Educating The 95 Percent
November 7, 2011 by Bob Livingston
“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered.” — Thomas Jefferson
According to my very unscientific analysis, only about 5 percent of the conscious American adult population (those who bother to follow issues at a minimum level and vote in national elections) truly understand inflation and how the Federal Reserve’s policies are stealing your wealth every day. Sadly, that percentage becomes frighteningly lower when combined with the rest of the American sheeple.
Remember that out of a voting age population of about 218 million people, only about 129.4 million cast votes in the 2008 Presidential election. The rest couldn’t trouble themselves enough to lay aside their bag of chips and can of Coke, turn off the idiot box, get off the couch and trudge down to the polling place to push a button on a machine or fill in a blank on a voting card.
I and many others write often of inflation’s devastating effects. Yet the hue and cry for the elimination of the Federal Reserve, the tarring and feathering of Ben Bernanke (and Alan Greenspan), the return to sound money and the elimination of fiat currency are seldom seen outside of Austrian economic blogs or heard outside of Ron Paul rallies.
Oh, yes, Rick Perry once called Bernanke “treasonous.” But he backed off because he couldn’t really explain what he was talking about. And Newt Gingrich has called for an audit of the Fed, but that didn’t resonate with his followers so it’s gone the way of his criticism of “conservative social engineering” and belief in man-caused global warming in Newt’s lexicon. Now Newt’s simply angling to be Herman Cain’s running mate.
Of the politicians on the national stage, only Congressman Ron Paul has consistently preached about the evils of the Federal Reserve’s monetary policies, the dangers of inflation and the need to truly rein in government spending. Yet, if you believe the national polls, Paul is garnering only about 10 percent support from so-called conservatives.
Americans sought “Hope and Change” in 2008. Fed up with eight years of President George W. Bush’s ill-advised wars and profligate spending, they elected a Marxist who offered the vague promise that he would “fundamentally transform America.” His statement to Joe the Plumber that “we need to spread the wealth around” was either ignored, dismissed or embraced by about 60 percent of the voters.
Americans wanted change, but they didn’t get a change in direction. They got acceleration. All President Barack Obama has done is double down on George W. Bush’s policies and push us closer to European-style socialism — which is failing rapidly in Europe — and move us ever closer toward complete totalitarianism. The only difference is the rhetoric over where the wealth should come from and which special interest should get the most of it.
But this is not just about Bush and Obama. Federal spending increases year after year and Federal power grows year after year regardless of whether the President has a “D” or an “R” after his name and regardless of which party controls Congress.
America is a police state, a military state, a welfare state. It’s all made possible by the Federal Reserve and increased Federalism.
The Federal Reserve was conceived in a secret meeting at a wealthy retreat on a barrier island called Jekyll Island, Ga., in 1910. The principals involved were: Senator Nelson Aldrich, the father-in-law of John D. Rockefeller Jr., representing Rockefeller interests and the Standard Oil crowd; Paul Warburg, a German banker representing MM Warburg of Hamburg, European banking interests (including the Rothschilds) and Kuhn Loeb in the U.S.; Henry P. Davison, partner in J.P. Morgan and chairman of Bankers Trust Company (a consortium of New York’s biggest banks); Benjamin Strong, vice president of Bankers Trust; Frank Vanderlip, chairman of National City Bank; and Charles D. Norton, president of the First National Bank.[i] Assistant U.S. Secretary of the Treasury Abraham Piatt Andrew is also reported to have attended. [ii]
Their work later evolved into the bill — the Federal Reserve Act — that formed the Federal Reserve and that was rammed through the House and Senate in 1913. The House version passed by a 287-85 margin, and most Congressmen didn’t even know what the bill was about. No amendments were allowed, and members were only given the opportunity to vote for or against. The bill was named for Representative Carter Glass of Virginia (a director of the United Loan and Trust and the Virginia Trust Company).[iii]
After passing the House, the bill went to the Senate where it took exactly four and half hours to debate and pass in the Senate by a 43-25 margin. Named the Owen Bill after Senator Robert Latham Owen of Oklahoma — a major stockholder of the First National Bank of Muskogee — the Republicans did not even see the conference report, which is normally read to the floor, and some Senators said they had no knowledge of the contents of the bill. President Woodrow Wilson signed the bill the same day it was passed.[iv]
And guess who was appointed to head the New York Federal Reserve? None other than Benjamin Strong, J.P. Morgan minion, former vice president of Bankers Trust and one of the original conspirators that met on Jekyll Island to draft the bill that would create the Federal Reserve.[v] Likewise, the Washington Federal Reserve was headed by two Morgan men, two Rockefeller minions, two men of undetermined affiliations: a prominent Alabama banker and an economist with vague family connections to Morgan family interests.[vi]
What did this law do? It established a private bank that controlled U.S. monetary policy. Although named Federal Reserve, the bank is not a part of the Federal government. It is a private for-profit entity. It holds no reserves, but lends “money” to other banks — both in the United States and abroad — and the Federal government. The loans must be paid back with interest. But the money the Fed lends is not real money. It’s simply a kited check.
It has the authority to arbitrarily set interest rates and lend money to whomever it wishes, and it has no real accountability to Congress or the President.
The Fed has a monopoly of the issue of all bank notes. National and State banks can issue only deposits, and the deposits are redeemable only in Federal Reserve Notes. All banks are forced to become members of the Federal Reserve System. The Fed is the lender of last resort, and that power allows it to inflate in order to bail out banks.[vii]
How does inflating steal your wealth? I have written before that even if you stored your dollars 40 miles deep, the money creators can steal the purchasing power of your paper money.
It is as simple a concept as supply and demand. With more money chasing fewer goods, more and more money is required to make a purchase. If you put your money in a certificate of deposit in the bank paying 1 percent interest, but inflation is running at 3.9 percent (the official tally from Washington), then your bank savings are losing money. It is like pouring water into milk. The more water you pour, the less milk is left.
Everyone is hurt, particularly those on a fixed income. The more money that is spewed out, the more worthless each one of those paper dollars is. In the past 100 years, the dollar has lost 95 percent of its value. Put another way; it now costs $1 to buy what once cost 5 cents.
This is no secret to the elites, although it is rare they will tell the truth. In 1967, long before he became Fed chairman and began dissembling, in a moment of candor Alan Greenspan wrote:
As the supply of money increases relative to the supply of tangible assets in the economy, prices must eventually rise. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value.
Now spread this message to your friends and family.
And consider this: The next election will be a referendum on the economy. Only one Presidential candidate has demonstrated an understanding of what has brought the U.S. economy to this point. Only one candidate predicted the bursting of the housing bubble long before it came. Only one candidate has been consistent for 30 years. It’s Ron Paul, and a vote for anyone else is a vote against your own pocketbook.
[i] The Federal Reserve Conspiracy, by Antony C. Sutton, p. 75.
[ii] The Creature From Jekyll Island: A Second Look at the Federal Reserve, by G. Edward Griffin, p. 5.
[iii] The Federal Reserve Conspiracy, p. 88
[iv] Ibid.
[v] A History of Money and Banking in the United States: The Colonial Era to World War II, Murray N. Rothbard, p. 264.
[vi] The Case Against the Fed, Murray N. Rothbard, p. 124.
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