The Fix Is In For The Owners Of The Fed

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DrKrbyLuv
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The Fix Is In For The Owners Of The Fed

From Joel Skousen (Excerpts)

International law professor Richard Cummings, writing
for Lew Rockwell.com, says, "Fed Chairman Ben Bernanke has resisted
calls from Congress that he release the names of the banks that were recipients
of the bailout money the Fed gave to AIG to prevent it from collapsing.
AIG insured its counterparties against losses from mortgage-backed derivatives.
The Fed poured $85 billion into AIG, which paid out $37.3 billion of that
money to counterparties that had purchased a certain type of derivative-based
protection from AIG, called multi-sector credit default swaps.

 
"The counterparties have never been disclosed but
the Wall Street Journal reported that they included Goldman Sachs, Merrill
Lynch, UBS and Deutsche Bank. AIG and the Federal Reserve Bank of New York
have unwound many of these contracts. To do this, they offered to buy the
CDOs (collateralized debt obligations) that were originally insured by
those agreements. The counterparties sold these assets at a discount, but
were compensated in full in return for allowing AIG to extricate itself
from the obligations. The counterparties also got to keep the $37.3 billion
in collateral, according to the Wall Street Journal.

 
"While Bear Stearns was collapsing, Goldman Sachs
boasted that it had insulated itself by buying insurance against the mortgage-backed
derivatives. As it turns out, it was, in fact, rescued by the Fed when
it bailed out AIG. In 2007, Lloyd Blankfein, Goldman Sachs' CEO, received
$70 million in compensation, including bonuses, $27 million in cash...
At the time the New York Fed came to AIG's assistance, Secretary of the
Treasury Timothy Geithner was its head. Blankfein is still drawing down
millions in compensation. The rationale for his compensation is the alleged
profitability of Goldman Sachs, which raked in over $9 billion in 2006.
It should also be noted that the bailout stopped Goldman stock from plummeting,
thereby protecting not only Blankfein's fortune, but that of Hank Paulson,
the former chairman of Goldman Sachs, who was Secretary of the Treasury
under George W. Bush.

 
"This is perhaps the greatest financial scandal
in American history but most Americans are totally ignorant of it.

As incredible as this sounds it's true - most Americans don't know that they are being bamboozled out of their retirement savings and are chaining future generations to debt that can never be fully repaid - all as part of a grand heist.  The MSM and most politicians are on-board covering up the scheme.

On top
of this, the AIG bailout enabled John Thain to pay out billions in bonuses
while he headed Merrill Lynch, just prior to its sale to Bank of America,
a recipient of billions of bailout money, this while the unemployment rate
is headed towards ten percent and the market collapse has caused losses
in the trillions. Were the names of the banks made officially public, there
would be cries of outrage so loud as to be deafening, making any further
bailouts dubious for political reasons. And while Bernanke has said that
he would not permit the big banks to fail, the looting of America by some
of the richest and most powerful people, such as Blankfein and Thain, goes
on, with no end in sight. Pandit the bandit now says Citigroup is profitable,
enabling its stock to rise above a dollar, generating a temporary euphoria
in the market. The cheers going up on CNBC can be heard all the way to
Warren Buffett's coffers. And American tax payers are not only bailing
out the American banks, they are also bailing out Europe."

Toni Reinhold of Reuters answers "Who got AIG's
bailout billions?" "The Wall Street Journal reported... that
some of the banks paid by AIG since the insurer started getting taxpayer
funds were: Goldman Sachs Group Inc, Deutsche Bank AG, Merrill Lynch, Societe
Generale, Calyon, Barclays Plc, Rabobank, Danske, HSBC, Royal Bank of Scotland,
Banco Santander, Morgan Stanley, Wachovia, Bank of America, and Lloyds
Banking Group." I think it's the large number of foreign banks that
would be particularly irritating to the public if it knew the extent of
this largess.

WHO OWNS THE FED?

Jim Quinn unravels for us the real link between all this
insider dealing. Who really owns the Federal Reserve. It's not the US government
and its not you the taxpayer. "The average American does not know
much about the Federal Reserve. The government and the Federal Reserve
prefer to operate in the shadows. If the American public understood what
their policies have done to their lives, they would be rioting in the streets.
Henry Ford had a similar opinion: 'It is well that the people of the nation
do not understand our banking and monetary system, for if they did, I believe
there would be a revolution before tomorrow morning.'

 
"Most Americans believe that the Federal Reserve
is part of the government. They are wrong. It is a privately held corporation
owned by stockholders. The Federal Reserve System is owned by the largest
banks in the United States. There are Class A, B, and C shareholders. The
owner banks and their shares in the Federal Reserve are a secret. Why is
this a secret? It is likely that the biggest banks in the country are the
major shareholders. Does this explain why Citicorp, Bank of America and
JP Morgan, despite being insolvent, are being propped up by Ben Bernanke
and Timothy Geithner?" It does, indeed.

 
Tony Rheinholt continues: "The U.S. Federal Reserve
has refused to publicize a list of AIG's derivative counterparties and
what they have been paid since the bailout, riling the U.S. Senate Banking
Committee. Federal Reserve Vice Chairman Donald Kohn testified before that
committee on Thursday that revealing names risked jeopardizing AIG's continuing
business. Kohn said there were millions of counterparties around the globe,
including pension funds and U.S. households." What this means is that
AIG is only paying out on SOME of its obligations, and US Pension funds
are NOT on that list. In other words, the bailout monies are only going
to a select few. AIG has absorbed $180B so far, with no end in sight, no
transparency, and no sign of changing this pattern.

 
Proof that we haven't even turned the corner yet comes
from Greg Gordon and Kevin G. Hall of McClatchy Newspapers (itself a losing
enterprise like dozens of other print media): "America's five largest
banks, which already have received $145 billion in taxpayer bailout dollars,
still face potentially catastrophic losses from exotic investments if economic
conditions substantially worsen, their latest financial reports show. Citibank,
Bank of America, HSBC Bank USA, Wells Fargo Bank and J.P. Morgan Chase
reported that their 'current' net loss risks from derivatives ---- insurance-like
bets tied to a loan or other underlying asset ---- surged to $587 billion
as of Dec. 31. Buried in end-of-the-year regulatory reports that McClatchy
has reviewed, the figures reflect a jump of 49 percent in just 90 days."
 

Americans and people everywhere, must soon wake and understand the central banking scam.  The MSM won't tell you but there are tons of books and historical references on the subject.  If you don't understand the Fed, don't take my word for it being a private scam - investigate it yourself.  The answers are easy to find - I recommend Ellen Brown's The Web of Debt - EXPLODING THE MYTHS ABOUT MONEY.

SQUEEZING THE SMALL SOLVENT BANKS

The next part of the fix is the most evil, in my opinion.
The Fed and the US Treasury have given trillions of paper dollars to insider
banks, and yet they are letting the FDIC run short of money so that this
"insurer" of the public's deposits ($250,000 and below) can have
an excuse to jack up the insurance premiums (surcharges) to member banks.
These new "temporary" fees are more than most small bank profits,
and will ensure that these banks fail.

As Paul Kiel writes in ProPublica, "It's looking
increasingly like the FDIC will have to turn to Treasury to help it weather
the storm... FDIC's deposit insurance fund has plummeted in the past year
as a growing number of banks have failed. The fund relies on fees from
member banks, and Bair held out hope that a recent bump in those feeswould
provide enough cushion. But if it doesn't, Bair said, people shouldn't
be nervous about their FDIC-insured accounts: 'It is important for people
to understand, we're backed by the full faith and credit of the United
States government. The money will always be there. We can't run out of
money.'" Then why has the fee increased? Why penalize the banks that
have been conservative, and limited their growth for safety?

Bill Butler describes the "squeeze play" going
on: "FDIC Chairwoman Sheila Bair announced last week that the quasi-public
insurance monopoly would become insolvent in the next few months if it
is not allowed to implement a one-time, draconian surcharge on all U.S.
banks. This charge will, in some cases, wipe out last year's profits. At
the same time, the FDIC has requested an additional $500 billion 'loan'
from Congress [notice that a loan requires the member banks to pay it off.
A bailout would not. They choose to ask only for the loan as a justification
for the surcharge].

"Small, solvent, well-run local and regional banks
have objected. They rightly claim that they are not the problem. These
banks have a solid and growing deposit base and many of them service their
own loans and so did not get caught in the trap of originating bad loans
and dumping them on the secondary mortgage market in federally-guaranteed
bundles. Whether they know it or not, these banks intuit that, like Social
Security, there is no FDIC "fund." FDIC insurance, like social
security, is just another government-coerced Ponzi scheme -- a tax that,
according to former FDIC commissioner Bill Isaac, goes immediately to the
Treasury to buy "spending . . . on missiles, school lunches, water
projects, and the like."

"Rather than increasing their taxes and punishing
their relatively good behavior, these small banks suggest that the FDIC
look first to Bailout Banks, the Wall Street mega-banks that have received
nearly a trillion dollars in unearned, government-supplied capital via
the printing press, for any increased insurance premium/tax. Ms. Bair rejected
these pleas by claiming that FDIC law does not allow her to 'discriminate'
against banks based on their size. Clever [Actually, there is a basis for
discrimination since the larger one's 1) caused the problem and 2) are
the recipients of taxpayer backed funds]. What is really going is that
the Bailout Banks are using the government and its insurance monopoly to
help them gain market share by drastically increasing the operating costs
of their smaller, better-run and scrappy competitors." We are about
to see the worst banks absorb the smaller sound banks--a great injustice,
and totally engineered.

Larry


 

 

strabes's picture
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Re: The Fix Is In For The Owners Of The Fed

Most excellent post sir.  The most important thing to read and understand.  End the Fed!

This is also why the Fed's actions are not inflationary.  This is about stealing from the masses in the middle of a deflationary crash to payoff the elite and further concentrate power in their hands.  This is not about helping the masses and giving them currency.  In fact, it is about taking future currency from them to funnel it through the IRS and give it to the Fed system.

 

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Re: The Fix Is In For The Owners Of The Fed

"

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Re: The Fix Is In For The Owners Of The Fed

personally i think they should all be spanked. i think it is ok to say that as corporal punishment is permitted in the schools.

i hope the moderator doesnt delete me and ban me for life for being to violent. but i think a good spanking would straighten out the whole situation. 

oh shoot i think it would be too violent to spank them 

ok hank, ben, alan, timmy now go stand in the corner you are all in timeout

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Re: The Fix Is In For The Owners Of The Fed

Why do you think so little has been done to help the home owner. It's not because the banks couldn't. It's because they won't unless they get paid. Yes, thats right. They have to get paid. How do I know, it's because my house may foreclose. The banks get commissions on houses that foreclose, they get nothing for those that don't. That means that the bottom line is they get money when they foreclose and so to look good for shareholders. 

 So what is the administration doing, they are doing the latest bill so that the bankers get paid to help modify the home owners loans. Time will tell if this works or not.  What a racket. You have to grease their palms to help anyone. Gotta love those bankers.........

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Re: The Fix Is In For The Owners Of The Fed

I smell a revolution. Not that it will do much good. The guys with the most money can afford the largest and best equipped armies. If Obama opposes the banking oligarchy, then he would no-doubt be assassinated, sparking off race riots everywhere. This situation is so frustrating because there is nothing the average person can really do about it. I guess its more effective to focus on taking care of your personal situation and try to keep a low profile. Hopefully, someone won't show up at your door someday and take it all away.

Sorry to be so negative, its really not my demeanor. I am just really pissed off.

Jeff 

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Re: The Fix Is In For The Owners Of The Fed
Jeff wrote:

This situation is so frustrating because there is nothing the average person can really do about it

True.  It's so unfortunate.  People who have tried, like the Sovereign Movement, who try to escape the banking system and IRS system are thrown in prison.  Sustainable communities are in danger in long run as the govt makes us register livestock, could confiscate gold, could outlaw "hoarding" as they did in Germany, etc.  Little banks who would be able to help us evolve back to a locally-based society are being driven out of business by what the US govt and the Fed are doing (higher FDIC fees or just being bought up by the big banks that are being propped up with our future tax dollars).  And of course those tax dollars are shifting power/wealth from us to the elite as well.  If you refuse to participate because you know it's an immoral feudal system, you go to prison.  Brilliant system.  Brilliant...and there's no "controlling legal authority" above them to break the cartel...it's the mafia without a fed police force able to pursue them.

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Re: The Fix Is In For The Owners Of The Fed

We support growth industries.

Prisons

Government

banks

Pharmaceuticals 

I disagree that we can do something about it. Spread the word and do things to counter the agenda. Write your congressmen.

 

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Re: The Fix Is In For The Owners Of The Fed

"if obama opposes the banking oligarchy?????????????" you cant be serious?

hello jeff they got him elected. he got 4 times the money that mccain got from them.

check out campaign contributions if you want to know who is paying for the best gov money can buy.

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Re: The Fix Is In For The Owners Of The Fed

joe2baba,

I'm aware of Obama's campaign contributors. Perhaps I should of said if ANYBODY opposes the oligarchy then.... And your right, I shouldn't be serious about this because its a waste of my time.

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Re: The Fix Is In For The Owners Of The Fed

If there is to be a revolution; and I think it's inevitable, it will happen as a financial awakening.  People are going to figure out the insanity of paying interest charges to central bankers.  Central bankers don't have near enough money or collateral  to issue a currency and so they must do it in the name of an otherwise sovereign nation.  Only sovereign nations have the power to issue a currency - central bankers are not needed.

Yes, nations may outsource the power to issue their money to private monopolies as we do now; but surely common sense will tell you this is at best in-efficient and costly.  Central banks are parasites - they are an unnecessary drag on the real economy and they benefit by throwing nations deep in debt.

Larry

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Re: The Fix Is In For The Owners Of The Fed - Correction

DrKLuv,

Don't let yourself be played by web sites more interested in being inciteful than insightful. I tried to correct some of the errors a few days ago in this post:

http://www.peakprosperity.com/comment/23312#comment-23312

What is happening to this country now and the future effects of the actions you describe is horrific. However, when the quote from Jim Quinn is inserted in the middle, it gives the impression that the Reuters and McClatchey journalists hold the view that the "owners" of the Fed are conducting these operations to enrich themselves. In fact in none of their quotes did they make such a claim. They very likely know that the idea of the Fed as a private corporation being owned by some big banks is false. A falsehood that is frequently repeated as one group will quote another, on and on. Using each other as reinforcing sources.

The Fed structure is indeed similar to a private corporation; however, there are no Articles of Incorporation filed in any state. There are no classes of shareholders. Each bank pays for membership in at most one Fed district bank, according to its size and receives a fixed 6% interest (or dividend if you like). Six of the nine directors of each Fed District are required to be independent of the banking industry. All of the ruling Board of Governors, a Federal Agency, are required to be without ties to the financial industry, appointed by the Pres and approved by Congress. Etc, etc.

None of this means that we are not being ripped off. This kind of error dilutes the important message about what is being done by the power elite, as those who know better can easily dismiss this site as just another misinformed conspiracy site. There were two links in the above-mentioned post.

The site is called:

 

Web Skeptic: Researching outrageous claims on the internet

and the links (last one particularly recommended) are

 

http://webskeptic.wikidot.com/federal-reserve-ownership

http://webskeptic.wikidot.com/federal-reserve-system

- Caasi

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Re: The Fix Is In For The Owners Of The Fed
Caasi wrote:

The Fed structure is indeed similar to a private corporation; however, there are no Articles of Incorporation filed in any state. There are no classes of shareholders. Each bank pays for membership in at most one Fed district bank, according to its size and receives a fixed 6% interest (or dividend if you like). Six of the nine directors of each Fed District are required to be independent of the banking industry. All of the ruling Board of Governors, a Federal Agency, are required to be without ties to the financial industry, appointed by the Pres and approved by Congress. Etc, etc.

Of course there are no articles of incorporation.  That's why it's above the UCC, i.e. the law.  It's incorporation was written by Congress...actually it was written by JP Morgan and friends and then it was passed by Congress.  

When was the last time you heard that people making a guaranteed 6% payout from an organization weren't "owners?"  Oh yeah, that type of structure is usually only associated with New Jersey families with Italian last names in "construction" or "waste management."  I think they've demonstrated over the years that they own whoever pays them.  So do these organizations and the power people behind them own the Fed system.  

Your source says "each bank pays for membership" as if that implies a diverse voluntary independence.  Banks are owned (preferred voting shares) and controlled (debt holders) by a very tight group.  The big Wall St ones are a cartel.  The other ones are subservient to that cartel...not in terms of real governance, but in terms of financial power and rule-setting.  

None of the directors/governors are independent.  Sure they might not be owners or obviously paid lobbyists, but every macroeconomist is tied to the banking industry.  It's their worldview.  They axiomatically think big is good, cartel is good, debt-based money is good, fractional reserve lending is good, saving "too big to fail" institutions is good, creating ungodly moral hazard is good, etc etc.   They are absolutely tied to the financial industry.  If they weren't they wouldn't be appointed. Heck, even Treasury Secs are tied to it.  Remember what happened to Bush's first Treasury Sec?  He was run out of town by the Wall St lobby because he was an industrialist who didn't understand the ways of the banking cartel.  He had to go. Let's see...other than him we've had Geithner, Paulson, Rubin, Regan...they're not tied to the financial industry?  Now that's funny.  

 

 

 

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Re: The Fix Is In For The Owners Of The Fed
investorzzo wrote:

We support growth industries.

Prisons

Government

banks

Pharmaceuticals 

I disagree that we can do something about it. Spread the word and do things to counter the agenda. Write your congressmen.

 

 

good points, but Write Your Congressmen? For real? :)

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Re: The Fix Is In For The Owners Of The Fed

strabes,

Of course there are no articles of incorporation....

It is in fact listed with the comptroller of the currency. This doesn't put it above the law. It is structured to be quasi-independent, but obviously is subject to political pressure. In fact, Congress modifed the Fed Reserve act to require them to strive for maximum employment, essentially requiring the Fed to inflate at the same time they were to maintain stable prices and moderate interest rates. When Congress can and has changed the Federal Reserve Act, the Fed can hardly be said to be above the law. The Fed just doesn't have a single overlord so it can claim independence, but certainly isn't immune from powerful influences.

When was the last time you heard that people making a guaranteed 6% payout from an organization weren't "owners?"

Corporate bond holders, Certificates of deposit, etc. My parents got 15% on a bank CD in the 70's. At that time 6% was a very negative real rate. As membership requires a payment based upon the size of the bank applying, it is not unreasonable to expect they'd get a moderate return. Thru various changes in the rate of inflation this might be good, or it might be terrible.

...not in terms of real governance, but in terms of financial power and rule-setting.

If you're talking about the Fed, it seems that the District Fed banks, are most likely to vote in their perceived regional interest. If you are talking about Congress and the Treasury, then I have no doubt that the large financial institutions own so many in our Legislature that they can play them like puppeteers, and insert people who will assist in their looting throughout the administration, eg Paulson, Bernanke, Rubin, etc. My point is that the Fed is not the easiest or most likely way for the looting to take place.

It's their worldview.

Agree completely. For the economists, it's what they teach and were taught. They seem unable to excape, even if they wanted to. All of those mentioned at the end of your post, Geithner, etc. are outside the Fed and don't in any way imply a national or global conspiracy by "owners" of the "privately owned" "3 tier shareholder" controlled Fed.

Occam's razor cuts through much of this. Which is more likely,

1) an organization listed with the comptroller of the currency, whose mandate is changed at the whim of congress. whose governing body, the Board of Governors (a federal agency) are required to have no direct financial ties to banks, etc and whose parts, the District Banks are governed by reps 2/3 of whom are also required to have no direct ties, (ownership etc) to financial institutions -- is acting under the control and secret ownership of a group of conspirators and has been for about a century? Or

2) special interests(manufaturers, energy companies, wooden arrow makers, and even banks, etc), thru lobbyists, political contributions, payoffs, etc effectively control congress and the administration, using them to channel looted funds into their coffers?

I'm simply voting for number two.

- Caasi

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Re: The Fix Is In For The Owners Of The Fed

Caasi said - DrKLuv,

Don't let yourself be played by web sites more interested in being
inciteful than insightful. I tried to correct some of the errors a few
days ago in this post:

You corrected some "errors" with that link?  Get your head out of the sand.  

What's your point?  Are you an advocate for the Federal Reserve?  Are you saying the Federal Reserve is not a private bank?  Are you saying the Federal Reserve is not guilty of the allegations in the article - if so which ones?  Are you saying that the people in the article were misquoted?

Ellen Brown, J.D (Global Research article)

The Federal Reserve (or Fed) has assumed sweeping
new powers in the last year. In an unprecedented move in March 2008,
the New York Fed advanced the funds for JPMorgan Chase Bank to buy
investment bank Bear Stearns for pennies on the dollar. The deal was
particularly controversial because Jamie Dimon, CEO of JPMorgan, sits
on the board of the New York Fed and participated in the secret weekend
negotiations.
In September 2008, the Federal Reserve did
something even more unprecedented, when it bought the world’s largest
insurance company. The Fed announced on September 16 that it was giving
an $85 billion loan to American International Group (AIG) for a nearly
80% stake in the mega-insurer. The Associated Press called it a
"government takeover," but this was no ordinary nationalization. Unlike
the U.S. Treasury, which took over Fannie Mae and Freddie Mac the week
before, the Fed is not a government-owned agency. Also unprecedented was the way the deal was funded. The Associated Press reported:

"The Treasury Department, for the first time in its history,
said it would begin selling bonds for the Federal Reserve in an effort
to help the central bank deal with its unprecedented borrowing needs." This is extraordinary. Why is the Treasury issuing
U.S. government bonds (or debt) to fund the Fed, which is itself
supposedly "the lender of last resort" created to fund the banks and
the federal government?
 

Normally, the Fed swaps green pieces of paper called
Federal Reserve Notes for pink pieces of paper called U.S. bonds (the
federal government’s I.O.U.s), in order to provide Congress with the
dollars it cannot raise through taxes. Now, it seems, the government is
issuing bonds, not for its own use, but for the use of the Fed! Perhaps
the plan is to swap them with the banks’ dodgy derivatives collateral
directly, without actually putting them up for sale to outside buyers.

"To switch debt that is less liquid for U.S.
government securities that are easily tradable" means that the
government gets the banks’ toxic derivative debt, and the banks get the
government’s triple-A securities. Unlike the risky derivative debt,
federal securities are considered "risk-free" for purposes of
determining capital requirements, allowing the banks to improve their
capital position so they can make new loans. (See E. Brown, "Bailout
Bedlam," webofdebt.com/articles, October 2, 2008.)

In its latest power play, on October 3, 2008, the
Fed acquired the ability to pay interest to its member banks on the
reserves the banks maintain at the Fed. Reuters reported on October 3: "The U.S. Federal Reserve gained a key tactical tool
from the $700 billion financial rescue package signed into law on
Friday that will help it channel funds into parched credit markets.
Tucked into the 451-page bill is a provision that lets the Fed pay
interest on the reserves banks are required to hold at the central
bank."

If the Fed’s money comes ultimately from the
taxpayers, that means we the taxpayers are paying interest to the banks
on the banks’ own reserves – reserves maintained for their own private
profit.
These increasingly controversial encroachments on the public
purse warrant a closer look at the central banking scheme itself. Who
owns the Federal Reserve, who actually controls it, where does it get
its money, and whose interests is it serving?

  1. The Fed is privately owned.  Its shareholders are private banks. In fact, 100% of
    its shareholders are private banks. None of its stock is owned by the
    government.
  2. The fact that the Fed does not get
    "appropriations" from Congress basically means that it gets its money
    from Congress without congressional approval, by engaging in "open
    market operations." 
    Here is how it works: When the government is short
    of funds, the Treasury issues bonds and delivers them to bond dealers,
    which auction them off. When the Fed wants to "expand the money supply"
    (create money), it steps in and buys bonds from these dealers with
    newly-issued dollars acquired by the Fed for the cost of writing them
    into an account on a computer screen. These maneuvers are called "open
    market operations" because the Fed buys the bonds on the "open market"
    from the bond dealers. The bonds then become the "reserves" that the
    banking establishment uses to back its loans. In another bit of sleight
    of hand known as "fractional reserve" lending, the same reserves are
    lent many times over, further expanding the money supply, generating
    interest for the banks with each loan. It was this money-creating
    process that prompted Wright Patman, Chairman of the House Banking and
    Currency Committee in the 1960s, to call the Federal Reserve "a total
    money-making machine." He wrote:  "When the Federal Reserve writes a check for a government bond it does exactly what any bank does, it creates money, it created money purely and simply by writing a check."

  3. The Fed generates profits for its shareholdersThe interest on bonds acquired with its newly-issued
    Federal Reserve Notes pays the Fed’s operating expenses plus a
    guaranteed 6% return to its banker shareholders. A mere 6% a year may
    not be considered a profit in the world of Wall Street high finance,
    but most businesses that manage to cover all their expenses and give
    their shareholders a guaranteed 6% return are considered "for profit"
    corporations.

    In addition to this guaranteed 6%, the banks will
    now be getting interest from the taxpayers on their "reserves."
    The
    basic reserve requirement set by the Federal Reserve is 10%. The
    website of the Federal Reserve Bank of New York explains that as money
    is redeposited and relent throughout the banking system, this 10% held
    in "reserve" can be fanned into ten times that sum in loans; that is,
    $10,000 in reserves becomes $100,000 in loans. Federal Reserve
    Statistical Release H.8 puts the total "loans and leases in bank
    credit" as of September 24, 2008 at $7,049 billion. Ten percent of that
    is $700 billion. That means we the taxpayers will be paying interest to
    the banks on at least $700 billion annually – this so that the banks
    can retain the reserves to accumulate interest on ten times that sum in
    loans.

    The banks earn these returns from the taxpayers for
    the privilege of having the banks’ interests protected by an
    all-powerful independent private central bank, even when those
    interests may be opposed to the taxpayers’ -- for example, when the
    banks use their special status as private money creators to fund
    speculative derivative schemes that threaten to collapse the U.S.
    economy.
    Among other special benefits, banks and other financial
    institutions (but not other corporations) can borrow at the low Fed
    funds rate of about 2%. They can then turn around and put this money
    into 30-year Treasury bonds at 4.5%, earning an immediate 2.5% from the
    taxpayers, just by virtue of their position as favored banks.

Larry

 

 

 

strabes's picture
strabes
Status: Diamond Member (Offline)
Joined: Feb 7 2009
Posts: 1032
Re: The Fix Is In For The Owners Of The Fed

Caasi, if you think the Fed is subject to the whims of Congress, you really need to do some research.

Your response to the 6% issue is right on the money...corporate bondholders.  Who are they?  Mostly banks.  They effectively own the corporations, just like the 6% owners of the Fed.  Your example of a CD is completely different...a debt instrument from a bank.  I'm talking about people getting a 6% return from a massively huge corporate entity like the Fed. 

I really don't know how to respond to your other points that are just blindly accepting statutes at face value...believing all the directors are independent.  Ok...believe that.

As far as your last 2 options, if #2 were correct, which is the notion of competing factions so nobody can get real power as was described in the Federalist Papers, then we wouldn't be living in the country we're living in today.  The US has been on a steady track toward national empire, stripping people/towns/states of power, hollowing out our financial standing as the Fed feeds us all debt and takes our gold, increasingly militarizing our police forces, building the biggest standing army in history, eviscerating the Bill of Rights, conducting heavy-handed tax policy that would've made any British king happy, etc.  You think all that's an accidental result of #2, random competing interests, or is that a cohesive strategy?  Regardless of which party sits in power, regardless of which corporate interests win in any election cycle, we keep going down this track.  The facts of the situation don't match your diagnosis. 

Caasi's picture
Caasi
Status: Member (Offline)
Joined: Aug 17 2008
Posts: 23
Re: The Fix Is In For The Owners Of The Fed

DrLuv,

Please understand my position. I believe the Fed is an eager particpant in this ongoing debacle. My point is that their world view and immersion in Keynesian economics leads to their actions. They are not controlled or "owned" by big banks.

Your reference to Ellen Brown is not convincing. From the google cache of her website:

"She returned to practicing law when she was asked to join the legal team of a popular Tijuana healer with an innovative cancer therapy, who was targeted by the chemotherapy industry in the 1990s. That experience produced her book Forbidden Medicine, which traces the suppression of natural health treatments to the same corrupting influences that have captured the money system."

Whether she sees conspiracies everywhere, I can't say. I'm not going to go thru her claims, researching them, and responding any more than I would for any such book or site. If they make any valid claims, I'm more likely to find them lookng at much more credible sources. The Webskeptic site mentioned in my first post contains numerous links of greater credibility, including links to the U.S. Code at Cornell Law School if you want to wade through the laws regarding the Fed, rather than rely upon summary info from the fed itself or external sources which are also linked. Consider this, which you can verify by reference to the U.S. Code.

"Who owns the Federal Reserve?

The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.

As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute. Also, the Federal Reserve must work within the framework of the overall objectives of economic and financial policy established by the government. Therefore, the Federal Reserve can be more accurately described as "independent within the government."

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year. "

http://federalreserve.gov/generalinfo/faq/faqfrs.htm#5

There are also answers to questions about structure, profit, audits, relative independence etc. Suggestion: pick one or two, then go to the actual US Code and verify it. It's more credible than someone supporting a Tijuana back-alley oncology --- oh never mind. Believe what you want!

-Caasi

 

DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
Re: The Fix Is In For The Owners Of The Fed

Caasi said:

Please understand my position. I believe the Fed is an eager
participant in this ongoing debacle. My point is that their world view
and immersion in Keynesian economics leads to their actions. They are
not controlled or "owned" by big banks.

So, who do you think owns and controls the Fed?  If they are not a private entity, why would they refuse to share information with the US Government - citing that they were "trade secrets."  And, by the way, Keynesian economics came on the scene much later than the Fed, it wasn't until after their first engineered depression.

Larry 

SteveS's picture
SteveS
Status: Gold Member (Offline)
Joined: Sep 6 2008
Posts: 358
Re: The Fix Is In For The Owners Of The Fed

I saw the 60 MInutes interview with Bernanke. I may have missed it, but there was never a question or statement that the FED is not a government agency and no other questions related to that. The closest was a mention of the FED being 'independant'.  This surprised me, as I think it's as crucial fact that most people don't know (I didn't until a few months ago) and it might get more people thinking about it and asking questions. Maybe Jon Stewart should have been the interviewer!

 

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