The Coastal Post - February, 1997

Economics For Idiots

(This column ran in the December 18, 1989 issue of the Coastal Post. I wish it weren't still true.)

Warning: What you are about to read was not written by a college-trained economist, MBA, banker, CPA, lawyer, or tax-consuming bureaucrat. It is therefore likely to contain understandable words and an insidious dose of common sense.

The "Federal" Reserve System was initiated in 1913 as the specific brainchild of a man named Paul Warburg. Warburg was a German-born immigrant to the United States who was trained in the Rothschild-controlled Bank of London. (An intriguing aside: Warburg's brother was the head of the German Secret Service in World War I, 1917)

During a clandestine meeting at an ultra-exclusive sporting club on Jekyll Island, George, Warburg and representatives of the Rockefeller family and J.P. Morgan first gathered in 1910 to discuss how they could manipulate the entire money supply of the United States to their private advantage. If you think this is just wild-eyed conspiratorial fiction, you owe it to yourself and to your children to understand how the mechanism that they invented in 1913 is still in complete control of every aspect of our financial lives today.

The Federal Reserve System is not a Federal institution. It is solely owned by private banks. You and I and the Congress have nothing (despite what the Constitution commands) whatsoever to do with it-nothing.

The Federal Reserve Corporation creates out of thin air, or prints, our paper currency. Each $1,000 bill costs this private corporation one penny to print. The Federal Reserve Corporation then LOANS this paper money to the Treasury of our national government, which, in exchange, gives the Federal Reserve Corporation some treasury notes (IOUs from the national government) in exchange for that warehouse full of freshly-printed $1,000 bills. But these are not, and never have been, no-interest loans. No way, folks. The national government promises (a T-bill is a promissory note) to repay that loan of freshly-printed paper money with interest. Don't you wish you could print money and loan it out with interest?

There is not one fraction of an ounce of gold or silver backing that piece of green paper that is called a $1,000 bill. There used to be such a safeguard before the Federal Reserve Corporation realized very early in the con game that this age-old idea of gold and silver backing of paper currency would deny them their vast, and unconstitutional, power to print and manipulate our money supply. (1997 note: Gold-backed currency went out in the 1930s and silver-backed currency went out in the late 1960s.)

How does the national government get the money to fulfill its promise to repay the Fed with interest? Well, what the government does it to TAX all of us. At this time, we taxpayers are expected to repay more than THREE TRILLION REAGANMANIA DOLLARS that our national government has borrowed from the Federal Reserve Corporation. (1997 note: It's now SIX TRILLION, and it's only fair to add that Congress spends the money, not the President.)

As you slave your guts out to make ends meet, you are robbed of your hard-earned money (1997 note: actually you are, in effect, robbed of your labor) to pay off a bunch of paper that cost one cent each to print. You see, if you can all be kept in debt, we have to keep working and will therefore produce more to provide for the interest payments! We each have to keep working and paying, or lose it all to...ah, yes...THE BANKS! Either way, loan payment or foreclosure, the banks do just fine, thank you.

Now you may perceptively ask why the Federal Reserve Corporation accepts principal and interest payments on their loans to the U.S. Treasury in the form of the same paper currency that they themselves printed for a penny apiece. It's not too hard to understand. The Federal Reserve Corporation's private bank members INSTANTLY take the paper money interest payments from our taxes and purchases real estate, industry, businesses and commodities like gold, silver, copper and aluminum. They gain a further share of the ownership of the real wealth of America and then print some more money!

The Federal Reserve Corporation realizes that the only true wealth is in tangible products. They aren't stupid enough to believe that their green paper money is true wealth. They trade that worthless paper immediately for ownership in American farmland, industry and an ownership of your productivity via the stock in the companies they purchase using their agents. The "Fed" also has the services of the toughest collection agency in America...the IRS. It's hardball with their rules, my friends. The "Fed" has NEVER been audited.

The Federal Reserve Corporation manipulates the price of the stock in American companies up and down with their control of the prime interest rate. Of course, the agents of the private "member" banks buy off the stock in companies at the bottom of the price swings they themselves manipulate! In this way, bit by bit, America is actually owned by fewer and fewer people.

"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 the corporations that will grow up around them [the banks]will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." - Thomas Jefferson 1786