Monday, December 8, 2008
The Federal Reserve Scam Made Simple
Monday, December 08, 2008 | 
Posted by
Chris Waner
The Federal Reserve (Fed) is the source of all money in the United States. However, don't be mistaken. The Fed is not a federal government institution; rather, it is privately owned bank whose primary shareholders are the London Rothschild family, Warburg family, Rockefeller family, Morgan family, Harriman family, Kuhn and Loeb families, the Lehman family, and the Schiff family. Neither does the Fed simply issue money into the economy; they loan money to us at interest. Where does the Fed get the money to fund the entire US economy? They simply print it out of thin air. Each dollar in your pocket is a dollar of debt to the Fed; the quantity of the debt is not only the value of the dollar but also the additional interest to be paid to these bankers for the trouble they go through in turning on a printing press.Here's how the scam works. The government or certified dealer, like an investment bank, issues a bond. The Fed buys the bond not with money it has in reserve, but with money it prints from nothing. This money is deposited into the bank account of the institution that issued the bond.
The commercial or investment bank that now has this newly printed money as a deposit on its books uses what is called Fractional Reserve Banking, simply the ability to loan out more money than you have, to create 100 times as much money in the form of loans or debt in the US economy. I can't make this process clear enough. It is crucial that each person understand the process: the Fed prints money out of thin air to buy bonds. The new money is deposited into the account of the person who sold the Fed the bond. Then the bank that has the Fed's new money loans out up to 100 times that amount of money to private citizens.
Lets look at a simple example. A bank issues a $1000 dollar bond. The Fed buys that bond for $1000 with money it printed out of thin air. Since that $1000 dollars was purchased from a bank, that money now exists in the banks holdings as a deposit. Now the bank loans out 100 times as much money as it has in reserve, which is $1000. So the bank loans to private citizens $100,000 for every $1000 that it has on hand. (Note: This is a slightly more complicated process that I'll cover in detail in an upcoming article about the 1/10 reserve requirement and the 9/10th deposit loan requirement).
The money from these bank loans go to fund private purchases like houses and cars as well as businesses and business expenses. It eventually works its way into everyone's pockets.
But it comes at a price. The international bankers require interest for the money they printed out of nothing and loaned to us. How do we pay for it? Are you ready for this? Our Federal Income Tax. That's right, your income taxes are not paying for roads or schools; it's not going to the poor or for Medicare or Medicaid; it's not helping out with Social Security or investing in clean energy or anything else beneficial to the American citizens. No, a report ordered by President Reagan in 1984 declared the unbelievable truth. Not a single cent of our income tax goes to anything at all except paying interest to the international bankers who own the Federal Reserve, and they didn't even loan us their own money; they just printed it, counterfeited it. And we pay through the nose at a staggering rate of more that $36,000,000 per hour.
Our money is debt, plain and simple--debt to the Fed and the international bankers. Can we every pay off the debt? If we gave every cent and sold or gave everything we own to them, we would likely only cover the principle and still owe much or all of the interest. The answer is, no. To do so would be bankruptcy and poverty for every man, woman, and child. Every dollar we have is a dollar plus interest of debt to first the commercial and investment bankers and then to the Fed.
This is the grandest fraud in the history of the world, and we're the ones who are the victims. History will look shamefully on us, and rightfully so. And it continues for two reasons. The first reason is that American citizens remain ignorant. If the average citizen knew the awful truth, knew that they and their children were being sold into slavery as a debtor nation, there would be revolt. Indeed, education is exactly why I'm writing this article. The second reason, is that Congress loves having a virtually unlimited supply of money because they can content their constituents with subsidies, goodies, entitlements, and handouts that the people don't pay for in taxes. Congress' ability to contribute public works without raising taxes is what keeps many of them in power.
Make no mistake about it. Congressional power is a puppet power of the real power that is the Federal Reserve and the international bankers. Congress is selling us into slavery for their own benefit. Some don't know the truth and only understand how to work the system. Others work the system because they know how the system works. Each American citizen, and, in fact, people all over the world need to know how the worldwide network of reserve banks is destroying lives for their own gain.
The true irony is that it could all be stopped tomorrow. The congress with one stroke could abolish the Fed and the Sixteenth Amendment, which allowed for the Federal Income Tax, and simply cancel the debt to the Fed. The money they loaned was not their money to begin with. And we could begin building a system based on sound, debt free money.
Share this article with others or point them to the information they need to make sound judgments. Write your congress person and senators, and encourage others to do the same. Let's abolish the Fed together. It's time to make a difference.
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5 comments:
Interesting. Somehow this explanation never came up in any of my college Econ. classes!
I still don't understand. Questions:
1) does the Fed CHARGE interest, or do they receive interest because of they purchased a bond? Is it always a fixed rate?
2) the income tax deal - congress thinks they are spending income tax in various ways right, this is just the effect because of the interest right?
If I understand the system in the way you describe, many of the steps seem silly. Why bother with taxes? Why should the Fed bother with interest? They can just print as much of their own money as they want.
Hey Rick, good questions.
Legally, the Fed receives interest because it's a bond, but it's all smoke and mirrors because the person who buys a bond receives interest because of the risk of the initial investment. The Fed has a near-zero risk investment because all the principle is imaginary (printed) and all interest is guaranteed by taxes.
Is it a fixed rate? No, unfortunately this is a rather complicated question. It's based on what's called the Treasury Yield Curve Methodology (you can google it). In most cases it comes out to a measly 1-2%, sometimes less. But that's huge with this much money.
I think most members of Congress think that income tax goes for their programs. But the Treasury, Department of Commerce, and Banking committee and Weighs and Means committee all know what's really going on. They know why money is being borrowed from Social Security; why we borrow from foreign governments; and why we print money. There is no money to pay for the things Congress wants.
The 16th Amendment passed Congress 3 months before the Federal Reserve Act and was created to pay the interest. It's important to note that if we were to get rid of the income tax tomorrow the federal budget would only have to be lowered to levels from the year 2000. That's how much money we are printing and borrowing.
As to the last question, why bother with taxes when the Fed could likely print as much money as it needs. I have a whole article forthcoming on exactly this question. It'll be sometime this week....hopefully.
Hope that helps a bit.
I would guess I know the answer to the "why bother" question - a ponzi scheme to keep it all going. its complicated enough that people don't know what's up. there are enough steps in the circle that it seems to make sense. simply and just say "ok we have this group of people who are going to be able to use monopoly money for anything they want" and its going to all come crashing down.
I assure you, I don't have it all figured out yet either, and unfortunately, complicated doesn't begin to do it justice. It's constantly wading through hundreds of pages of information. Just trying to fact check everything takes up days. I try to write what I can confirm, then find some piece of information that counters it, only to find a more official document that supports it.
I'm having to get closer and closer to primary research in order to actually know what's going on. You can't trust someone quoting someone who knows someone who saw a document somewhere.
My goal is the truth. If I find something that I can show conclusively proves me wrong, or if you or anyone else does, that's fine with me. I'll post it and make the correction.
But I've got sources to back up this stuff as it stands. But the search continues.
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