Fed warns Congress not to meddle in its affairs

arbilad · Head Chef

Fed warns Congress not to meddle in its affairs

lundbaek · Profuse Pontificator

The Federal Reserve - From my own files

According to the U.S. Constitution, Article I, Section 8, "The Congress shall have power...To coin money, regulate the value thereof,.." and "....To provide for the punishment of counterfeiting the securities and current coin of the United States;"

With creation of the Federal Reserve System in 1913, and destruction of the constitutional monetary system based on silver and gold in the 1930s, Congress surrendered tremendous discretionary power over Americas economy to a few men and women in the highest echelons of the nations central bank.

Power that Americas Founding Fathers withheld even from the government, because they understood and feared its potential for abuse.

Power that an egotistical, dynamic, and designing Chairman of the Federal Reserves Board of Governors might concentrate in his own hands.

Power that such an unscrupulous man might misuse for base and even malicious personal reasons.

Power that others might find a way secretly to manipulate, so as to transform the Federal Reserve from a mechanism for "fine tuning" the economy into a guided missile for mass destruction.

In 1913, the Federal Reserve replaced the national bank system. Then in 1933 the United States abandoned the gold standard for its currency. Today, the American economy operates under a monetary system which is completely outside the U.S. Constitution. Its fiat money is continually manipulated both in value and in quantity. This has had a devastating impact on its purchasing power, which by 1985 was down to 8 percent of its 1933 value. It has eroded the value of savings, insurance policies, retirement funds, and the fixed incomes of the elderly. It gets even more personal when I note that between 1955 and 2005 the prices of a regular size candy bar, the price of a soda pop, the price of a gallon of gasoline, the cost of a Volkswagen "Beetle Bug", the price of my shotgun, and many other items the price of which I am constantly aware of, have increased at least 10 fold. And that in spite of improvements in obtaining raw materials and manufacturing/production processes.

The "Fed" seems to have been conceived at a secret meeting of Insider financiers and Rothschild agent Paul Warburg on Jekyll Island, a resort island off the coast of Georgia, in 1910, where the basic plan for what became the Federal Reserve Act was formulated. It is not federal, it has no reserves, and it is not a bank. It is, in fact, a cartel operating against the public interest. The widespread belief that the Federal Reserve exists to "stabilize the economy" is hogwash; the real reason for its existence is the making of money not out of "thin air" as is commonly supposed, but, more accurately, out of debt. It utilizes the act of borrowing by the U.S. federal government and other governments to cause money to spring into existence. It profits from the repayment of loans with interest.

The game starts with a mammoth loan (created out of nothing through the magic of fractional reserves) from (Citicorp, Chase Manhattan, Bank of America, etc.) to a Third World country with scant means of servicing the debt, much less ever repaying the principle. This is the kind of loan these bankers love, since they make their money from interest on the loan, not on repayment of the loan. They prefer the loan never to be repaid. They know they cant lose because the Federal Reserve guarantees that massive loans that go into default will not be allowed to seriously affect the issuing bank (too big to fail) because this would "disrupt the entire economy." The "System" makes it profitable for banks to make large, unsound loans, that is the kind of loans banks will make. Furthermore, it is predictable that most unsound loans will go into default. When default threatens, the bank creates additional money out of nothing and lends it so its interest stream continues on both the original loan plus the new loan (the "roll-over" play). At the next crisis, the bank creates still more money out of nothing to cover the interest on both loans plus an additional amount for the borrower to spend freely (the "up-the-ante" play). Finally the bank agrees to a lower interest rate and a longer period for repayment (the rescheduling" play). Eventually it is time for the "Final Maneuver." Congress agrees to guarantee future payments in a way that the whole mess is shifted to the backs of U.S. taxpayers while the borrower is trapped into an IMF "austerity" program that makes an "end run" around its sovereignty.
Now money moves through various foreign aid channels to the deadbeat borrower, who continues to pay perpetual interest to the bank. Almost all of this money is generated by the Federal Reserve; as it moves out into the economy it dilutes the value of the money already there. In this way the American people are footing the bill to enrich the Insider bankers.

If anyone ever doubted the existence of a "secret combination", the story of the Fed should cure that doubt. The

Creature from Jekyll Island by G. Edward Griffin is a great look into the Federal Reserve. If you haven't read it yet, it's on my recommended reading list.

lundbaek · Profuse Pontificator

CHICAGO (Reuters) - A petition floated by top U.S. economists is urging Congress to reaffirm support for the independence of the Federal Reserve system, saying that the trajectory of the economy and inflation is at risk.

The petition, framed as an "Open Letter to Congress and the Executive Branch," was conceived by eight economists including former Fed Governor Frederic Mishkin. It has over 180 signatories from U.S. academic institutions and businesses.

"The independence of U.S. monetary policy is at risk. We urge Congress and the Executive Branch to reaffirm their support for and defend the independence of the (Fed) as a foundation of U.S. economic stability," the statement said.

"Central bank independence has been shown to be essential for controlling inflation," the statement added.

Moreover, if the Fed -- the U.S. central bank -- is given new responsibilities for overseeing risk within the U.S. financial system, "every effort must be made to avoid compromising its ability to manage monetary policy as it sees fit."

The petition comes at a time when the Fed's independence is under attack by Congress, and President Barack Obama is mulling whether to reappoint Fed Chairman Ben Bernanke, whose term expires in January.

A proposal from a long-time congressional foe of the Fed to give lawmakers more sway over the Fed's decisions has won considerable bipartisan support.

"Calls to alter the structure or personnel selection of the Federal Reserve System easily could backfire by raising inflation expectations and borrowing costs and dimming prospects for recovery," the petition said.

http://www.reuters.com/article/businessNews/idUSTRE56E69R20090715

An outfit that has for decades stolen wealth from the American people wants us to back off and let it continue stealing from us.

lundbaek · Profuse Pontificator

For the first time since 1914, there is a public debate in Congress over the Federal Reserve's power. Never before has a majority of the House of Representatives called for what should always have existed: Congressional scrutiny over the FED's money. Bernanke says that Ron Paul's bill to audit the Federal Reserve is a bill to audit Federal Reserve policy. Yet the bill says nothing about auditing policy. So, what is he talking about? Bernanke says that Congress can have access to an audit at any time. Sure it can an audit vetted and sanitized by the FED, where no one knows which banks got what bailout money.This is an audit in the way a CIA audit is an audit. What has Bernanke panicked is this: the Federal Reserve has bailed out the biggest banks and has let almost 100 little ones die.

If Ron Paul's bill (to audit the Federal Reserve) is kept bottled up, this will be grist for the mill of a growing number of Americans who have only recently learned about the existence of the Federal Reserve System. From the beginning, the Federal Reserve was designed to be a mystery to the public. This strategy succeeded for over 90 years. But Ron Paul's Presidential campaign at long last began to gain attention for the FED. The campaign took place in 2008. That was the year of the crash and the desperation bailouts. This was bad timing for the FED. This bad timing led this year to widespread member support in the House of Representatives for an audit of the FED. Worse yet, the bill was sponsored by Ron Paul the FED's greatest Congressional opponent in this generation. This is very bad news for the banking cartel. It took place on Bernanke's watch. He is in panic mode.

http://www.lewrockwell.com/north/north739.html