We’ve spoken about how money came to be and how it was a useful, even powerful, tool for us, an invention to fill a need. Now, we will discuss what money became, after the days of gold and silver coins… or wampum and cacao beans. But, we will be taking a few steps backwards in this section. The events we will now explore occurred almost 60 years before the “Nixon Shock” we spoke about in the last section.
To begin our account, we’ll skip over hundreds of years of history and focus on 1913. For, that was the year America was taken to the cleaners. That was the year our system of credit and our entire monetary system were handed over to private interests. In essence, a cabal of bankers, from the old school, bribed, bought and forced their way into the position of controlling our entire economy – and our government. The events we have witnessed, since 1898, are a direct result of banking and corporate actions. The events playing out, today, in the political and economic spheres, are a direct result of the Federal Reserve Act of 1913.
The way it all came to pass is simple enough. This consortium of banking interests, as well as others, like armaments and energy interests, conspired to take complete control of all our international and domestic affairs, for the sole and exclusive benefit of themselves, and at the detriment of the rest of the country. Indeed, they’ve done this not just in the United States. The rest of the so-called “free world”, and the governments therein, are also in the corporate thrall. But, this is the story of how it happened, here, and is as fair an illustration, as any, of the forces in play, today, throughout the modern world.
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. The growth of the nation, therefore, and all our activities are 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 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 duress of a small group of dominant men.
The Federal Reserve Act of 1913 was railroaded through a mostly absent Congress, on the 23rd of December. Yes, that’s right, they pulled this stunt two days before Christmas. It goes without saying what most of Congress was doing, as well as the rest of the country, on December 23rd, 1913. They were enjoying the holidays with their families, of course, and, in the case of members of Congress, glad-handing with the constituency. Everything was normal enough, it seemed… business as usual. But, the crime which was perpetrated upon the American people, that day, has been the cause of endless misery. War, strife, civil disorder, bubbles, crashes, the whole panoply of modern American misery – almost all of it due to that one Act.
At its core, the scam works simply, enough. The Federal Reserve Act places the Federal Reserve in charge of our economy. That sounds fine, on the surface. It says “Federal” right there in the name and the name is on our money, too. It only makes sense that the Federal Reserve would be a part of the federal government, right? Well, no… wrong. As mentioned, earlier, it’s a private corporation. So, Alan Greenspan and Ben Bernanke were never federal employees, at all, as we usually assume, as we are meant to assume. No, they don’t work for the US. The US works for them. They’re extremely powerful bankers, with the purse strings of the world’s most powerful economy to play with… and play they do!
To begin with, what do you imagine happens when the government spends more than it generates in taxes and other income? Well, we run a deficit, of course, right? And that means we must borrow money, one way or another. Traditionally, the US government would sell government bonds to raise capital. Also traditionally, the US would only do such a thing under great duress, in time of war or economic necessity. The early American political class didn’t like the notion of getting the country deep in the pockets of international banking interests. History is replete with lessons against such conduct for a country. It seems the folks who ran the country, back then, knew their history, too.
Since at least 1913, we haven’t done things in the proper, conservative manner, though. Certainly, our government hasn’t behaved as one would expect with regards to the national purse – not by a longshot. Most of us chalk that up to stupidity, inefficiency and/or bureaucracy. As well as some corruption, of course, which seems inevitable. But, that is far from the case. Simply put, when we run a deficit, and we need to borrow money, some very specific entities will benefit. Namely, all the banks which receive deposits of that freshly minted coin of the realm will benifit, tremendously. This explains the $750 hammer and the $3000 toilet as much as vendor corruption and black ops funding do. It’s all part of the hustle.
The scam starts with our rampant budget overruns. When the government spends more than it takes in, the treasury department is ordered to issue bonds to the Fed (the privately‐owned Federal Reserve Bank) to cover the balance. The Fed, in turn, loans the United States the necessary funds, dollar for dollar, according to the value of the bonds. That all sounds perfectly reasonable if this bank, the Fed, is actually loaning us real funds. But, they aren’t, really. They, essentially, create that money, out of double‐talk, smoke and mirrors. Those dollars never existed, before.
That's how the Federal Reserve increases the money supply – by acting as if all the new money created is owed to the banks. Granted, almost all the profits from the Federal Reserve go back to the US Treasury. So, it’s not as bad as some misinformed sources would have you believe. However, in the end, it’s almost as bad. Inevitably, this money ends up in the commercial banking system. That’s when the voraciousness of the banks is revealed, in all its hideous glory.
Hey, wait a minute! No one can loan someone money that doesn’t exist, right?
Well, they have… for over a hundred years, now.
Pretty sweet deal, huh?
So, what happens when that newly‐minted money hits the nation’s financial bloodstream?
Well, that’s when it gets interesting… we'll talk about that next.
(BONUS FACT: Only 3% of our money supply is in the form of cash. The rest is ones and zeroes… pure ether.)