters.

History of ROYAL DUTCH PETROLEUM COMPANY THE "SHELL" TRANSPORT AND TRADING COMPANY P.L.C. – FundingUniverse

Later copied by the Oil producing Arab/ME kingdoms cartel known as OPEC.

The New Oil Price Leadership And the WorId Price of Oil

Finally, the Cold War created the third Cartel of MIC with government collusion via NATO, Seato, and rivals Comecon during the cold war period which has created the lucrative and ever growing World ARms bazar as legacy.

There we have the three cartel ingredients of Reaganomics construct,  the vital blood lines of the victory of corpocracy PAx Americana  of last twenty years. AS, the NWO has spread this disease world wide by  its world leader hold on the three blood lines of modern capitalistic cartels, now morphed into the UBER cartel,  the Global Oligarchy of 0.1% uber rich; since Chindia and BRic have got sucked into it along with traditional surrogates Japan and Euro zone. These guys are the new Rockafellas and Morgans, and money has no smell nor does racial origin in this new exclusive club! 

And... this whole thing... in bunga bunga mode...is now keeling over under is own dead weight of fiat funny money exponential build up.

Marx must be laughing in his grave while we all cry, as he was right at least about this monopoly scam tradition in capitalism! 

How do we fight it? Your guess as good as mine! 

Fri, 07/06/2012 - 07:06 | 2591158 jekyll island
jekyll island's picture

You really cannot fight it, TPTB have had a 100 year head start to buy politicians and consolidate their position. The current system is not broken, it is doing exactly what it was designed to do:  steal the wealth of nations for the elite. I am convinced that the only way the sheeple will wake up and demand change is if the FRN$ collapses in a cloud of fiat smoke.  I hate to say it, but the fastest way to make that happen is to reelect Obummer.  He just passed the largest tax increase in the history of the US.  I wonder what else he could do if he got another four years?  Surely he could derail this train, he just needs our support.   

Fri, 07/06/2012 - 09:00 | 2591432 marathonman
marathonman's picture

I don't know.  Romney would keep the printing press humming.  Extend tax cuts, war with Iran, out of control ObamaCare costs.  In my mind, it's a toss up over which would be worse.

Fri, 07/06/2012 - 21:30 | 2593896 blindman
blindman's picture

you might want to drain the swamp and buy pms.
oh well
,
and go a boating.

Fri, 07/06/2012 - 07:54 | 2591214 A82EBA
A82EBA's picture

shows how ignorant wethepeople are..all this going on for 100 yrs 'cause we allowed it...we didnt go into debt at gunpoint...we're not victims. we're VOLUNTEERS.

Fri, 07/06/2012 - 08:24 | 2591275 yogibear
yogibear's picture

The Federal Reserve bankster system was installed to fleece wealth. The fractional reserve ponzi works until it doesn't.

 

Fri, 07/06/2012 - 08:44 | 2591352 paulypaul
paulypaul's picture

The 6 cent can also be printed, so its completely free.

Fri, 07/06/2012 - 08:57 | 2591415 marathonman
marathonman's picture

The Federal Reserve System - Stealing from you since 1913.  Buy the t-shirt at http:/www.zazzle.com/600px_us_federalreservesystem_seal_svg_stealin_tshirt-235...

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