If you are a Christian and have had discussions on the ‘mark of the beast’ and how only those with the ‘mark’ will be able to buy and sell at some point in the future, you have probably wondered how this could happen.  How could anyone really gain financial control of the entire world?  If you are not a Christian, chances are that you have heard about this ‘mark’ and its control over the world’s financial system and have rejected this as being completely ridiculous – how could anyone control the world’s financial system?  If you throw in the popular Christian interpretations of end time prophecies – that one future ruler of the world will somehow unite the world’s government, the world’s religion and the world’s financial system – all within a period of 7 years – it becomes almost unbelievable.  How could someone – anyone – do all of this within a 7 year time period?  If I were not a Christian and had never heard about these things and someone told me that all of these things will happen within 7 years – I would find it very difficult to believe – if not impossible – the world simply does not cooperate this easily.  As you’ve seen in previous posts, Satan’s control of the world’s government and religion is not taking place during 7 years – and financial control of the world is no different. What you will find as you read this post, is that a few men have already gained worldwide financial control – and they did it before you and I were born.  It didn’t take 7 years – it took hundreds of years.  You and I rely on an economic system that has placed us in financial bondage – and most of us don’t even know it.  What you will find, once again, is that our spiritual enemy is much more cunning and deceptive than you have been led to believe.

 

Let’s start this with a simple question – do you know how our money is created?  Whether you are wealthy or poor, highly educated or not – chances are this question causes you some concern – because you really don’t know the answer.  Most people (and I was included) would say that the United States creates our own money through the U.S. Treasury – correct?  No.  It did until the early 20^th Century.  It is correct that the U.S. Mint and the Bureau of Engraving and Printing (agencies of the U.S. Government) create the hard currency we use, but the U.S. Treasury is not responsible for creating and managing our money supply.  Who then, is responsible for creating and managing our money supply?  A private corporation - The Federal Reserve Banking System.

 

If the U.S. Government needs $20 billion in hard currency (paper and coins), the Federal Reserve creates this $20 billion out of nothing (there is nothing of value that backs our currency), the U.S. Mint and the Bureau of Engraving and Printing creates the paper and coin currency and the U.S. Government gives the Federal Reserve an IOU for $20 billion in exchange.  The U.S. Government then pays interest on this $20 billion.  On the surface, it may seem to you that this is logical – what’s wrong with the U.S. Government paying a private bank/corporation to print our money?  Actually, there is a whole lot wrong with it.  This is what I’m going to explain in this post. 

 

We’ve seen how physical currency is created and added to our economy, but physical currency – coins and paper – makes up less than 5% of the overall dollars in circulation in the world.  The other 95% is made up of all of the electronic dollars in checking accounts, savings accounts, CD’s, money market accounts, etc.  How is this money created?  The majority of our money is created by private banks.  This is where things get interesting.

 

If you have purchased a home, then you know that you apply for and receive a mortgage to pay for your home.  The question then becomes – where does the bank get the money to pay for your home?  If you are like most Americans (and I was certainly included in this group), you assume that this money somehow comes out of the bank’s profits or from deposits made at the bank.  It seems logical, but this isn’t what happens.  By authority of the bank’s charter, it has the ability to create the dollars needed for your home.  In the same manner that the Federal Reserve creates money out of nothing, your bank once again creates money out of nothing and places the dollars needed into your account.  The funds are then used to pay for your home.  I know what you’re thinking – this is the most ridiculous thing you’ve ever heard, there’s no way this is what happens.  You’d be wrong.  In our current monetary system (commonly referred to as a Fractional Reserve System), your act of signing for debt - creates money.  Every time someone signs for an auto loan, home loan, home equity loan, etc. – money is created.  This is how money is created in our system.  In our current monetary system, money is not created from value, money is created from debt.  It doesn’t matter if our money is created because the U.S. Government needs hard currency or if it is created through bank loans, the only way money is created in our current system is through debt.  Get ready - because this leads to some very interesting analysis.

 

If you’re thinking this through, then you’re beginning to feel very uncomfortable – and you should.  Even though it may seem strange to you that our money is created by debt, it might initially seem like this could work – that our economy has – and will continue to – function under this system.  There’s one very big problem inherent in this system.  If you’ve seen the movie ‘The Matrix’, then you remember that the massive computer simulation in the movie had a flaw in the program – an anomaly that over a long period of time would eventually crash the system.  We have the same type of ‘anomaly’ in our current economic system that over time – will have the same result.  What is the ‘anomaly’ in our system?  Interest.  When you take out a loan for $200,000 to pay for your home, is this all you need to pay back?  Of course not.  You must pay the $200,000 plus interest.  The total amount of money you will pay back with interest will be more than $400,000 if you have a 30 year fixed rate (around 6%) and don’t pay it off early.  Remember, our money is created from the principle, not the principle plus interest.  So, you bought a house for $200,000, and as a result, added $200,000 to our total money supply of dollars.  Do you see the problem?  If our money is only created from the principle payment, where do we get the money to pay interest?  This is where things really start to get interesting.

 

Let’s look at another example. Let’s say that the total debt (new debt – retired debt) created in a given year in the United States is $1 trillion dollars.  Based on our current system, $1 trillion dollars would then be added to our money supply.  As I mentioned above, because this is debt, the total actually owed is much higher – let’s say the total debt actually owed is $2 trillion.  So, we have created $2 trillion in liabilities that must be repaid, but we’ve only created $1 trillion dollars in the system to pay this debt.  Do you see the problem?  We never add enough money into our economy to pay for the debt. Our debt continues to rise and our money supply continues to rise – but the money supply can never equal the total amount owed.  What this means is that we can never pay off our debt under our current monetary system.

 

Let’s make it really simple.  If you and I each owe $100 and there’s only $150 in currency available to us – one of us isn’t going to have enough to pay our debts.  It’s a catch-22 that we cannot get out of.  In our current system, there will always be a certain percentage of people and businesses that cannot get enough money to pay their bills, debts, etc.  It’s mathematically impossible for everyone to have enough money to pay what they owe.  We can talk all day about why certain businesses fail (poor management, supply and demand, changing markets, etc), why businesses and people go bankrupt, but the bottom line is this - if there’s not enough money in our economy to pay for all outstanding debts, it doesn’t matter what we do, how we manage our budgets, we will never pay off our debts as a nation – never.  Of course I’m talking about our nation as a whole.  Individually, we can make good financial decisions and manage our money in a prudent manner, but on a national level, we are in a never ending cycle of ever increasing debt – personal debt, corporate debt, government debt, etc.  If our system never changes, it is mathematically impossible for us to ever pay off our national debt. 

 

I now find it interesting when I hear our President or members of Congress debating ‘fiscal irresponsibility’ or when I hear our leaders talking about reducing our national debt.  The truth is that all of us – our Government included – must continue to create debt in order to keep our economy from crashing.  The meter is always running on the current interest (which is now enormous). In order to keep creating additional money to pay for our ever increasing debt, we must create more debt to create more money.  I know what you’re thinking – this has to be the most ridiculous economic system ever devised.  It’s actually quite ingenious – when you realize why it exists.  We’ll examine this more later.

 

Since our money is created from debt, as our debts increase – our money supply increases.  The only thing that has prevented this system from collapsing years ago is due to the lag time we have to pay back the interest on our loans.  We are not required to immediately pay back the principle plus interest.  Although this system seems to have worked for a very long time, we’re going to see that it cannot continue forever.  You will see that it’s mathematically impossible for our economic system to continue without eventually collapsing.

 

If this hasn’t blown your mind yet, consider what would happen if we paid off all of our debt – personal debt (home loans, auto loans, etc), corporate debt and Government debt.  Since debt equals money in our system, if there is no debt, there would be no money!  I know – it keeps getting more ridiculous.  Your mind wants to reject this outright.  This is crazy!  Unfortunately, it’s the truth.  Our entire economy is based on the creation of debt.  Without debt, our economy would crash completely.  You now know the real reasons why we are all always fighting to get enough money to pay our bills and debts (there’s not enough money in the system for all of us).  You now know why we consistently have a steady stream of people and businesses that file for bankruptcy (there’s never enough money in our economy), why inflation has dramatically reduced the buying power of the dollar in the past few decades (our money supply is always increasing – it never stabilizes), why the total volume of dollars in the world economy has sky-rocketed in recent decades (leading to a decline in the value of the dollar – worldwide) and why we’re always being bombarded with loan offers (home, auto, home equity, etc), credit cards, etc.  Without debt, we have no economy.  How is this possible you ask?  Why would anyone allow this to happen?  How did this happen?  The most important question that you should be asking yourself is this – if we are creating so much debt, who are we indebted to?  What you will find later in this post is that this is all very deliberate – it’s not by chance.  There is a plan at work here – and it’s evil.  The honest truth is that every person in the United States has been placed in financial bondage since 1913 – and most don’t even know it.  Have I mentioned how deceptive our spiritual enemy is?  Keep reading.

 

I mentioned earlier that our current banking system is referred to as a Fractional Reserve System.  Basically, this means that banks can issue loans for much more money than they have on hand.  It depends on the type of account, but as an example, let’s say that the Federal Reserve sets the reserve requirement at 9:1 (or a 10% reserve ratio).  The Federal Reserve Board of Governors also has the power to change this ratio within limits set by law.  This means that for every dollar that a bank has held in ‘reserve’ at the Federal Reserve, it can lend out 9 times that amount.  Let’s say that a new bank holds approximately $1,111 dollars at the Federal Reserve.  It can then lend up to $10,000 dollars (9 x $1111 = $10,000). Money on reserve at the Fed is sometimes referred to as ‘super’ money – since the banks get to multiply its volume. The bank then loans this $10,000 to you for a new car.  You pay the car seller who then deposits the money in their checking account.  Their bank (this is a closed loop system – it doesn’t matter which bank receives the deposit) then takes the $10,000 – adds $1,000 of it to their reserves (the same 9:1 reserve ratio – reversed) – and loans out $9,000 to someone else who then deposits the money in their checking account.  Their bank takes the $9,000 – adds $900 to their reserves (9:1 reserve ratio) – and loans out $8,100 to someone else.  At this point, the original reserve of $1,111 has generated $27,100 in new money ($10,000 + $9,000 + $8,100).  If we do the math and continue to carry this through (and everyone deposits their money in a bank – not in a mattress), then this original reserve of $1,111 generates just under $100,000 of currency in our economy.  It’s like a huge game of musical chairs – as long as we’re creating money from debt, the music doesn’t stop playing.  Also remember – the original reserve deposit at the Fed ($1,111) was money created by debt – it has no value.  Some types of accounts in this system only require a 20:1 or 30:1 reserve ratio and some accounts do not require a reserve at all.  Should anyone be surprised that we always have inflation? 

 

What happens when the Federal Reserve changes the reserve ratio?  Is this significant?  Absolutely.  Let’s examine this more closely.  If the current ratio is 9:1 and the Fed changes this to 5:1 – what impact does this have?  If you’re a bank that has loaned millions of dollars at a ratio of 9:1, and have planned future loans around this ratio, what happens to you if the ratio changes to 5:1 (the reserve requirement increases)?  If you don’t have additional reserves to meet the new requirement - you instantly become under-capitalized.  Here’s a simple example: if a bank has a reserve of $1,000 and plans to make a loan of $9,000 – it can no longer make the loan if the reserve ratio is reduced to 5:1.  At 5:1, the reserve requirement on $9,000 would be $1800.  The real world result is – the bank must generate significantly more capital to increase its reserves or stop lending in order to meet the new reserve requirement. 

 

What should we learn from this?  Most of us know that the Federal Reserve has the power to raise and lower interest rates and therefore, has the power to raise and lower overall prices within our economy.  What most people don’t realize is that they also have the power to raise and lower the total volume of dollars in our economy.  If they raise the reserve requirement (requiring banks to have more reserves at the Fed), banks will lend less money and since our money is based on the creation of debt, less money is created.  If this happens, the gap between the amount owed within our economy (interest never stops accumulating) and the amount of money to pay the debt – widens.  We are often told that this is used to fight inflation – inflation that is caused by this system of money creation through debt.  The truth is that an increase in the reserve requirement results in even less money in the overall economy to pay back debt – which could easily lead to a recession or depression.  This is the continual game central banks around the world play every day – more money in the economy means economic growth, but higher inflation – reducing the money supply reduces inflation, but will also cause economic growth to slow or contract. 

 

The following chart shows the impact of the reserve ratio on our money supply.  It’s easy to see that as the reserve amount required is lowered, the amount of money generated increases significantly.  The reverse is also true – as the reserve required by the Fed is raised, the amount of money generated decreases.

 

 

 

What really happens when our money supply contracts?  Periods of recession or depression.  What we’re consistently told is that periods of economic growth and periods of economic contraction are unavoidable, when the truth tells us something different.  The Federal Reserve has the power to create periods of growth (increased money supply coupled with low interest rates) and periods of contraction (reduced money supply coupled with higher interest rates).  How are we told to categorize these periods of growth and contraction?  This is the ‘business cycle’.  While everyday business transactions certainly affect our overall economy – there is nothing that private business or individuals can do that will overcome the debt based economic system we’ve been placed under. 

 

You have also learned why the current credit ‘crunch’ is being referred to as a ‘crisis’.  What happens if banks reduce lending and consumers reduce taking on more debt?  Less money is created in the system – and a vicious cycle starts.  Wall Street refers to this as ‘de-leveraging’.  We’re going to explore the real reasons this happens.  Before we look closely at what is going on today, let’s examine another problem with our current economic system.  We have discussed how our economy must continue to grow in order for debt creation to continue in order to create additional money in order to pay the debt – a never-ending cycle of debt creation.  The question becomes – can this continue forever?

 

If you were to ask people about economic growth, some will know that our economic (GDP – Gross Domestic Product) growth rate typically averages about 3% (annually) in recent years.  Most of us assume this is a linear growth rate.  A linear growth rate looks like this:

 

 

 

The problem is that our economic growth rate is not linear.  As an example, let’s assume that the current overall value of our economy is $100.  If our economy grows 3% this year, then the overall value at the end of this year is $103.  If our economy grows an additional 3% next year, will the overall value of our economy be $106 at the end of next year?  No.  Since we grew our economy 3% this year, next year’s growth will be 3% of $103 and the total value of our economy at the end of next year will be $106.09 ($103*.03 + $103).  Our economy does not grow linearly, it grows exponentially.  What this means is that 3% growth this year is actually more growth than 3% last year since our growth is compounded annually.  This is what exponential growth looks like:

 

 

You are probably starting to feel uncomfortable, because you are beginning to see where this is going.  In theory, this growth rate remains relatively low for a given period of time – but as you can see, as each year’s growth compounds on the previous year, overall growth begins to accelerate rapidly at a given point in time.  A simple example of this phenomenon can be seen in the growth of a company.  A company that plans to grow 10% with annual revenues of $10 million only needs to grow $1 million.  A company that plans to grow 10% with annual revenues of $10 billion needs to grow $1 billion.  As growth compounds upon itself, the system requires ever more resources to grow the same amount (%).

 

In our current economic system that relies on continual growth to stave off a collapse, we must continually burn through more and more natural resources to keep the system going.  In a theoretical world, this exponential curve continues on to infinity.  Is this possible in a finite world with finite resources?  Of course not.  If we take a logical look at our economic system, mathematics tells us one of two things must happen to our current system.  The first scenario is that we burn through all of our resources and the system collapses.  We can certainly see the beginning of this from a global perspective.  As more economies around the world have instituted the same economic system as ours, we are seeing more and more concern that natural resources (oil, forests, water, etc.) are being depleted at an alarming rate – demand is outstripping supply – adding to inflationary pressures.  Although this is certainly possible in our distant future, since we are much farther along the exponential curve than other economies in the world, there is a much more likely scenario for the United States. 

 

The second scenario is that our current system collapses under the weight of the debt it has created.  If the rate of debt increases much more quickly than the rate of the supply of money in the system, eventually the amount of money in the system will not be able to support the increased debt.  There will not be enough money to make interest payments, pay utilities, buy consumer goods and create additional money.  As the exponential curve gets steeper and steeper – it will be more and more difficult to grow our economy, while supporting the existing debt in the system.  At some point, since we live in the real world, our monetary system will collapse under the weight of its debt – long before we burn through all of our resources. 

 

Before we get too far into this – let’s ask a question.  Where are we on this exponential curve?  If we look at trends of some of the most widely used economic indicators, can we determine if we should be worried about imminent collapse?   As you will see, we have reason to be concerned.

 

Let’s start by looking at our debt.  The following is a graph of our nation’s federal debt:

 

 

 

Does this look linear or exponential?  You don’t have to be a mathematician to see the answer.

 

The following is a different look at our national debt that calculates the debt as a percentage of GDP:

 

 

We hear politicians and economists talk about how there’s nothing to worry about since our debt remains in line with past years - as a percentage of GDP.  The problem is that they are only focusing on the amount of debt as a % of GDP in a given year and not the effect of our cumulative debt. As we’ll soon see, what is even more important is the ratio of debt to the money supply.

 

We also have much more debt than just the federal debt.  The following chart shows total debt over time (state, federal, personal, corporate).  Once again, we see an exponential curve.

 

 

What about our money supply?  We should expect to see the same trend – and we do.

 

 

 

 

 

Hard currency appears to be somewhat linear, but it’s an illusion.  If we reduce the scale (since hard currency is such a small percentage of the total money supply), we see the same trend:

 

 

Since the Federal Reserve stopped publishing M3 (total amount of dollars in circulation) money supply data in 2006, a couple of economists have worked to re-create it.  The next graph was created by John Williams at shadowstats.com.  Take note of how the year over year growth of our money supply has steadily increased since early 2005.  Also note how the rate of growth is beginning to slow since the beginning of 2008. (I originally wrote this post in early 2008 - I have updated the graph below to show money supply growth through the first few months of 2009 - you can see how the current credit 'crisis' is affecting money supply growth).

 

 

I believe we’re going to see our money supply growth continue to slow since we are now at the point that we cannot create enough new money (through debt) to support the existing debt. If we’re not able to create enough new money (through debt) each year to service the interest on the existing debt – the system begins to collapse (loan defaults & bankruptcies begin to increase).  The world tells us that our economy is ‘maturing’, which is why our economy’s growth is slowing.  The truth, as you see, is much different.  We are beginning to see the very real signs of an economy on the brink of collapse under the weight of its monetary system.  We’ll talk about these signs later in this post.

 

Let’s continue by viewing inflation.  Once again, we hear the world tell us that inflation is running at a rate of 3% a year and we all accept this as normal – and we forget that this rate is compounded year after year.  If we see our money supply increase at such a fast pace, we should expect to see inflation also rise at an exponential rate – and we do.

 

 

Now you know why cars that once cost $3,000 now cost $30,000 or a loaf of bread that once cost $0.25 now costs $2.50.  Prices increase as the volume of money in the system increases.  More people with more money to spend places upward pressure on prices for everything – cars, fuel, food, natural resources, etc.  As money supplies throughout the world increase at an exponential rate, we see inflation skyrocketing across the globe.  More on this below.

 

What about other economic indicators?  We see the same trend.

 

Government Spending:

 

Government Revenues:

 

 

 

Commercial Bank Credit:

 

 

 

 

Total Revolving Credit:

 

 

Total Consumer Credit:

 

 

These are all interesting, but the most important graph will show us the rate of increase of our debt and the rate of increase of our money supply.  If we see a widening gap between the two, then we know that the system is beginning to break down as the rate of increase in debt (new debt – retired debt + interest) is outpacing the money supply used to create and service the debt.

 

 

 

 Sobering isn’t it?  What you are seeing is a system on the brink of total collapse.  With no way to pay our debts (since money is created by debt), this was inevitable at some point.  Even though our money supply is also on an exponential curve, it cannot (mathematically) keep up with the runaway debt.  We are nearing the end of an inevitable cycle.  A cycle that ends with the economic collapse of the United States.  As I mentioned earlier, this would not be a surprise to the men who created the system in the U.S. in 1913, nor is it a surprise to the men who are controlling the system today.

 

What about the rest of the world?  Can’t they continue to finance our debt?  Won’t this help delay our collapse?  What you are about to see is that every major world economy also has a Central Bank – and therefore is on the same exponential curve as us.  At some point, the entire world system will be unable to sustain itself unless the entire system changes.  We’ll just take a look at money supplies of some of the world’s biggest economies.  As you view these graphs, also take note of the total amount of Euros (European Union) in circulation compared to the amount of dollars in circulation.  If you consider that there are trillions more dollars in circulation throughout the world compared to pounds and euros and also consider the massive amount of U.S. debt – it shouldn’t surprise anyone that the overall value of the dollar is declining against the world’s major currencies.

 

Global Money Supply:

 

 

 

European Union:

 

 

Australia:

 

 

New Zealand:

 

 

India:

 

 

In addition, in recent months China’s money supply (M1+M2) has been growing at a 16-18% annualized rate.  So, it’s easy to see that the same insane economic/monetary system has been instituted the world over.  The question is – why?  Before we answer this, let’s take a look at what is going on in the U.S. economy today.

 

Let’s think about what we would expect to see if the economic system of the United States begins to collapse due to this monetary system.  As the amount of total debt continues to increase faster than the money supply, we would expect the number of personal and corporate bankruptcies to continue to increase.  As global inflation also continues to increase prices on a broad range of products and commodities (due to increases in money supplies the world over), we would expect this to also negatively affect individuals and corporations in America.  We would also expect to see those of us with the lowest cash reserves to be affected first.  Are we seeing these things?  Absolutely.  We see them everyday in our news.  The current ‘credit crisis’ began when subprime borrowers began defaulting on their home loans.  Now, we see that the number of Alt-A and Prime borrowers falling behind on their mortgages is also increasing.  Home prices are now decreasing across the nation as a result.  How does this affect the money supply?  If a homeowner defaults on a loan, the bank must ‘foreclose’ and take a loss on its books.  The bank then must sell the home – but sell it in a depressed housing market.  If the home was originally purchased for $100,000; and the bank can only get $75,000 now - based on what we now know about how money is created - you can see how the money supply will begin to be affected in a very big way.  As home prices decline, the amount of money generated from the home loans from consumers also declines.  As banks tighten credit due to the rising defaults, the vicious cycle continues – fewer loans and lower prices equals less money created (thanks to this debt based monetary system).  Less money created means less money to loan and less money to buy things – and the exponential money creation cycle from debt begins to reverse itself. It’s also easy to see that falling housing prices and falling housing sales are not the only problem here – all of the suppliers, subcontractors, etc. are also affected.  The rapid increase in the money supply generated by private banks that we’ve seen over the past decade is beginning to slow significantly.  But as you know, this isn’t all that’s happening.

 

You’ve watched as the value of CDO’s (Collateralized Debt Obligations), CLO’s (Collateralized Loan Obligations), SIV’s (Structured Investment Vehicles) and other derivatives are now plunging in value resulting in huge write-offs for banks.  As foreclosures have risen, the value of the bonds created from these mortgages have plunged in value – even those bonds based on ‘prime’ mortgages.  All of these things are reducing the money supply.  If you have an investment that you thought was worth $100, but now is only worth $60 on the open market, your access to money has been substantially reduced.  Auction rate securities, once thought as safe as cash, now can’t be sold – there are no buyers.  What you are seeing are the cracks beginning to form in the dam. 

 

What is the Federal Reserve doing?  Basically, they are trying to plug the holes by injecting money into our economy to delay the inevitable.  Money creation through the private banking system is faltering, so someone has to step in or something catastrophic is going to happen.  As the process has accelerated, not only are banks slowing their lending to consumers, they have also significantly reduced lending to each other.  In order to get the capital they need, many banks are now borrowing more money directly from the Federal Reserve discount window.  Remember, the Fed isn’t giving the money away; banks are borrowing this money from a private corporation.  We can see the impact from the current credit crisis from the graph below.

 

 

(Courtesy of Bloomberg)

 

We see this problem developing with the money supply, but there is one area of our financial system that has yet to suffer a significant drop in value – the stock market.  It’s been very volatile, but has not really suffered a prolonged decrease in value.  Think about this – what happens when financial conditions worsen, people can’t pay their bills/debts, all other investments have significantly declined in value and there’s only one remaining large source of wealth remaining?  People will sell their stocks to survive.  There’s an obvious problem with this – if a large number of people start selling – what happens?  Prices drop significantly.  Since stocks are one of the most volatile investments in the world, the coming decline in the stock market will, in all probability, be much worse than the current decline in value of CDOs/SIVs, Auction Rate Securities and other bonds.  One thing is for certain, it’s not a matter of if, but when this will happen.

 

 

 

 

Take a look at the above graph of the Dow Jones Industrial Average (Share volume is also shown).  Look familiar?  Once again, we see an exponential curve.  The DJIA is shadowing both our debt and our money supply.  Why?  Think about how the world tells us to invest.  We’re constantly told that stocks offer the best long term returns.  If you only look at stock returns over the past 30 years – this would appear to be good advice (if you ignore the possibility of something negative happening tomorrow).  The problem is that there are two very good reasons why the stock market has continued to increase over this time period – and they have nothing to do with the stock market itself.  As money has increased exponentially over the past 30 years – more and more liquidity has been placed in the hands of investors.  What is another consequence of this exponential money growth?  Inflation has also increased exponentially.  We have more and more money in a system where inflation is eroding the value of this money.  In this situation, everyone is trying to at least maintain the value of their money – by trying to earn a return higher than the inflation rate.  So, we see more and more people investing more and more money into risky investments (stocks, hedge funds, CDO’s, SIV’s, Auction-Rate Securities, etc.) in an attempt to outrun the inflation rate. 

 

There’s also another problem that no one in the mainstream media is discussing.  We assume that our inflation rate has been approximately 1%-5% in recent years because this is what our government tells us.  The problem is that since the early 1980’s, the government has changed the way it measures inflation.  I won’t go into details here (please watch Chris Martenson’s video for further information on how our government has changed how it calculates inflation and other economic data:  http://www.chrismartenson.com/fuzzy_numbers).  The truth is that the actual annual consumer inflation rate has been between 8%-12% over the past 10 years – which means that you would need to average an annual return of around 10% over the past 10 years just to break even.  The current rate of inflation is closer to 13% and increasing - not 5% as we’ve been told (I have updated the graph in 2009 to show how the current crisis is causing deflationary pressures).

 

 

 

If we also consider the impact that the actual inflation rate has on real GDP (inflation is subtracted from nominal GDP to calculate real GDP) – we see why businesses and consumers are telling us that we’re in a recession – while our government tells us that our economy is still growing.  The current state of our economy starts to make sense when we see inflation in double digits and negative GDP for several quarters.

 

 

Do you know people who have lost their jobs recently?  Wonder why it’s difficult to find a job right now?  It’s because the current unemployment rate is closer to 13% - not the 5% that we’ve been told (I have updated the graph in 2009 to show the continuing impact of the current recession/depression - real unemployment is now approaching 20%).   The government selectively removes ‘discouraged workers’ from total unemployment in order to calculate the lower rate.  It’s simply a way for our government to manipulate the data to show more favorable percentages.

 

 

 

What is going to happen to the stock market as our money supply growth continues to slow, GDP continues to contract, inflation continues to increase, housing prices continue to fall and more people lose their jobs?  The stock market will, once again, shadow our money supply straight down as the system collapses.  We’re beginning to see how this is affecting the stock market today.  The market has been extremely volatile as earnings reports from companies seem to contradict government economic data.  When it becomes clear to everyone that we’re in serious trouble – we’re going to see a mass exodus from stock markets worldwide.

 

If you’re wealthy, you may feel somewhat secure that you’ve got a nice nest egg to see this through.  Where is your money?  It’s most likely in dollar currency in the system – checking/savings accounts, money market funds, stocks, bonds, 401(k)’s, retirement accounts, etc.  What happens if it’s not just a segment of the system that collapses, but the entire system?  It won’t matter what you have - $5 or $5 million – your wealth will vanish before your eyes.  We are facing a far worse scenario than 1929.  From 1929 through 1933, our money supply contracted approximately 30% after a period of money supply expansion in the 1920’s.  As you can see from the money supply trends in previous charts, we have also been through a period of significant money supply expansion from 1995 until 2007.  It appears that 1929 was a trial run for what will happen in the near future to us. 

 

Was wealth destroyed during the Great Depression?  No.  Wealth was transferred.  If you read the biographies of some of the great bankers of that era (J.P. Morgan and others), you will see that the majority of them did not have their money in stocks.  Earlier in 1929, they moved their investment holdings to cash and gold.  For them, the crash of 1929 was not a catastrophe, it was a buying opportunity. A buying opportunity they created.  The price of assets dropped dramatically during this time - and guess who happened to have the cash on hand to buy assets at depressed values? 

 

Until now, you’ve probably thought that we’re all playing by the same rules – we’re not.  This really isn’t about money – it’s about power and control of the world.  It’s about a ruling elite enslaving humanity on a worldwide scale.  A ruling elite given power by the world’s spiritual ruler.  Now you know a little more about why the Lord has warned us.  He warned us that this beast would be deceptive and would deceive the whole world – and you’re beginning to see why.  When God tells us in His Word that something in our future will be deceptive on a worldwide scale – it’s a warning we should heed.

 

This leads us to why our monetary system exists.  In 1913, the battle for the control of the United States banking system was lost – and the Federal Reserve Bank was created.  The name of this private corporation should tell us all we need to know – it’s a lie.  It’s a bank that is not Federal and there are no reserves.    The truth is that this ingenious monetary system was created by some highly intelligent men for one purpose – global power.  Whoever controls interest rates and the volume of money in a nation controls the nation (and ultimately the world).  In a world focused on money and the pursuit of money, whoever controls our money has the power – absolute power.  These men created a monetary system that forever places our nation in debt and one that can be manipulated by them for their purposes.  What is going to happen when markets collapse? Guess who, once again, will be there to acquire depressed assets? 

 

As I’ve said before, this was inevitable.  If you give a banking system, in our evil world, the ability to control the money supply and the ability to charge interest on the money they create, the bankers will slowly, over time, exchange worthless money (paper and electronic fiat currency) for real assets – gold, silver, land and property.  If you view this from a spiritual standpoint, you begin to understand why Jesus told us that building the foundation of your life on the things of this world is not wise.  As has happened before, and will happen again, wealthy people of this world will see the foundation of their lives (money) slowly sift away through their fingers.  Our wealth is an illusion.  Satan has offered wealth and power to many in this nation and they have gladly accepted.  They are about to witness what happens when you do a deal with the devil.  Take him on by yourself and sooner or later – he’s going to find a way to get his tentacles into you.  What happens when wealth is taken away from people who are focused on wealth?  It’s not pretty.  How do we overcome?  As I’ve said before, and will continue to say until I leave this world – you will not overcome this world and its ruler until you humbly ask forgiveness from God.  Until you acknowledge your sins and truly believe the Lord’s promise of salvation through His Son, you will never get free of the world.  You will always be susceptible to the world’s many disappointments.  When you truly repent and are born again, what happens in the world no longer matters because you know the Lord and the Lord stands with you – until the end.

 

At some point you’ve probably wondered how on earth this monetary system has survived until now.  If you read the many quotes throughout recent history from bankers, world leaders, economists and tycoons about central banks – and really pay attention to what they’re saying - it’s no secret that those in power knew what was happening (I have listed many of these quotes on my website).  Why hasn’t anyone stopped this madness?  It’s not hard to figure out – fear.  If you attain a position of power and are told to look the other way or face the consequences – what do you do?  Most people in the world will gladly take the money and power….and look the other way.  Why place my life at risk when I can continue living this nice lifestyle by not rocking the boat?  Yes – I said that by standing against this beast – you place your life at risk.  I’m not saying this merely to make a hypothetical point.  Take a look at this list.  These men had three things in common.

 

Abraham Lincoln

James Garfield

John F. Kennedy

 

All were Presidents of the United States.  Each man spoke out against the issuance of money by anyone other than our Government and made it clear who they were targeting with these comments – and all were assassinated.  Lincoln refused to attain loans from the European banks to finance the Civil War (he was offered loans at 24%+ interest) and instead had the U.S. Treasury issue its own money.  JFK gave a speech in 1961 about a worldwide ‘monolithic and ruthless conspiracy’ which is ‘a system that has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations’.  I have added a link to the speech on my website. (Here’s the link:  http://www.youtube.com/watch?v=C4cqSXtj9ak)  JFK even had the audacity in the summer of 1963 to give the U.S. Government the authority to, once again, create its own money via Executive Order 11110 (based on a Silver standard).  The U.S. Treasury actually began to print its own money in 1963….but as we all know, this didn’t last long. 

 

As you read the quotes below, notice carefully what these men are telling us.  They didn’t realize it at the time they made these statements, but each one of them learned about and then commented on – one of the beasts of Revelation 13.  Some of them paid the ultimate price for doing so.  The Lord doesn’t arbitrarily label something a ‘beast’ without reason.  He uses the term ‘beast’ to tell us who and what we’re dealing with – an organization that will kill, steal and destroy anyone and anything in its path – anything that opposes it.  This beast obeys its father – the father of lies and deceit who walks in complete darkness.  There is only one way in this world that you and I can oppose this beast and survive – by standing with and obeying the Lord. 

 

“The very word secrecy is repugnant in a free and open society – and we are, as a people, inherently and historically, opposed to secret societies, to secret oaths and to secret proceedings.” –JFK

 

 

“We are opposed around the world by a monolithic and ruthless conspiracy that relies primarily on covet means for expanding its sphere of influence – on infiltration instead of invasion – on subversion instead of elections – on intimidation instead of free choice.  It is a system that has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine - that combines military, diplomatic, intelligence, economic, scientific and political operations. Its preparations are concealed, not published.  Its mistakes are buried, not headlined.  Its dissenters are silenced, not praised.  No expenditure is questioned, no secret is revealed.”  -JFK

 

“I am asking your help in the tremendous task of informing and alerting the American people.” –JFK referring to the worldwide conspiracy mentioned above

 

“Whoever controls the volume of money in our country is absolute master of all industry and commerce….and when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.”  -James A. Garfield

 

“The Government should create, issue and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers.  By the adoption of these principles, the taxpayers will be saved immense sums of interest.  The privilege of creating and issuing money is not only the supreme prerogative of government, but it is the government’s greatest creative opportunity.” -Abraham Lincoln

 

“We are grateful to the Washington Post, the New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected the promises of discretion for almost forty years.  It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during those years.  But, the world is now more sophisticated and prepared to march towards a world government.  The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the National auto-determination practiced in past centuries.” –David Rockefeller in an address to Trilateral Commission Meeting, 1991

 

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will
grow up around them (around the banks), will deprive the people of their property
until their children will wake up homeless on the continent their fathers conquered." –Thomas Jefferson

 

"Capital must protect itself in every way... Debts must be collected and loans and mortgages foreclosed as soon as possible. When, through a process of law, the common people have lost their homes, they will be more tractable and more easily governed by the strong arm of the law applied by the central power of leading financiers. People without homes will not quarrel with their leaders. This is well known among our principle men now engaged in forming an imperialism of capitalism to govern the world. By dividing the people we can get them to expend their energies in fighting over questions of no importance to us except as teachers of the common herd." -J.P. Morgan

 

"We shall have World Government, whether or not we like it. The only question is whether World Government will be achieved by conquest or consent." –James Paul Warburg (Chairman of the Council on Foreign Relations, speaking before the U.S. Senate, 1950)

 

"The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson. History depicts Andrew Jackson as the last truly honorable and incorruptible American president." –Franklin D. Roosevelt

 

"[The task is to] covertly lower the standard of living, the whole social
structure, of America so that we can be merged with all other nations." –Rowan Gaither (President of the Ford Foundation, 1954)

 

“I am myself persuaded, on the basis of extensive study of the historical evidence, that... the severity of each of the contractions - 1920-21, 1929-33, and 1937-38 - is directly attributable to acts of commission and omission by the Reserve authorities and would not have occurred under earlier monetary and banking arrangements.'' –Milton Friedman (Nobel Prize-winning economist, economic advisor to President Ronald Reagan)

 

"Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the U.S., in the field of commerce and manufacturing, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it." –Woodrow Wilson

 

"A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom."  -Woodrow Wilson

 

"We have restricted credit, we have restricted opportunity, we have controlled development, and we have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world--no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men." –Woodrow Wilson

 

"This Act (the Federal Reserve Act, Dec. 23rd 1913) establishes the most gigantic trust on earth. When the President (Woodrow Wilson) signs the Bill, the invisible government of the Monetary Power will be legalized... The worst legislative crime of the ages is perpetrated by this banking and currency Bill." –Charles A. Lindbergh Sr. (Congressman and father of the famous aviator)

 

"The most wonderful thing of all is that the distinguished Lutheran and
Calvinist theologians who belong to our order really believe that they see in it (Illuminati) the true and genuine sense of Christian Religion. Oh mortal man, is there anything you cannot be made to believe?" - Adam Weishophf upon establishing his "Order of the Illuminati", on May 1, 1776

 

"It is ironical that the only nation which affirmatively expresses a dependence upon and belief in Almighty God in its birth certificate, should now be in mortal combat for its very existence with a godless conspiracy intent upon conquering the world, and reverting human society to the hazards and indignities of the Dark Ages." –Loyd Wright (Former President of the American Bar Association, 1961)

 

"From the days of Spartacus, Weishophf, Karl Marx, Trotski, Belacoon, Rosa Luxenburg, and Ema Goldman, this world conspiracy has been steadily growing. This conspiracy played a definite recognizable role in the tragedy of the French revolution. It has been the mainspring of every subversive movement during the 19th Century. And now at last this band of extraordinary personalities from the underworld of the great cities of Europe and America have gripped the Russian people by the hair of their head and have become the undisputed masters of that enormous empire." –Winston Churchill, 1920

 

"The real menace of our Republic is the invisible government which like a giant octopus sprawls its slimy legs over our cities, states and nation. At the head is a small group of banking houses generally referred to as 'international bankers.' This little coterie... run our government for their own selfish ends. It operates under cover of a self-created screen...[and] seizes...our executive officers... legislative bodies... schools... courts... newspapers and every agency created for the public protection." –John Hylan (Mayor of New York, 1918-1925)

 

"The sovereignty fetish is still so strong in the public mind, that there would appear to be little chance of winning popular assent to American membership in anything approaching a super-state organization. Much will depend on the kind of approach which is used in further popular education." (Council on Foreign Relations, 1944)

 

If you spend some time studying these international bankers who have instituted this debt based monetary system worldwide, you will find that at the top echelon of power there are approximately 300 names.  These are the same 300 families who own stock in the Federal Reserve of the United States and all of the other central banks the world over. These are the people who wield the world’s real power from the shadows and provide the wealth and power needed to infiltrate the world’s monetary and political systems.  These are the people the Lord describes in Revelation 13 – this ‘beast out of the earth’.   

 

If you continue to study how they have gained this power, you will be led back in time to the early 1690’s to the founding of the Bank of England – the world’s first central bank.  And if you continue to search for the truth, you will find that all roads on this journey eventually lead to one name – Rothschild.  The world will tell you that the Rothschild’s banking empire has been reduced to a ‘niche’ bank – catering mainly to very wealthy investors.  The truth is that they control approximately 70%-80% of the world’s wealth from the shadows.  If I had told you this at the beginning of this post, you would have probably rejected this statement outright.  Now you know how it’s possible – they print the world’s money and exchange it for the world’s real assets.  As I mentioned at the beginning, it’s really an ingenious plan – when you realize why it was created.  It’s evil, but ingenious.  The Rothschilds and every member of these ‘elite’ families would tell you that this plan was devised by them for their purposes – but we know the truth.  The Lord has told us Satan’s plans – they’re simply obeying the one they serve.

 

We now see how the world’s financial system has been overtaken by a few very powerful men.  If we take what we know and think about the ‘mark of the beast’, we realize that control of the world’s financial system isn’t enough to satisfy the prophecies about the ‘mark’.  Controlling the world’s financial system is one piece of the puzzle, but something else is needed – enforcement.  Everyone throughout the world will be ‘forced’ to accept the mark. These powerful men need a way in which to deceive us into believing that humanity needs protecting – and now we know why the Lord tells us in the book of Revelation about ‘miraculous signs’ used by this beast.  The beast creates these ‘signs’ to strike fear among us – fear that will eventually drive humanity to give over its freedom to the beast – and Satan.  We’ve seen many of these ‘signs’ already, but they are only the beginning.

 

When it comes to spiritual deception, you are beginning to see just how blind we really are in this world when we walk away from our Creator.  We focus on the things in the world – money, careers, cars, houses, addictions, stuff, etc. – and we forget about the subtle things that are missing from our lives.  Some of these things are big picture – How did we come into being?  Why are we here?  Does God really exist?  If He exists, why can’t I see Him?  Can I really know God - personally?  Where do I go when I die?  Am I really alone in this fallen world?  How can I get free of this mess?  Other questions are smaller picture, but would also lead us to the truth if we would just slow down for awhile and think about what we’re consistently told in this world and compare it to God’s truth – could someone really consolidate the world’s government, world’s religion and world’s financial system within 7 years?  If God has allowed His children to experience pain and suffering throughout human history in order to strengthen them in this world, why would He change now? Sometimes it’s a very simple question that leads us to some very important answers – how is our money created?  Think about how many times in your life – friends, parents, teachers, professors – someone has explained our monetary system to you.  Never?  You’re not alone – and there’s a reason it’s being hidden.  If I were to ask 1000 Americans today what is the greatest threat to our nation’s sovereignty – how many do you think would respond - ‘the war on terror’?  My guess is that 99% of us would agree that ‘the war on terror’ is our greatest threat.  Our spiritual enemy has created a perceived threat – while his true ‘beasts’ gain control of the world through deceptive means – subversion, infiltration and intimidation.  Again, an ingenious plan – and not of this world.  The only way to overcome it is to obey the One spiritual being that Satan cannot deceive, intimidate or overcome – our Father in heaven. 

 

The truth is that never before, in the history of the United States, have we faced a greater threat to our national sovereignty as we do now – never.  We are facing an enemy that is much more intelligent and powerful than you and I - an enemy that has not used brute force against us, but works in the shadows to deceive and infiltrate.  At times in the past I would think about the book of Revelation and wonder how the people of the world could ever allow themselves to be subjected to an evil world government.  I simply didn’t want to believe it was possible and I, like most people today, disregarded the Lord’s warnings about how this beast would deceive the whole world.  Now that I’ve humbled myself and know the truth, I listen to this beast talk to us everyday through corporate, governmental, banking and religious leaders – leaders of the United States.  It’s no longer a mystery.  Their plan has almost come to fruition.  At some point, you might think that all hope is lost – that they are too powerful and the plan is too far along.  How can we possible stop this?  I’m not fearful of these things because I know that God could see this coming since the creation of the world – and I don’t need to figure out what to do on my own.  I will simply continue to seek the Lord’s will for me – His plan, not mine.  What you are about to see throughout the world is that God is going to go on the offensive – and he’s going to do it with you and me.  Now is not the time for weak people with weak ministries to proclaim a weak message.  Now is the time to allow ourselves to be strengthened spiritually.  Now is the time to stand in the face of overwhelming odds – and succeed. 

 

At different times in your life you have probably felt that something wasn’t quite right.  You could ‘sense’ it, but you couldn’t ‘see’ it.  You couldn’t really explain it, but you knew that there was something not quite right about the world you live in.  The economy is up – the economy is down.  Life is good – life is not so good.  Chaos seems to rule the world.  It’s like we’re walking on very thin ice that is constantly cracking – about to give way.  You are now beginning to understand that there is a method to the madness.  When the world chose death over life, sin over righteousness – when we chose to believe lies instead of the Truth – this was the inevitable result.  What gets the true Christian through all of this is that this isn’t the end – it’s only the beginning – and we’re not alone.  The end is glorious for us – end of story.

 

You’ve seen me reference the movie ‘The Matrix’ and how many aspects of the movie are similar to the spiritual battle being waged in the world.  I’m going to end this post with some dialog from the movie because it certainly relates to most of us.  The following scene takes place right before Neo learns the truth about his world.

 

Morpheus: I imagine that right now, you're feeling a bit like Alice. Hmm? Tumbling  

down the rabbit hole?
Neo: You could say that.
Morpheus: I see it in your eyes. You have the look of a man who accepts what he sees because he is expecting to wake up. Ironically, that's not far from the truth. Do you believe in fate, Neo?
Neo: No.
Morpheus: Why not?
Neo: Because I don't like the idea that I'm not in control of my life.
Morpheus: I know *exactly* what you mean. Let me tell you why you're here. You're here because you know something. What you know you can't explain, but you feel it. You've felt it your entire life, that there's something wrong with the world. You don't know what it is, but it's there, like a splinter in your mind, driving you mad. It is this feeling that has brought you to me. Do you know what I'm talking about?
Neo: The Matrix.
Morpheus: Do you want to know what it is?
Neo: Yes.
Morpheus: The Matrix is everywhere. It is all around us. Even now, in this very room. You can see it when you look out your window or when you turn on your television. You can feel it when you go to work... when you go to church... when you pay your taxes. It is the world that has been pulled over your eyes to blind you from the truth.
Neo: What truth?
Morpheus: That you are a slave, Neo. Like everyone else you were born into bondage. Into a prison that you cannot taste or see or touch. A prison for your mind.

 

I finally found a video that does an excellent job of explaining our monetary system in simple terms.  I recommend that you watch it to get a better understanding of what I have discussed here.  The video was created by Paul Grignon and is only 47 minutes long.  It’s available on Google Video at:  http://video.google.com/videoplay?docid=-9050474362583451279&q=paul+grignon&ei=kmAsSL70C5CUrgL0r72aCg .  I have used a couple of Paul’s examples in this post.

 

http://johngilmore.org/

OCTOBER 21, 2008

Volcker Makes a Comeback as Part of Obama Brain Trust

By MONICA LANGLEY

NEW YORK -- At 81 years old, former Federal Reserve chairman Paul Volcker is getting a second chance to shape his legacy with a presidential hopeful more than 30 years his junior.

Mr. Volcker has emerged as a top economic adviser to Sen. Barack Obama during a presidential campaign dominated by a global financial crisis. Their growing bond is paying dividends for each man.

Mr. Volcker delivers gravitas and credibility to Sen. Obama, people in the Obama camp say, as well as ideas and approaches to the economic crisis. "Volcker whispering in Obama's ear will make even Republicans comfortable, because he's a hero of the right and a supporter of a strong dollar," says John Tamny, a supply-side economist and Republican.

On Tuesday, Mr. Volcker is scheduled to appear on the campaign trail with Sen. Obama for the first time. At a round-table discussion with voters in Lake Worth, Fla., he'll "give his view on the state of the economy and the credit markets, and what needs to be done to fix them," says one campaign adviser. Longtime Fed watchers are amused that Mr. Volcker, known for his muttered statements during Fed meetings in the 1980s, will be in a political role on the stump.

For Mr. Volcker, a connection with Sen. Obama could help burnish his record as Fed chairman. The cigar-chomping central banker from 1979 to 1987, he received blame for driving up interest rates and tipping the U.S. into the deepest recession since the Great Depression. But Mr. Volcker is just as well known for taming the runaway inflation of that era. His stock has risen in recent months as his gruff warnings about the risks of deregulating the financial sector have come to look prescient. His successor's reputation, meanwhile, has come under a cloud. Alan Greenspan is under criticism that the low interest rates and deregulatory ideology of his tenure contributed to today's crisis.

With nearly every day presenting a fresh financial emergency, Sen. Obama has persuaded Mr. Volcker, who travels the globe for economic meetings and occasionally disappears on fly-fishing trips, to be at the ready; Mr. Volcker now keeps a cellphone on him at all times. And though he still doesn't own a computer (his assistant prints out emails for him), he's gotten used to Sen. Obama's rapid-fire messages sent from a BlackBerry device.

The Obama-Volcker relationship continues to evolve, campaign advisers say. At the start, Sen. Obama sought advice from Mr. Volcker and other outside voices through his economic adviser, Austan Goolsbee, a 39-year-old University of Chicago professor. But starting with the demise of Bear Stearns Cos. in March and continuing today, Sen. Obama speaks directly and often with Mr. Volcker about the intricacies of the financial crisis and possible solutions. They've become "collaborators," as one aide puts it.

For example, when the U.S. Treasury put forth a plan to set up a $700 billion rescue fund to buy up toxic assets, Sen. Obama quickly backed it on the advice of Mr. Volcker. Like other prominent economists, Mr. Volcker also advocated early on for the recapitalization of banks. On this advice, Sen. Obama proposed direct equity infusions in banks in his frequent conference calls with Treasury Secretary Henry Paulson. The idea, initially rejected by Mr. Paulson, was finally proposed last week by the administration, in an effort to get banks lending again to businesses and each other.

Sen. Obama's team of economic advisers includes two former Treasury secretaries, Robert Rubin and Lawrence Summers, and in some decisions, Mr. Volcker doesn't reign supreme. The candidate's latest proposal, for example, a $60 billion stimulus package, was initially fought by the former Fed chief on the grounds that Americans were already overspending. Moreover, he is unlikely to take a long-term role in any Obama administration.

Paul Volcker, delivering a lecture last week in Singapore, where he warned that the U.S. and Europe are facing recession from the financial crisis.

But for now, and going into the campaign's final weeks, aides say Sen. Obama is increasingly relying on Mr. Volcker. His staff now routinely reviews policy proposals and speeches with Mr. Volcker. Conference calls and face-to-face meetings of the Obama economic team are often reorganized to accommodate his schedule. When the team discusses the financial crisis, "The most important question to Obama: What does Paul Volcker think?" says Jason Furman, the campaign's economic-policy director.

The two men have developed an ease with each other, say aides, even as their styles appear to differ: Sen. Obama, who tends to use the Socratic method from his law-school training, examines all points of view and debates them. With a more formal and direct demeanor, Mr. Volcker likes to go straight to solutions.

In last week's final presidential debate, after Republican John McCain raised questions about his rival's ties, Sen. Obama said, "Let me tell you who I associate with. On economic policy, I associate with Warren Buffett and former Fed Chairman Paul Volcker...who have shaped my ideas and who will be surrounding me in the White House."

Some Democrats have speculated that, if elected, Sen. Obama could name Mr. Volcker to a post, possibly even as Treasury secretary, for a limited time. Banking and Wall Street executives are pushing the two campaigns to name a new secretary shortly after the election to reassure markets during the transition. The Obama campaign wouldn't comment on possible appointments.

"I just want to be helpful, because I believe Sen. Obama -- in his person, in his ideas and in his ability to understand and articulate both our needs and our hopes -- brings the strong and fresh leadership we need," Mr. Volcker said in an interview in New York. Mr. Volcker wouldn't provide details of his policy suggestions or his personal relationship with Sen. Obama.

After leaving the Fed 20 years ago, Mr. Volcker stopped smoking cigars, became a professor at Princeton University and spent more time fly-fishing. His corner office overlooking Fifth Avenue is filled with photographs and statues of fish, as well as a pillow inscribed: "Work is for people who don't know how to fish."

Following a stint as chairman of a boutique investment-banking firm, Mr. Volcker largely steered clear of joining any Wall Street companies. He set up his own office in Rockefeller Center, where he consults for companies and governments. He has served on a few corporate boards, such as UAL Corp., Prudential Insurance Co. of America and Nestlé SA. He also participated on commissions including the United Nations committee to investigate corruption in its oil-for-food program, and an inquiry launched by Swiss banks to determine which accounts belonged to Holocaust victims.

The bond between Messrs. Obama and Volcker started with a dinner invitation. In June 2007, Mark Gallogly, co-founder of Centerbridge Partners, a New York private-investment firm, and an early supporter of Sen. Obama, invited a dozen financial executives to meet the senator, including Goldman Sachs Group Inc. President Gary Cohn, Merrill Lynch & Co. President Greg Fleming and Mr. Volcker.

Along with the invitation, Mr. Volcker received from Mr. Gallogly a "briefing package" containing some speeches by Sen. Obama and news articles about him. Mr. Volcker also read the two books written by the senator.

In the private dining room at a Capitol Hill restaurant, Mr. Gallogly seated Mr. Volcker directly across from Sen. Obama, who at the time was considered a long shot to win the Democratic nomination over Sen. Hillary Clinton. Returning late that night on a flight to New York, Mr. Volcker told the group he was "genuinely impressed" with the Illinois senator.

That message was eventually passed along to Sen. Obama's advisers in New York, Michael Froman, a friend from Harvard Law School and a Citigroup Inc. executive, and Jenny Yeager, a fund-raiser. Ms. Yeager told Obama headquarters in Chicago that Mr. Volcker seemed "interested" in the candidate, but in two months no one had followed up with the ex-central banker for fund raising or anything else.

When Sen. Obama's economics adviser, Mr. Goolsbee, heard about Mr. Volcker's interest, he immediately got excited. "Paul Volcker is a legend! We don't want to use his contacts for money, we want to pick his brain," he recalls saying to a campaign operative.

Starting in late summer 2007, Mr. Goolsbee had regular discussions with Mr. Volcker. He incorporated Mr. Volcker's ideas, including his early concern that the housing downturn would snowball into a larger financial crisis, into Sen. Obama's policy positions. In a September 2007 speech at Nasdaq, Sen. Obama predicted that because of oversight lapses and abusive practices that cause the public to doubt financial results, "the markets will be ravaged by a crisis in confidence."

In early January 2008, when Sen. Clinton was pounding her rival over his lack of experience and stature, Sen. Obama phoned Mr. Volcker to ask for his endorsement. (At that time, billionaire investor Warren Buffett had refused to take sides between the Democratic contenders, saying he would support whoever got the nomination.) Mr. Volcker, a long-time Democrat who had mostly stayed out of partisan politics, agreed, and wrote out his statement in longhand.

The presidential candidate's first big economic address took place in March at Cooper Union in New York. Mr. Volcker's fingerprints were evident in the speech. The onetime central banker had long been vigilant about strong regulatory oversight; as Fed chairman he rejected big banks' attempts to repeal Depression-era laws to engage in more risky practices like investment banking. New financial institutions and instruments have since led to the repeal or relaxation of those laws, and Mr. Volcker told Sen. Obama that the U.S. regulatory structure must be strengthened and updated for the 21st century.

With Mr. Volcker sitting in the front row, Sen. Obama told the audience at Cooper Union that the current financial-regulatory framework must be "revamped." He faulted deregulation for the growing economic crisis. "Our free market was never meant to be a free license to take whatever you can get, however you can get it."

Once Sen. Obama became the expected Democratic nominee in June, and the economy became the central campaign issue, his chats with Mr. Volcker picked up. Mr. Goolsbee would get emails from Sen. Obama's traveling aide Reggie Love or his senior strategist David Axelrod with the message: "BO wants to call Volcker. What's his number again?"

In the past two months, financial crises have come one after another, picking up speed with the federal government's July effort to bolster big mortgage insurers Fannie Mae and Freddie Mac. As the contagion from the subprime mortgages and risky mortgage credit swaps threatened to topple other institutions, Sen. Obama asked for "emergency meetings" with his economic team, about a dozen advisers including Mr. Volcker and Mr. Buffett.

At the first group meeting in Washington in late July, Sen. Obama said he wanted to hear from each adviser on the worsening economic downturn and asked Mr. Volcker to go first. "The very health of the credit markets is at stake," Mr. Volcker said, according to one attendee. He urged strong action to restore confidence, particularly in the U.S. banking system.

When Sen. Obama raised the prospect of a package of spending and tax measures to "stimulate" the economy, Mr. Volcker disapproved. "Americans are spending beyond their means," he told the group. A stimulus package would delay the belt-tightening and savings needed, he added, proposing instead better regulation and assistance to banks.

Laura Tyson, economics adviser for President Bill Clinton and a professor at University of California, Berkeley, disagreed. "Americans can't help but spend beyond their means because they've had no income growth while their costs on gas and food have skyrocketed." She suggested spending money to rebuild infrastructure and create jobs. Even as some others agreed with Ms. Tyson, Mr. Volcker didn't budge. Sen. Obama delayed putting out a new stimulus package, but stressed that he wanted to find the "right balance" of possible assistance.

When the bailout bill became a political football and the markets seized up, Sen. Obama called the second in-person meeting of his financial team on Sept. 26 in Miami. Mr. Volcker initially said he would have to call in because he was leaving for Europe that day. Sen. Obama, according to campaign aides, called him with a personal plea.

The next morning, the senator seated Mr. Volcker beside him, an arrangement that was photographed by the media entourage covering the campaign. Mr. Volcker told the group he had changed his mind about an economic-stimulus package due to the global recession, but he couldn't stay to hear the discussion about the approach because he had to catch a plane to Europe.

In the past two weeks, with the stock market's drastic volatility and weak economic indicators, Sen. Obama presented his $60 billion package, which contains tax cuts and spending to provide public-works jobs to struggling Americans.

On Monday, Fed Chairman Ben Bernanke endorsed the idea of another stimulus package, giving a boost to Democratic lawmakers who are considering one. But congressional Republicans have so far shown little interest in a second spending bill.

February 10, 2009

 

Here’s another article that relates to the article above.  This is an article from the Loose Change website.  I encourage you to research these things on your own. 

 

jg

 

Obama’s Trilateral Commission Connections, Council on Foreign Relations Sellouts and Wartime Military/National Guard Draft Re-Instatement Issues that the Republicans Don’t Even Talk About

 

By Patrick Wood, Editor
The August Review, Global elite research center

January 30, 2009

[Ed. note: For clarity, members of the Trilateral Commission appear in bold type.]

As previously noted in Pawns of the Global Elite, Barack Obama was groomed for the presidency by key members of the Trilateral Commission. Most notably, it was Zbigniew Brzezinski, co-founder of the Trilateral Commission with David Rockefeller in 1973, who was Obama’s principal foreign policy adviser.

The pre-election attention is reminiscent of Brzezinski’s tutoring of Jimmy Carter prior to Carter’s landslide election in 1976.

For anyone who doubts the Commission’s continuing influence on Obama, consider that he has already appointed no less than eleven members of the Commission to top-level and key positions in his Administration.

According to official Trilateral Commission membership lists, there are only 87 members from the United States (the other 337 members are from other regions). Thus, in less than two weeks since his inauguration, Obama’s appointments encompass more than 12% of Commission’s entire U.S. membership.

Is this a mere coincidence or is it a continuation of dominance over the Executive Branch since 1976? (For important background, read The Trilateral Commission: Usurping Sovereignty.)

• Secretary of Treasury, Tim Geithner
• Ambassador to the United Nations, Susan Rice
• National Security Advisor, Gen. James L. Jones
• Deputy National Security Advisor, Thomas Donilon
• Chairman, Economic Recovery Committee, Paul Volker
• Director of National Intelligence, Admiral Dennis C. Blair
• Assistant Secretary of State, Asia & Pacific,  Kurt M. Campbell
• Deputy Secretary of State, James Steinberg
• State Department, Special Envoy, Richard Haass
• State Department, Special Envoy, Dennis Ross
• State Department, Special Envoy, Richard Holbrooke

There are many other incidental links to the Trilateral Commission, for instance,

Secretary of State Hillary Clinton is married to Commission member William Jefferson Clinton.

Geithner’s informal group of advisors include E. Gerald Corrigan, Paul Volker, Alan Greenspan and Peter G. Peterson, among others. His first job after college was with Henry Kissinger at Kissinger Associates.

Brent Scowcroft has been an unofficial advisor to Obama and was mentor to Defense Secretary Robert Gates.

Robert Zoelick is currently president of the World Bank.  The World Bank Group is comprised of five agencies that make loans or guarantee credit to 177 member countries. Its stated aim is to help countries reduce poverty by making long-term loans to governments for large-scale projects such as dams or pipelines, or to back economic reform programs. However, World Bank loans have often had very negative effects on countries putting them in situations of precarious debt and setting conditions on which countries can receive loans, conditions which often have a devastating impact on the lives of citizens
Laurence Summers, White House Economic Advisor, was mentored by former Treasury Secretary Robert Rubin during the Clinton administration.

There are many other such links, but these are enough for you to get the idea of what’s going on here.

Analyze the positions

Notice that five of the Trilateral appointees involve the State Department, where foreign policy is created and implemented. Hillary Clinton is certainly in line with these policies because her husband, Bill Clinton, is also a member.
What is more important than economic recovery? Paul Volker is the answer.
What is more important than national intelligence? Gen. James Jones, Thomas Donilon and Adm. Dennis Blair hold the top three positions.

What is more important than the Treasury and the saving of our financial system? Timothy Geithner says he has the answers.

The State Department is virtually dominated by Trilaterals: Kurt Campbell, James Steinberg, Richard Haass, Dennis Ross and Richard Holbrooke.

This leaves Susan Rice, Ambassador to the United Nations. The U.N. is the chosen instrument for ultimate global governance. Rice will help to subvert the U.S. into the U.N. umbrella of vassal states.

Conflict of interest

Since 1973, the Commission has met regularly in plenary sessions to discuss policy position papers developed by its members. Policies are debated in order to achieve consensuses. Respective members return to their own countries to implement policies consistent with those consensuses.

The original stated purpose of the Trilateral Commission was to create a “New International Economic Order.” Its current statement has morphed into fostering a “closer cooperation among these core democratic industrialized areas of the world with shared leadership responsibilities in the wider international system.” (See The Trilateral Commission web site)

U.S. Trilateral members implement policies determined by a majority of non-Americans that most often work against the best interests of the country.

“How,” you say?

Since the administration of Jimmy Carter, Trilaterals held these massively influential positions:

• Six out of eight World Bank presidents, including the current appointee, Robert Zoelick
• Eight out of ten U.S. Trade Representatives
• President and/or Vice-President of every elected administration (except for Obama/Biden)
• Seven out of twelve Secretaries of State
• Nine out of twelve Secretaries of Defense

Is this sinking in? Are you grasping the enormity of it?

Endgame is at hand

For the Trilateral crowd, the game is about over. The recent reemergence of original members Henry Kissinger, Zbigniew Brzezinski, Brent Scowcroft and Paul Volker serves to reinforce the conclusion that the New International Economic Order is near.

The Trilateral Commission and its members have engineered the global economic, trade and financial system that is currently in a state of total chaos.

Does that mean that they have lost? Hardly.

In the article Chorus call for New World Order, they are using the crisis to destroy what remains of national Sovereignty, so that a New World Order can finally and permanently be put into place.  Sovereignty is the principle that the state exercises absolute power over its territory, system of government, and population.  Accordingly, the internal authority of the state supersedes that of all other bodies.

Conclusion on Obama’s Trilateral Commission Connections

The Obama presidency is a disingenuous fraud. He was elected by promising to bring change, yet from the start change was never envisioned. He was carefully groomed and financed by the Trilateral Commission and their friends.
In short, Obama is merely the continuation of disastrous, non-American policies that have brought economic ruin upon us and the rest of the world. The Obama experience rivals that of Jimmy Carter, whose campaign slogan was “I will never lie to you.”

When the Democrat base finally realizes that it has been conned again (Bill Clinton and Al Gore were members), perhaps it will unleash a real political revolution that will oust Trilateral politicians, operatives and policies from the shores of our country.

If the reader is a Democrat, be aware that many Republicans and conservatives are still licking their wounds after finally realizing that George Bush and Dick Cheney worked the same con on them for a disastrous eight years of the same policies!

A who’s who guide to the people poised to shape Obama’s foreign policy.

U.S. policy is not about one individual, and no matter how much faith people place in President-elect Barack Obama, the policies he enacts will be fruit of a tree with many roots. Among them: his personal politics and views, the disastrous realities his administration will inherit, and, of course, unpredictable future crises. But the best immediate indicator of what an Obama administration might look like can be found in the people he surrounds himself with and who he appoints to his Cabinet. And, frankly, when it comes to foreign policy, it is not looking good.

Obama has a momentous opportunity to do what he repeatedly promised over the course of his campaign: bring actual change. But the more we learn about who Obama is considering for top positions in his administration, the more his inner circle resembles a staff reunion of President Bill Clinton’s White House. Although Obama brought some progressives on board early in his campaign, his foreign policy team is now dominated by the hawkish, old-guard Democrats of the 1990s. This has been particularly true since Hillary Clinton conceded defeat in the Democratic primary, freeing many of her top advisers to join Obama’s team.

“What happened to all this talk about change?” a member of the Clinton foreign policy team recently asked the Washington Post. “This isn’t lightly flavored with Clintons. This is all Clintons, all the time.”

Amid the euphoria over Obama’s election and the end of the Bush era, it is critical to recall what 1990s U.S. foreign policy actually looked like. Bill Clinton’s  boiled down to a one-two punch from the hidden hand of the free market, backed up by the iron fist of U.S. militarism. Clinton took office and almost immediately bombed Iraq (ostensibly in retaliation for an alleged plot by Saddam Hussein to assassinate former President George H.W. Bush). He presided over a ruthless regime of economic sanctions that killed hundreds of thousands of Iraqis, and under the guise of the so-called No-Fly Zones in northern and southern Iraq, authorized the longest sustained U.S. bombing campaign since Vietnam.

Under Clinton, Yugoslavia was bombed and dismantled as part of what Noam Chomsky described as the “New Military Humanism.” Sudan and Afghanistan were attacked, Haiti was destabilized and “free trade” deals like the North America Free Trade Agreement and the General Agreement on Tariffs and Trade radically escalated the spread of corporate-dominated globalization that hurt U.S. workers and devastated developing countries. Clinton accelerated the militarization of the so-called War on Drugs in Central and Latin America and supported privatization of U.S. military operations, giving lucrative contracts to Halliburton and other war contractors. Meanwhile, U.S. weapons sales to countries like Turkey and Indonesia aided genocidal campaigns against the Kurds and the East Timorese.

The prospect of Obama’s foreign policy being, at least in part, an extension of the Clinton Doctrine is real. Even more disturbing, several of the individuals at the center of Obama’s transition and emerging foreign policy teams were top players in creating and implementing foreign policies that would pave the way for projects eventually carried out under the Bush/Cheney administration. With their assistance, Obama has already charted out several hawkish stances. Among them:

– His plan to escalate the war in Afghanistan;

– An Iraq plan that could turn into a downsized and rebranded occupation that keeps U.S. forces in Iraq for the foreseeable future;

– His labeling of Iran’s Revolutionary Guard as a “terrorist organization;”

– His pledge to use unilateral force inside of Pakistan to defend U.S. interests;

– His position, presented before the American Israel Public Affairs Committee (AIPAC), that Jerusalem “must remain undivided” — a remark that infuriated Palestinian officials and which he later attempted to reframe;

– His plan to continue the War on Drugs, a backdoor U.S. counterinsurgency campaign in Central and Latin America;

– His refusal to “rule out” using Blackwater and other armed private forces in U.S. war zones, despite previously introducing legislation to regulate these companies and bring them under U.S. law.

Obama did not arrive at these positions in a vacuum. They were carefully crafted in consultation with his foreign policy team. While the verdict is still out on a few people, many members of his inner foreign policy circle — including some who have received or are bound to receive Cabinet posts — supported the invasion and occupation of Iraq. Some promoted the myth that Saddam had weapons of mass destruction. A few have worked with the neoconservative Project for the New American Century, whose radical agenda was adopted by the Bush/Cheney administration. And most have proven track records of supporting or implementing militaristic, offensive U.S. foreign policy. “After a masterful campaign, Barack Obama seems headed toward some fateful mistakes as he assembles his administration by heeding the advice of Washington’s Democratic insider community, a collective group that represents little ‘change you can believe in,’” notes veteran journalist Robert Parry, the former Associated Press and Newsweek reporter who broke many of the stories in the Iran-Contra scandal in the 1980s.

 

A few days ago I posted an article on Ben Bernanke’s recent comments regarding the economy and what the Federal Reserve was prepared to do to ‘help’ the situation.  We looked at what Mr. Bernanke had to say and compared it to actual data.  The data clearly shows that we’re not being told the truth. 

Mr. Bernanke’s partner in crime – Hank Paulson – has been a willing participant in this continued deception.   Mr. Paulson wrote a letter to the Editor of the NY Times yesterday.  I started to write a commentary on his comments and then noticed that Chris Martenson has already dissected Paulson’s comments – in much more detail.  I have attached Chris’ blog post below.  Take careful note of what Paulson has said in the past – and what he is saying today.

The art of deception: Hank Paulson speaks

Tuesday, November 18, 2008, 2:22 pm, by cmartenson

The key problems that we face are all expressions of the fact that our monetary system is based on debt, and this enforces an exceptionally short-term investing and planning horizon, along with the need for continuous exponential expansion.

Thus our primary ailment today is a failure of our money system. Practically everything else that we read about today – bank failures, foreclosures, rapidly depleting resources, etc – are merely symptoms of this failure.

We are facing a money crisis, not a banking crisis. We are not experiencing a failure of our credit markets, but a failure of our money system. The apparent inability of our policy makers to understand this crucial distinction all but assures that their attempts to “fix things” will do more harm than good.

This OpEd piece by Hank Paulson, published today by the NYT, is a monument to wasteful, off-target thinking.

“Fighting the Financial Crisis, One Challenge at a Time”
By Secretary Henry M. Paulson, Jr.
The New York Times November 18, 2008

We are going through a financial crisis more severe and unpredictable than any in our lifetimes. We have seen the failures, or the equivalent of failures, of Bear Stearns, IndyMac, Lehman Brothers, Washington Mutual, Wachovia, Fannie Mae, Freddie Mac and the American International Group. Each of these failures would be tremendously consequential in its own right. But we faced them in succession, as our financial system seized up and severely damaged the economy.

My Comment:  So far so good, but all he’s done here is describe a few symptoms. No recognition of the causes of the problems yet (let alone assigning culpability). But this is just his opening paragraph; perhaps he’ll get to the causes later.

By September, the government faced a systemwide crisis. After months of making the most of the authority we already had, we asked Congress for a comprehensive rescue package so we could stabilize our financial system and minimize further damage to our economy.

My Comment:  Actually, the crisis was fully recognized by many observers several years back, but was obvious to everyone in the industry a full year earlier than September 2008, and Hank knows it. The August 17th, 2007 event (a credit dislocation and stock market swoon) was a full-blown systemic crisis that kicked off everything we are seeing today.  Astute observers of financial markets know that every warning bell in the engine room went off on that day.

Hank is avoiding raising that uncomfortable fact because it puts the lie to the “emergency” bailout bill, which was rammed through Congress and which has subsequently enriched many of his closest personal associates. So he is trying to reshape history by implying that the crisis erupted in September of 2008. It did not. It had been in the offing long enough that I remain confident that Ben Bernanke was handpicked in 2002 based on his recipes for fighting this exact sort of a battle. If this isn’t true, then I have to believe that one guy in Western MA with an Internet connection was able to diagnose and predict a set of ailments that eluded professionals with access to far better information. It’s possible, but not very likely.

There is no playbook for responding to turmoil we have never faced. We adjusted our strategy to reflect the facts of a severe market crisis, always keeping focused on our goal: to stabilize a financial system that is integral to the everyday lives of all Americans.

My Comment:  The goal here, while laudable, is very much directed at the symptoms and offers us no insights as to whether the cause has been identified. After all, is it worth “stabilizing” a system that is inherently unstable? Do we know why it was unstable? Will providing massive funds help, or hurt? How can we know unless we know that the cause of the instability has been identified? What if the cause was “too much debt?” How will going deeper into debt help? These are all valid questions and they are left unasked and unanswered, probably because confidence in our economic system would be eroded by any such introspection.

As we assessed how best to use the remaining money for the Troubled Asset Relief Program, we carefully considered the uncertainties around the deteriorating economic situation in the United States and globally. The latest economic reports underscore the challenges we are facing. The gross domestic product for the third quarter (which ended Sept. 30, three days before the bill passed) shrank by 0.3 percent. The unemployment rate rose in October to a level not seen since the mid-1990s. Home prices in 10 major cities have fallen 18 percent over the previous year. Auto sales numbers plummeted in October and were more than a third lower than one year ago.

My Comment:  Here Hank is connecting the bailout money to fixing the economy. He explicitly draws that connection and maintains it throughout the editorial. The application of TARP money, he implies, is the same as aiding the economy. But what this mechanism might be is never stated, and I’ve not yet seen any mention of it anywhere. For the millions out of work, new capital in a big bank is not helpful in the least. For an ailing company addicted to selling to overly indebted consumers, the TARP money provides no relief.

I have always said that the decline in the housing market is at the root of the economic downturn and our financial market stress. And the economy, as it slows further, threatens to prolong this decline, as well as the stress on our financial institutions and financial markets.

My Comment:  Um, no, Hank, sorry, this is not true. Here are some recent quotes from you:

April 20, 2007 — “I don’t see (subprime mortgage market troubles) imposing a serious problem. I think it’s going to be largely contained.”

July 26, 2007 — “I don't think it [the subprime mess] poses any threat to the overall economy.”

Perhaps “always” and “root” mean different things to Hank than to me, but when I say “I have always maintained,” I generally mean for a much longer period of time than, say, last year.

The current $250 billion capital purchase program is strong medicine for our financial institutions. More capital enables banks to take losses as they write down or sell troubled assets. And stronger capitalization is essential to increasing lending, which is vital to economic recovery.

My Comment:  This is technically true, but in a very, very slippery way. What Hank is leaving unsaid is that the banks are not really taking losses to anywhere near their true extent, because the Federal Reserve is buying their assets at prices far above fair market value. So you’ve got Hank shoveling taxpayer money into the capital/equity side of banks (at very unfavorable terms to the taxpayers, especially compared to European efforts), while on the other side of the balance sheet you’ve got the Fed lifting damaged assets off their books at above-market rates so that the banks can avoid an honest appraisal of their true condition. So the slippery part was for Hank to mysteriously leave out the Fed's efforts in describing the scope of the bailout help.

Worse, this paragraph displays the pro debt-growth bias that will lead to our eventual ruin as a nation. Hank is parroting a thoroughly unquestioned premise on Wall Street, which is that “stronger capitalization is essential to increasing lending, which is vital to economic recovery,” but you and I might reasonably question whether this is true. Increased lending has brought us to the highest levels of debt ever and is the precise cause of the current mess. So, clearly there is a type of lending that is not good and should be avoided at all costs. Instead we need to actively begin paying down our debts, not increasing them. But as a creature of the banking system, Hank only knows one thing: more debt.

Recently I've been asked two questions. First, Congress gave you the authority you requested, and the economy has only become worse. What went wrong? Second, if housing and mortgages are at the root of our economic difficulties, why aren't you addressing those problems?

My Comment:  These straw-man questions are ducking the main issues. The continued espousing of the myth that mortgages are “at the root of” our problems either displays an appalling lack of awareness or a deliberate attempt to deceive. The root of our problems is primarily composed of excess leverage and a reckless disregard for risk by big financial institutions. It was Hank himself who oversaw the dangerous accumulation of leverage during his tenure as the captain at the helm of the flagship Wall Street firm Goldman Sachs. Reckless lending was the cause, mortgage foreclosures are the symptom. This utter failure to distinguish between cause and effect is what worries me most about our chances of pulling through all this with minimal pain.

The answer to the second question is that more access to lower-cost mortgage lending is the No. 1 thing we can do to slow the decline in the housing market and reduce the number of foreclosures. Together with our bank capital program, the moves we have made to stabilize and strengthen Fannie Mae and Freddie Mac, and through them to increase the flow of mortgage credit, will promote mortgage lending.

My Comment:  Given that Hank cannot spot the cause of the disease, it is unsurprising that he’s decided to treat the symptom. Here he advocates “access to lower-cost mortgage lending” as the solution to the housing crisis, delightfully unaware that he is prescribing more of the very toxin that caused the sickness in the first place. No, we do not need more low-cost lending. Yes, we do need to wring out the excesses of the past and have house prices fall back into a lower equilibrium with incomes. With this one statement, Hank Paulson is effectively saying, “We’ve decided to treat the alcoholic with a fifth of scotch.” Perhaps it’s time to get a new doctor?

The rest of the article closes with three paragraphs of gratuitous self-congratulation for operating boldly in an uncertain market environment. There’s nothing to gain from parsing that out, so I’ll stop here.

In summary, these are the things that are not helped, but rather hurt, by the actions of the US government going deeper into debt to repair failed banks:

1.                               Insolvent entitlement programs. Our government is already fully insolvent with regard to the entitlement programs. Going deeper into debt at this time only exacerbates that problem, which is no longer far off into the future, but only a decade away from being a full-blown crisis of its own. Instead, a program of saving and cutting government spending needs to be implemented immediately.

2.                               Lack of readiness for a new energy future. We need to make trillions of dollars in investments into preparing for a very different energy future. A smart grid, electric high speed railroads, reforming our ‘exurb’ living/work arrangement, and the complete replacement of our auto fleet are all essential components of arriving at the future gracefully.  To use this recent weakness in oil prices to encourage people to borrow more to buy SUVs is about the most cynical and shortsighted policy I can imagine.

3.                               A deficit and crumbling infrastructure. To be a first-world nation, you need an elegant and modern infrastructure. Drive from JFK to NYC with this in mind, and you will know the meaning of ‘embarrassing.’ Have you heard about any major bridges falling into rivers in any major country besides the US recently? We have vast investment needs just in rebuilding and maintaining our current infrastructure. Going into debt to bail out Wall Street does nothing to help in this regard, and very likely sabotages our future ability to borrow, should we ever decide that investing in ourselves is a priority. 

4.                               A national failure to save. Ending our raw-consumptive spending and rebuilding savings (the only way to support true capital formation) is an absolute must if we want a future of prosperity. By showing zero willingness to do anything other than spend whatever it takes to return to a zero-saving society, the federal government is setting a bad example. Instead we should be exploring ways to cut spending where possible and redirect funds to places where some investment could yield a decent return. Green energy comes to mind.

Financial Times Editorial Admits Agenda For Dictatorial World Government

Paul Joseph Watson
Tuesday, December 9, 2008

The Financial Times, one of the most respected and widely read newspapers on the planet, features an editorial today that openly admits the agenda to create a world government based on anti-democratic principles and concedes that the term “global governance” is merely a euphemism for the move towards a centralized global government.

For years we were called paranoid nutcases for warning about the elite’s plans to centralize global power and destroy American sovereignty. Throughout the 1990’s people who talked about the alarming move towards global government were smeared as right-wing lunatics by popular culture and the media.

Now the agenda is out in the open and in our faces, the debunkers have no more ammunition with which to deride us.

A jaw-dropping editorial written by the Financial Times’ chief foreign affairs commentator Gideon Rachman entitled ‘And now for a world government’ lays out the plan for global government and how it is being pushed with deceptive language and euphemisms in order to prevent people from becoming alarmed.

 

“For the first time in my life, I think the formation of some sort of world government is plausible,” writes Rachman, citing the financial crisis, “global warming” and the “global war on terror” as three major pretexts through which it is being introduced.

Rachman writes that “global governance” could be introduced much sooner than many expect and that President elect Barack Obama has already expressed his desire to achieve that goal, making reference to Obama’s circle of advisors which includes Strobe Talbott, who in 1992 stated, “In the next century, nations as we know it will be obsolete; all states will recognize a single, global authority. National sovereignty wasn’t such a great idea after all.”

Rachman then concedes that the more abstract term “global governance,” which is often used by top globalists like David Rockefeller as a veil to offset accusations that a centralized global government is the real agenda, is merely a trick of “soothing language” that is used to prevent “people reaching for their rifles in America’s talk-radio heartland”.

“But some European thinkers think that they recognise what is going on,” says Rachman. “Jacques Attali, an adviser to President Nicolas Sarkozy of France, argues that: “Global governance is just a euphemism for global government.” As far as he is concerned, some form of global government cannot come too soon. Mr Attali believes that the “core of the international financial crisis is that we have global financial markets and no global rule of law”.

Rachman proceeds to outline what the first steps to an official world government would look like, including the creation of “A legally binding climate-change agreement negotiated under the auspices of the UN and the creation of a 50,000-strong UN peacekeeping force”.

“A “world government” would involve much more than co-operation between nations,” writes Rachman. “It would be an entity with state-like characteristics, backed by a body of laws. The European Union has already set up a continental government for 27 countries, which could be a model. The EU has a supreme court, a currency, thousands of pages of law, a large civil service and the ability to deploy military force.”

“So, it seems, everything is in place. For the first time since homo sapiens began to doodle on cave walls, there is an argument, an opportunity and a means to make serious steps towards a world government,” concludes Rachman, before acknowledging that the path to global government will be “slow and painful”.

Tellingly, Rachman concedes that “International governance tends to be effective, only when it is anti-democratic,” citing the continual rejection of EU expansion when the question is put to a vote. “In general, the Union has progressed fastest when far-reaching deals have been agreed by technocrats and politicians – and then pushed through without direct reference to the voters,” writes Rachman.

So there you have it - one of the world’s top newspapers, editorially led by chief economics commentator Martin Wolf, a top Bilderberg luminary, openly proclaiming that not only is world government the agenda, but that world government will only be achieved through dictatorial measures because the majority of the people are dead against it.

And now for a world government

 

Financial Times

By Gideon Rachman

Published: December 9 2008 02:00 | Last updated: December 9 2008 02:00

 

I have never believed that there is a secret United Nations plot to take over the US. I have never seen black helicopters hovering in the sky above Montana. But, for the first time in my life, I think the formation of some sort of world government is plausible.

A "world government" would involve much more than co-operation between nations. It would be an entity with state-like characteristics, backed by a body of laws. The European Union has already set up a continental government for 27 countries, which could be a model. The EU has a supreme court, a currency, thousands of pages of law, a large civil service and the ability to deploy military force.

So could the European model go global? There are three reasons for thinking that it might.

First, it is increasingly clear that the most difficult issues facing national governments are international in nature: there is global warming, a global financial crisis and a "global war on terror".

Second, it could be done. The transport and communications revolutions have shrunk the world so that, as Geoffrey Blainey, an eminent Australian historian, has written: "For the first time in human history, world government of some sort is now possible." Mr Blainey foresees an attempt to form a world government at some point in the next two centuries, which is an unusually long time horizon for the average newspaper column.

But - the third point - a change in the political atmosphere suggests that "global governance" could come much sooner than that. The financial crisis and climate change are pushing national governments towards global solutions, even in countries such as China and the US that are traditionally fierce guardians of national sovereignty.

Barack Obama, America's president-in-waiting, does not share the Bush administration's disdain for international agreements and treaties. In his book, The Audacity of Hope , he argued that: "When the world's sole superpower willingly restrains its power and abides by internationally agreed-upon standards of conduct, it sends a message that these are rules worth following." The importance that Mr Obama attaches to the UN is shown by the fact that he has appointed Susan Rice, one of his closest aides, as America's ambassador to the UN, and given her a seat in the cabinet.

A taste of the ideas doing the rounds in Obama circles is offered by a recent report from the Managing Global Insecurity project, whose small US advisory group includes John Podesta, the man heading Mr Obama's transition team and Strobe Talbott, the president of the Brookings Institution, from which Ms Rice has just emerged.

The MGI report argues for the creation of a UN high commissioner for counter-terrorist activity, a legally binding climate-change agreement negotiated under the auspices of the UN and the creation of a 50,000-strong UN peacekeeping force. Once countries had pledged troops to this reserve army, the UN would have first call upon them.

These are the kind of ideas that get people reaching for their rifles in America's talk-radio heartland. Aware of the political sensitivity of its ideas, the MGI report opts for soothing language. It emphasises the need for American leadership and uses the term, "responsible sovereignty" - when calling for international co-operation - rather than the more radical-sounding phrase favoured in Europe, "shared sovereignty". It also talks about "global governance" rather than world government.

But some European thinkers think that they recognise what is going on. Jacques Attali, an adviser to President Nicolas Sarkozy of France, argues that: "Global governance is just a euphemism for global government." As far as he is concerned, some form of global government cannot come too soon. Mr Attali believes that the "core of the international financial crisis is that we have global financial markets and no global rule of law".

So, it seems, everything is in place. For the first time since homo sapiens began to doodle on cave walls, there is an argument, an opportunity and a means to make serious steps towards a world government.

But let us not get carried away. While it seems feasible that some sort of world government might emerge over the next century, any push for "global governance" in the here and now will be a painful, slow process.

There are good and bad reasons for this. The bad reason is a lack of will and determination on the part of national, political leaders who - while they might like to talk about "a planet in peril" - are ultimately still much more focused on their next election, at home.

But this "problem" also hints at a more welcome reason why making progress on global governance will be slow sledding. Even in the EU - the heartland of law-based international government - the idea remains unpopular. The EU has suffered a series of humiliating defeats in referendums, when plans for "ever closer union" have been referred to the voters. In general, the Union has progressed fastest when far-reaching deals have been agreed by technocrats and politicians - and then pushed through without direct reference to the voters. International governance tends to be effective, only when it is anti-democratic.

The world's most pressing political problems may indeed be international in nature, but the average citizen's political identity remains stubbornly local. Until somebody cracks this problem, that plan for world government may have to stay locked away in a safe at the UN.

gideon.rachman@ft.com

The assault on free markets continues.  Here we see the Australian Prime Minister issuing the same rhetoric as other world leaders – including Barack Obama.  You’ll notice that the message below contains similar language as we’ve heard from other leaders:

 

“Kevin Rudd…….called for a new era of "social capitalism" in which government intervention and regulation feature heavily”

 

"The time has come, off the back of the current crisis, to proclaim that the great neo-liberal experiment of the past 30 years has failed….”

 

“…it now falls to social democracy to prevent liberal capitalism from cannibalising itself.”

 

“Mr. Rudd writes in The Monthly that just as Franklin Roosevelt rebuilt US capitalism after the Great Depression, modern-day "social democrats" such as himself and the US President, Barack Obama, must do the same again.”

 

“….he argues that "minor tweakings of long-established orthodoxies will not do" and advocates a new system.”

 

“He [Mr. Rudd] advocates tighter regulation and policing of global finances”

 

This quote sounds like it came straight out of Atlas Shrugged:

 

"[Mr. Rudd advocates] a system of open markets, unambiguously regulated by an activist state, and one in which the state intervenes to reduce the greater inequalities that competitive markets will inevitably generate.”

 

It’s easy to believe all of this economic rhetoric when we hear world leaders constantly telling us what the problem is and how to solve it.  The rhetoric always follows the same line of reasoning and consists of some version of the following language:

 

1. It appears that the free market system (capitalism) is seriously flawed
2. Greed has compounded the problem (true enough)
3. The current crisis is a direct result of #1 and #2 above (let’s ignore the truth)
4. Anyone who advocates free markets is attacked (see article below)
5. At a minimum – we need more government intervention and regulation
6. #5 will probably not be good enough – so we’ll need a new, heavily regulated ‘system’.
7. The ‘system’ in #6 is usually described as a ‘New World Order’
8. The ‘State’ must be heavily involved in creating and regulating this ‘New World Order’

 

As we’ve learned previously, what’s really causing the problems we’re experiencing today?  A monetary system that is based on exponential debt and money growth.  It is the world’s monetary system (I say ‘world’ because we’re all on the same underlying system) that is causing the current economic ‘crisis’.  It’s not subprime loans or subprime borrowers.  It’s not ‘interest only’ or ‘option-arm’ loans.  It’s not a ‘liquidity’ problem.  It’s not an ‘interest rate’ problem.  It’s not a ‘financial derivatives’ problem.  All of these things are symptoms of an underlying disease that no one in power wants to discuss.

 

The hard truth that no one wants to admit to or research is this – the current economic crisis is deliberate and is being used to promote a new ‘order’ that is built on socialism.  We hear it promoted from leaders all over the world almost daily now – yet we don’t want to face the truth – so we stick our heads in the sand and pretend that the ‘stimulus’ packages will somehow save us from economic oblivion.  The ‘stimulus’ packages will not save us – but they will certainly contribute to the world’s bankruptcy as governments the world over eventually default under the weight of massive debt.

 

If you haven’t read the Bible in awhile – I recommend that you pick it up and start learning the truth.  The prophecies of Revelation are now screaming at us – and very few are paying any attention.

 

 

Time for a New World Order: PM

Phillip Coorey Chief Political Correspondent
January 31, 2009

 

KEVIN RUDD has denounced the unfettered capitalism of the past three decades and called for a new era of "social capitalism" in which government intervention and regulation feature heavily.

In an essay to be published next week, the Prime Minister is scathing of the neo-liberals who began refashioning the market system in the 1970s, and ultimately brought about the global financial crisis.

 

"The time has come, off the back of the current crisis, to proclaim that the great neo-liberal experiment of the past 30 years has failed, that the emperor has no clothes," he writes of those who placed their faith in the corrective powers of the market.

 

"Neo-liberalism and the free-market fundamentalism it has produced has been revealed as little more than personal greed dressed up as an economic philosophy. And, ironically, it now falls to social democracy to prevent liberal capitalism from cannibalising itself."

 

Mr Rudd writes in The Monthly that just as Franklin Roosevelt rebuilt US capitalism after the Great Depression, modern-day "social democrats" such as himself and the US President, Barack Obama, must do the same again. But he argues that "minor tweakings of long-established orthodoxies will not do" and advocates a new system that reaches beyond the 70-year-old interventionist principles of John Maynard Keynes.

 

"A system of open markets, unambiguously regulated by an activist state, and one in which the state intervenes to reduce the greater inequalities that competitive markets will inevitably generate," he writes.

 

He urges "a new contract for the future that eschews the extremism of both the left and right".

He mocks neo-liberals "who now find themselves tied in ideological knots in being forced to rely on the state they fundamentally despise to save financial markets from collapse".

 

He advocates tighter regulation and policing of global finances, and identifies the immediate challenge as restoring global growth by 3 per cent of gross domestic product, the amount it is expected to fall in 2009. Next week, as Parliament resumes, his Government will chip in with a second economic stimulus package.

 

Mr Rudd commits to keeping budgets in surplus "over the cycle", meaning deficits should be temporary. In a further sign the Government is not contemplating additional tax cuts, which would deliver a permanent hit to revenue, he stresses that stimulus measures have to be paid for when the economy recovers.

 

Mr Rudd singles out Thatcherism as a culprit, as well as the former Howard government. His essay implicitly attacks the Opposition Leader, Malcolm Turnbull, who this week urged the free market be allowed to dictate commercial property values as he slammed a Government measure to prop them up.

 

Mr Rudd's essay follows the blast Mr Obama gave Wall Street bankers yesterday for awarding themselves $28 billion in bonuses last year at the same time as they were being bailed out by taxpayers.

 

In a message to Mr Obama and the US Congress, Mr Rudd counselled against erecting trade barriers. "Soft or hard, protectionism is a sure-fire way of turning recession into depression as it exacerbates the collapse in global demand."

 

The message was reinforced in Davos yesterday when the Trade Minister, Simon Crean, described the "buy American" provisions of the new Obama stimulus package as "very worrying". "On the face of it, it looks like it contravenes commitments made to the World Trade Organisation," he said.

 

with Paola Totaro

TIME Magazine

New World Order

By Justin Fox

 

Thursday, Feb. 05, 2009

In recent weeks, the world has been politely standing by and watching how things play out with the fiscal stimulus and latest bank-bailout plans in Washington. Yes, there's been some grumbling overseas about "buy American" provisions in the stimulus bill, but for the most part, officials elsewhere don't want to step on the toes of a new President to whom they are favorably disposed. They also don't want to endanger legislation that they hope will help jump-start the global economy.

Just wait a couple of months, though. Politicians from Beijing to Berlin to Brasília see the current crisis as the product of a messed-up global financial infrastructure dominated by the U.S., and they will soon be pushing for big changes--whether Americans like them or not.

All this will begin to gel on April 2, when the newish international organization known as the G-20--the leaders of 19 of the world's biggest national economies, plus the European Union--meets in London. An unofficial meeting has already taken place, at the World Economic Forum in Davos, Switzerland, where G-20 officials (with the conspicuous exception of those from the U.S.) made speeches, conversed in the halls and gave a sense of the direction in which the world outside the U.S. wants to head. (Read TIME's special report on Davos 2009.)

The global discussion of the financial crisis is strikingly different from the one in the U.S. Here there's still something of a debate over whether the mess is the result of too much government interference in the housing market or too little government regulation of financial markets. In the rest of the world, that's no debate: inadequate and inconsistent financial regulation is uniformly blamed. What's more, a consensus seems to have emerged among the world's finance ministers and central-bank bosses that the chief underlying cause of the crisis was an unbalanced and out-of-control system of global capital flows in which some big-spender countries (namely the U.S.) ran up huge debts while big savers (China and India, for example) hoarded surpluses.

On the regulatory front, the path to a new global approach is pretty clear. Last spring the leaders of the G-7, a club of wealthy nations, agreed to create a "college of supervisors" to more closely coordinate regulation of multinational banks. The Group of Thirty, an influential organization of current and former central bankers and financial regulators, recommended in January that "systematically significant" financial institutions (those that are too big to fail) be identified in advance and subjected to higher capital requirements and tougher regulation. (See who's to blame for the financial crisis.)

Yet regulators around the world were already jointly setting bank-capital standards before the current crisis hit. A lot of good that did us. So there is also much talk about the need for a new architecture--"a new Bretton Woods" was a phrase that echoed around Davos--to rein in global financial flows.

Bretton Woods is the mountain resort in New Hampshire where in 1944 the Allied nations met--with the U.S. calling almost all the shots--to plan a postwar financial system. The Bretton Woods creations included the International Monetary Fund (IMF), the World Bank and a quarter-century of fixed exchange rates built around a U.S. dollar that was linked to gold. The fixed exchange rates and gold standard unraveled in the 1970s, and ever since we've had a system in which the IMF occasionally steps in to help countries in currency crises (usually imposing harsh terms in the process) but exercises no real control over the global financial system.

After the emerging-market currency collapses of the late 1990s, in which IMF aid wasn't much help, the lesson that emerging economies such as China and India took was that they needed to build up gigantic reserves of U.S. dollars to protect their currencies. To build those reserves, they ran big trade surpluses, which were in turn enabled mainly by record trade deficits in the U.S., which were in turn enabled by massive borrowing from around the world. It was an extremely unbalanced financial ballet, and it has now come crashing to the ground.

In the view of many outside the U.S. (and some within), the only way to limit such excesses is through a bigger, more powerful IMF that can act as a central bank to the world--and knock heads when needed. While everybody agrees that this new IMF needs to be less dominated by the U.S. and Western Europe, things get controversial as soon as you go past voting rights. Should capital flows be restricted? Should there be limits on trade deficits and surpluses? Should the IMF be able to order around even the U.S.? If the answer to any of these questions is yes, global capitalism will have entered a new and dramatically less freewheeling era.

 

I mentioned in an earlier post that we can get a very good idea of what is being planned by the global elite by paying close attention to articles within mainstream media outlets.  The article below is a great example of this – you and I are being told in this article who will oversee (regulate) – and control - the future global financial system. 

 

First of all – we should pay close attention to the audience for Bernanke’s speech.  Who was the audience?  The Council on Foreign Relations.  If you research the CFR – you’ll notice that the goal of this organization is a worldwide global government (search for the CFR and David Rockefeller if you want to know more about their motives).  I have links to a couple of videos on the CFR on my website.  The CFR has infiltrated mainstream media and has been planning for global government for decades – so it should be no surprise that Bernanke would address this group.  What is surprising to me is that they would be so bold as to broadcast this.  Again, you and I are dealing with some very arrogant people.  They think that you and I have no idea what’s going on – and unfortunately, for the vast majority of the world’s people – they are correct. 

 

Let’s take a look at the comments by Federal Reserve Chairman Ben Bernanke in the article below.

 

"The responsibility to use the resulting capital inflows effectively fell primarily on the receiving countries, particularly the United States," Mr. Bernanke said. The "failure" of the U.S. and other big economies to do so "has led to a powerful reversal in investor sentiment and a seizing up of credit markets," he said.

Bernanke is telling us that current credit market problems have been caused by the inability of the U.S. (and other large economies) to manage capital inflows.  Is this really what has caused the current global financial crisis?  No.  As you now know, the current crisis is a direct result of the world’s debt based monetary system – not a result of the management of ‘capital inflows’.  Bernanke obviously knows this – he’s using financial language to confuse the lies.  What is telling here - is that he never defines ‘effective’ use of capital inflows.  No details – just a general statement criticizing our government – that tells us absolutely nothing. 

 

"In the near term, governments around the world must continue to take forceful and, when appropriate, coordinated actions to restore financial market functioning and the flow of credit," Mr. Bernanke said. In the U.S., officials are determined "to ensure that systemically important financial institutions continue to be able to meet their commitments," Mr. Bernanke said.

"Until we stabilize the financial system, a sustainable economic recovery will remain out of reach," he said.

The statement above is a common message we’re hearing a lot lately from global leaders – government stimulus is required to ‘restore’ financial markets and the flow of debt (everyone likes to use the term ‘credit’ because it sounds better than ‘debt’ – but if you’re borrowing money – it’s debt we’re talking about).  Can we (U.S.) restore financial/credit markets by borrowing trillions of dollars for government ‘stimulus’ packages? Of course not.  We can’t borrow our way out of this mess.  Until our monetary system changes – governments of the world can continue their ‘determined’ efforts to support the financial system all they want – it will eventually end with not only the failure of the financial institutions – but will also bring down the governments themselves. 

 

The last sentence above is the most telling.  Can we stabilize the financial system?  No – we cannot stabilize the financial system under the current monetary system.  We’ve reached the end of the line.  We can no longer create the amount of debt required to keep the system functioning – it’s going to fail.  So – what does this last sentence above tell us?  Bernanke is telling us that we will never achieve ‘a sustainable economic recovery’ under this system.  Since we’re never going to achieve economic recovery under the current system – what needs to happen?  We’ll need a new ‘system’.  Take note of his next comments.

 

“But even as Mr. Bernanke and others focus on stabilizing markets in the short term, he signaled it isn't too early to consider longer-term reforms including -- in the U.S. -- putting responsibility for addressing possible systemic risks with one authority, such as the Fed.

He outlined four steps related to: systemically important and interconnected firms; financial infrastructure; regulation; and addressing systemic risks under one authority.”

 

Bernanke is recommending that ‘one authority’ should be in charge of addressing systemic risks.  Who is he recommending to be this ‘one authority’?  The Federal Reserve.  Again – who is the Federal Reserve?  It is a cartel of private international bankers.  Bernanke is telling us that a group of private bankers – not our government - should oversee and regulate the entire financial system.  This is your future – a world governed by a ruling elite that controls every aspect of the world’s financial system.  They are now telling you this on almost a daily basis.  What does the Bible tell us about the end of this age?  A deceptive, ruling organization will control a world government and world financial system.  The world stands on the edge of the abyss – and few can see the signs – just as the Bible tells us.  If there is one, overriding warning we are given in the Bible concerning our times – it is a warning against deception.  We are not heeding the warning.

 

If the quotes above were not enough, Bernanke finishes his speech by reiterating the message.

 

As for placing responsibility for overall systemic risk with one authority, Mr. Bernanke noted that "some commentators have proposed that the Federal Reserve take on the role of systemic risk authority" while "others have expressed concern that adding this responsibility would overburden the central bank."

Whether the Fed's right for the job depends on how Congress defines the role of the new authority, Mr. Bernanke said.

"As a practical matter, however, effectively identifying and addressing systemic risks would seem to require the involvement of the Federal Reserve in some capacity, even if not in the lead role," he said.

 

You and I are being prepared for the complete takeover of the world’s financial system by an international cartel of private bankers.  They currently run the world’s banking system – and they’re crashing it – in preparation for the next step in the plan. These same people have also infiltrated the world’s governments – so don’t expect our current leaders to offer much resistance.  It will take true leaders with honor and courage to overcome this.

 

MARCH 10, 2009, 9:04 A.M. ET

Bernanke Outlines Steps to Avoid Future Crises

 

Wall St. Journal

By BRIAN BLACKSTONE

WASHINGTON -- U.S. Federal Reserve Chairman Ben Bernanke on Tuesday outlined steps he thinks would help avert future financial crises, saying the time for such a longer-term discussion has come even as policy makers address the worst crisis since the 1930s.

In remarks to the Council on Foreign Relations, Mr. Bernanke also issued a mea culpa of sorts for the current global financial crisis on behalf of the U.S. and some other big economies that failed to "prudently" invest the rush of capital inflows that started more than a decade ago.

"The responsibility to use the resulting capital inflows effectively fell primarily on the receiving countries, particularly the United States," Mr. Bernanke said. The "failure" of the U.S. and other big economies to do so "has led to a powerful reversal in investor sentiment and a seizing up of credit markets," he said.

"In the near term, governments around the world must continue to take forceful and, when appropriate, coordinated actions to restore financial market functioning and the flow of credit," Mr. Bernanke said. In the U.S., officials are determined "to ensure that systemically important financial institutions continue to be able to meet their commitments," Mr. Bernanke said.

"Until we stabilize the financial system, a sustainable economic recovery will remain out of reach," he said.

But even as Mr. Bernanke and others focus on stabilizing markets in the short term, he signaled it isn't too early to consider longer-term reforms including -- in the U.S. -- putting responsibility for addressing possible systemic risks with one authority, such as the Fed.

He outlined four steps related to: systemically important and interconnected firms; financial infrastructure; regulation; and addressing systemic risks under one authority.

Referring to big interconnected firms, known as "too big to fail," Mr. Bernanke said "any firm whose failure would pose a systemic risk must receive especially close supervisory oversight of its risk-taking, risk management, and financial condition, and be held to high capital and liquidity standards."

Mr. Bernanke also suggested ways to address the "potential fragility" of money-market mutual funds. "One approach would be to impose tighter restrictions on the instruments in which money market mutual funds can invest, potentially requiring shorter maturities and increased liquidity," Mr. Bernanke said.

"A second approach would be to develop a limited system of insurance for money-market mutual funds that seek to maintain a stable net asset value," he said.

Officials should also consider changes to deposit-insurance funding, Mr. Bernanke said, such as raising reserve ratios in good times to create a buffer that can be drawn on in down times.

As for placing responsibility for overall systemic risk with one authority, Mr. Bernanke noted that "some commentators have proposed that the Federal Reserve take on the role of systemic risk authority" while "others have expressed concern that adding this responsibility would overburden the central bank."

Whether the Fed's right for the job depends on how Congress defines the role of the new authority, Mr. Bernanke said.

"As a practical matter, however, effectively identifying and addressing systemic risks would seem to require the involvement of the Federal Reserve in some capacity, even if not in the lead role," he said.

Write to Brian Blackstone at brian.blackstone@dowjones.com

You've probably wondered at some point after receiving these emails from me - is anyone else looking into this stuff besides Gilmore?  Actually, there are many people who are now researching our monetary system - you just won't hear them on CNN or Fox News.  It's very rare to hear anyone in mainstream media tell us the truth.

 

The article below was published recently and does a great job of briefly explaining the history of the Fed.  If you haven't taken the time to research the Fed and our monetary system - now is the time to do so.  This should be at the top of your list of priorities - it's that important.  Why?  Because sooner - rather than later - the Fed (and the world's central banking system) is going to lead us into the worst depression in the history of our nation.  I hope this gets your attention - because it's the truth.  You are watching it happen on the news everyday now.

 

If I were to point to one piece of information in the article below to focus on - it would be the following quote from the Rothschilds. 

 

"Those few who can understand the system (check book money and credit) will either be so interested in its profits, or so dependent on it favors, that there will be little opposition from that class, while on the other hand, the great body of people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear it burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests."  -Rothschild’s Bros. of London

 

What are they telling you?  They are telling you that when it comes to this monetary system they created - there are two types of people in the world - and they are not worried about either of them.  They are telling you that there are very few people who have the mental ability to understand the system.  Are they worried about this minority?  No.  Why?  Because this minority will be so enamored with the wealth and power that the system brings them - they will do nothing to stop it.  They will ignore the danger it presents because their focus is on the money, power and prestige the system gives to them.  Do you think this might apply to all of the intelligent people on Wall Street today?  Even now - the vast majority of the people at the financial epicenter of the world - cannot see the danger.

 

The quote above also tells us that the Rothschilds believe the vast majority of us do not have the mental ability to understand the system - and therefore will be slaves to the system without knowing it.  While most of us are burdened by the system without knowing it (struggling to earn enough to pay our bills, fighting to stay ahead of inflation, paying interest on everything, etc.), I believe that many people can understand the system once it's explained to them.  It's actually a relatively simple system when you focus on the basics of how the system works - the problem is all of the deception surrounding it.  You will not hear how our monetary system works on CNN, Fox News, CBS, NBC, ABC, etc.  Our President is not going to inform you about the dangers of our monetary system during a primetime address.  You will not find many (if any) college courses that accurately explain how the Federal Reserve System works.  Did you study the history of the Fed at any point in high school?  Did your high school economics teacher review the details of our monetary system with you?  Did your high school economics text book have a chapter on our monetary system and how our money is created by debt?  Did your high school math teacher use our money supply and debt as examples of exponential growth?  You get the picture.  There is a determined effort to keep the secrets of the system hidden. 

 

Imagine what would happen tomorrow if someone was able to explain this system to every American.  What would happen if every American woke up tomorrow morning and instead of watching 'Regis and Kelly' or 'American Idol' highlights - they instead watched a program explaining how the Fed is causing our economy and the financial system to collapse.  What if their motives were exposed?  What if every American began to ask some very hard questions like - why is our government allowing this to happen?  The answers would lead to a very angry population.  Ladies and gentlemen, this is the stuff of revolutions.  I wish that none of this were true - but the truth is the truth.  You either accept it and do something about it - or you do what most people in our nation are doing - and keep your head in the sand.  Each of us chooses the path we will take.  Each of us chooses who we will follow.  Each of us chooses whether to take a stand against evil or succumb to it. 

 

If you've studied what God has to say about the pursuit of money and applied this knowledge to our monetary system - then you've probably got alarms going off in your mind.  Our spiritual enemy is very skilled at offering short term gains that deliver long term misery and destruction.  Some of us recognize these tactics within our lives and protect ourselves accordingly.  If you are a Christian - then you understand what I'm telling you.  We are not unaware of the devil's schemes against us personally.  The problem is that almost all of us never think about this from a corporate standpoint.  Our nation has done a deal with our enemy - and I assure you - this deal will turn out like all the rest.  We have experienced relatively short term gains - and now we're about to see the long term consequences.

 

Take Care,

 

John

 

 

The Grand Illusion – The Federal Reserve

 

The whole world is in a state of complete confusion. Americans are coming to the realization that their lives have been a grand illusion. You thought your neighbor had it made. They were driving a Mercedes, spent $40,000 on a new kitchen with granite countertops and stainless steel appliances, sent their kids to private school, had a second home at the shore, and took exotic vacations all over the world. Now their house is in foreclosure and you are paying to bail them out. The anger and outrage in the country is at the highest level since the Vietnam War. The American public is being misled by government officials, politicians, and the Federal Reserve regarding the causes of this crisis and the solutions needed to solve our economic tribulations.

 

 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?

 

 

The history of National Banks in the United States has been controversial since the Founding Fathers signed the Declaration of Independence. The Constitution of the United States unequivocally states that only Congress has the authority to coin money, not an independent bank owned by unknown bankers.

 

The Congress shall have Power to coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures

 

Article 1, Section 8 – US Constitution

 

Our most recent horrifying experience with an all powerful central bank has led to the current worldwide financial crisis. In less than one century the Federal Reserve Bank of the United States has destroyed our currency and has allowed bankers to gain unwarranted power over the country. They had the ability and opportunity to bring down the worldwide financial system.

 

Then the average American is told that the dollar has lost 95% of its purchasing power since the inception of the Federal Reserve in 1913, they look at you with a blank stare and start wondering whether American Idol is on TV tonight. The systematic inflation purposely created by the Federal Reserve silently robs the average American of their standard of living. The CPI figures published by the US government tell the story.

 

Year	Annual Average	Annual Percent Change (rate of inflation)
1913	9.9	--
1914	10.0	1.0
1915	10.1	1.0
1916	10.9	7.9
1917	12.8	17.4
1918	15.1	18.0
1919	17.3	14.6
1920	20.0	15.6
1971	40.5	4.4
1972	41.8	3.2
1973	44.4	6.2
1974	49.3	11.0
1975	53.8	9.1
1976	56.9	5.8
1977	60.6	6.5
1978	65.2	7.6
1979	72.6	11.3
1980	82.4	13.5
1981	90.9	10.3
1982	96.5	6.2
2000	172.2	3.4
2001	177.0	2.8
2002	179.9	1.6
2003	184.0	2.3
2004	188.9	2.7
2005	195.3	3.4
2006	201.6	3.2
2007	207.3	2.9
2008	215.2	3.8
2009*	218.4	1.5

Source: BLS

 

The government began keeping official track of inflation in 1913, the year the Federal Reserve was created. The CPI on January 1, 1914 was 10.0. The CPI on January 1, 2009 was 211.1. This means that a man’s suit that cost $10 in 1913 would cost $211 today, a 2,111% increase in 96 years. This is a 95% loss in purchasing power of the dollar. For some further perspective here are the prices of some other common items in 1913 per the Morristown Daily Record:

 Boy's shoes for school, .98/pair                              Women's shoes, 2.00-8.00/pair

Bread, .10/3 loaves                                                  Butter, fancy, .30/lb

Cereal, Kellogg's Corn Flakes, .09/box                 Eggs, Fresh Western, .27/dozen

Peanut butter, .09/jar                                                Toilet paper, .26/6 rolls

Daily Record [Morristown NJ], .01/daily paper    

 

Notable on the CPI chart is that in the years following the creation of the Federal Reserve, inflation ran at double digit rates to finance Woodrow Wilson’s foreign intervention into World War I. The other notable period was in the years following President Nixon’s closing of the gold window in 1971. This led to rampant inflation that wasn’t tamed until the early 1980’s by Paul Volcker, the only independent courageous Federal Reserve Chairman in its history. The figures so far in the 21st Century seem modest. This is due partly to the methodical downward manipulation of the calculation by government bureaucrats. The period from 2010 to 2020 will show a dramatic jump caused by all of the money printing and reckless spending that is occurring today. Book it Dano.

 The average American might just conclude that prices always go up, so what’s the big deal about inflation. This is where the Federal Reserve and politicians have pulled the wool over your eyes. The CPI was 30.9 in 1964. Today, it is 211.1. This means that prices have risen 683% since 1964. The only problem is that your wages have not risen at the same rate, even using the government manipulated CPI. Using a true CPI figure, average weekly earnings are 64% below what they were in 1964. This explains why a family of five could live well with one parent working in 1964, but even with both parents working and using debt in prodigious amounts, the average family does not live as well today.

 

 

 

Don’t Know Much About History

The First Bank of the United States was created in 1791. Alexander Hamilton, the 1st Secretary of the Treasury, proposed this bank and convinced a hesitant President Washington to agree. John Adams and Thomas Jefferson were against the concept. It favored the moneyed classes of the North versus the agrarian South. The bank was given a 20 year charter and President James Madison let it expire in 1811. He then renewed the charter in 1816. The wise men who took unprecedented risks in declaring independence from England’s tyranny, feared the tyranny of bankers equally:

"All the perplexities, confusion and distress in America rise, not from defects in the Constitution or Confederation, not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation."

 

John Adams, in a letter to Thomas Jefferson, 1787

 

"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a moneyed aristocracy that has set the government at defiance. The issuing power (of money) should be taken away from the banks and restored to the people to whom it properly belongs."

Thomas Jefferson, U.S. President -1802

 

[The] Bank of the United States... is one of the most deadly hostility existing, against the principles and form of our Constitution... An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries. What an obstruction could not this bank of the United States, with all its branch banks, be in time of war! It might dictate to us the peace we should accept, or withdraw its aids. Ought we then to give further growth to an institution so powerful, so hostile?

 

                                                Thomas Jefferson, U.S. President -1803

 

"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance".

James Madison, U.S. President

 

President Andrew Jackson was the first and only President in the history to pay off the National Debt. He worked tirelessly to rescind the charter of the Second Bank of the United States. His reasons for abolishing the bank were:

·        It concentrated the nation's financial strength in a single institution.

·        It exposed the government to control by foreign interests.

·        It served mainly to make the rich richer.

·        It exercised too much control over members of Congress.

·        It favored northeastern states over southern and western states.

President Jackson believed that only Congress should be responsible for the issuance and control of the currency. Delegating that duty to powerful New York bankers was distasteful to him.

"If Congress has the right to issue paper money, it was given to them to be used ... and not to be delegated to individuals or corporations"

 

 President Andrew Jackson, Vetoed Bank Bill of 1836

 

President Jackson, shown here "driving out the devils and money changers"
with his order to withdraw public money from the central bank
-Edward Clay lithograph, published 1833

 President Jackson’s honesty and anger at the bankers should resonate today, as bankers have again brought our country to its knees.

 “Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, will rout you out.”

 

 A President with Jackson’s strength of character would put the blame where it belongs today. He would rout out these criminal bankers, rather than give them more taxpayer money to squander. A President with a moral backbone would put an end to the disastrous 96 year experiment of the Federal Reserve. Instead our last two spineless Presidents have put Goldman Sachs bankers in charge of our national Treasury. An examination of inflation throughout the history of the United States proves that from the beginning of our nation through wars and the Industrial Revolution, the country experienced virtually no inflation as our currency was backed by gold.  The creation of the Federal Reserve in 1913 and the closing of the gold window in 1971 unleashed a tsunami of inflation that continues today.

 

 

Source: Chartingstocks.net

 

1913 – A Bad Year for America

 Karl Marx published his Communist Manifesto in 1848. It included 10 planks. Two of the ten planks were as follows:

•          A heavy progressive or graduated income tax.
•         Centralization of credit in the hands of the State by means of a national bank with State capital and an exclusive   monopoly.

 The dates February 3, 1913 and December 24, 1913 framed a year which placed our country on a downward fiscal spiral. The United States had tinkered with an income tax during the Civil War and the 1890’s, but the Supreme Court declared it unconstitutional. Until 1913, the U.S. government was restrained from overspending because it was completely reliant on tariffs and duties to generate revenue. The Sixteenth Amendment changed the game forever.

 

 “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.”

 

 When you give a Congressman a dollar, he’ll take a hundred billion. The initial tax rates of 1% to 7% were rather modest. That did not last long. The top tax rate reached 92% during the 1950s and today rates are still 500% to 1,000% higher than they were in 1913. The government is addicted to tax revenue. In 2007, they absconded $1.2 trillion in taxes from American individuals. Does anyone think that the bloated government bureaucracy spent these funds more efficiently or for a more beneficial purpose than its citizens could have?

 

Partial History of U.S. Federal Income Tax Rates Since 1913
Applicable Year	Income brackets	First bracket	Top bracket	Source
1913-1915	-	1%	7%	IRS
2003-2009	6 brackets	10%	35%	Tax Foundation

Source: Wikipedia

 

Without $1.2 trillion in individual tax revenue, Congressmen would not be able to add 9,200 earmarks to the current $400 billion Federal spending bill every year. This is how they waste your money:

 

·        $1.8 million to research “swine odor and manure management” in Ames, Iowa.

·        $41.5 million to upgrade presidential libraries of Franklin D. Roosevelt, Lyndon B. Johnson, and John F. Kennedy, according to the Heritage Foundation.

·        $2.9 million to study how to breed and raise shrimp on “shrimp farms.” Citizens Against Government Waste (CAGW) reports that since 1985 the federal government has allocated $71 million to the study of shrimp science.

·        $209,000 to improve blueberry production in Georgia, according to CAGW.

·        $200,000 for a tattoo removal program in Mission Hills, Calif.

·        $5.8 million for the Edward M. Kennedy Institute for the Senate in Boston, according to the Heritage Foundation.

·        $6.6 million for Formosan subterranean termites, also according to Heritage.

 

 

Rothschild, J.P. Morgan & the Federal Reserve       

 

"Those few who can understand the system (check book money and credit) will either be so interested in its profits, or so dependent on it favors, that there will be little opposition from that class, while on the other hand, the great body of people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear it burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests."

 

Rothschild’s Bros. of London

 

The House of Rothschild had been the dominant banking family in Europe for two centuries. They were known for making fortunes during Panics and War. Some claimed that they would cause Panics in order to take advantage of those who panicked. The Panic of 1907 was the used as the reason for creating the Federal Reserve. The Federal Reserve Bank of Minneapolis attributed the causes of the Panic of 1907 to financial manipulation from the existing banking establishment.

"If Knickerbocker Trust would falter, then Congress and the public would lose faith in all trust companies and banks would stand to gain, the bankers reasoned."

In 1906, Frank Vanderlip Vice President of the Rockefeller owned National City Bank convinced many of New York's banking establishment that they needed a banker-controlled central bank that could serve the nation's financial system. Up to that time, the House of Morgan had filled that role. JP Morgan had initiated previous panics in order to initiate stronger control over the banking system. (Picture slimy Mr. Potter offering the members of the Bailey Building & Loan, 50 cents on the dollar for their shares during a bank panic in the classic movie Its A Wonderful Life). Morgan initiated the Panic of 1907 by circulating rumors that the Knickerbocker Bank and Trust Co. of America was going broke, there was a run on the banks creating a financial crisis which began to solidify support for a central banking system. During this panic Paul Warburg, a Rothschild associate, wrote an essay called "A Plan for a Modified Central Bank" which called for a Central Bank in which 50% would be owned by the government and 50% by the nation's banks.

 In November 1910 a secret conference took place on Jekyll Island off the coast of Georgia. Those in attendance were: JP Morgan, Paul Warburg, John D. Rockefeller, Bernard Baruch, Senator Nelson Aldrich, Colonel House, Frank Vanderlip, Benjamin Strong, Charles Norton, Jacob Schiff, and Henry Davison. Out of this meeting of the most powerful bankers and politicians in the country came the plan for a Central Bank. This conference was unknown until 1933.  In 1935, Frank Vanderlip wrote in the Saturday Evening Post: "I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System."

 

Behind the scenes these powerful men were formulating the plan for a Federal Reserve System. There was no outcry from the public to implement this plan. The public knew nothing of this. The Aldrich Plan was renamed the Federal Reserve Act and pushed forward by Paul Warburg and Colonel House. Warburg essentially wrote the Act and pressured Congressmen to see his way or lose the next election. Colonel House, who had socialist leanings, was the top advisor to President Wilson.

The Glass Bill (the House version of the final Federal Reserve Act) had passed the House on September 18, 1913 by 287 to 85. On December 19, 1913, the Senate passed their version by a vote of 54-34. More than forty important differences in the House and Senate versions remained to be settled, and the opponents of the bill in both houses of Congress were led to believe that many weeks would elapse before the Conference bill would be taken up. The Congressmen prepared to leave Washington for the annual Christmas recess, assured that the Conference bill would not be brought up until the following year. The creators of the bill then pulled the ultimate scam on the American public. In a single day, they ironed out all forty of the disputed passages in the bill and quickly brought it to a vote. On Monday, December 22, 1913, the bill was passed by the House 282-60 and the Senate 43-23. This meant that the single most important piece of legislation ever passed by the Senate was missing the votes of 26 Senators because it was passed during the Christmas recess. President Wilson, at the urging of Bernard Baruch, signed the bill on December 23, 1913. A few years later, President Wilson had second thoughts:

"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world--no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men."

There were some brave Americans who did oppose this legislation and foresaw the devastation that it would lead to.

“Throughout my public life I have supported all measures designed to take the Government out of the banking business. This bill puts the Government into the banking business as never before in our history. The powers vested in the Federal Reserve Board seen to me highly dangerous especially where there is political control of the Board. I should be sorry to hold stock in a bank subject to such dominations. The bill as it stands seems to me to open the way to a vast inflation of the currency. I had hoped to support this bill, but I cannot vote for it cause it seems to me to contain features and to rest upon principles in the highest degree menacing to our prosperity, to stability in business, and to the general welfare of the people of the United States.”

                                                            Senator Henry Cabot Lodge – Dec 17, 1913

“From now on, depressions will be scientifically created.”

 

Congressman Charles A. Lindbergh Sr. - 1913

 

John Maynard Keynes, the current hero of the Obama administration and Paul Krugman, had this to say about the Federal Reserve in 1920.

“Should government refrain from regulation (taxation), the worthlessness of the money become apparent and the fraud can no longer be concealed. By this means government may secretly and unobserved, confiscate the wealth of the people and not one man in a million will detect the theft."

Mandate from Hell

According to the Federal Reserve’s own website, their duties fall into four general areas:

1. Conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates.
2. Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
3. Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
4. Providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system

The American public was told that the Federal Reserve would eliminate any future bank panics. From 1913 through 1920, inflation increased at more than 10% per year as Wilson spent vast sums during World War I and its aftermath. From the early 1920s to 1929, the monetary supply expanded at a rapid pace and the nation experienced tremendous economic growth. Benjamin Strong, one of the participants at the secret conference on Jekyll Island, was the Federal Reserve head. By the end of the 1920s, speculation and loose money had propelled asset and equity prices to unsustainable levels.  The stock market crashed in 1929, and as the banks struggled with liquidity problems, the Federal Reserve cut the money supply.  This was the greatest financial panic and economic collapse in American history so far - and it never could have happened  without the Fed's intervention.  The Fed caused the bubble with loose monetary policy. The Depression did not become Great until the Smoot Hawley Act in 1930 destroyed world trade and the raising of the top income tax rates from 25% to 63% in 1932 destroyed the incentive to earn money. Over 9,000 banks failed and a few of the old robber barons' banks managed to swoop in and grab up thousands of competitors for pennies on the dollar. 

 

 

 

The Federal Reserve’s primary mandates were maximum employment, stable prices and moderate long-term interest rates. Their other chief function was to supervise and regulate banks to ensure the banking system is safe. Lets assess their success regarding their mandates:

 

• Unemployment reached 25% during the Great Depression; attained levels above 10% in 1982; and will breach 10% in the next year. Grade: Failure

 

• Based on the chart above and the CPI data since the Federal Reserve’s inception, the dollar has lost 95% of its purchasing power. Grade: Failure

 

• Based on the chart below interest rates have been anything but moderate since the inception of the Federal Reserve. They have consistently caused booms and busts by setting rates too low or too high. Grade: Failure

 

• The Federal Reserve was supposed to supervise the activities of banks. Instead, under Alan Greenspan, they stepped aside and let banks take preposterous risks while giving an unspoken assurance that the Fed would clean up any messes that they caused. This total dereliction of duty gross negligence has led the greatest financial collapse in history. Grade: Failure

 

 

Voices of Reason

The Chairman of the House banking & Currency Committee Louis T. McFadden fought a lonely battle against the Federal Reserve in the early 1930s. He was swept out of office when his opponent in the next election received thousands of dollars in campaign contributions.

 "Mr. Chairman, we have in this Country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks, hereinafter called the Fed. The Fed has cheated the Government of these United States and the people of the United States out of enough money to pay the Nation's debt. The depredations and iniquities of the Fed have cost enough money to pay the National debt several times over. This evil institution has impoverished and ruined the people of these United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Fed and through the corrupt practices of the moneyed vultures who control it.”

                  Louis T. McFadden – Representative from PA 1934

Mr. McFadden has a soul mate in Representative Ron Paul from Texas. Mr. Paul has been on a one man mission to abolish the Federal Reserve for over a decade. He seems to be the only person in Congress with the courage, fortitude and intellect to understand the damage that has been caused by the Federal Reserve and call for its abolition. The entrenched political class, despise Mr. Paul because his call to abolish the Federal Reserve would destroy their ill begotten wealth and power.

Since the creation of the Federal Reserve, middle and working-class Americans have been victimized by a boom-and-bust monetary policy. In addition, most Americans have suffered a steadily eroding purchasing power because of the Federal Reserve's inflationary policies. This represents a real, if hidden, tax imposed on the American people.

 

From the Great Depression, to the stagflation of the seventies, to the burst of the dotcom bubble last year, every economic downturn suffered by the country over the last 80 years can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial "boom" followed by a recession or depression when the Fed-created bubble bursts. In conclusion, Mr. Speaker, I urge my colleagues to stand up for working Americans by putting an end to the manipulation of the money supply which erodes Americans' standard of living, enlarges big government, and enriches well-connected elites, by cosponsoring my legislation to abolish the Federal Reserve.

                                                                        Ron Paul – Sept 10, 2002

Representative Paul sized up his colleagues in Congress and the Federal Reserve perfectly in 2006 when they were oblivious to the impending disaster that was about to befall the nation. He was belittled by the mainstream press and fellow Congressmen.

The coming dollar crisis is not likely to be “fixed” by politicians who are unwilling to make hard choices, admit mistakes, and spend less money. Demographic trends will place even greater demands on Congress to maintain benefits for millions of older Americans who are dependent on the federal government.

Faced with uncomfortable financial realities, Congress will seek to avoid the day of reckoning by the most expedient means available – and the Federal Reserve undoubtedly will accommodate Washington by printing more dollars to pay the bills. The Fed is the enabler for the spending addicts in Congress, who would rather spend new fiat money than face the political consequences of raising taxes or borrowing more abroad.

The irony is that many of the Fed’s biggest cheerleaders are the same supposed capitalists who denounced centralized economic planning when practiced by the former Soviet Union. Large banks and Wall Street firms love the Fed’s easy money policy, because they profit at the front end from the resulting loan boom and artificially high equity prices. It’s the little guy who loses when the inflated dollars finally trickle down to him and erode his buying power. Someday Americans will understand that Federal Reserve bankers have no magic ability – and certainly no legal or moral right – to decide how much money should exist and what the cost of borrowing money should be.

                                                                        Ron Paul – July 11, 2006

 

Before he became a tool of the political ruling elite and the bankers who truly control the country, Alan Greenspan actually understood and supported a currency backed by gold which couldn’t be manipulated by corrupt politicians. The confiscation of middle class wealth through the insidious use of inflation has proceeded unchecked for 96 years.

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. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.

                                                                        Alan Greenspan – 1966

 

 I’m Mad as Hell & I’m Not Going to Take it Anymore

Howard Beale, the news anchor in the movie Network, could have spoken the same lines today that he was speaking in 1976. He describes our current financial crisis to a tee.

 

 I don't have to tell you things are bad. Everybody knows things are bad. It's a depression. Everybody's out of work or scared of losing their job. The dollar buys a nickel's worth; banks are going bust; shopkeepers keep a gun under the counter; punks are running wild in the street, and there's nobody anywhere who seems to know what to do, and there's no end to it.

 

I want you to get mad!

 

I don't want you to protest. I don't want you to riot. I don't want you to write to your Congressman, because I wouldn't know what to tell you to write. I don't know what to do about the depression and the inflation and the Russians and the crime in the street.

 

All I know is that first, you've got to get mad.

 

You've gotta say, "I'm a human being, My life has value!"

 

So, I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window, open it, and stick your head out and yell,

 

"I'm as mad as hell, and I'm not going to take this anymore!!"