Post by Col. Frank Slade on Apr 24, 2014 17:35:46 GMT -6
I'm going to put together (probably slowly and in installments) a series of informational blurbs on the Federal Reserve Act, hoping to explain not only what it is but what the implications are for everyday useful idiots like myself. I'll do it in chapters, why not. I'm not an absolute authority or claim to be 100% correct so feel free to add to it or tell me i'm full of shizen, i like to learn things so i appreciate any input.
CHAPTER 1. WHAT IS THE FED AND HOW DOES IT WORK?
Let us start with what it is not. The FED is not a Federal Agency. It is essentially a corporation chartered by Congress. Individual member banks of the FED hold stock certificates. These stock certificates do not carry any of the typical privileges of private ownership, such as: they cannot be sold; larger banks hold more certificates than smaller banks but still only get 1 vote each.
The 1 vote they do receive is almost meaningless for the following reasons: 1)they are controlled by National Board of Directors (NBOD) and the chairman of the FED (Bernanke, Greenspan etc...), all of which are EXECUTIVE BRANCH APPOINTED. 2) While they can vote for their regional directors (look at your dollar bill, it lists the regional FED branch from which it came) which could set regional interest rates, the NBOD can over ride the choice of interest rate and can even override the regional director appointment.
Then what is the FED? It is a Central Bank, it is a hybrid which is neither a private company or a federal agency, and more importantly it is a CARTEL. The Fed allows Congress and the Whitehouse to spend unlimited amounts of cash, and in return the banks that make up the Fed gain the ability to collect perpetual interest on monies they never had to begin with. It also allows the Government of the U.S. to tax the people as much as they want without the knowledge or permission of the citizen.
Let's think more about this ability to tax without calling it a tax thing. Historically, a government would need money for a purpose, let's say to build a canal for the transport of products for industry, this is a valid project idea which could be positive for most everyone and it may actually fit into the guise of "regulating interstate commerce." Without a central bank the Gov would have to find a way to raise the number of dollars in tax receipts in order to pay the bill for a project, which would in turn mean that the citizenry would be consulted in the form of a bill presented before congress to raise taxes for that purpose. The citizenry would get to mull that over and either agree or they could contact their Representative or Senator and ask that they not vote yes. At least there was some semblance of a representative Republic. Since the creation of the FED our Congress can vote to spend monies they don't have, lie about how they will raise funds to pay that money back, and not propose bills before the citizenry that call for tax increases. Now our Gov't can agree to issue forth Treasury Notes that pay a nice amount of interest to the FED (interest on monies they never fully had), and in return the FED writes a check to the Treasury. The citizenry get taxed directly through inflation of the Federal Reserve Note (we call them dollars but they arent')and increased price of goods. Since wages never come close to catching up with inflation we all lose.
This part should blow your mind, and is how the large banks that are FED members get filthy rich while destroying your dollar. Member banks take loans out with the FED, the top tier banks get to borrow at what they call the "discount window", and as an example, recently i looked on the FED website and the discount rate was 0.75% interest. Tier 1 banks like JP Morgan could borrow monies at 0.75% interest at that time. In case ya'll didn't know, Countrywide Mortgage Company was JP Morgan's mortgage arm and was the most nefarious and highly scrutinized lender in the Housing Bubble debacle that tanked our economy and bilked Trillions from the taxpayer. How many of you got a home loan at anything near 0.75% on a 30 year mortgage?? Nobody did, let's take a historically low interest rate of 5% on a mortgage of 145K, amortized over a 30 year period it comes out to greater than $300,000. They made over twice the value of that home in interest received, for the sole privileged of loaning you money they never had to begin with. Now think of how many loans like this they made. Here comes the awesome part. The Fed mandates that you only keep 10% of deposits on reserve. So, with a deposit of $100 dollars at their bank, the bank can theoretically loan out and receive interest on $900 dollars in a relatively short period of time; if a bank pretty much dominates a large percentage of banking in a region they could achieve nearly that level of leverage. REMEMBER THIS, CURRENTLY IN OUR SOCIETY CREDIT IS MONEY. This means that the flood of credit into the marketplace results in more dollars chasing (typically) the same amount of goods, resulting directly in price inflation.
I NEED A BEER, THIS WILL THEREFORE CONCLUDE CHAPTER 1.
CHAPTER 1. WHAT IS THE FED AND HOW DOES IT WORK?
Let us start with what it is not. The FED is not a Federal Agency. It is essentially a corporation chartered by Congress. Individual member banks of the FED hold stock certificates. These stock certificates do not carry any of the typical privileges of private ownership, such as: they cannot be sold; larger banks hold more certificates than smaller banks but still only get 1 vote each.
The 1 vote they do receive is almost meaningless for the following reasons: 1)they are controlled by National Board of Directors (NBOD) and the chairman of the FED (Bernanke, Greenspan etc...), all of which are EXECUTIVE BRANCH APPOINTED. 2) While they can vote for their regional directors (look at your dollar bill, it lists the regional FED branch from which it came) which could set regional interest rates, the NBOD can over ride the choice of interest rate and can even override the regional director appointment.
Then what is the FED? It is a Central Bank, it is a hybrid which is neither a private company or a federal agency, and more importantly it is a CARTEL. The Fed allows Congress and the Whitehouse to spend unlimited amounts of cash, and in return the banks that make up the Fed gain the ability to collect perpetual interest on monies they never had to begin with. It also allows the Government of the U.S. to tax the people as much as they want without the knowledge or permission of the citizen.
Let's think more about this ability to tax without calling it a tax thing. Historically, a government would need money for a purpose, let's say to build a canal for the transport of products for industry, this is a valid project idea which could be positive for most everyone and it may actually fit into the guise of "regulating interstate commerce." Without a central bank the Gov would have to find a way to raise the number of dollars in tax receipts in order to pay the bill for a project, which would in turn mean that the citizenry would be consulted in the form of a bill presented before congress to raise taxes for that purpose. The citizenry would get to mull that over and either agree or they could contact their Representative or Senator and ask that they not vote yes. At least there was some semblance of a representative Republic. Since the creation of the FED our Congress can vote to spend monies they don't have, lie about how they will raise funds to pay that money back, and not propose bills before the citizenry that call for tax increases. Now our Gov't can agree to issue forth Treasury Notes that pay a nice amount of interest to the FED (interest on monies they never fully had), and in return the FED writes a check to the Treasury. The citizenry get taxed directly through inflation of the Federal Reserve Note (we call them dollars but they arent')and increased price of goods. Since wages never come close to catching up with inflation we all lose.
This part should blow your mind, and is how the large banks that are FED members get filthy rich while destroying your dollar. Member banks take loans out with the FED, the top tier banks get to borrow at what they call the "discount window", and as an example, recently i looked on the FED website and the discount rate was 0.75% interest. Tier 1 banks like JP Morgan could borrow monies at 0.75% interest at that time. In case ya'll didn't know, Countrywide Mortgage Company was JP Morgan's mortgage arm and was the most nefarious and highly scrutinized lender in the Housing Bubble debacle that tanked our economy and bilked Trillions from the taxpayer. How many of you got a home loan at anything near 0.75% on a 30 year mortgage?? Nobody did, let's take a historically low interest rate of 5% on a mortgage of 145K, amortized over a 30 year period it comes out to greater than $300,000. They made over twice the value of that home in interest received, for the sole privileged of loaning you money they never had to begin with. Now think of how many loans like this they made. Here comes the awesome part. The Fed mandates that you only keep 10% of deposits on reserve. So, with a deposit of $100 dollars at their bank, the bank can theoretically loan out and receive interest on $900 dollars in a relatively short period of time; if a bank pretty much dominates a large percentage of banking in a region they could achieve nearly that level of leverage. REMEMBER THIS, CURRENTLY IN OUR SOCIETY CREDIT IS MONEY. This means that the flood of credit into the marketplace results in more dollars chasing (typically) the same amount of goods, resulting directly in price inflation.
I NEED A BEER, THIS WILL THEREFORE CONCLUDE CHAPTER 1.
