Posts Tagged ‘Federal Reserve System’

In 1935, Cret designed the Seal of the Board o...

The claim that the Federal Reserve was given a 99-year charter set to expire in 2012 isn’t the only myth surrounding its creation.

There is also the myth that the Federal Reserve Act was passed during the Christmas break when most members of Congress were away. That isn’t true, and there is the official record showing the final vote in the Senate was 54-32 on December 18, 1913.

According to Section 4, part 2 of the Federal Reserve Act, 1913, it says of each of the 12 privately owned Federal Reserve Banks:

To have succession for a period of twenty years from its organization unless it is sooner dissolved by an Act of Congress, or unless its franchise becomes forfeited by some violation of law.

Since the Federal Reserve Board’s site shows that all 12 original Federal Reserve Banks are still in operation, their 20-year charter must have been extended.

A 20-year charter was also granted to the First and Second Banks of the United States, and both had their charter terminated. Yes, there was a time when privately owned central banks had time-limited charters, and for good reason, due to the havoc they caused.

12 U.S.C. § 341 : US Code – Section 341: General enumeration of powers shows:

Second. To have succession after February 25, 1927, until dissolved by Act of Congress or until forfeiture of franchise for violation of law.

Again, since the Federal Reserve Board’s site shows that shows that all 12 original Federal Reserve Banks are still in operation, this provision was either changed with some other time limit, or was never changed.

In fact, it was never changed, and, therefore, their charter doesn’t expire in 2012, and there was never a 99-year charter for the Federal Reserve.

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Image of Lew Rockwell

Previously, I wrote the article, The Economic Collapse Blog throws its 14 reasons for nationalizing the Federal Reserve out the window in just four months, where I noted how in November 2011, they called for nationalizing the Fed, and four months later, called for Congress to shut it down and throw away the key.

What could explain such a radical shift in such a short period of time?

I think the clue lies in the article’s title and editorial commentary in saying that Ben Bernanke said why the gold standard is bad.

As I have pointed out, LewRockwell.com had published 72 articles by the Economic Collapse Blog by November 12, 2011, but only the depressing ones about the current dysfunctional U.S. government and not the positive articles that Michael Snyder publishes as well, such as actually fixing the Federal Reserve.

His articles are also picked up and referenced by The Daily Bell, whose founder, as I have pointed out, admitted on his own bio to advising and consulting to large international banks, despite portraying an anti-establishment front.

LewRockwell.com has also published many articles by the Daily Bell, especially those blasting “central banks,” while failing to draw the distinction between public and private central banks.

You will see references to the Economic Collapse Blog articles on The Daily Bell, that, by their own words, is a fierce opponent of central banking, despite large international banks being the primary owners of the world’s largest central bank, the Federal Reserve, and being strange bedfellows with that very privately owned central bank.

Subsequent articles by Michael Snyder will show whether he has truly abandoned his call for nationalizing the Fed and whether his positive pro-government solution-oriented articles were too much for Lew Rockwell and The Daily Bell to take, and if they pressured him to drop his talk of improving government in the interest of securing more article publications and references.

For more on the problems with the gold standard, see my article, The gold double standard, and my article on prominent LewRockwell.com writer Gary North, Gary North’s “free market gold standard” is also a fool’s gold standard.

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The north face of the Marriner S. Eccles Feder...

On November 6, 2011, the Economic Collapse Blog published the article, 14 Reasons Why We Should Nationalize The Federal Reserve.

On March 21, 2012, they published the article, Ben Bernanke Tries To Convince America That The Federal Reserve Is Good And The Gold Standard Is Bad.

At the end of the article, the author, Michael Snyder writes:

When you take an honest look at the Federal Reserve, there is only one rational conclusion: Congress should shut it down, lock the doors and throw away the key.

On November 12, 2011, I wrote the article, Lew Rockwell says MSNBC is blocking their regular contributor, Pat Buchanan, from discussing his new book, but what about LewRockwell.com keeping certain articles by its regular contributors from its readers?

In it I challenged Lew Rockwell to hold himself to the same standard he expected of MSNBC regarding his selective publication of articles by the Economic Collapse Blog, in publishing lots of depressing articles about how poorly the U.S. government is currently functioning but none of the ones about improving government.

What happened in the past four months to make Michael Snyder throw his 14 reasons for nationalizing the Federal Reserve completely out the window?

See my forthcoming article for my guess.

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Harry BrowneThe late Harry Browne, libertarian champion and 1996 and 2000 Libertarian Party presidential candidate, started off his November 20, 2004 radio show with talk of the Federal Reserve.

At 4:32, he said:

The Federal Reserve System is not privately owned.

I wouldn’t have had as much of an issue if he said it’s not private — in drawing attention to its public aspects — but to say it is not privately owned is a complete falsehood, as it is 100% privately owned by the member banks of the 12 privately owned regional Federal Reserve banks.

At 16:08, he claimed the Fed returns “trillions and trillions” of dollars back to the U.S. Treasury each year. The New York Times reported on January 10, 2012 that the Fed returned $76.9 billion to the Treasury for 2011, and that’s with far more debt outstanding than when Browne made his comments.

I came across this excellent letter in 2010 by Harry Browne to his daughter, entitled A Christmas Gift for My Daughter, originally published on December 25, 1966, explaining why nobody owes her anything. However, when it comes to his statements on the Federal Reserve, they were an epic fail.

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G. Edward Griffin

G. Edward Griffin, in providing a chapter-by-chapter summary of his 1994 book, The Creature from Jekyll Island, made this claim in the summary for chapter 8:

Fractional money is defined as paper money with precious-metal backing for part, not all, of its stated value. It was introduced in Europe when goldsmiths began to issue receipts for gold which they did not have, thus only a fraction of their receipts was redeemable. Fractional money always degenerates into pure fiat money.

The reason for this, which he doesn’t mention, is that whenever new money is created, only the principal is created, and never the interest.

Compound interest charges will always eventually outstrip the supply of new precious metal.

Griffin admits that a fractional gold standard is inherently flawed, and, therefore, the Federal Reserve wasn’t the ultimate cause of the failure of the gold standard in the U.S. in 1933.

Be wary, therefore, of anyone who does advocate a gold standard with less than 100% backing.

For more on the gold standard, see my article, The gold double standard.

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Lyndon H. LaRouche, Jr.

When Lyndon LaRouche made his second appearance on The Alex Jones Show on June 30, 2011, he made a bogus claim about America’s monetary system.

At around 42 minutes into the second hour GCN archive, he claimed that Alexander Hamilton set up a system of national credit in the U.S., and not a monetary system, like in the UK.

However, it was Hamilton who lobbied for a privately owned central bank modeled after the private Bank of England, and it is the Constitution that says that Congress alone has the power to coin money, and that states can only make gold and silver legal tender in payment for debts.

I covered LaRouche’s first interview on the Alex Jones Show in my April 9, 2011 article, Lyndon LaRouche jumps off the deep end on Alex Jones.

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Timothy F. Geithner, Under Secretary of the Tr...

In May, 2011, Treasury Secretary Timothy Geithner held up a pocket copy of the U.S. Constitution, and made the audacious claim that the Congressional debt limit is unconstitutional, citing Section 4 of the Fourteenth Amendment, which reads in part:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.

The nerve of him to claim the federal debt limit is unconstitutional, since he was previously the head of the largest of the 12 privately-owned regional banks of the illegal and unconstitutional Federal Reserve System.

Despite the 1819 U.S. Supreme Court ruling in McCulloch v. Maryland, which effectively ruled that a private central bank is constitutional, a private central bank was regarded as unconstitutional by the Father of the Constitution, James Madison, and by Thomas Jefferson, and is unconstitutional by a plain reading of the Constitution, which states that Congress has the power to coin money.

I think most Americans would regard the delegation of Congress’ power to declare war to a private entity to be ridiculous, but what about delegating its power to coin money?

Not only is Timothy Geithner a hypocrite on one count, he’s also a hypocrite for previously threatening that Congress is going to have to raise the debt limit he now claims is unconstitutional.

He also showed his ignorance of U.S. monetary history in claiming that the U.S. meets its financial obligations, in failing to acknowledge that the U.S. ended the gold standard in 1933, and the gold exchange standard in 1971.

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