By rahnuma ahmed
It is not only the American corporate media which keeps the lid on the Federal Reserve System — since, contrary to what most Americans believe, it is `not federal’, has `no reserve’, is `not even a bank’ but actually a banking cartel which serves and furthers the interests of the wealthiest men in the world – American universities too play their role. As Stephen Lendman points out, his MBA curriculum 46 years ago, had `left out the most important parts of the story and never hinted at anything sinister about how the banking system works in fact’ (The Federal Reserve, Z Magazine, June 29, 2006).
A similar situation seemingly prevails in the UK, for, when I asked a relative who teaches business and finance at a British university about who owns the Bank of England, I was told, its nationalised. Its a public organisation wholly-owned by the government. Corroborating the official storyline secured in place by the powers-that-be, reflected in the Bank’s website: ‘As a public organisation, wholly-owned by Government, and with a significant public policy role, the Bank is accountable to Parliament.’
But this account – unfailingly subscribed to by most Brits, `You ask the question, Who Owns The Bank Of England? to one thousand Britons, and I kid you not, all of them will say that it is owned by the Government’ (The Tap Blog, February 27, 2010) – glosses over actualities. For instance, the setting up of a wholly owned subsidiary called Bank of Nominees Limited (BOEN), a private limited company, by the Bank of England in 1977, which was granted an exemption from disclosing its shareholders. ‘It was considered undesirable that the disclosure requirements should apply to certain categories of shareholders.’ This exemption is separate to the fact that the Bank of England is also protected by its Royal Charter status, and the Official Secrets Act. To put it briefly, members of the British public are ‘not allowed to know who the shareholders are who own the company which carries out Central Banking in the UK.’
Obviously, the public’s access to such basic information in the mother of parliamentary democracies, is `undesirable.’ What was it George Orwell had said? All animals are equal, but some animals are more equal than others.
There are other powerful banks as well, these include the Bank of Japan, and the European Central Bank (consisting of the 12 European countries which adopted the singe euro currency in 1999). But the mother of these powerful central banks which serve and further the interests of the wealthiest men in the world, is a little-known bank — ‘a bank never heard of’ — the Bank of International Settlements (BIS). Founded in 1930, based in Basle, Switzerland, it is `the central banker to its member central banks.’ The BIS and the dominant central banks, writes Lendman, wield their influence in a `cartel-like alliance with each other to assure they all benefit more than they otherwise would without such a cozy arrangement’ (The Federal Reserve, June 29, 2006).
The `concentration of financial power into the hands of a small group of powerful banking and investment firms on Wall Street’ through the Federal Reserve Act of 1913 (G. Edward Griffin, author of The Creature From Jekyll Island, interview, April 2, 2004) was preceded by longer term historical changes which ‘switched’ money from wealth to debt. As monetary researchers at Discover the Secret of Our Money System blog explain, the real issue is not gold and silver vs. paper, commodity money vs. fiat money. The real issue is wealth money vs. debt money. It is honesty vs. fraud. A close look at the trail of United States money reveals how previous notions and practices of gold and silver commodity money which was `put into circulation as a wealth to the people, by the people’ was later replaced by ones of `monetized debt, put into circulation by the banks, as interest bearing debts to the people, for the personal profit of bankowners.’ These, are current.
Gold and silver had worked earlier, say Byron Dale, Gregory Soderberg and Thomas Hedin, because people had produced the gold and silver, a raw resource of the earth, through their labour. It was a wealth to `ourselves’, the people, it was spent into circulation as a benefit to all of society, there was no debt attached to it. But, it was not the depositing of gold and silver coins at the Treasury for the sake of convenience, in lieu of Treasury notes (paper money), that signalled the shift because there was still `good, honest, wealth money with no debt, no excessive profit, nor excessive purchasing power to anyone.’
It was the depositing of gold and silver coins in a fractional reserve bank, which clinched the switch: `The bank held the coins as a reserve and expanded the money supply by making new loans equal to 10 times the face value of the coins deposited.’ Wealth switched to debt, as all new money was formed not by creating wealth, but by creating debt.
What might have seemed a good idea to many at the outset, leading to all round benefits, banks get more profits, people get quicker and easier loans, more capital is available for commerce, for production, increasingly turns into a nightmare as `sooner or later, more and more people can not make their loan repayments.’ As increasingly, what Thomas Jefferson foresaw — when banks are allowed to control the issuance of their currency the American people are gradually deprived of all property, until their children one day wake up homeless — becomes a reality.
Another Founding Father, James Madison, a main draftor of the US Constitution, had called bankers ‘Money Changers,’ a reference to the Bible which says Jesus twice drove the Money Changers from the Temple in Jerusalem two thousand years ago. ‘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.’
The US Congress and the President’s agreement to privatise the nation’s money system, says Lendman, to relinquish what should have remained the government’s exclusive power led to the creation of the Federal Reserve System, an all-powerful privately owned banking cartel which has the right to print money in any amount, to control its supply and price. To ‘benefit hugely by loaning it out for a profit including to the government itself that must pay interest on the money it should never have to if it simply printed its own.’
The Federal Reserve Act was possibly, and still is, illegal as Article 1, Section 8 of the US Constitution – the inviolable law of the land — states that the Congress shall have the power to coin (create) money and regulate the value thereof. The US Supreme Court in 1935 ruled that the Congress `cannot constitutionally delegate its power to another group or body.’
The American public is harmed in several ways because of the Fed, points out Lendman. Through the invisible tax of inflation: newly-created money entering the system dilutes the purchasing power, it reduces the value of dollars already present. The dollar’s weakness since 2002 is possibly the result of excessive printing to fund the Bush administration’s `endless wars and reckless tax cuts for the rich.’ Through the banking cartel’s practice of usury, its power to artificially move rates up or down to any level it chooses. Through the taxes the public must pay, `to cover the interest on the huge national debt’, well over $8.4 trillion, which has accumulated from the money the Fed printed and loaned to the government. Through the cartel getting the public to bail out the system with more of its tax dollars. Through — contrary to what the public had been fed (pun intended) about the Fed, that it would stabilise the economy, smooth out the business cycle, maintain sustainable growth, keep prices steady, benefit all – the crashes since its creation in 1913, `with them in charge’ are: 1921, 1929, the Great Depression years, recessions of 1953, 1957, 1969, 1975, 1981, 1990 and 2001.
The manner in which the Fed and European central banks operate to impoverish their own people, bears parallels to how the World Bank and the IMF does to `the rest’, but that is another story.
Controversy over whether the United States official gold reserves (over 4,500 metric tons) actually exist in the United States Bullion Depository, widely known as Fort Knox, or have been spirited away, have raged over the past decades. Edith Roosevelt, the grand-daughter of president Theodore Roosevelt is often quoted by many, ‘Allegations of missing gold from our Fort Knox vaults are being widely discussed in European circles. But what is puzzling is that the Administration is not hastening to demonstrate conclusively that there is no cause for concern over our gold treasure – if indeed it is in a position to do so.’
These concerns were revived in 2009 when rumours spread virally of tungsten i.e., fake gold bars of Fort Knox origin, having been discovered in Hong Kong. Informed sources say, hours after the scam was identified, Chinese officials caught the perpetrators. And reportedly uncovered, during the Clinton administration ‘between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day.’ Stock market analyst Robert Prechter claims to know people who have ‘copies of the original shipping docs with dates and exact weights of ‘tungsten’ bars shipped to Ft. Knox’ (Market Oracle, November 12, 2009).
The Fort Knox gold story got murkier middle of this year, when rumors circulated that a report prepared by the Federal Security Service for the Russian prime minister Vladimir Putin says, the former International Monetary Fund chief Dominique Strauss-Kahn was charged and jailed for sex crimes in the US on May 14 because he had discovered that all of the gold held at Fort Knox was `missing and/or unaccounted’ for. This was reported in the EU Times, May 31, 2011 (nothing to do with the European Union by the way, the online publication does not enjoy credibility with many, according to wiki_rational, it is ‘xenophobic,’ ‘anti-semitic,’ ‘racist’), and I have no means at my disposal of verifying whether the Federal Security Service had actually reported any such thing to the Russian prime minister. However, other news items reported in the feature are verifiably true. That Putin had posted a defense of Strauss-Kahn on the Kremlin’s official website, alleging that he was the victim of a US conspiracy, ‘It’s hard for me to evaluate the hidden political motives but I cannot believe that it looks the way it was initially introduced. It doesn’t sit right in my head.’ That Ron Paul, a top Congressman and 2012 Republican presidential candidate (of Libertarian views) is worried that the Fort Knox gold is gone. That, when directly asked by reporters, he had replied, ‘I think it is a possibility.’
With the US Treasury’s debt to China having reached the $1.2 trillion mark, with the largest creditor of the world’s superpower having advised the latter to ‘live within its means’ (Huffington Post, August 6, 2011), the US targets China in classic warfare fashion: encirclement, seige, more or less clandestine support for internal disorder (Global Research, November 18, 2010).
As sounds of `End the Fed‘ voiced by Occupy Wall Street-ers reverberate across the world, as I ponder Madison’s Biblical reference to the Money Changers, I come across a recent interview of Eric Walberg, author, Post-modern Imperialism. Walberg, who dislikes slots and -isms, who makes use of Marx, who describes himself as being `a freelance monotheist’ (Eric Walberg and Jonathan Reynolds, Global Research, November 10, 2011), suggests something with which I would like to end my two-part series:
‘The Judaic prophets, followed by Jesus and Muhammad, and the nineteenth century secular prophet of revolution Marx, rejected usury and interest, as representing ill-gotten gain, with good reason. Marx condemned this mode of extraction of surplus as the highest form of fetishism, based on private property and exploitation of labor. They all rejected this exploitation on a moral basis as unjust, insisting that morality be embedded in the economy, a principle which was abandoned when capitalism took hold. While Judaism and Christianity adapted, Islam did not.
‘Interest, and today’s money based on US military might alone, are the root cause not only of the current world financial crisis, but, as a corollary to Rothschild’s dictum [‘Give me control of a nations money supply and I care not who makes its laws’]… and Clausewitz’s dictum [Politics is the womb in which war develops], the primary instrument facilitating (and benefiting from) the wars in the Middle East and Central Asia, and the world political crisis.’
Whether believers and secularists can unite to fight this battle, is anyone’s guess.
Published in New Age, Tuesday, November 15, 2011Show